THE TRANSLATION GROUP, LTD.
                             A DELAWARE CORPORATION

     AMENDED AND RESTATED 1995 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN

      1.  PURPOSE.  The  name  of the  plan is the  Amended  and  Restated  1995
Incentive and Non-Qualified Stock Option Plan (the "Plan").  The purposes of the
Plan  are to  attract  and  retain  the best  available  personnel,  to  provide
additional incentive to the employees, Consultants and non-employee directors of
The  Translation  Group  Ltd.,  a  Delaware  corporation,  and its  subsidiaries
(collectively,  the  "Company"),  and to promote  the  success of the  Company's
business.  It is anticipated that providing such persons with a direct link with
the Company's  welfare will assure a closer  identification  of their  interests
with those of the Company,  thereby  stimulating  their efforts on the Company's
behalf and strengthen their desire to remain with the Company.

      2.  DEFINITIONS.  As used in this Plan,  the following  definitions  shall
apply:


         (a) "ACT" means the Securities Exchange Act of 1934, as amended.

         (b)  "Award"  or  "Awards,"  except  where  referring  to a  particular
category  of grant  under the  Plan,  shall  include  Incentive  Stock  Options,
Non-Qualified Stock Options,  Restricted Stock Awards, Stock Awards, Performance
Share Awards and Stock Appreciation Rights.

         (c) "AWARDEE" means the recipient of an Award.

         (d) "BOARD" means the Board of Directors of the Company.

         (e) "CODE"  means the Internal  Revenue  Code of 1986,  as amended from
time to time, and the rules and regulations promulgated thereunder.

         (f)  "COMMISSION"  means the  United  States  Securities  and  Exchange
Commission.

         (g) "COMMON  STOCK" means the common  stock of the  Company,  par value
$0.01 per share.

         (h) "CONSULTANT"  means any person who is engaged by the Company or any
Parent or Subsidiary to render  consulting  services and is compensated for such
consulting  services;  PROVIDED  that  the term  Consultant  shall  not  include
directors  who are  not  compensated  for  their  services  or are  paid  only a
director's fee by the Company.

         (i)  "CONTINUOUS  STATUS AS AN  EMPLOYEE,  CONSULTANT  OR  NON-EMPLOYEE
DIRECTOR" means the absence of any  interruption or termination of service as an
employee, Consultant or non-employee director, as applicable.  Continuous Status
as an Employee,  Consultant  or  non-employee  director  shall not be considered
interrupted  in the case of sick  leave  or  military  leave,  any  other  leave
provided  pursuant  to a written  policy of the Company in effect at the time of
determination,  or any other leave of absence  approved by the Board or the Plan

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Administrator;  PROVIDED  that  such  leave is for a period of not more than the
greater of (i) 90 days or (ii) the date of the  resumption  of such service upon
the  expiration  of such leave which is  guaranteed by contract or statute or is
provided in a written policy of the Company.

         (j)  "PARENT"  means a "parent  corporation,"  whether now or hereafter
existing, as defined in Section 424(e) of the Code.

         (k) "RULE 16B-3" means Rule 16b-3,  as  promulgated  by the  Commission
under  Section  16(b) of the Exchange  Act, as such rule is amended from time to
time and as interpreted by the Commission.

         (l) "SECURITIES  ACT" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.

         (m)  "SHARE"  means  a  share  of the  Common  Stock,  as  adjusted  in
accordance with Section 10 of this Plan.

         (n) "STOCK  APPRECIATION  RIGHT" or "SAR"  means a right,  the value of
which is determined  relative to  appreciation in value of Shares pursuant to an
award granted under Section 12 hereof.

         (o)  "SUBSIDIARY"  means a  "subsidiary  corporation,"  whether  now or
hereafter existing, as defined in Section 424(f) of the Code.

      3. SCOPE OF PLAN.  Subject to the  provisions  of Section 10 of this Plan,
and unless  otherwise  amended by the Board and approved by the  stockholders of
the Company as required by law, the maximum  aggregate number of Shares issuable
under this Plan is 2,500,000 and such Shares are hereby made available and shall
be reserved  for  issuance  under this Plan.  The Shares may be  authorized  but
unissued,  or reacquired,  Common Stock.  Notwithstanding the foregoing,  on and
after the date that the Plan is subject to Section  162(m) of the Code,  Options
with  respect to no more than  200,000  shares of Common Stock may be granted to
any one individual during any one calendar-year period.

         If an  Option  shall  expire  or become  unexercisable  for any  reason
without having been exercised in full, the  unpurchased  Shares subject  thereto
shall (unless this Plan shall have  terminated)  become  available for grants of
other Options, Restricted Stock Awards, Stock Awards or Performance Share Awards
under this Plan.

      4. ADMINISTRATION OF PLAN.

         (A)  PROCEDURE.  The Plan  shall be  administered  by the full Board of
Directors of the Company or a committee of such Board of Directors  comprised of
two or more  "Non-Employee  Directors"  within the  meaning of Rule  16b-3(a)(3)
promulgated under the Act (the "Plan Administrator").

         (B) POWERS OF PLAN  ADMINISTRATOR.  Subject to the  provisions  of this
Plan,  the Plan  Administrator  shall  have  full  and  final  authority  in its
discretion to:

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             (i) grant Awards under the Plan;

             (ii)  determine,   upon  review  of  relevant  information  and  in
accordance with Section 7 below, the Fair Market Value of the Common Stock;

             (iii) determine the exercise price per share of Options and SARs to
be granted, in accordance with this Plan;

             (iv) select the directors,  officers,  employees and Consultants to
whom, and the time or times at which,  Awards shall be granted and the number of
shares to be represented by each Award;

             (v) cancel, with the consent of the Awardee, outstanding Awards and
grant new Awards in substitution therefor;

             (vi) interpret this Plan and any Award under the Plan;

             (vii)  accelerate  or defer  (with  the  consent  of  Awardee)  the
exercise date of any Option;

             (viii) prescribe,  amend and rescind rules and regulations relating
to this Plan;

             (ix)  impose  limitations  on  Awards,   including  limitations  on
transfer and repurchase  provisions and extend the exercise  period within which
Stock Options and SARs may be exercised;

             (x)  determine  the terms and  provisions of each Award (which need
not be identical) by which Options,  SARs or Shares shall be evidenced and, with
the consent of the holder  thereof,  modify or amend any  provisions  (including
without limitation  provisions relating to the exercise price and the obligation
of any Optionee to sell purchased Shares to the Company upon specified terms and
conditions) of any Option;

             (xi)  require  withholding  from or  payment  by an  Awardee of any
federal, state or local taxes;

             (xii) appoint and  compensate  agents,  counsel,  auditors or other
specialists as the Plan Administrator deems necessary or advisable;

             (xiii)  correct any defect or supply any omission or reconcile  any
inconsistency  in this Plan and any  agreement  relating to any Option,  in such
manner and to such extent the Plan  Administrator  determines  is  necessary  to
carry out the purposes of this Plan, and;

             (xiv) construe and interpret  this Plan, any agreement  relating to
any Award, and make all other determinations deemed by the Plan Administrator to
be necessary or advisable for the  administration of this Plan, even in conflict
with an express provision of the Plan.

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         (C)   EFFECT   OF  PLAN   ADMINISTRATOR'S   DECISION.   All   decisions
determinations and  interpretations of the Plan Administrator shall be final and
binding on all Awardees and any other  holders of any Awards  granted under this
Plan.

         (D) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Plan Administrator, in
its  discretion,  may  delegate  to the  Chairman  of the  Company  or the Chief
Operating Officer all or part of the Plan  Administrator's  authority and duties
with  respect  to  granting  Awards to  individuals  who are not  subject to the
reporting  provisions of Section 16 of the Act or "covered employees" within the
meaning  of Section  162(m) of the Code.  The Plan  Administrator  may revoke or
amend the terms of such a delegation at any time, but such revocation  shall not
invalidate  prior actions of the Chairman or Chief  Operating  Officer that were
consistent with the terms of the Plan.

      5. ELIGIBILITY.

         (a) Directors,  officers,  employees and  consultants of the Company or
its  Subsidiaries  who,  in the  opinion of the Plan  Administrator,  are mainly
responsible  for the  continued  growth and  development  and  future  financial
success  of the  business  shall be  eligible  to  participate  in the Plan.  In
addition,  non-employee  directors are eligible to receive an automatic grant of
Stock Options pursuant to Section 9 hereof.

         (b)  Anything  to  the  contrary  notwithstanding,   each  non-employee
director  who is  first  elected  or  appointed  to serve  as a  director  shall
automatically be granted Non-Qualified Stock Options to purchase 5,000 shares of
Stock.  The Option exercise price for Options granted to non-employee  directors
under the Plan will be equal the Fair  Market  Value of the Stock on the date of
grant. Options granted to non-employee  directors under the foregoing provisions
will be granted on the date that such non-employee  director is first elected or
appointed to serve as a director and will vest in equal annual installments over
three years  commencing on the  anniversary of the date of grant and will expire
ten years after grant,  subject to earlier termination if the optionee ceases to
serve as a director.

         (c)  Each  Option   granted   under  Section  5(b)  above  shall  be  a
Nonstatutory Stock Option.  Each other Option shall be designated in the written
option  agreement as either an Incentive  Stock Option or a  Nonstatutory  Stock
Option.  Notwithstanding  such  designations,  if  and to the  extent  that  the
aggregate  Fair  Market  Value of the  Shares  with  respect  to  which  Options
designated as Incentive  Stock Options are exercisable for the first time by any
Optionee  during any  calendar  year  (under all plans of the  Company)  exceeds
$100,000,  such options  shall be treated as  Nonstatutory  Stock  Options.  For
purposes of this Section 5(c),  Options shall be taken into account in the order
in which they are  granted,  and the Fair  Market  Value of the Shares  shall be
determined as of the time the Option with respect to such Shares is granted.

         (d) This Plan shall not confer upon any Awardee any right with  respect
to  continuation of employment by or the rendition of services to the Company or
any  Parent or  Subsidiary,  nor shall it  interfere  in any way with his or her
right or the right of the Company or any Parent or  Subsidiary  to terminate his
or her employment or services at any time,  with or without cause.  The terms of
this Plan or any Awards  granted  hereunder  shall not be  construed to give any
Awardee the right to any benefits not  specifically  provided by this Plan or in

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any manner modify the Company's  right to modify,  amend or terminate any of its
pension or retirement plans.

      6.  EFFECTIVENESS  OF PLAN.  The  amendments  to this  Plan  shall  become
effective  upon its  adoption by the Board of  Directors  of the  Company  (such
adoption to include the approval of at least two non-employee directors) and the
approval thereof by vote of the holders of a majority of the outstanding  shares
of the Company present, or represented,  and entitled to vote at a meeting to be
duly held (or through written  consents in lieu of a meeting) in accordance with
the applicable laws of the State of Delaware.  Such meeting shall be held within
twelve months of the adoption of the Plan by the Board of Directors.

      7.  EXERCISE PRICE AND CONSIDERATION.

         (a) EXERCISE  PRICE.  The per Share exercise price for the Shares to be
issued  pursuant  to  exercise  of an  Option  shall be  determined  by the Plan
Administrator as follows:

             (i) In  the  case  of an  Incentive  Stock  Option  granted  to any
employee,  the per Share  exercise  price shall be no less than 100% of the Fair
Market Value per Share on the date of grant,  but if granted to an employee who,
at the time of the grant of such Incentive Stock Option, owns stock representing
more than ten percent  (10%) of the voting  power of all classes of stock of the
Company or any Parent or  Subsidiary,  the per Share  exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of grant.

             (ii) With  respect to (i) above,  the per Share  exercise  price is
subject to  adjustment  as  provided in Section 10 below.  For  purposes of this
Section 7(a), if an Option is amended to reduce the exercise price,  the date of
grant of such  option  shall  thereafter  be  considered  to be the date of such
amendment.

         (b) FAIR MARKET  VALUE.  The "Fair  Market  Value" of a share of Common
Stock on any day means:  (a) if the  principal  market for the Common Stock is a
national  securities  exchange or the NASDAQ National Market System, the closing
sales  price of the Common  Stock on such day as  reported  by such  exchange or
market  system,  or on a  consolidated  tape  reflecting  transactions  on  such
exchange or market system,  or (b) if the principal  market for the Common Stock
is not a national  securities exchange or the NASDAQ National Market System, and
the Common Stock is quoted on the National  Association  of  Securities  Dealers
Automated  Quotations  System,  the mean between the closing bid and the closing
asked prices for the Common  Stock on such day as quoted on such system,  or (c)
if the  principal  market  for the  Common  Stock is not a  national  securities
exchange  or the NASDAQ  National  Market  System,  and the Common  Stock is not
quoted on the National  Association of Securities  Dealers  Automated  Quotation
System,  the mean between the highest bid and lowest asked priced for the Common
Stock on such day as reported by the National Quotation Bureau,  Inc.;  provided
that if clauses (a), (b) and (c) of this paragraph are all  inapplicable,  or if
no  trades  have been made or no quotes  are  available  for such day,  the Fair
Market Value of the Common Stock shall be determined  by the Plan  Administrator
by any method which it deems to be appropriate.  The  determination  of the Plan
Administrator  shall be  conclusive  as to the Fair  Market  Value of the Common
Stock.

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         (C)  CONSIDERATION.  The Option  exercise price of each share purchased
pursuant to an Option  shall be paid in full at the time of each  exercise  (the
"Payment  Date") of the Option (i) in cash;  (ii) by delivering to the Company a
notice of exercise with an irrevocable  direction to a broker-dealer  registered
under the Act to sell a  sufficient  portion of the shares and  deliver the sale
proceeds  directly  to the  Company  to pay the  exercise  price;  (iii)  in the
discretion  of the Plan  Administrator,  through the  delivery to the Company of
previously-owned  shares of Common Stock  having an aggregate  Fair Market Value
equal to the Option exercise price of the shares being purchased pursuant to the
exercise of the Option; provided, however, that shares of Common Stock delivered
in  payment of the Option  price must have been held by the  participant  for at
least six (6) months in order to be  utilized to pay the Option  price;  (iv) in
the discretion of the Plan Administrator,  through an election to have shares of
Common Stock  otherwise  issuable to the  optionee  withheld to pay the exercise
price  of such  Option;  or (v) in the  discretion  of the  Plan  Administrator,
through any  combination  of the  payment  procedures  set forth in  subsections
(i)-(iv) of this Section 7(c).

         (D) TAX WITHHOLDING.

             (i)  Whenever  Shares  are to be issued or cash is to be paid under
the Plan,  the Company shall have the right to require the  participant to remit
to the  Company an amount  sufficient  to satisfy  federal,  state and local tax
withholding  requirements prior to the delivery of any certificate for Shares or
any proceeds;  provided, however, that in the case of a participant who receives
an Award of Shares  under the Plan which is not fully  vested,  the  participant
shall remit such amount on the first  business day following  the Tax Date.  The
"Tax Date" for  purposes of this Section 7 shall be the date on which the amount
of tax to be withheld is  determined.  If a participant  makes a disposition  of
shares acquired upon the exercise of an Incentive Stock Option within either two
years  after the  Option  was  granted  or one year  after its  exercise  by the
participant,  the participant  shall promptly notify the Company and the Company
shall have the right to require the  participant to pay to the Company an amount
sufficient to satisfy federal, state and local tax withholding requirements.

             (ii) A  participant  who is  obligated to pay the Company an amount
required to be withheld under  applicable tax withholding  requirements  may pay
such  amount  (i) in cash;  (ii) in the  discretion  of the Plan  Administrator,
through  the  delivery  to the  Company  of  previously-owned  Shares  having an
aggregate Fair Market Value on the Tax Date equal to the tax obligation provided
that the previously  owned shares  delivered in  satisfaction of the withholding
obligations  must have been held by the participant for at least six (6) months;
or (iii) in the discretion of the Plan  Administrator,  through a combination of
the procedures set forth in subsections (i) and (ii) of this Section 7(d).

             (iii) A  participant  who is  obligated  to pay to the  Company  an
amount required to be withheld under applicable tax withholding  requirements in
connection  with either the exercise of a  Non-Qualified  Stock  Option,  or the
receipt of a Restricted  Stock  Award,  Stock Award or  Performance  Share Award
under  the Plan  may,  in the  discretion  of the Plan  Administrator,  elect to
satisfy this withholding obligation, in whole or in part, by requesting that the
Company withhold shares of stock otherwise  issuable to the participant having a
Fair Market  Value on the Tax Date equal to the amount of the tax required to be
withheld;  provided, however, that shares may be withheld by the Company only if
such withheld  shares have vested.  Any  fractional  amount shall be paid to the

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Company by the  participant in cash or shall be withheld from the  participant's
next regular paycheck.

             (iv) An election by a participant  to have shares of stock withheld
to satisfy  federal,  state and local tax withholding  requirements  pursuant to
Section 7(d) must be in writing and  delivered  to the Company  prior to the Tax
Date.

      8. OPTIONS.

         (a) TERM OF OPTION.  The term of each  Option  granted  (other  than an
Option  granted  under Section 5(b) above) shall be for a period of no more than
ten (10) years from the date of grant  thereof  or such  shorter  term as may be
provided in the Option agreement.  However,  in the case of an Option granted to
an Optionee who, at the time the Option is granted, owns stock representing more
than ten  percent  (10%) of the  voting  power,  of all  classes of stock of the
Company or any Parent or  Subsidiary,  the term of the Option  shall be five (5)
years from the date of grant  thereof or such shorter time as may be provided in
the Option Agreement.

         (b) EXERCISE OF OPTIONS.

             (i)  PROCEDURE FOR EXERCISE;  RIGHTS AS A  STOCKHOLDER.  Any Option
granted under this Plan (other than an Option  granted  pursuant to Section 5(b)
above)  shall  be  exercisable  at such  times  and  under  such  conditions  as
determined  by the  Plan  Administrator,  including  performance  criteria  with
respect  to  the  Company  and/or  the  Optionee,  and  as  shall  otherwise  be
permissible under the terms of this Plan.

         An Option may not be exercised for a fraction of a Share.

         An Option shall be deemed to be exercised  when written  notice of such
exercise  has been  given to the  Company  in  accordance  with the terms of the
Option by the person  entitled to exercise  the Option and full  payment for the
Shares with  respect to which the Option is exercised  has been  received by the
Company.  Full payment may, as authorized by the Plan Administrator,  consist of
any  consideration and method of payment allowable under Section 7 of this Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a  stockholder  shall exist with respect to the optioned  stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock  certificate  promptly upon exercise of the Option. If the
exercise of an Option is treated in part as the exercise of an  Incentive  Stock
Option and in part as the exercise of a  Nonstatutory  Stock Option  pursuant to
Section  5(b)  above,  the  Company  shall  issue a separate  stock  certificate
evidencing  the Shares  treated as acquired upon exercise of an Incentive  Stock
Option  and a  separate  stock  certificate  evidencing  the  Shares  treated as
acquired upon exercise of a  Nonstatutory  Stock Option and shall  identify each
such certificate  accordingly in its stock transfer records.  No adjustment will
be made for a dividend  or other right for which the record date is prior to the
date the stock  certificate is issued,  except as provided in Section 10 of this
Plan.

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         Exercise of an Option in any manner  shall  result in a decrease in the
number of Shares which  thereafter  may be available,  both for purposes of this
Plan and for sale  under  the  Option,  by the  number of Shares as to which the
Option is exercised.

             (ii) METHOD OF EXERCISE.  An Optionee  may  exercise an Option,  in
whole or in part, at any time during the option period by the Optionee's  giving
written  notice of exercise on a form  provided  by the Plan  Administrator  (if
available)  to the  Company  specifying  the  number of  shares of Common  Stock
subject to the Option to be  purchased.  Such  notice  shall be  accompanied  by
payment in full of the purchase  price in a manner  provided  for under  Section
7(c)  above.  No shares of Common  Stock  shall be  issued  until  full  payment
therefor  has  been  made.  An  Optionee  shall  have  all  of the  rights  of a
stockholder of the Company  holding the class of Common Stock that is subject to
such  Option  (including,  if  applicable,  the right to vote the shares and the
right to receive  dividends),  when the  Optionee  has given  written  notice of
exercise, has paid in full for such shares and such shares have been recorded on
the Company's official stockholder records as having been issued or transferred.

             (iii)  COMPANY LOAN OR  GUARANTEE.  Upon the exercise of any Option
and subject to the pertinent  Option  agreement  and the  discretion of the Plan
Administrator,  the Company may at the request of the Optionee;  (A) lend to the
Optionee,  with recourse, an amount equal to such portion of the option exercise
price as the Plan Administrator may determine;  or (B) guarantee a loan obtained
by the  Optionee  from a  third-party  for the purpose of  tendering  the option
exercise price.

         (c)  TERMINATION OF STATUS AS AN EMPLOYEE,  CONSULTANT OR  NON-EMPLOYEE
DIRECTOR.  An Option or SAR may be  exercised  in whole at any time,  or in part
from time to time,  within such period or periods  (not to exceed ten years from
the granting of the Option in the case of an Incentive  Stock  Option) as may be
determined by the Plan Administrator and set forth in the agreement (such period
or periods being hereinafter referred to as the "Option Period"), provided that,
unless the agreement provides otherwise:

             (i) If a participant  who is an employee of the Company shall cease
to be employed  by the  Company,  all Options and SARs to which the  employee is
then  entitled to exercise may be  exercised  only within three months after the
termination of employment  and within the Option Period or, if such  termination
was due to disability or retirement (as  hereinafter  defined),  within one year
after  termination of employment  and within the Option Period.  Notwithstanding
the foregoing:  (a) in the event that any termination of employment shall be for
Cause (as defined herein) or the participant  becomes an officer or director of,
a consultant to or employed by a Competing Business (as defined herein),  during
the Option  Period,  then any and all Options and SARs held by such  participant
shall  forthwith  terminate;  and(b)  the Plan  Administrator  may,  in its sole
discretion,  extend the Option Period of any Option or SAR for up to three years
from the date of  termination  of employment  regardless of the original  Option
Period.  For  purposes of the Plan,  retirement  shall mean the  termination  of
employment with the Company, other than for Cause, at any time after the age 65.

         For purposes of this Plan, the term "Cause" shall mean (a) with respect
to an  individual  who is party to a written  agreement  with the Company  which
contains a definition  of "cause" or "for cause" or words of similar  import for
purposes of termination of employment thereunder by the Company, "cause" or "for

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cause" as  defined in such  agreement;  (b) in all other  cases (I) the  willful
commission  by an employee  of a criminal  or other act that causes  substantial
economic damage to the Company or substantial injury to the business  reputation
of the Company;  (II) the  commission of an act of fraud in the  performance  of
such  person's  duties to or on behalf of the Company;  or (III) the  continuing
willful  failure of a person to perform the duties of such person to the Company
(other than a failure to perform duties resulting from such person's  incapacity
due to illness) after written notice thereof (specifying the particulars thereof
in reasonable detail) and a reasonable opportunity to cure such failure is given
to  the  person  by  the  Board  of   Directors  of  the  Company  or  the  Plan
Administrator.  For purposes of the Plan, no act, or failure to act, on the part
of any person shall be considered "willful" unless done or omitted to be done by
the person  other  than in good faith and  without  reasonable  belief  that the
person's action or omission was in the best interest of the Company.

         For purposes of this Plan, the term  "Competing  Business"  shall mean:
any person, corporation or other entity engaged in the business of (a) providing
translation and localization  services, (b) Web site design or hosting services,
or (c) selling or attempting to sell any product or service which is the same as
or similar to  products or  services  sold by the  Company  within the last year
prior to termination of such person's  employment,  consultant  relationship  or
directorship, as the case may be, hereunder.

             (ii) If a participant  who is a director of the Company shall cease
to serve as a director of the Company,  any Options or SARs then  exercisable by
such  director may be exercised  only within three months after the cessation of
service  and  within  the  Option  Period  unless  such  cessation  was  due  to
disability,  in which case such  optionee may exercise such Option or SAR within
one  year   after   cessation   of  service   and  within  the  Option   Period.
Notwithstanding the foregoing: (a) if any cessation of service as a director was
the  result of  removal  for Cause or the  participant  becomes  an  officer  or
director  of, a  consultant  to or employed by a Competing  Business  during the
Option Period,  any Options and SARs held by such  participant  shall  forthwith
terminate;  and (b) the Plan Administrator may in its sole discretion extend the
Option  Period  of any  Option  or SAR for up to  three  years  from the date of
cessation of service regardless of the original Option Period;

             (iii) If the  participant  shall die during the Option Period,  any
Options or SARs then exercisable may be exercised only within one year after the
participant's  death and within the Option Period and only by the  participant's
personal representative or persons entitled thereto under the participant's will
or the laws of descent and distribution;

             (iv)  The  Option  or SAR  may not be  exercised  for  more  shares
(subject to adjustment as provided in Section 10) after the  termination  of the
participant's   employment,   cessation   of  service  as  a  director   or  the
participant's  death,  as the case may be, than the  participant was entitled to
purchase  thereunder  at the  time  of  the  termination  of  the  participant's
employment or the participant's death; and

             (v) If a  participant  owns (or is deemed  to own under  applicable
provisions of the Code and regulations  promulgated thereunder) more than 10% of
the combined  voting power of all classes of stock of the Company (or any parent
or  subsidiary  corporation  of the  Company)  and an  Option  granted  to  such
participant is intended to qualify as an Incentive  Stock Option,  the Option by

                                       -9-
<PAGE>

its terms may not be  exercisable  after the  expiration  of five years from the
date such Option is granted.

      9.  TRANSFERABILITY  OF OPTIONS.  An Option granted hereunder shall by its
terms not be sold, pledged, assigned, hypothecated,  transferred, or disposed of
in any manner other than by will or the laws of descent and  distribution  or as
permitted  by  applicable   Federal  Securities  laws,  rules  and  regulations.
Specifically, employees or consultants may transfer options to family members or
family  entities  by gift or  pursuant to a domestic  relations  order.  For the
purposes  of this  section,  "family  member"  includes  any  child,  stepchild,
grandchild,  parent,  stepparent,  grandparent,  spouse, former spouse, sibling,
niece,  nephew,  mother-in-law,   father-in-law,   son-in-law,  daughter-in-law,
brother-in-law,  or sister-in-law,  including adoptive relationships, any person
sharing the employee's  household (other than a tenant or employee),  a trust in
which these persons have more than fifty percent of the beneficial interests,  a
foundation in which these persons (or the  employee)  control the  management of
assets,  and any other entity in which these  persons (or the employee) own more
than fifty percent of the voting interests. An Option shall also be transferable
to the extent such  transfer  will not cause either the Option or the Plan to no
longer  qualify as an  Incentive  Stock  Option under the Code or as meeting the
requirements of Rule 16b-3.

      10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

         (a) CAPITALIZATION.  Subject to any required action by the stockholders
of the Company,  the number of shares of Common Stock which have been authorized
for issuance under this Plan but as to which no Options have yet been granted or
which have been  returned to this Plan upon  cancellation  or  expiration  of an
Option, the number of shares of Common Stock subject to each outstanding Option,
the price per share of Common Stock covered by each such outstanding Option, and
the number of Options  that can be  granted  to any one  individual  participant
shall be proportionately  adjusted by the Plan Administrator for any increase or
decrease in the number of issued shares of Common Stock  resulting  from a stock
split,  reverse stock split, stock dividend,  combination or reclassification of
the  Common  Stock  of the  Company  or other  similar  transaction.  Except  as
expressly  provided herein, no issuance by the Company of shares of stock of any
class,  or  securities  convertible  into  shares of stock of any  class,  shall
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option.

         (b)  DISSOLUTION  OR   LIQUIDATION.   In  the  event  of  the  proposed
dissolution  or   liquidation  of  the  Company,   each  Option  will  terminate
immediately prior to the consummation of such proposed action,  unless otherwise
provided by the Plan Administrator.  The Plan Administrator may, in the exercise
of its  sole  discretion  in such  instances,  declare  that  any  Option  shall
terminate as of a date fixed by the Plan  Administrator  and give each  Optionee
the right to  exercise  his or her Option as to all or any part of the  Optioned
Stock,  including  Shares  as  to  which  the  Option  would  not  otherwise  be
exercisable.

         (c) SALE OR MERGER.  Immediately  prior to a Sale,  each  Optionee  may
exercise  his or her  Option  as to  all  Shares  then  subject  to the  Option,
regardless  of  any  vesting  conditions   otherwise  expressed  in  the  Option
Agreement.  "Sale"  means:  (i)  sale  (other  than a sale  by the  Company)  of
securities  entitled  to more than 75% of the voting  power of the  Company in a

                                      -10-
<PAGE>

single  transaction  or a  related  series  of  transactions;  or  (ii)  sale of
substantially  all of the  assets  of the  Company;  or  (iii)  approval  by the
stockholders of the Company of a reorganization,  merger or consolidation of the
Company,  as a result  of which the  persons  who were the  stockholders  of the
Company immediately prior to such reorganization, merger or consolidation do not
own securities  immediately  after the  reorganization,  merger or consolidation
entitled  to more than 50% of the  voting  power of the  reorganized,  merged or
consolidated  company.  Voting power, as used in this Section 10(c), shall refer
to those securities entitled to vote generally in the election of directors, and
securities of the Company not entitled to vote but which are  convertible  into,
or exercisable for,  securities of the Company entitled to vote generally in the
election of directors  shall be counted as if converted or  exercised,  and each
unit of voting  securities shall be counted in proportion to the number of votes
such unit is entitled to cast.

         (d) PURCHASED  SHARES.  No adjustment under this Section 10 shall apply
to any purchased  Shares already deemed issued at the time any adjustment  would
occur.

         (e) NOTICE OF ADJUSTMENTS. Whenever the purchase price or the number or
kind of  securities  issuable  upon the exercise of the Option shall be adjusted
pursuant to Section  10, the Company  shall give each  Optionee  written  notice
setting forth, in reasonable  detail,  the event  requiring the adjustment,  the
amount  of  the  adjustment,  and  the  method  by  which  such  adjustment  was
calculated.

         (f)  MITIGATION  OF EXCISE TAX. If any payment or right  accruing to an
Optionee under this Plan (without the application of this Section), either alone
or together  with other  payments or rights  accruing to the  Optionee  from the
Company  or an  affiliate  ("Total  Payments")  would  constitute  a  "parachute
payment"  (as defined in Section 280G of the Code and  regulations  thereunder),
the Plan  Administrator may in each particular  instance determine to (i) reduce
such payment or right to the largest  amount or greatest  right that will result
in no  portion  of the amount  payable  or right  accruing  under the Plan being
subject to an excise tax under Section 4999 of the Code or being disallowed as a
deduction  under Section 280G of the Code, or (ii) take such other  actions,  or
make such other  arrangements  or payments  with  respect to any such payment or
right as the Plan Administrator may determine under the circumstances.  Any such
determination  shall be made by the Plan  Administrator  in the  exercise of its
sole discretion,  and such determination  shall be conclusive and binding on the
Optionee.  The  Optionee  shall  cooperate  as may  be  requested  by  the  Plan
Administrator  in  connection  with  the  Plan  Administrator's   determination,
including providing the Plan Administrator with such information concerning such
Optionee as the Plan Administrator may deem relevant to its determination.

      11. TIME OF GRANTING  OPTIONS.  The date of grant of an Option shall,  for
all  purposes,   be  the  date  on  which  the  Plan  Administrator   makes  the
determination  granting such Option.  Notice of the determination shall be given
to each employee,  Consultant or  non-employee  director to whom an Option is so
granted  within a  reasonable  time  after the date of such  grant.  If the Plan
Administrator  cancels,  with the consent of the  Optionee,  any Option  granted
under this Plan,  and a new Option is  substituted  therefor,  the date that the
canceled  Option was originally  granted shall be the date used to determine the
earliest date for exercising the new substituted  Option under Section 7 so that
the  Optionee may  exercise  the  substituted  Option at the same time as if the
Optionee had held the substituted  Option since the date the canceled Option was
granted,  unless the canceled  Option shall have a new exercise  price, in which

                                      -11-
<PAGE>

case,  the date of grant  shall be the  date the Plan  Administrator  makes  the
determination to grant the substituted Option.

      12. STOCK  APPRECIATION  RIGHTS.  The Plan Administrator may, from time to
time,   subject  to  the  provisions  of  the  Plan,   grant  SARs  to  eligible
participants.  Such SARs may be granted (i) alone, (ii)  simultaneously with the
grant of an Option  (either an  Incentive  Stock Option or  Non-Qualified  Stock
Option) and in  conjunction  therewith  or in the  alternative  thereto or (iii)
subsequent  to the grant of an Option  (either an  Incentive  Stock  option or a
Non-Qualified  Stock Option) and in conjunction  therewith or in the alternative
thereto.

             (i) An SAR shall  entitle  the  holder  upon  exercise  thereof  to
receive from the Company, upon a written request filed with the Secretary of the
Company at its  principal  offices  (the  "Request"),  (i) a number of shares of
Common Stock (with or without  restrictions as to substantial risk of forfeiture
and  transferability,  as  determined  by the  Plan  Administrator  in its  sole
discretion),  (ii) an amount  of cash,  or (iii)  any  combination  of shares of
Common Stock and cash,  as specified in the Request (but subject to the approval
of the  Plan  Administrator  in its  sole  discretion,  at  any  time  up to and
including the time of payment, as to the making of any cash payment),  having an
aggregate  Fair Market  Value equal to the product of (i) the excess of the Fair
Market Value, on the day of such Request,  of one share of Common Stock over the
exercise price per share specified in such SAR or its related Option, multiplied
by (ii) the  number  of shares  of  Common  Stock  for  which  such SAR shall be
exercised.

             (ii) The exercise price of an SAR granted alone shall be determined
by the Plan Administrator, but may not be less than the Fair Market Value of the
underlying Common Stock on the date of grant. An SAR granted simultaneously with
or subsequent to the grant of an Option and in  conjunction  therewith or in the
alternative  thereto shall have the same exercise  price as the related  Option,
shall be  transferable  only upon the same terms and  conditions  as the related
Option,  and shall be exercisable only to the same extent as the related Option;
PROVIDED, HOWEVER, that an SAR, by its terms, shall be exercisable only when the
Fair Market  Value of the Common  Stock  subject to the SAR and  related  Option
exceeds the exercise price thereof.

             (iii)  Upon  exercise  of an SAR  granted  simultaneously  with  or
subsequent to an Option and in the alternative  thereto, the number of shares of
Common Stock for which the related Option shall be exercisable  shall be reduced
by the  number of shares of Stock for which the SAR shall  have been  exercised.
The number of shares of Common Stock for which an SAR shall be exercisable shall
be  reduced  upon any  exercise  of a related  Option by the number of shares of
Common Stock for which such Option shall have been exercised.

             (iv) Any SAR shall be exercisable  upon such  additional  terms and
conditions as may be prescribed by the Plan Administrator.

         Any election by a Holder to receive cash in full or partial  settlement
of a SAR,  and any  exercise  of a SAR for  cash,  may be made only by a request
filed with the Corporate Secretary of the Company during the period beginning on
the third  business day  following  the date of release for  publication  by the
Company of quarterly or annual summary  statements of earnings and ending on the
twelfth  business day  following  such date.  Within  thirty (30) days after the
receipt  by the  Company  of a  request  to  receive  cash in  full  or  partial

                                      -12-
<PAGE>

settlement  of a SAR or to exercise  such SAR for cash,  the Plan  Administrator
shall, in its sole discretion,  either consent to or disapprove,  in whole or in
part, such request.

         If the Plan Administrator  disapproves in whole or in part any election
by a  Holder  to  receive  cash  in full or  partial  settlement  of a SAR or to
exercise  such SAR for cash,  such  disapproval  shall not affect such  Holder's
right to exercise such SAR at a later date, to the extent that such SAR shall be
otherwise exercisable, or to elect the form of payment at a later date, provided
that an election to receive  cash upon such later  exercise  shall be subject to
the approval of the Plan Administrator. Additionally, such disapproval shall not
affect such Holder's right to exercise any related Option or Options  granted to
such Holder Under the Plan.

      13. RESTRICTED STOCK AWARDS.

             (a) The Plan Administrator may grant Restricted Stock Awards to any
officer,  employee  or  Consultant  of  the  Company  and  its  Subsidiaries.  A
Restricted Stock Award entitles the recipient to acquire shares of Stock subject
to such  restrictions and conditions as the Plan  Administrator may determine at
the time of grant  ("Restricted  Stock").  Conditions may be based on continuing
employment   (or   other   business    relationship)   and/or   achievement   of
pre-established performance goals and objectives.

             (b) Upon  execution  of a  written  instrument  setting  forth  the
Restricted  Stock Award and paying any applicable  purchase price, a participant
shall have the rights of a stockholder  with respect to the Stock subject to the
Restricted  Stock  Award,  including,  but not  limited to the right to vote and
receive dividends with respect thereto; provided,  however, that shares of Stock
subject to Restricted  Stock Awards that have not vested shall be subject to the
restrictions  on  transferability  described in Section 10(d) below.  Unless the
Plan  Administrator  shall  otherwise  determine,  certificates  evidencing  the
Restricted  Stock  shall  remain in the  possession  of the  Company  until such
Restricted Stock is vested as provided in Section 13(c) below.

             (c) The Plan  Administrator  at the time of grant shall specify the
date or dates  and/or  the  attainment  of  pre-established  performance  goals,
objectives and other  conditions on which  Restricted Stock shall become vested,
subject to such further rights of the Company or its assigns as may be specified
in the instrument  evidencing the Restricted  Stock Award. If the Awardee or the
Company,  as the  case may be,  fails to  achieve  the  designated  goals or the
Awardee's relationship with the Company is terminated prior to the expiration of
the vesting period, the Awardee shall forfeit all shares of Stock subject to the
Restricted Stock Award which have not then vested.

             (d)   Unvested   Restricted   Stock  may  not  be  sold,   assigned
transferred,   pledged  or  otherwise   encumbered  or  disposed  of  except  as
specifically  provided  herein  or in  the  written  instrument  evidencing  the
Restricted Stock Award.

      14. STOCK  AWARDS.  The Plan  Administrator  may, in its sole  discretion,
grant (or sell at a purchase price determined by the Plan Administrator) a Stock
Award to any officer, employee or Consultant of the Company or its Subsidiaries,

                                      -13-
<PAGE>

pursuant to which such individual may receive shares of Common Stock free of any
vesting  restrictions  (a "Stock  Award")  under the Plan.  Stock  Awards may be
granted  or sold as  described  in the  preceding  sentence  in  respect of past
services or other valid  consideration,  or in lieu of any cash compensation due
to such individual.

      15.  Performance  Share  Awards.  A  Performance  Share  Award is an Award
entitling the recipient to acquire shares of Common Stock upon the attainment of
specified  performance  goals. The Plan Administrator may make Performance Share
Awards  independent  of or in  connection  with the  granting of any other Award
under the Plan.  Performance  Share Awards may be granted  under the Plan to any
officer,  employee or Consultant of the Company or its  Subsidiaries,  including
those who qualify for awards under other performance  plans of the Company.  The
Plan  Administrator in its sole discretion  shall determine  whether and to whom
Performance  Share Awards shall be made, the performance  goals applicable under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions  applicable to the awarded  Performance Shares;
provided, however, that the Plan Administrator may rely on the performance goals
and other  standards  applicable  to other  performance  plans of the Company in
setting the standards for Performance Share Awards under the Plan.

      16. AMENDMENT AND TERMINATION OF PLAN.

         (a) AMENDMENT AND TERMINATION.  The Board or the Plan Administrator may
amend, waive or terminate this Plan,  including any express provision  contained
herein, from time to time in such respects as it shall deem advisable;  PROVIDED
that,  to the extent  necessary to comply with Rule 16b-3 or with Section 422 of
the Code (or any other successor or applicable law or  regulation),  the Company
shall obtain stockholder  approval of any Plan amendment in such a manner and to
such a  degree  as is  required  by the  applicable  law,  rule  or  regulation.
Notwithstanding  the  foregoing,  neither the provisions of Section 5(b) of this
Plan,  nor any other  provisions  pertaining to the  automatic  option grants to
non-employee directors,  shall be amended more than once every six months, other
than to comport with changes in the Code or other  applicable  laws or any rules
or regulations  promulgated  thereunder.  The Plan shall terminate no later than
October 31, 2004.

         (b)  EFFECT  OF  AMENDMENT  OR  TERMINATION.   Any  such  amendment  or
termination  of this Plan  shall not affect  Options  already  granted  and such
Options  shall  remain  in full  force  and  effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Plan  Administrator,  which  agreement  must be in writing and signed by the
Optionee and the Company.

      17.  CONDITIONS  UPON  ISSUANCE  OF  SHARES.  Shares  shall  not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance  and  delivery of such Shares  pursuant  thereto  shall comply with all
relevant provisions of law, including,  without limitation,  the Securities Act,
the Exchange Act, and the rules and regulations promulgated thereunder,  and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

                                      -14-
<PAGE>

         As a condition  to the  exercise of an Option,  the Company may require
the person  exercising  such Option to represent  and warrant at the time of any
such  exercise  that the  Shares are being  purchased  only for  investment  and
without  any  present  intention  to sell or  distribute  such Shares if, in the
opinion of counsel for the Company,  such a representation is required by any of
the aforementioned relevant provisions of law.

      18. RESTRICTIONS ON SHARES. Shares of Common Stock issued upon exercise of
an Option shall be subject to the terms and conditions  specified  herein and to
such other terms,  conditions and restrictions as the Plan  Administrator in its
discretion  may  determine  or provide in the grant.  The  Company  shall not be
required to issue or deliver any certificates  for shares of Common Stock,  cash
or other  property prior to (a) the listing of such shares on any stock exchange
(or other  public  market)  on which  the  Common  Stock may then be listed  (or
regularly  traded),  (b) the completion of any  registration or qualification of
such  shares  under  federal or state law,  or any ruling or  regulation  of any
government  body which the Plan  Administrator  determines  to be  necessary  or
advisable,  and (c) the satisfaction of any applicable withholding obligation in
order for the Company or an affiliate to obtain a deduction  with respect to the
exercise of an Option.  The Company may cause any  certificate  for any share of
Common  Stock to be  delivered  to be  properly  marked  with a legend  or other
notation reflecting the limitations on transfer of such Common Stock as provided
in this  Plan or as the  Plan  Administrator  may  otherwise  require.  The Plan
Administrator  may  require  any  person  exercising  an  Option  to  make  such
representations  and furnish such information as it may consider  appropriate in
connection  with the  issuance  or  delivery  of the  shares of Common  Stock in
compliance  with  applicable  law or otherwise.  Fractional  shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.

      19.  STOCKHOLDER  RIGHTS. No person shall have any rights of a stockholder
as to shares of Common Stock subject to an Option until,  after proper  exercise
of the Option or other action required,  such shares shall have been recorded on
the Company's official stockholder records as having been issued or transferred.
Subject to the preceding  Section and upon exercise of the Option or any portion
thereof,  the  Company  will have thirty (30) days in which to issue the shares,
and the Optionee will not be treated as a stockholder for any purpose whatsoever
prior to such issuance.  No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date such  shares are  recorded
as issued or transferred in the Company's official stockholder  records,  except
as provided herein or in an agreement.

      20.  BEST  EFFORTS  TO  REGISTER.  The  Company  may  register  under  the
Securities Act the Common Stock delivered or deliverable  pursuant to Options on
Commission  Form  S-8 if  available  to the  Company  for this  purpose  (or any
successor or alternate  form that is  substantially  similar to that form to the
extent available to effect such registration),  in accordance with the rules and
regulations  governing  such  forms,  as soon as such  forms are  available  for
registration  to the  Company  for this  purpose.  The  Company  will,  if it so
determines,  use its good faith efforts to cause the  registration  statement to
become  effective  as soon as  possible  and  will  file  such  supplements  and
amendments  to the  registration  statement  as may be  necessary  to  keep  the
registration  statement in effect  until the earliest of (a) one year  following
the expiration of the option period of the last Option outstanding, (b) the date
the Company is no longer a reporting  company under the Exchange Act and (c) the
date all Optionees have disposed of all shares delivered pursuant to any Option.
The Company may delay the foregoing actions at any time and from time to time if

                                      -15-
<PAGE>

the Plan  Administrator  determines in its discretion that any such registration
would materially and adversely affect the Company's  interests or if there is no
material benefit to Optionees.

      21. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all  times  reserve  and keep  available  such  number  of Shares as shall be
sufficient to permit the exercise of all Options outstanding under this Plan and
the payment of all Restricted Stock Awards,  Stock Awards and Performance  Share
Awards under this Plan.  The inability of the Company to obtain  authority  from
any  regulatory  body  having  jurisdiction,  which  authority  is deemed by the
Company's  counsel to be necessary to the lawful issuance and sale of any Shares
hereunder,  shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained for any reason.

      22.  AGREEMENTS.  Options,  Stock  Awards,  Restricted  Stock  Awards  and
Performance  Share Awards shall be evidenced by written  agreements in such form
as the Plan Administrator shall approve.

      23. INFORMATION TO AWARDEES. To the extent required by applicable law, the
Company shall provide to each Awardee,  during the period for which such Awardee
has one or more  Awards  outstanding,  copies of all  annual  reports  and other
information  which are provided to all  stockholders  of the Company.  Except as
otherwise noted in the foregoing sentence,  the Company shall have no obligation
or duty to affirmatively  disclose to any Awardee, and no Awardee shall have any
right to be advised of, any material  information  regarding  the Company or any
Parent or Subsidiary at any time prior to, upon or otherwise in connection with,
the exercise of an Award.

      24. FUNDING.  Benefits payable under this Plan to any person shall be paid
directly by the Company.  The Company shall not be required to fund or otherwise
segregate assets to be used for payment of benefits under this Plan.

      25.  INDEMNIFICATION.  In addition to such other rights of indemnification
as they may have as  directors  or as  members  of the Plan  Administrator,  the
members of the Plan  Administrator  shall be indemnified by the Company  against
the reasonable  expenses,  including  attorneys' fees,  actually and necessarily
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 this
Plan or any option  granted  hereunder,  and against all amounts paid by them in
settlement  thereof  (provided such settlement is approved by independent  legal
counsel  selected by the Company) or paid by them in  satisfaction of a judgment
in any such  action,  suit or  proceeding;  provided  that  within 60 days after
institution of any such action,  suit or proceeding a Plan Administrator  member
shall in writing  offer the  Company the  opportunity,  at its own  expense,  to
handle and defend the same. The foregoing right of indemnification  shall not be
exclusive and shall be  independent  of any other rights of  indemnification  to
which  such  persons  may  be  entitled  under  the  Company's   Certificate  of
Incorporation or by-laws, by contract, as a matter of law, or otherwise.

26. COMPLIANCE WITH SECTION 16. With respect to persons subject to Section 16 of
the Act, transactions under this Plan are intended to comply with all applicable

                                      -16-
<PAGE>

conditions  of Rule 16b-3 (or its  successor  rule and shall be construed to the
fullest extent possible in a manner consistent with this intent ). To the extent
that any Award  fails to so  comply,  it shall be deemed to be  modified  to the
extent  permitted  by  law  and to  the  extent  deemed  advisable  by the  Plan
Administrator in order to comply with Rule 16b-3.

      27.  PARTICIPATION BY FOREIGN  NATIONALS.  The Plan  Administrator may, in
order to fulfill the purposes of the Plan and without amending the Plan,  modify
grants to foreign  nationals or United States citizens  employed abroad in order
to recognize differences in local law, tax policy or custom.

      28.  CONTROLLING LAW. This Plan shall be governed by the laws of the State
of New York  applicable  to contracts  made and  performed  wholly in New Jersey
between New Jersey residents.




                                      -17-