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                                                                   EXHIBIT 10.11


                           HORIZON HEALTH CORPORATION
                             1998 STOCK OPTION PLAN
                      [AS AMENDED THROUGH OCTOBER 31, 2002]

         Horizon Health Corporation, a Delaware corporation (the "Corporation"),
hereby establishes this Horizon Health Corporation 1998 Stock Option Plan (the
"Plan").

                         SECTION 1. PURPOSE; DEFINITIONS

         The purpose of the Plan is to give the Corporation a competitive
advantage in attracting, retaining and motivating directors, officers, key
employees and consultants and to provide the Corporation and its Subsidiaries
with a stock option plan providing incentives directly linked to the
profitability of the Corporation's businesses and increases in shareholder
value.

         For purposes of the Plan, the following terms are defined as set forth
below:

                  a. "Board" means the Board of Directors of the Corporation.

                  b. "Cause" means (except as otherwise provided by the
Committee in the option agreement relating to any Stock Option) (i) the willful
and continued failure of the optionee to perform substantially the optionee's
duties with the Corporation or one of its Subsidiaries (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the optionee by the
optionee's immediate supervisor or the Chief Executive Officer of the
Corporation (or, in the case of the Chief Executive Officer of the Corporation
as the optionee, the Board of Directors) which specifically identifies the
manner in which the optionee's immediate supervisor or the Chief Executive
Officer of the Corporation (or, in the case of the Chief Executive Officer of
the Corporation as the optionee, the Board of Directors) believes the optionee
has not substantially performed the optionee's duties, or (ii) the willful
engaging by the optionee in illegal conduct or ordinary misconduct which is
materially and demonstrably injurious to the Corporation. Notwithstanding the
foregoing, if an optionee is a party to an employment or consulting agreement
with the Corporation or any Subsidiary that contains a definition of "Cause,"
such definition shall apply to such optionee for purposes of the Plan except to
the extent otherwise provided by the Committee in the option agreement relating
to any Stock Option. Except as may otherwise be provided in any such employment
or consulting agreement, if applicable, the existence of Cause shall be
determined by the Board of Directors of the Corporation in its sole discretion
and in good faith.

                  c. "Change of Control means (a) the acquisition by any
individual, entity or group (within the meaning of Section 13(d)(e) or 14(d)(2)
of the Exchange Act) (an "Acquiring Person") of beneficial ownership (within the
meaning of Rule 13d-e promulgated under the Exchange Act) of 50% or more of
either (i) the then outstanding shares of Common Stock of the Corporation (the
"Outstanding Corporation common stock") or (ii) the combined voting power of the
then outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the "Outstanding Corporation Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by the Corporation, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the Corporation;
(b) individuals

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who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Corporation's shareholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of an
Acquiring Person other than the Board; or (c) approval by the shareholders of
the Corporation of a complete liquidation or dissolution of the Corporation.

                  d. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

                  e. "SEC" means the Securities and Exchange Commission or any
successor agency.

                  f. "Committee" means the Committee referred to in Section 2.

                  g. "Common Stock" means common stock, par value $0.01 per
share, of the Corporation.

                  h. "Constructive Termination" means the assignment to the
optionee of any duties inconsistent in any material respect with the optionee's
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities as exists at the time of a Change of
Control, or any other action by the Corporation which results in material
diminution in such position, authority, duties or responsibilities.

                  i. "Corporation" means Horizon Health Corporation, a Delaware
corporation.

                  j. "Disability" means permanent and total disability as
determined under procedures established by the Committee for purposes of the
Plan.

                  k. "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor thereto.

                  l. "Fair Market Value" means, as of any given date, the
closing price per share of the Common Stock on that date on the Nasdaq National
Market or on such national securities exchange on which the Common Stock is then
listed, as applicable, or, if no shares of Common Stock were traded on that
date, on the most recent day on which shares were traded, as reported by the
National Quotation Bureau, Inc. or other national quotation service.

                  m. "Non-Employee Director" means a member of the Board who
qualifies as a Non-Employee Director as defined in Rule 16b-3(b)(3), as
promulgated by the SEC under Section 16(b) of the Exchange Act, or any successor
definition adopted by the SEC.

                  n. "Plan" means the Horizon Health Corporation 1998 Stock
Option Plan, as set forth herein and as hereafter amended from time to time.


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                  o. "Retirement" means retirement from active employment with
the Corporation or a Subsidiary under the retirement policies of the Corporation
applicable to it and its Subsidiaries.

                  p. "Rule 16b-3" means Rule 16b-3, as promulgated by the SEC
under Section 16(b) of the Exchange Act, as amended from time to time.

                  q. "Section 162(m) Exemption" means the exemption from the
limitation on deductibility imposed by Section 162(m) of the Code that is set
forth in Section 162(m)(4)(c) of the Code.

                  r. "Stock Option" means a Stock Option granted under the Plan.

                  s. "Subsidiary" means a corporation or other entity controlled
by, or under common control with the Corporation.

                  t. "Termination of Employment" means, with respect to any
optionee under the Plan, the termination of such optionee's employment with the
Corporation and its Subsidiaries. An optionee employed by a Subsidiary shall
also be deemed to incur a Termination of Employment if such Subsidiary ceases to
be a Subsidiary and such optionee does not immediately thereafter become an
employee of the Corporation or another Subsidiary. Temporary absences from
employment because of illness, vacation or leave of absence and transfers among
the Corporation and its Subsidiaries shall not be considered Terminations of
Employment.

         In addition, certain other capitalized terms used herein have
definitions specified for them elsewhere herein.

                            SECTION 2. ADMINISTRATION

         The Plan shall be administered by the Compensation and Option Committee
or such other committee of the Board as the Board may from time to time
designate (the "Committee"), which shall be composed of two or more Non-Employee
Directors, each of whom shall be an "outside director" for purposes of Section
162(m)(4)(c)(i) of the Code, and who shall be appointed by and serve at the
pleasure of the Board.

         The Committee shall have plenary authority to grant Stock Options upon
such terms (not inconsistent with the terms of the Plan) as are determined by
the Committee to directors, officers and key employees of the Corporation and
its Subsidiaries.

         Among other things, the Committee shall have the authority, subject to
the terms of the Plan:

                  (a) To select the directors, officers, employees and
consultants to whom Stock Options may from time to time be granted;

                  (b) To determine the number of shares of Common Stock to be
covered by each Stock Option granted hereunder; and


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                  (c) To determine the terms and conditions of any Stock Option
granted hereunder and the terms of any agreement relating thereto (including,
but not limited to, the option price (subject to Section 5(a) hereof), any
vesting condition, restriction or limitation (which may be related to the
performance of the optionee, the Corporation or any Subsidiary) and any vesting
modification, acceleration or forfeiture waiver regarding any Stock Option and
the shares of Common Stock relating thereto, based on such factors as the
Committee shall determine.

         The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Stock Option granted under the Plan (and any agreement relating
thereto) and to otherwise supervise the administration of the Plan.

         The Committee may act only by a majority of its members then in office,
except that the members thereof may authorize any one or more of their number or
any officer of the Corporation to execute and deliver documents on behalf of the
Committee.

         Any determination made by the Committee or pursuant to delegated
authority pursuant to the provisions of the Plan with respect to any Stock
Option shall be made in the sole discretion of the Committee or such delegate at
the time of the grant of the Stock Option or, unless in contravention of any
express term of the Plan, at any time thereafter. All decisions made by the
Committee or any appropriately delegated officer pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Corporation
and optionees under the Plan.

         Any authority granted to the Committee may also be exercised by the
full Board, except to the extent that the grant or exercise of such authority
would cause any Stock Option or transaction to become subject to (or lose an
exemption under) the short-swing profit recovery provisions of Section 16 of the
Exchange Act or to lose the Section 162(m) Exemption with respect thereto. To
the extent that any permitted action taken by the Board conflicts with action
taken by the Committee, the Board action shall control.

                     SECTION 3. COMMON STOCK SUBJECT TO PLAN

         Subject to adjustment as provided in the last paragraph of this Section
3, (i) the total number of shares of Common Stock reserved and available for
grant under the Plan shall be eight hundred thousand (800,000), and (ii) during
any fiscal year of the Corporation, no person may be granted Stock Options under
the Plan covering in excess of one hundred fifty thousand (150,000) shares of
Common Stock. Shares subject to a Stock Option under the Plan may be authorized
and unissued shares or may be treasury shares.

         If any Stock Option terminates without being exercised, shares of
Common Stock subject to such Stock Option shall again be available for
distribution in connection with Stock Options under the Plan.

         In the event of any change in corporate capitalization of the
Corporation, such as a stock split or a corporate transaction, or any merger,
consolidation, separation, including a spin-off, or other distribution of stock
or property of the Corporation, any reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code) or any partial or complete liquidation of the Corporation, the Committee
or Board may make such


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substitution or adjustments in the aggregate number and kind of shares reserved
for issuance under the Plan, in the number, kind and option price of shares
subject to outstanding Stock Options and/or such other equitable substitution or
adjustments as it may determine to be appropriate in its sole discretion;
provided, however, that the number of shares subject to any Stock Option shall
always be a whole number.

                             SECTION 4. ELIGIBILITY

         Directors, officers, employees and consultants of the Corporation and
its Subsidiaries who are responsible for or contribute to the management, growth
or profitability of the business of the Corporation and its Subsidiaries are
eligible to be granted Stock Options under the Plan.

                            SECTION 5. STOCK OPTIONS

         Stock Options may only be non-qualified Stock Options that do not
qualify as "incentive stock options" within the meaning of Section 422 of the
Code.

         The Committee shall have the authority to grant Stock Options to any
eligible person at any time. Stock Options shall be evidenced by option
agreements, the terms and provisions of which may differ. An option agreement
shall indicate on its face that it is intended to be an agreement for a
non-qualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution grants an individual a Stock Option (or on the date
otherwise specified as the effective date of the grant by the Committee) and
specifies the terms and provisions of the Stock Option. The Corporation shall
notify an optionee of any grant of a Stock Option, and a written option
agreement or agreements shall be duly executed and delivered by the Corporation
to the optionee. Such agreement or agreements shall become effective upon
execution by the Corporation.

         Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:

                  (a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee and set
forth in the option agreement, and shall not be less than the Fair Market Value
of the Common Stock subject to the Stock Option on the date of grant.

                  (b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date the Stock Option is granted.

                  (c) Exercisability. Except as otherwise provided herein, Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option vests or is exercisable only in installments, the
Committee may at any time waive or modify such installment vesting or exercise
provisions, in whole or in part, based on such factors as the Committee may
determine. In addition, the Committee may at any time accelerate the vesting
and/or exercisability of any Stock Option.


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                  (d) Method of Exercise. Subject to the vesting provisions
applicable to a Stock Option and to the provisions of this Section 5, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Corporation specifying the
number of shares of Common Stock subject to the Stock Option to be purchased.

                  Such notice shall be accompanied by payment in full of the
purchase price by certified or bank check or such other instrument as the
Committee may accept. Payment may also be made in whole or in part by tendering
to the Company shares of the Common Stock of the Company already owned by the
optionee which were acquired at least six months prior to the Stock Option
exercise date and valued at an aggregate Fair Market Value as of the date of
exercise equal to the aggregate Option Price for the shares being purchased.
Payment for any shares subject to a Stock Option may also be made by delivering
a properly executed exercise notice to the Corporation, together with a copy of
irrevocable instructions to a broker to deliver promptly to the Corporation the
amount of sale or loan proceeds necessary to pay the purchase price, and, if
requested by the Corporation, the amount of any federal, state, local or foreign
withholding taxes. To facilitate the foregoing, the Corporation may enter into
agreements for coordinated procedures with one or more brokerage firms. In
addition, payment for any shares subject to a Stock Option may also be made by
instructing the Committee to withhold a number of such shares being issued on
the exercise of such Stock Option having a Fair Market Value on the date of
exercise equal to the aggregate exercise price of the exercised Stock Option.
Any shares of stock subject to a Stock Option that are withheld upon the
exercise of such Stock Option for the purposes of the payment of the exercise
price or withholding taxes applicable as a result of the exercise of stock
options, shall again be available for issuance in connection with options
thereafter granted under the Plan in the same manner as shares subject to an
Option that terminates without exercise become available under the Plan.
However, the Option to which such withheld shares related shall be cancelled and
no longer outstanding.

                  No shares of Common Stock shall be issued until full payment
therefor has been made. An optionee shall only have the rights of a stockholder
of the Corporation holding the class or series of Common Stock that is subject
to such Stock Option (including, if applicable, the right to vote the shares and
the right to receive dividends), after the optionee has given written notice of
exercise, paid in full for such shares and, if requested, given the
representation described in Section 8(a).

                  (e) Transferability of Stock Options. Stock Options shall be
transferable by the optionee only pursuant to the following methods: (i) by will
or the laws of descent and distribution; or (ii) as a gift to family members of
the optionee or to trusts for the benefit of family members of the optionee or
to charities or other not-for-profit organizations; or (iii) to an entity (other
than a public company) controlled or owned by, or for the benefit of, family
members of the optionee. Except to the extent provided in this Section 5(e) or
in Section 5(f), (g) and (h) below, Stock Options may not be assigned,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise), shall not be subject to execution, attachment or
similar process, and may be exercised during the lifetime of the holder thereof
only by such holder.

                  (f) Termination Upon Disability or Death.


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                           (1) Unless otherwise determined by the Committee and
expressly provided otherwise in the option agreement, if a Termination of
Employment of an optionee occurs by reason of Disability of such optionee, any
Stock Option held by such optionee may thereafter be exercised to the extent it
was exercisable at the date of such Termination of Employment, for a period of
ninety (90) days (or such other period as the Committee may specify in the
option agreement) from such date or until the expiration of the stated term of
such Stock Option, whichever period is shorter (but no further installments of
such Stock Option shall vest during such ninety (90) day period and all portions
of such Stock Option not exercisable on the date of such Termination of
Employment shall terminate immediately on such date), and thereafter such Stock
Option shall terminate in its entirety.

                           (2) Unless otherwise determined by the Committee and
expressly provided otherwise in the option agreement, upon the death of an
optionee, any Stock Option held by such optionee may thereafter be exercised to
the extent it was exercisable at the date of death, for a period of one hundred
and eighty (180) days (or such other period as the Committee may specify in the
option agreement) following the date of death or until the expiration of the
stated term of such Stock Option, whichever period is shorter, by the optionee's
legal representatives or distributees having the valid authority to exercise
such right (but no further installments of such Stock Option shall vest during
such one hundred and eighty (180) day period and all portions of such Stock
Option not exercisable on the date of death shall terminate immediately on such
date), and thereafter such Stock Option shall terminate in its entirety.

                  (g) Termination Upon Retirement. Unless otherwise determined
by the Committee, if a Termination of Employment of an optionee occurs by reason
of retirement of such optionee, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
date of such Retirement for a period of ninety (90) days (or such other period
as the Committee may specify in the option agreement) from the date of such
Retirement or until the expiration of the stated term of such Stock Option,
whichever period is shorter (but no further installments of such Stock Option
shall vest during the ninety (90) day period and all portions of such Stock
Option not exercisable on the date of such Retirement shall terminate
immediately on such date), and thereafter such Stock Option shall terminate in
its entirety; provided, however, that if the optionee dies within such ninety
(90) day period any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such period, continue to be exercisable to the
extent to which it was exercisable at the date of death for a period of one
hundred and eighty (180) days from the date of death or until the expiration of
the stated term of such Stock Option, whichever period is shorter.

                  (h) Other Terminations. Unless otherwise determined by the
Committee and expressly provided otherwise in the option agreement, (1) if an
optionee voluntarily effects his or her Termination of Employment, then each
Stock Option held by such optionee to the extent unexercised shall terminate in
its entirety on the date of such Termination of Employment, (2) if the
Termination of Employment of an optionee is effected by the Corporation or a
Subsidiary for Cause, then each Stock Option held by such optionee to the extent
unexercised shall terminate in its entirety on the date of such Termination of
Employment, and (3) if the Termination of Employment of an optionee is effected
by the Corporation or a Subsidiary without Cause, then each Stock Option held by
such optionee to the extent exercisable on the date of such Termination of
Employment shall terminate thirty (30) days after such date (but no further
installments of such Stock Option shall vest during such thirty (30) day period
and all portions of


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such Stock Option not exercisable on the date of such Termination of Employment
shall terminate immediately on such date) and thereafter such Stock Option shall
terminate in its entirety.

                  (i) Consultant or Director Status. Notwithstanding the
foregoing provisions of Sections 5(f), 5(g) and 5(h), a Stock Option held by an
optionee shall not terminate upon the Termination of Employment of such optionee
if such optionee continues to serve as a consultant or director to the
Corporation or any of its Subsidiaries, in which case such Stock Option shall
continue in effect, including future vesting of installments, until the status
of such optionee as a consultant or director terminates at which time the Stock
Option shall terminate on the date of such termination of consultant or director
status on the same basis as provided above in this Section 5 with respect to
Termination of Employment status.

                  (j) Acceleration Upon Change of Control. Unless otherwise
determined by the Committee and expressly provided otherwise in the option
agreement, Stock Options granted under the Plan with a vesting date no more than
three years from the date of the optionee's Termination of Employment or
termination of consultant or director status with the Corporation will
accelerate as to vesting upon the termination by the Corporation of such
employment or consulting or director status (including Constructive
Termination), except when such termination is for Cause, and only when such
termination follows a Change of Control.

                          SECTION 6. TAX OFFSET BONUSES

         At the time a Stock Option is granted hereunder or at any time
thereafter, the Committee in its sole discretion may grant to the optionee
receiving such Stock Option the right to receive a cash payment in an amount
specified by the Committee, to be paid at such time or times (if ever) as the
Stock Option results in compensation income to the optionee, for the purpose of
assisting the optionee to pay the resulting taxes, all as determined by the
Committee and on such other terms and conditions as the Committee shall
determine.

                   SECTION 7. TERM, AMENDMENT AND TERMINATION

         The Plan will terminate ten (10) years after the effective date of the
Plan. Under the Plan, Stock Options outstanding as of such date shall not be
affected or impaired by the termination of the Plan. Notwithstanding the
foregoing statements, subject to and conditioned upon the requirement that Stock
Options have been granted for all the shares reserved for issuance under the
Plan, during the initial ten-year term of the Plan, the term of the Plan shall
be automatically extended for an additional 10 years to permit the grant of
Stock Options pursuant to the Plan for the number of shares (and no more) that
become available for Stock Options, whether such occurs before or after such
initial ten-year term, as a result of the termination or forfeiture of
previously granted Stock Options or the withholding of shares otherwise issuable
upon the exercise of previously granted Stock Options to pay either the exercise
price of such previously granted Stock Options or the withholding taxes payable
upon the exercise of such previously granted Stock Options.

         The Board may amend, alter, or discontinue the Plan in any respect
whatsoever, but no amendment, alteration or discontinuation shall be made which
would impair the rights of an optionee under a Stock Option theretofore granted
without the optionee's consent, except such an amendment made to cause the Plan
to qualify for any exemption provided by Rule 16b-3. In


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addition, no such amendment shall be made without the approval of the
Corporation's stockholders to the extent, if at all, such approval is required
by applicable law, stock market or exchange rule, or agreement.

         The Committee may amend in any respect whatsoever the terms of any
Stock Option theretofore granted, but no amendment may impair the rights of any
holder of such Stock Option without such holder's consent except an amendment
made to cause the Plan or Stock Option to qualify for any exemption provided by
Rule 16b-3.

         Subject to the above provisions, the Board shall have the authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as other developments, and to grant Stock Options which qualify for
beneficial treatment under such rules without stockholder approval.

                          SECTION 8. GENERAL PROVISIONS

                  (a) The Committee may require each person purchasing or
receiving shares pursuant to a Stock Option to represent to and agree with the
Corporation in writing that such person is acquiring the shares without a view
to the distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any restrictions on
transfer. Notwithstanding any other provisions of the Plan or agreements made
pursuant thereto, the Corporation shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:

                           (1) Listing or approval for listing upon notice of
issuance, of such shares on the Nasdaq National Market or such other securities
exchange as may at the time be the principal market for the Common Stock;

                           (2) Any registration or other qualification of such
shares of the Corporation under any state or federal law or regulation, or the
maintaining in effect of any such registration or other qualification which the
Committee shall, in its absolute discretion upon the advice of counsel, deem
necessary or advisable; and

                           (3) Obtaining any other consent, approval, or permit
from any state or federal governmental agency which the Committee shall, in its
absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable.

                  (b) Nothing contained in the Plan shall prevent the
Corporation or any Subsidiary from adopting other or additional compensation
arrangements for its employees.

                  (c) Adoption of the Plan shall not confer upon any employee
any right to continue employment, nor shall it interfere in any way with the
right of the Corporation or any Subsidiary to terminate the employment of any
employee at any time.

                  (d) No later than the date as of which an amount first become
includible in the ordinary income of the optionee for federal income tax
purposes with respect to any Stock Option under the Plan, the optionee shall pay
to the Corporation, or make arrangements satisfactory to the Corporation
regarding the payment of, any federal, state, local or foreign taxes of any kind
required by law to be withheld with respect to such amount. Withholding


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obligations may be settled with Common Stock, including the withholding of
Common Stock that is part of the Stock Option issuable upon exercise of the
Stock Options that gives rise to the withholding requirement. The obligations of
the Corporation under the Plan and the Stock Option shall be conditional on such
payment or arrangements, and the Corporation and its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the optionee. The Committee may establish such
procedures as it deems appropriate, including making irrevocable elections, for
the settlement of withholding obligations with Common Stock.

                  (e) The Committee shall establish such procedures as it deems
appropriate for an optionee to designate a beneficiary by whom any rights of the
optionee, after the optionee's death, may be exercised.

                  (f) In the case of a grant of a Stock Option to any employee
of a Subsidiary of the Corporation, the Corporation may, if the Committee so
directs, issue or transfer the shares of Common Stock, if any, covered by the
Stock Option to the Subsidiary, for such lawful consideration as the Committee
may specify, upon the condition or understanding that the Subsidiary will
transfer the shares of Common Stock to the employee in accordance with the terms
of the Stock Option specified by the Committee pursuant to the provisions of the
Plan.

                  (g) The Plan and all Stock Options made and actions taken
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without reference to principles of conflict of laws.

                  (h) Anything in this Plan to the contrary notwithstanding, the
Board may, without further approval by the stockholders, substitute new options
for, or assume, prior options of any corporation which engages with the
Corporation or any of its Subsidiaries in a transaction to which Section 424(a)
of the Code applies (or would apply if the option assumed or substituted were an
incentive stock option), or any parent or any subsidiary of such corporation.

                  (i) With respect to optionees subject to Section 16 of the
Exchange Act, transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any provision of the Plan or action by the Committee fails to so
comply, the Stock Option or action shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee.



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                        SECTION 9. EFFECTIVE DATE OF PLAN

         The Plan shall be effective as of the date it is approved by at least a
majority of the shares of Common Stock of the Corporation represented by proxy
or in person and entitled to vote at a meeting of the stockholders of the
Corporation having as one of its purposes voting on approval of the adoption of
the Plan by the Corporation.

                    SECTION 10. INDEMNIFICATION OF COMMITTEE

         In addition to such other rights of indemnification as they may have as
directors of the Corporation or as members of the Committee, the members of the
Committee shall be indemnified by the Corporation against the reasonable
expenses, including attorneys' fees actually and reasonably incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan or
any Stock Option granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by a majority of the
disinterested directors of the Corporation or by independent legal counsel
selected by the Corporation) or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that a member of the
Committee is liable for gross negligence or intentional and willful misconduct
in the performance of his duties; provided that within sixty (60) days after
institution of any such action, suit or proceeding, such member of the Committee
shall in writing offer the Corporation the opportunity, at its own expense, to
handle and defend the same.


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