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                                                                     EXHIBIT 4.3




                      AMERICAN BANK NOTE HOLOGRAPHICS, INC.
                             STOCK OPTION AGREEMENT

         Agreement as of the 20th day of July, 2000, pursuant to which American
Bank Note Holographics, Inc., a Delaware corporation (the "Company"), hereby
grants to Stephen Benton (the "Grantee") a non-qualified stock option to
purchase up to 15,000 shares of the Common Stock of the Company, at an exercise
price of $8.50 per share, subject to adjustment as provided herein.

         1. TERM OF OPTION. This option is granted as of the date first above
written (the "Date of Grant"), and will terminate and expire, to the extent not
previously exercised, on the tenth anniversary of the Date of Grant, or at such
earlier time as may be specified in this Agreement.

         2. RIGHT TO EXERCISE. During the Grantee's employment or service, this
option will become vested and exercisable (i) with respect to 33 1/3% of the
total shares of Common Stock subject thereto on the first anniversary of the
Date of Grant and (ii) in cumulative installments, with respect to 8 1/3% of the
total shares of Common Stock subject thereto on the last day of each of the
first eight (8) consecutive three (3) month periods immediately following the
first anniversary of the Date of Grant. Notwithstanding any provision in this
Agreement to the contrary, upon a Change in Control (as defined in Section 7
below) this option will become immediately vested and may be exercised
immediately.

         3. METHOD OF EXERCISE. This option shall be exercised by delivery of
written notice to the Company, in accordance with Section 9 below, specifying
the number of shares with respect this option being exercised. Such notice shall
be accompanied by payment in full of the exercise price for such shares together
with the amount necessary to satisfy any applicable withholding requirements:
(i) in cash, cashier's check or money order, (ii) by delivery of an equivalent
value in shares of Common Stock previously owned by the Grantee for at least six
(6) months (free and clear of any liens and encumbrances), or (iii) by such
other methods approved by the Board of Directors of the Company or a committee
thereof (the "Board"), from time to time.

         4. TERMINATION OF SERVICE. If the Grantee's employment or service is
terminated due to the Grantee's retirement or permanent disability (each as
determined by the Board or a committee thereof), then: (i) that portion of this
option, if any, that is not vested and exercisable on the date of termination
shall immediately terminate, and (ii) that portion of this option, if any, that
is vested and exercisable on the date of termination shall remain exercisable by
the Grantee during the thirty-six (36) month period following the date of
termination or, if earlier, until the expiration of the term of this option,
and, to the extent not exercised during such period, shall thereupon terminate.
If the Grantee's employment or service is terminated due to the Grantee's death:
(a) that portion of this option, if any, that is not then vested and exercisable
shall terminate, and (b) that portion of this option, if any, that is vested and
exercisable shall remain exercisable by the Grantee's estate (or beneficiaries)
during the one year period commencing on the date of death or, if earlier,
until, the expiration of the term of this option, and, to the extent not
exercised during such period, shall thereupon terminate. If the Grantee's
employment or service is terminated for any reason other than retirement,
permanent disability or death, then,
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unless otherwise determined by the Board, this option (whether or not then
vested and exercisable) shall immediately terminate and cease to be exercisable.

         5. NON-ASSIGNABILITY. This option shall not be assignable or
transferable by the Grantee except by will or by the laws of descent and
distribution. During the Grantee's lifetime, this option shall only be
exercisable by the Grantee.

         6. RECAPITALIZATION. In the event that the outstanding shares decreased
or changed into or exchanged for a different number or kind of shares or other
shares or other securities of the Company by reason of a recapitalization,
reclassification, stock split-up, combination of shares, or dividend payable in
stock, appropriate adjustments shall be made by the Board in the number and kind
of shares or other securities as to which this option shall be exercisable, so
that the Grantee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment shall be made without change in the
total exercise price applicable to the unexercised portion of this option and
with a corresponding adjustment in the exercise price per share. Any fractional
shares resulting from any of the foregoing adjustments shall be disregarded and
eliminated.

         7. DEFINITION OF CHANGE IN CONTROL. A "Change in Control" shall mean:

                  (i) the direct or indirect acquisition, whether by sale,
merger, consolidation, or purchase of assets or stock, by any person,
corporation, or other entity or group thereof of the beneficial ownership (as
that term is used in Section 13(d)(1) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder) of shares in the
Company which, when added to any other shares the beneficial ownership of which
is held by the acquirer, shall result in the acquirer's having more than fifty
(50%) of the votes that are entitled to be cast at meetings of stockholders as
to matters on which all outstanding shares are entitled to be voted as a single
class; provided however, that such acquisition shall not constitute a Change of
Control for purposes of this Agreement if prior to such acquisition a resolution
declaring that the acquisition shall not constitute a Change of Control is
adopted by the Board with the support of a majority of the Board members who
either were members of the Board for at least two years prior to the date of the
vote on such resolution or were nominated for election to the Board by at least
two-thirds of the directors then still in office who were members of the Board
at least two years prior to the date of the vote on such resolution; and
provided further, that neither the Company, nor any person who as of July 20,
1998 was a director or officer of the Company, nor any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, nor
any corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of shares of
the Company shall be deemed to be an "acquirer" for purposes of this Section;

                  (ii) the election during any two-year period to a majority of
the seats on the Board of Directors of the Company of individuals who were not
members of the Board at the beginning of such period unless such additional or
replacement directors were approved by at least eighty percent (80%) of the
continuing directors; or


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                  (iii) stockholder approval of a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.

         8. NO SERVICE RIGHTS CONFERRED. Neither the grant of this option nor
the exercise thereof will confer upon the Grantee any right with respect to
continuance of the Grantee's employment or service with the Company.

         9. NOTICES. Any notice, payment or communication required or permitted
to be given by any provision of this Agreement shall be in writing and shall be
delivered personally or sent by certified mail, return receipt requested,
addressed as follows: if to American Bank Note Holographics, Inc., 399 Executive
Boulevard, Elmsford, New York 10523 Attention: President; if to Grantee, at the
address set forth on the signature page hereto. Each party may, from time to
time, by notice to the other party hereto, specify a new address for delivery of
notices to such party hereunder. Any such notice shall be deemed to be
delivered, given, and received for all purposes as of the date such notice is
properly mailed.

         10. BINDING EFFECT. Except as otherwise provided in this Agreement,
every covenant, term, and provision of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legatees,
legal representatives, successors, transferees, and permitted assigns.

         11. HEADINGS. Section and other headings contained in this Agreement
are for reference purposes only and are not intended to describe, interpret,
define or limit the scope or intent of this Agreement or any provision hereof.

         12. SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.

         13. WITHHOLDING TAXES. The Company shall have the right to require the
Grantee to remit to the Company an amount sufficient to satisfy any federal,
state and/or local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. The Company may issue or transfer
such shares of Common Stock net of the number of shares sufficient to satisfy
the withholding tax requirements, provided that, to the extent required to avoid
adverse accounting charges, shares may not be withheld in excess of the minimum
number of shares required to satisfy tax withholding. For withholding tax
purposes, the shares of Common Stock shall be valued on the date the withholding
obligation is incurred.

         14. GOVERNING LAW. The internal laws of the State of New York shall
govern the validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties hereto.

         15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter

hereof and supersedes any prior understandings, agreements, or representations
by or between the parties with respect to the subject matter

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hereof. This Agreement may not be amended except by written instrument executed
by the parties hereto.

         IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.

                                   AMERICAN BANK NOTE HOLOGRAPHICS, INC.

                                   By: /s/ Alan Goldstein
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                                   Name:   Alan Goldstein
                                   Title:  Vice President and Chief Financial
                                           Officer

         The undersigned Grantee hereby accepts the terms of the foregoing Stock
Option Agreement.

                                   Grantee

                                   By: /s/ Stephen A. Benton
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                                                 (Address)




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