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                                                                   EXHIBIT 10.26

                         AMERICAN BIO-TECHNOLOGIES, INC.

                             1989 STOCK OPTION PLAN


        1. PURPOSE

        The purpose of this 1989 Stock Option Plan (the "Plan") is to encourage
directors, consultants and key employees of American Bio-Technologies, Inc. (the
"Company") and its Subsidiaries (as hereinafter defined) to continue their
association with the Company, by providing favorable opportunities for such
persons to participate in the ownership of the Company and in its future growth
through the granting of stock options, some of which, as specially designated
under Section 4 hereof, are designed to qualify as "incentive stock options"
within the meaning of Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"). The term "Subsidiary" as used in the Plan means a
corporation of which the Company owns, directly or indirectly through an
unbroken chain of ownership, fifty percent (5O%) or more of the total combined
voting power of all classes of stock.

        2. ADMINISTRATION OF THE PLAN

        The Plan shall be administered by a Stock Options Committee (the
"Committee") of which the initial members shall be Simon R. McKenzie, Wm. Terry
Elliott, Dr. George Jones and Dr. Deborah Pavan-Langston. In the event that a
vacancy occurs on account of the resignation of a member or the removal of a
member by vote of the holders of a majority of the shares of the Company's
common stock, a successor member shall be appointed by vote of the holders of a
majority of the shares of the Company's common stock. No member of the Committee
shall be eligible to vote on the grant to himself of an option under the Plan.

        The Committee may from time to time determine to whom options shall be
granted under the Plan, whether the options granted shall be incentive stock
options or non-qualified stock options, the terms of the options, and the number
of shares which may be purchased under the option or options. The Committee
shall report to the Board the names of individuals to whom options are to be
granted, the number of shares covered by each option and the terms and
conditions of each option.

        The Committee shall select one of its members as Chairman and shall hold
meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum, and acts of the Committee at which a quorum
is present, or acts reduced to or approved in writing by all the members of the
Committee, shall be the valid acts of the Committee. The Committee shall have
the authority to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan. All questions of
interpretation and application of such



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rules and regulations, of the Plan or of options granted thereunder (the
"Options") shall be subject to the determination of the Committee, which shall
be final and binding. The Plan shall be administered in such a manner as to
permit those Options granted hereunder and specially designated under Section 4
hereof to qualify as "incentive stock options" as described in Section 422A of
the Code.

        3. OPTION SHARES

        The stock subject to Options under the Plan shall be shares of the
Company's common stock, no par value. (the "Stock"). The total amount of the
Stock with respect to which Options may be granted shall not exceed in the
aggregate 150,000 shares; provided that such aggregate number of shares shall be
subject to adjustment in accordance with the provisions of Section 17. In the
event that any outstanding Option shall expire for any reason or shall terminate
by reason of the death or severance of employment of the optionee, the surrender
of any such Option, or any other cause, the shares of Stock allocable to the
unexercised portion of such Option may again be subject to an option under the
Plan.

        4. AUTHORITY TO GRANT OPTIONS

        The Board shall grant from time to time, to such eligible individuals as
the Committee shall from time to time determine, an Option or Options to buy a
stated number of shares of Stock under the terms and conditions of the Plan,
each of which Option or Options shall be designated at the time of grant either
a nonqualified option or an "incentive stock option" within the meaning of
Section 422A of the Code. Subject only to any applicable limitations set forth
elsewhere in the Plan, the number of shares of Stock to be covered by any Option
shall be as determined by the Committee.

        5. WRITTEN AGREEMENT

        Each Option granted hereunder shall be embodied in a written option
agreement which shall be subject to the terms and conditions prescribed herein
and shall be signed by the optionee and by the President or any Vice President
of the Company for and in the name and an behalf of the Company. Such an option
agreement shall indicate whether the subject Option has been designated a
non-qualified option or an incentive stock option, and shall contain such other
provisions as the Committee in its discretion shall deem advisable.


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        6. ELIGIBILITY

        The individuals who shall be eligible for grant of Options under the
Plan shall be key employees (including officers who may be members of the Board)
and other individuals who render services of special importance to the
management, operation, or development of the Company or a Subsidiary, and who
have contributed or may be expected to contribute materially to the success of
the Company or a Subsidiary. Options designated incentive stock options shall
not be granted to any individual who is not an employee of the Company or a
Subsidiary.


        7. OPTION PRICE

        The price at which shares may be purchased pursuant to an Option shall
be specified by the Board at the time the Option is granted, but in the case of
an incentive stock option shall not be less than the fair market value of the
shares of Stock on the date the Option is granted. For purposes of the Plan, the
"fair market value" of a share of Stock at any particular date shall be
determined according to the following rules: (i) if the Stock is not at the time
listed or admitted to trading on a stock exchange, the fair market value shall
be the mean between the lowest reported bid price and highest reported asked
price of the Stock on the date in question in the over-the-counter market, as
such prices are reported in a publication of general circulation selected by the
Board and regularly reporting the price of the Stock in such market; provided,
however, that if the price of the Stock is not so reported, the fair market
value shall be determined by the Board, which may take into consideration (1)
the price paid for the Stock in the most recent trade of a substantial number of
shares known to the Board to have occurred at arm's length between willing and
knowledgeable investors, or (2) an appraisal by an independent party, or (3) any
other method of valuation undertaken in good faith by the Board, or some or all
of the above as the Board shall in its discretion elect; or (ii) if the Stock is
at the time listed or admitted to trading on any stock exchange, then the fair
market value shall be the mean between the lowest and highest reported sale
prices of the Stock on the date in question on the principal exchange on which
the Stock is then listed or admitted to trading. If no reported sale of Stock
takes place on the date in question on the principal exchange, then the reported
closing asked price of the Stock on such date on the principal exchange shall be
determinative of fair market value.

        In the case of any employee of the Company or a Subsidiary who owns,
directly or indirectly, Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the, Company or of any
corporation which on the date of grant of an Option is a Subsidiary, the price
at which shares may be so purchased pursuant to an incentive stock option shall
be not


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less than one hundred ten percent (110%) of the fair market value of the Stock
on the date the Option is granted. 

        8. DURATION OF OPTIONS

        The duration of any Option shall be specified by the Committee, but no
Option designated an incentive stock option shall be exercisable after the
expiration of ten (10) years from the date such Option is granted; and no
incentive stock option granted to an employee of the Company or a Subsidiary who
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or a Subsidiary shall be
exercisable after the expiration of five (5) years from the date such Option is
granted. The Committee, in its discretion, may provide that an Option shall be
exercisable during its entire duration or during any lesser period of time.

        9. AMOUNT EXERCISABLE

        Each Option may be exercised so long as it is valid and outstanding from
time to time, in part or as a whole, in such manner and subject to such
conditions as the Committee in its discretion may provide in the option
agreement.

        10. EXERCISE OF OPTION

        Options shall be exercised by the delivery of written notice to the
Company setting forth the number of shares with respect to which the Option is
to be exercised, accompanied by payment of the option price of such shares,
which payment shall be made, subject to the alternative provisions of this
Section 10, in cash or by such cash equivalents, payable to the order of the
Company in an amount in United States dollars equal to the option price of such
shares, as the Board in its discretion shall consider acceptable. Such notice
shall be delivered in person to the Secretary of the Company or shall be sent by
registered mail, return receipt requested, to the Secretary of the Company, in
which case delivery shall be deemed made on the date such notice is deposited in
the mail.

        Alternatively, payment of the option price may be made, in whole or in
part, in shares of Stock previously acquired by the optionee. If payment is made
in whole or in part in shares of Stock, then the Optionee shall deliver to the
Company in payment of the option price of the shares with respect of which such
Option is exercised (i) certificates registered in the name of such optionee
representing a number of shares of Stock legally and beneficially owned by such
optionee, free of all liens, claims and encumbrances of every kind and having a
fair market value on the date of delivery of such notice equal to the option
price of the

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shares with respect to which such Option is to be exercised, such certificates
to be accompanied by stock powers duly endorsed in blank by the record holder of
the shares represented by such certificates; and (ii) if the option price of the
shares with respect to which such Option is to be exercised exceeds such fair
market value, cash or such cash equivalents payable to the order to the Company,
in an amount in United States dollars equal to the amount of such excess, as the
Board in its discretion shall consider acceptable. Notwithstanding the foregoing
provisions of this Section 10, the Board, in its sole discretion, may refuse to
accept shares of Stock in payment of the option price of the shares with respect
to which such Option is to be exercised and, in that event, any certificates
representing shares of Stock which were delivered to the Company with such
written notice shall be returned to such optionee together with notice by the
Company to such optionee of the refusal of the Board to accept such shares of
Stock.

        Alternatively, if the option agreement so specifies, payment of the
option price may be made in part by a promissory note executed by the optionee
and collaterally secured by the Stock obtained upon exercise of the Option,
providing for repayment at such time or times as the Board shall specify;
provided, however, (a) that such promissory note shall provide for repayment no
later than five (5) years from the date of exercise and for interest at a rate
not less than the "base" rate announced on the date of exercise by The First
National Bank of Boston, (b) that in any event an amount not less than the par
value of the shares of Stock with respect to which the Option is being exercised
must be paid in cash, cash equivalents, or shares of Stock in accordance with
this Section 10 and (c) the payment of such exercise price by promissory note
does not violate any applicable laws or regulations, including, without
limitation, margin lending rules. The decision as to whether to permit partial
payment by a promissory note for Stock to be issued upon exercise of any Option
granted shall rest entirely in the discretion of the Board.

        As promptly as practicable after the receipt by the Company of (i)
written notice from the optionee setting forth the number of shares with respect
to which such Option is to be exercised and (ii) payment of the option price of
such shares in the form required by the foregoing provisions of this Section 10,
the Company shall cause to be delivered to such optionee certificates
representing the number of shares with respect to which such Option has been so
exercised.


        11. TRANSFERABILITY OF OPTIONS

        Options shall not be transferable by the optionee otherwise than by will
or under the laws of descent and distribution, and shall be exercisable during
his lifetime only by him.


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        12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE
C0MPANY

        For purposes of this Section 12, employment by a Subsidiary shall be
considered employment by the Company. Non-qualified options shall be exercisable
following an Optionee's termination of employment to the extent provided below
with respect to incentive stock options, unless otherwise set forth in the
option agreement for such non-qualified options. Except as may be otherwise
expressly provided herein, Options designated incentive stock options shall be
exercisable after the optionee's termination of employment with the Company only
within the period of three (3) months after the date the optionee ceases to be
in the employ of the Company, and only to the extent to which the optionee was
entitled to exercise the Option immediately prior to the termination of his
employment. If, before the date of expiration of the Option, the optionee shall
be retired in good standing from the employ of the Company for reasons of age
under the then established rules of the Company, the Option shall terminate on
the earlier of such date of expiration or three (3) months after the date of
such retirement. In the event of the death of the holder of an Option before the
date of expiration of such Option and while in the employ of the Company or
during the three (3) month period described in the preceding sentence, or in the
event of the retirement of the optionee for reasons of disability (within the
meaning of Section 22(e)(3) of the Code), such Option shall terminate on the
earlier of such date of expiration or one (1) year following the date of such
death or retirement. After the death of the optionee, his executors,
administrators or any persons to whom his Option may be transferred by will or
by the laws of descent and distribution shall have the right at any time prior
to such termination to exercise the Option to the extent to which the optionee
was entitled to exercise the Option on the date of his death.

        Authorized leave of absence or absence on military or government service
shall not constitute severance of the employment relationship between the
Company and the optionee for purposes of the Plan, provided that either (i) such
absence is for a period of no more than ninety (90) days or (b) the Employee's
right to re-employment after such absence is guaranteed either by statute or by
contract.

        For optionees who are not employees of the Company, options shall be
exercisable for such periods following the termination of the optionee's
involvement with the Company as may be set forth in the specific written option
agreement with the optionee.

        13. REQUIREMENTS OF LAW

        The Company shall not be required to sell or issue any shares upon the
exercise of any Option if the issuance of such shares shall constitute or result
in a violation by the optionee or the


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                                      -7-


Company of any provisions of any law, statute or regulation of any governmental
authority. Specifically, in connection with the Securities Act of 1933, as
amended (the "Securities Act"), upon exercise of any Option the Company shall
not be required to issue such shares unless the Board has received evidence
satisfactory to it to the effect that the holder of such Option will not
transfer such shares except pursuant to a registration statement in effect under
the Securities Act or unless an opinion of counsel satisfactory to the Company
has been received by the Company to the effect that such registration is not
required. Any determination in this connection by the Board shall be final,
binding and conclusive. The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of an Option or the issuance
of shares pursuant thereto to comply with any law or regulations of any
governmental authority, including, without limitation, the Securities Act or
applicable state securities laws.

        14. NO RIGHTS AS STOCKHOLDER

        No optionee shall have rights as a stockholder with respect to shares
covered by his Option until the date of issuance of a stock certificate for such
shares; except as otherwise provided in Section 18 no adjustment for dividends
or otherwise shall be made if the record date therefor is prior to the date of
issuance of such certificate.

        15. EMPLOYMENT OBLIGATION

        The granting of any Option shall not impose upon the Company or any
Subsidiary any obligation to employ or continue to employ any optionee, or to
engage or retain the services of any optionee, and the right of the Company or
any Subsidiary to terminate the employment or services of any optionee shall not
be diminished or affected by reason of the fact that an Option has been granted
to him. The existence of any Option shall not be taken into account in
determining any damages relating to termination of employment for any reason.

        16. FORFEITURE FOR DISHONESTY

        Notwithstanding anything to the contrary in the Plan, if the Board
determines, after full consideration of the facts presented on behalf of both
the Company and the optionee, that the optionee has been engaged in fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the course
of his employment by the Company or a Subsidiary, which damaged the Company or a
Subsidiary, or has made unauthorized disclosure of trade secrets or other
proprietary information of the Company or a Subsidiary or of a third party who
has entrusted such information to the Company or a Subsidiary, the optionee
shall forfeit all unexercised


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                                      -8-


Options. The decision of the Board as to the cause of an optionee's discharge
and the damage done to the Company or a Subsidiary shall be final, binding and
conclusive. No decision of the Board, however, shall affect in any manner the
finality of the discharge of such optionee by the Company or a Subsidiary.


        17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE

        The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business or any merger or consolidation of
the Company or any issue of bonds, debentures, preferred or preference stock,
whether or not convertible into the Stock or other securities, ranking prior to
the Stock or affecting the rights thereof, or warrants, rights or options to
acquire the same, or the dissolution or liquidation of the Company or any sale
or transfer of all or any part of its assets or business or any other corporate
act or proceeding, whether of a similar character or otherwise.

        The number of shares covered by any outstanding Option and the price per
share payable upon exercise thereof shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Stock
resulting from the subdivision, split, combination or consolidation of shares of
Stock or any other capital adjustment, the payment of a Stock dividend or any
other increase in such shares effected without receipt of consideration by the
Company or any other decrease therein effected without a distribution of cash or
property in connection therewith.

        In the event the Company merges or consolidates with one or more
corporations and the Company is the surviving corporation, thereafter upon any
exercise of an Option, the holder thereof shall be entitled to purchase in lieu
of the number of shares of Stock as to which the Option shall then be
exercisable, the number and class of shares of stock and securities to which the
holder would have been entitled pursuant to the terms of the agreement of merger
or consolidation if immediately prior to such merger or consolidation, the
holder had been the holder of record of shares of Stock as to which the Option
is then exercisable.

        In the event the Company merges or consolidates with a wholly-owned
subsidiary for the purpose of reincorporating itself under the laws of another
jurisdiction, the optionees will be entitled to acquire shares of the common
stock of the reincorporated Company upon the same terms and conditions as were
in effect immediately prior to such reincorporation and the Plan, unless
otherwise rescinded by the Board, will remain the Plan of the reincorporated
Company.


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        Except as otherwise provided in the preceding paragraph, if the Company
is merged into or consolidated with another corporation under circumstances
where the Company is not the surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of all or substantially all of its
assets to another corporation while unexercised Options remain outstanding under
the Plan, (i) subject to the provisions of clause (iii) below, after the
effective date of such merger, consolidation or sale, as the case may be, each
holder of an outstanding Option shall be entitled, upon exercise of such Option,
to receive in lieu of shares of Stock, shares of such stock or other securities
as the holders of shares of Stock received pursuant to the terms of the merger,
consolidation or sale; (ii) the Board may waive any limitations imposed pursuant
to Section 9 so that all Options from and after a date prior to the effective
date of such merger, consolidation, liquidation or sale, as the case may be,
specified by the Board, shall be exercisable in full; and (iii) all outstanding
Options may be cancelled by the Board as of the effective date of any such
merger, consolidation, liquidation or sale provided that notice of such
cancellation shall be given to each holder of an Option not less than thirty
(30) days preceding the effective date of such merger, consolidation,
liquidation, sale or disposition and provided that the Board may in its sole
discretion waive any limitations imposed pursuant to Section 9 with respect to
any Option so that such Option shall be exercisable in full or in part as the
Board may determine during such thirty (30) day period.

        Except as hereinbefore expressly provided, the issue by the Company of
shares of Stock or other securities of any class or securities convertible into
shares of Stock or other securities of any class for cash or property or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number,
class or price of shares of Stock then subject to outstanding Options.

        18. AMENDMENT OR TERMINATION OF PLAN

        The Board may modify, revise or terminate the Plan at any time and from
time to time; provided, however, that without the further approval of the
holders of at least a majority of the outstanding shares of Stock, the Board may
not (i) materially increase the benefits accruing to optionees under the Plan;
(ii) change the aggregate number of shares of Stock which may be issued under
Options pursuant to the provisions of the Plan; (iii) reduce the option price at
which incentive stock options may be granted to an amount less than the fair
market value per share at the time the Option is granted; or (iv) change the
class of persons eligible to receive incentive stock options. Notwithstanding
the preceding sentence, the Board shall in all events have the power


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to make such changes in the Plan and in the regulations and administrative
provisions hereunder or in any outstanding Option as, in the opinion of counsel
for the Company, may be necessary or appropriate from time to time to enable any
Option granted pursuant to the Plan to qualify as an incentive stock option or
such other stock option as may be defined under the Code, as amended from time
to time, so as to receive preferential federal income tax treatment.


        19. REPURCHASE RIGHTS OF THE COMPANY

        Unless an optionee's option agreement specifically provides to the
contrary, the provisions of this Section 19 shall apply to each Option granted
under the Plan and to the shares of Stock acquired on exercise thereof. Shares
of Stock acquired by any person pursuant to an Option or Options granted under
the Plan shall not be transferred by him without the written consent of the
Board. If the optionee's employment by or involvement with the Company
(including, for this purpose, any Subsidiary) shall terminate for any reason
other than his death or retirement for reasons of age or disability in
accordance with the then policy of the Company, the Company shall have the right
to repurchase all or any of such shares of Stock at a price equal to the fair
market value of the shares of Stock at the time of such repurchase. In addition,
if at the time of such termination an employee holds an Option granted under the
Plan which is by its terms exercisable after such termination, the Company shall
have the right to repurchase all or any part of the shares of Stock acquired
pursuant to the exercise of such Option, at a price equal to that described in
the preceding sentence. If the option price for any repurchased shares has been
paid by the optionee's promissory note pursuant to Section 10, then the
repurchase price for such shares of Stock shall be first applied to the
repayment of the outstanding amount, if any, due under such note in respect of
the repurchased shares, and any accrued but unpaid interest thereon. The
Company's right to repurchase shares of Stock may be exercised at any time
during the period beginning on the date of the optionee's termination of
employment and ending ninety (90) days after the later of (i) the date of such
termination and (ii) the date on which shares of Stock subject to the repurchase
rights of this Section 19 are acquired by the employee. Any such shares of Stock
as to which the Company does not exercise its repurchase rights within such
period shall thereafter be free of the restrictions of this Section 19.


        20. EFFECTIVE DATE AND DURATION OF THE PLAN

        The Plan shall become effective and shall be deemed to have been adopted
on January 1, 1989, subject only to ratification by the holders of at least a
majority of the outstanding shares of Stock within twelve (12) months after such
date. Unless the Plan shall have terminated earlier, the Plan shall terminate on
the


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                                      -11-


tenth (10th) anniversary of its effective date, and no Option shall be granted
pursuant to the Plan after the day preceding the tenth (10th) anniversary of its
effective date.


<PAGE>   12
                        AMERICAN BIO-TECHNOLOGIES, INC.
                          1990-1991 STOCK OPTION PLAN

     1.   PURPOSE

     The purpose of this 1990-1991 Stock Option Plan (the "Plan") is to 
encourage the directors, consultants and key employees of American 
Bio-Technologies, Inc. (the "Company") and its Subsidiaries (as hereinafter 
defined) to continue their association with the Company, by providing favorable 
opportunities for such persons to participate in the ownership of the Company 
and in its future growth through the granting of stock options, some of which, 
as specially designated under Section 4 hereof, are designed to qualify as 
"incentive stock options" within the meaning of Section 422A of the Internal 
Revenue Code of 1986, as amended (the "Code"). The term "Subsidiary" as used in 
the plan means a corporation of which the Company owns, directly or indirectly 
through an unbroken chain of ownership, fifty percent (50%) or more of the 
total combined voting power of all classes of stock.

     2.   ADMINISTRATION

     The Plan shall be administered by the Board of Directors of the Company. 
No member of the Board shall be eligible to vote on the grant to himself of an 
option under the Plan.

     The Board may from time to time determine to whom options (the "Options") 
shall be granted under the Plan, whether the options granted shall be incentive 
stock options or non-qualified stock options, the terms of the Options, and the 
number of which which may be purchased under the Option or Options.

     The Board shall select one of its members as Chairman and shall hold 
meetings at such times and places as it may determine. A majority of the Board 
shall constitute a quorum, and acts of the Board at which a quorum is present, 
or acts reduced to or approved in writing by all the members of the Board, 
shall be the valid acts of the Board. The Board shall have the authority to 
adopt, amend and rescind such rules and regulations as, in its opinion, may be 
advisable in the administration of the Plan. All questions of interpretation 
and application of such rules and regulations, of the Plan or of Options 
granted thereunder shall be subject to the determination of the Board, which 
shall be final and binding. The Plan shall be administered in such manner as to 
permit those options granted hereunder and specially designated under Section 4 
hereof to qualify as "incentive stock options" as described in Section 422A of 
the Code. 

     3.   OPTION SHARES

     The stock subject to Options under the Plan shall be shares of the 
Company's common stock, no par value (the "Stock"). The total amount of the 
Stock with respect to which Options may be granted shall not exceed in the 
aggregate 135,000 shares; provided that such aggregate number of shares shall 
be subject to adjustment in accordance with the provisions of Section 17. In 
the event that any outstanding Option shall expire for any reason or shall 
terminate by reason of the death or severance of employment of the optionee, 
the surrender of any such Option, or any other cause, the shares of Stock 
allocable to the unexpired portion of such Option may again be subject to an 
Option under the Plan.

     4.   AUTHORITY TO GRANT OPTIONS

     The Board shall grant from time to time, to such eligible individuals as 
the Board shall from time to time determine, an Option or Options to buy a 
stated number of shares of Stock under the terms and conditions of the Plan, 
each of which Option or Options shall be designated at the
<PAGE>   13
                                                                               2

time of grant either a "non-qualified option" or an "incentive stock option"
within the meaning of Section 422A of the Code. Subject only to any applicable
limitations set forth elsewhere in the Plan. The number of shares of Stock to be
covered by any Option shall be as determined by the Board.

     5.   WRITTEN AGREEMENT

     Each Option granted hereunder shall be embodied in a written agreement
which shall be subject to the terms and conditions prescribed herein and shall
be signed by the optionee and by the President or any Vice President of the
Company for and in the name and on behalf of the Company. Such an option
agreement shall indicate whether the subject Option has been designated a
non-qualified option or an incentive stock option, and shall contain such other
provisions as the Board in its discretion shall deem advisable.

     6.   ELIGIBILITY    

     The individuals who shall be eligible for grant of Options under the Plan
shall be key employees (including officers who may be members of the Board) and
other individuals who render services of special importance to the management,
operation or development of the Company or a Subsidiary, and who have
contributed or may be expected to contribute materially to the success of the
Company or a Subsidiary. Options designated incentive stock options shall not be
granted to any individual who is not an employee of the Company or a Subsidiary.

     7.   OPTION PRICE

     The price at which shares may be purchased pursuant to an Option shall be
specified by the Board at the time the Option is granted, but in any case shall
not be less than the fair market value of the shares of Stock on the date the
Option is granted. For the purposes of the Plan, the "fair market value" of a
share of Stock at any particular date shall be determined according to the
following rules: (i) if the Stock is not at the time listed or admitted to
trading on a stock exchange, the fair market value shall be the mean between the
lowest reported bid price and the highest reported asked price of the Stock on
the date in question in the over-the-counter market, as such prices are reported
in a publication of general circulation selected by the Board and regularly
reporting the price of the Stock in such market; provided, however, that if the
price of the Stock is not so reported, the fair market value shall be determined
by the Board, which may take into consideration (1) the price paid for the Stock
in the most recent trade of a substantial number of shares known to the Board to
have occurred at arm's length between willing and knowledgeable investors, or
(2) an appraisal by an independent party, or (3) any other method of valuation
undertaken in good faith by the Board, or some or all of the above as the Board
shall in its discretion elect; or (ii) if the Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market value shall be
the mean between the lowest and highest reported sale prices of the Stock on the
date in question on the principal exchange on which the Stock is then listed or
admitted to trading. If no reported sale of Stock takes place on the date in
question on the principal exchange, then the reported closing asked price of the
Stock on such date on the principal exchange shall be determinative of fair
market value.

     In the case of any employee of the company or a Subsidiary who owns,
directly or indirectly, Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
corporation which on the date of grant of Option is a subsidiary, the price at
which shares may be so purchased pursuant to an incentive stock option shall be
not less than one hundred and ten percent (110%) of the fair market value of the
stock on the date the Option is granted.
<PAGE>   14
     8.   DURATION OF OPTIONS

     The duration of any Option shall be specified by the Board, but no Option 
designated an incentive stock option shall be exercisable after the expiration 
of ten (10) years from the date such Option is granted; and no incentive stock 
option granted to an employee of the Company or a Subsidiary who owns stock 
possessing more than ten percent (10%) of the total combined voting power of 
all classes of stock of the Company or a Subsidiary shall be exercisable after 
the expiration of five (5) years from the date such Option is granted. The 
Board, in its discretion, may provide that an Option shall be exercisable 
during its entire duration or during any lesser period of time, provided, 
however, that an Option designated an "incentive stock option" shall not be 
exercisable within two years immediately following the date the Option is 
granted.

     9.   AMOUNT EXERCISABLE

     Each Option may be exercised so long as it is valid and outstanding from 
time to time, in part or as a whole, in such manner and subject to such 
conditions as the Board in its discretion may provide in the option agreement.

    10.   EXERCISE OF OPTION

     Options shall be exercised by the delivery of written notice to the 
Company setting forth the number of shares with respect to which the Option is 
to be exercised, accompanied by payment of the option price of such shares, 
which payment shall be made, subject to the alternative provisions of this 
Section 10, in cash or by such cash equivalents, payable to the order of the 
Company in an amount in United States dollars equal to the option price of such 
shares, as the Board in its discretion shall consider acceptable. Such notice 
shall be sent by registered mail, return receipt requested, to the Clerk of the 
Company, in which case delivery shall be deemed made on the date such notice is 
deposited in the mail.

     Alternatively, payment of the option may be made, in whole or in part, in 
shares of Stock previously acquired by the optionee. If payment is made in whole
or in part in shares of Stock, then the optionee shall deliver to the Company in
payment of the option price of the shares with respect to which such Option is
exercised (i) certificates registered in the name of such optionee representing
a number of shares of Stock legally and beneficially owned by such optionee,
free of all liens, claims and encumbrances of every kind and having a fair
market value on the date of delivery of such notice equal to the option price of
the shares with respect to which such Option is to be exercised, such
certificates to be accompanied by stock powers duly endorsed in blank by the
record holder of the shares represented by such certificates; and (ii) if the
option price of the shares with respect to which such Option is to be exercised
exceeds such fair market value, cash or such cash equivalents payable to the
order of the Company, in an amount in United States dollars equal to the
amount of such excess, as the Board in its discretion shall consider acceptable.
Notwithstanding the foregoing provisions of this Section 10, the Board, in its
sole discretion, may refuse to accept shares of Stock in payment of the option
price of the shares with respect to which such Option is to be exercised and, in
that event, any certificates representing shares of Stock which were delivered
to the Company with such written notice shall be returned to such optionee
together with notice by the Company to such optionee of the refusal of the Board
to accept such shares of Stock.

     Alternatively, if the option agreement so specifies, payment of the option 
price may be made in part by a promissory note executed by the optionee and 
collaterally secured by the Stock obtained upon the exercise of the Option, 
providing for repayment at such time or times as the Board shall specify; 
provided, however, (a) that such promissory note shall provide for repayment no 
later than five (5) years from the date of exercise and for interest at a rate 
not less than the 
<PAGE>   15
"base" rate announced on the date of exercise by The First National Bank of 
Boston, (b) that in any event an amount not less than the par value of the 
shares of Stock with respect to which the Option is being exercised must be 
paid in cash, cash equivalents or shares of Stock in accordance with this 
Section 10 and (c) the payment of such exercise price by promissory note does 
not violate any applicable laws or regulations, including, without limitation, 
margin lending rules. The decision as to whether to permit partial payment by a 
promissory note for Stock to be issued upon exercise of any Option granted 
shall rest entirely in the discretion of the Board.

     As promptly as practicable after the receipt by the Company of (i) written 
notice from the optionee setting forth the number of shares with respect to 
which such Option is to be exercised and (ii) payment of the option price of 
such shares in the form required by the foregoing provisions of this Section 
10, the Company shall cause to be delivered to such optionee certificates 
representing the number of shares with respect to which such Option has been so 
exercised.

     11.  TRANSFERABILITY OF OPTIONS

     Options shall not be transferable by the optionee otherwise than by will 
or under the laws of descent and distribution, and shall be exercisable during 
his lifetime only by him.

     12.  TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE COMPANY.

     For the purposes of this Section 12, employment by a Subsidiary shall be 
considered employment by the Company. Non-qualified options shall be 
exercisable following an optionee's termination of employment to the extent 
provided below with respect to incentive stock options, unless otherwise set 
forth in the option agreement for such non-qualified options. Except as may be 
otherwise expressly provided herein, Options designated incentive stock options
shall be exercisable after the optionee's termination of employment with the 
Company only within the period of three (3) months after the date the optionee
ceases to be in the employ of the Company, and only to the extent to which the 
optionee was entitled to exercise the Option immediately prior to the 
termination of his employment. If, before the date of expiration of the Option, 
the optionee shall be retired in good standing from the employ of the Company 
for reasons of age under the then established rules of the Company, the Option 
shall terminate on the earlier of such date of expiration or three (3) months 
after the date of such retirement. In the event of the death of the holder of an
Option before the date of expiration of such Option and while in the employ of 
the Company or during the three (3) month period described in the preceding 
sentence, or in the event of the disability (within the meaning of Section 
22(e)(3) of the Code), such Option shall terminate on the earlier of such date
of expiration or one (1) year following the date of such death or retirement. 
After the death of the optionee, his executors, administrators or any persons 
to whom his Option may be transferred by will or by the laws of descent and 
distribution shall have the right at any time prior to such termination to 
exercise the Option to the extent to which the optionee was entitled to 
exercise the Option on the date of his death.

     Authorized leave of absence on military or government service shall not 
constitute severance of the employment relationship between the Company and the 
optionee for the purposes of the Plan, provided that either (i) such absence is 
for a period of no more than ninety (90) days or (b) the employee's right to 
re-employment after such absence is guaranteed either by statute or by contract.

     For optionees who are not employees of the Company, options shall be 
exercisable for such periods following termination of the optionee's 
involvement with the Company as may be set forth in the specific written option
agreement with the optionee.
<PAGE>   16
        13.     REQUIREMENTS OF LAW

        The Company shall not be required to sell or issue any shares upon the 
exercise of any Option if the issuance of such shares shall constitute or 
result in a violation by the optionee or the Company of any provisions of any 
law, statute or regulation of any governmental authority. Specifically, in 
connection with the Securities Act of 1933, as amended (the "Securities Act"), 
upon exercise of any Option the Company shall not be required to issue such 
shares unless the Board has received evidence satisfactory to it to the effect 
that the holder of such Option will not transfer such shares, except pursuant 
to a registration statement in effect under the Securities Act or unless an 
opinion of counsel satisfactory to the Company has been received by the Company 
to the effect that such registration is not required. Any determination in 
this connection by the Board shall be final, binding and conclusive. The 
Company shall not be obligated to take any other affirmative action in order to 
cause the exercise of an Option or the issuance of shares pursuant thereto to 
comply with any law or regulations of any governmental authority, including, 
without limitation, the Securities Act or applicable state securities laws.

        14.     NO RIGHTS AS STOCKHOLDER

        No optionee shall have rights as a stockholder with respect to shares 
covered by his Option until the date of issuance of a stock certificate for 
such shares; except as otherwise provided in Section 18, no adjustment for 
dividends or otherwise shall be made if the record date therefor is prior to 
the date of issuance of such certificate.

        15.     EMPLOYMENT OBLIGATION

        The granting of any Option shall not impose upon the Company or any 
Subsidiary any obligation to employ or continue to employ any optionee, or to 
engage or retain the services of any optionee, and the right of the Company or 
any Subsidiary to terminate the employment or services of any optionee shall 
not be diminished or affected by reason of the fact that an Option has been 
granted to him. The existence of any Option shall not be taken into account in 
determining any damages relating to termination of employment for any reason.

        16.     FORFEITURE FOR DISHONESTY

        Notwithstanding anything to the contrary in the Plan, if the Board 
determines, after full consideration of the facts presented on behalf of both 
the Company and the optionee, that the optionee has been engaged in fraud, 
embezzlement, theft, commission of a felony or proven dishonesty in the course 
of his employment by the Company or a Subsidiary, which damaged the Company or 
a Subsidiary, or has made unauthorized disclosure of trade secrets or other 
proprietary information of the Company or a Subsidiary or of a third party who 
has entrusted such information to the Company or a Subsidiary, the optionee 
shall forfeit all unexercised Options. The decision of the Board as to the 
cause of an optionee's discharge and the damage done to the Company or a 
Subsidiary shall be final, binding and conclusive. No decision of the Board, 
however, shall affect in any manner the finality of the discharge of such 
optionee by the Company or a Subsidiary.

        17.     CHANGES IN THE COMPANY'S CAPITAL STRUCTURE

        The existence of outstanding Options shall not affect in any way the 
right or power of the Company or its stockholders to make or authorize any or 
all adjustments, recapitalizations, reorganizations or other changes in the 
Company's capital structure or its business or any merger or consolidation of 
the Company or any issue of bonds, debentures, preferred or preference 
securities, whether or not convertible into the Stock or other securities, 
ranking prior to the Stock or affecting the rights thereof, or warrants, rights 
or options to acquire the same, or the
<PAGE>   17
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business or any other corporate act or proceeding, whether
of a similar character or otherwise.

     The number of shares covered by any outstanding Option and the price per
share payable upon exercise thereof shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Stock
resulting from the subdivision, split, combination or consolidation of shares of
Stock or any other capital adjustment, the payment of a Stock dividend or any
other increase in such shares effected without receipt of consideration by the
Company or any other decrease therein effected without a distribution of cash or
property in connection therewith.

     In the event the Company merges or consolidates with one or more
corporations and the Company is the surviving corporation, thereafter upon any
exercise of an Option, the holder thereof shall be entitled to purchase in lieu
of the number of shares of Stock as to which the Option shall then be
exercisable, the number and class of shares of stock and securities to which the
holder would have been entitled pursuant to the terms of the agreement of merger
or consolidation if, immediately prior to such merger or consolidation, the
holder had been the holder of record of shares of Stock as to which the Option
is then exercisable.

     In the event the Company merges or consolidates with a wholly-owned
subsidiary for the purpose of reincorporating itself under the laws of another
jurisdiction, the optionees will be entitled to acquire shares of the common
stock of the reincorporated Company upon the same terms and conditions as were
in effect immediately prior to such reincorporation and the Plan, unless
otherwise rescinded by the Board, will remain the Plan of the reincorporated
Company.

     Except as otherwise provided in the preceding paragraph, if the Company is
merged into or consolidated with another corporation under circumstances where
the Company is not the surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of all or substantially all of its assets to another
corporation while unexercised Options remain outstanding under the Plan, (i)
subject to he provisions of clause (iii) below, after the effective date of such
merger, consolidation or sale, as the case may be, each holder of an outstanding
Option shall be entitled, upon exercise of such Option, to receive in lieu of
shares of Stock, shares of such stock or other securities as the holders of
shares of Stock received pursuant to the terms of the merger, consolidation or
sale; (ii) the Board may waive any limitations imposed pursuant to Section 9 so
that all Options from and after a date prior to the effective date of such
merger, consolidation, liquidation or sale, as the case may be, specified by the
Board, shall be exercisable in full; and (iii) all outstanding Options may be
cancelled by the Board as of the effective date of any such merger,
consolidation, liquidation or sale provided that notice of such cancellation
shall be given to each holder of an Option not less than thirty (30) days
preceding the effective date of such merger, consolidation, liquidation, sale or
disposition and provided that the Board may, in its sole discretion, waive any
limitations imposed pursuant to Section 9 with respect to any Option so that
such Option shall be exercisable in full or in part as the Board may determine
during such thirty (30) day period.

     Except as hereinbefore expressly provided, the issue by the Company of
shares of Stock or other securities of any class or securities convertible into
shares of Stock or other securities of any class for cash or property or for any
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number,
class or price of shares of Stock then subject to outstanding Options.

<PAGE>   18
                                                                               7

     18.  AMENDMENT OR TERMINATION OF PLAN

     The Board may modify, revise or terminate the Plan at any time and from
time to time; provided, however, that without the further approval of the
holders of at least a majority of the outstanding shares of Stock, the Board may
not (i) materially increase the benefits accruing to optionees under the Plan;
(ii) change the aggregate number of shares of Stock which may be issued under
Options pursuant to the provisions of the Plan; (iii) reduce the option price at
which incentive stock options may be granted to an amount less than the fair
market value per share at the time the Option is granted; or (iv) change the
class of persons eligible to receive incentive stock options. Notwithstanding
the preceding sentence, the Board shall in all events have the power to make
such changes in the Plan and in the regulations and administrative provisions
hereunder or in any outstanding Option as, in the opinion of counsel for the
Company, may be necessary or appropriate from time to time to enable any Option
granted pursuant to the Plan to qualify as an incentive stock option or such
other stock option as may be defined under the Code, as amended from time to
time, so as to receive preferential federal income tax treatment.

     19.  REPURCHASE RIGHTS OF THE COMPANY

     Unless an optionee's option agreement specifically provides to the
contrary, the provisions of this Section 19 shall apply to each Option granted
under the Plan and to the shares of Stock acquired on exercise thereof. Shares
of Stock acquired by any person pursuant to an Option or Options granted under
the Plan shall not be transferred by him without the written consent of the
Board. If the optionee's employment by or involvement with the Company
(including, for this purpose, any Subsidiary) shall terminate for any reason
other than his death or retirement for reasons of age or disability in
accordance with the then policy of the Company, the Company shall have the right
to repurchase all of any of such shares of Stock at a price equal to the fair
market value of the shares of Stock at the time of such repurchase. In addition,
if at the time of such termination an employee holds an Option granted under the
Plan which is by its terms exercisable after such termination, the Company shall
have the right to repurchase all or any part of the shares of Stock acquired
pursuant to the exercise of such Option, at a price equal to that described in
the preceding sentence. If the option price for any repurchased shares has been
paid by the optionee's promissory note pursuant to Section 10, then the
repurchase price for such shares of Stock shall be first applied to the
repayment of the outstanding amount, if any, due under such note in respect of
the repurchased shares, and any accrued but unpaid interest thereon. The
Company's right to repurchase shares of Stock may be exercised at any time
during the period beginning on the date of the optionee's termination of
employment and ending ninety (90) days after the later of (i) the date of such
termination and (ii) the date on which the shares of Stock subject to the
repurchase rights of this Section 19 are acquired by the employee. Any such
shares of Stock as to which the Company does not exercise its repurchase rights
within such period shall thereafter be free of the restrictions of this Section
19.

     20.  EFFECTIVE DATE AND DURATION OF THE PLAN

     The Plan shall become effective and shall be deemed to have been adopted on
January 1, 1990, subject only to ratification by the holders of at least a
majority of the outstanding shares of Stock within twelve (12) months after such
date. Unless the Plan shall have terminated earlier, the Plan shall terminate on
the tenth (10th) anniversary of its effective date, and no Option shall be
granted pursuant to the Plan after the day preceding the tenth (10th)
anniversary of its effective date.