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                                                                    EXHIBIT 10.7


                             FINANCIAL INTRANET INC.

                             1998 STOCK OPTION PLAN


1.       PURPOSE OF PLAN; ADMINISTRATION

         1.1      Purpose.

     The  Financial  Intranet  Inc.  1998 Stock  Option Plan  (hereinafter,  the
"Plan")  is  hereby  established  to  grant to  officers,  directors  and  other
employees  of  Financial  Intranet  Inc. or of its parents or  subsidiaries  (as
defined in Sections 424(e) and (f),  respectively,  of the Internal Revenue Code
of 1986, as amended (the "Code"),  if any (individually  and  collectively,  the
"Company"),  and to non-employee  consultants and advisors and other persons who
may perform  significant  services for on or behalf of the Company,  a favorable
opportunity  to acquire  common  stock  ("Common  Stock"),  of the Company  and,
thereby,  to create an incentive  for such persons to remain in the employ of or
provide services to the Company and to contribute to its success.

     The Company may grant under the Plan both  incentive  stock options  within
the meaning of Section 422 of the Code  ("Incentive  Stock  Options")  and stock
options  that  do  not  qualify  for   treatment  as  Incentive   Stock  Options
("Nonstatutory Options").  Unless expressly provided to the contrary herein, all
references  herein to "options,"  shall include both incentive Stock Options and
Nonstatutory Options.

         1.2      Administration.

     The Plan shall be  administered by members of the Board of Directors of the
Company  (the  "Board"),  if  each  such  member  administering  the  Plan  is a
"Non-Employee  Director"  within the meaning of Rule 16b-3 under the  Securities
Exchange  Act  of  1934,  as  amended  ("Rule  16b-3"),   or  a  committee  (the
"Committee") of two or more directors,  each of whom is a disinterested  person.
Appointment  of  Committee   members  shall  be  effective  upon  acceptance  of
appointment.  Committee  members  may resign at any time by  delivering  written
notice to the Board. Vacancies in the Committee may be filled by the Board.

     A majority of the members of the  Committee  shall  constitute a quorum for
the purposes of the Plan.  Provided a quorum is present,  the Committee may take
action by affirmative  role or consent of a majority of its members present at a
meeting.  Meetings may be held telephonically as long as all members are able to
hear one another,  and a member of the  Committee  shall be deemed to be present
for this purpose if he or she is in simultaneous communication by telephone with
the  other  members  who are able to hear one  another.  In lieu of  action at a
meeting, the Committee may act by written consent of a majority of its members.

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     Subject to the express provisions of the Plan, the Committee shall have the
authority to construe and interpret the Plan and all Stock Option Agreements (as
defined in Section  3.4) entered  into  pursuant  hereto and to define the terms
used therein,  to prescribe,  adopt,  amend,  and rescind rules and  regulations
relating to the administration of the Plan and to make all other  determinations
necessary or advisable for the  administration of the Plan;  provided,  however,
that the Committee may delegate  nondiscretionary  administrative duties to such
employees  of the Company as it deems  proper;  and  provided,  further,  in its
absolute  discretion,  the Board may at any time and from time to time  exercise
any and all rights and duties of the  Committee  under the Plan.  Subject to the
express  limitations of the Plan, the Committee  shall designate the individuals
from among the class of persons  eligible to  participate as provided in Section
1.3 who shall receive options,  whether an optionee will receive Incentive Stock
Options or Nonstatutory  Options, or both, and the amount,  price,  restrictions
and  all  other  terms  and  provisions  of  such  options  (which  need  not be
identical).

     Members of the Committee shall receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities which
members of the Committee  incur in connection  with the  administration  of this
Plan shall be borne by the Company.  The Committee may, with the approval of the
Board, employ attorneys, consultants,  accountants, appraisers, brokers or other
persons.  The  Committee,  the Company and the Company's  officers and directors
shall be entitled to rely upon the advise,  opinions or  valuations  of any such
persons. No members of the Committee or Board shall be personally liable for any
action,  determination or interpretation  made in good faith with respect to the
Plan, and all members of the Committee  shall be fully  protected by the Company
in respect of any such action, determination or interpretation.

         1.3      Participation.

     Officers,  Directors,  employees  of the Company and  consultants  shall be
eligible  for  selection  to  participate  in  the  Plan  upon  approval  by the
Committee;  provided,  however  that only  "employees" (within  the  meaning of
Section  3401(c) of the Code) of the Company  shall be eligible for the grant of
Incentive  Stock Options.  An individual who has been granted an options may, if
otherwise  eligible,  be granted  additional  options if the Committee  shall so
determine,  provided that no recipient  may be granted  options to purchase more
than 20% of the shares of Common Stock initially reserved for issuance under the
Plan. No person is eligible to participate in the Plan by matter of right;  only
those eligible persons who are selected by the Committee in its discretion shall
participate in the Plan.

         1.4      Stock Subject to the Plan.

     Subject to  adjustment  as provided in Section 3.5, the stock to be offered
under  the Plan  shall be  shares  of  authorized  but  unissued  Common  Stock,
including any shares repurchased under the terms of the Plan or any Stock Option
Agreement  entered into pursuant  hereto.  the  cumulative  aggregate  number of
shares of Common Stock to be issued  under the Plan shall not exceed  1,500,000,
subject to adjustment as set forth in Section 3.5.

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     If any options  granted  hereunder shall expire or terminate for any reason
without having been fully  exercised,  the  unpurchased  shares subject  thereto
shall again be  available  for the  purposes of the Plan.  For  purposes of this
Section  1.4,  where  the  exercise  price  of  options  is paid by means of the
grantee's  surrender of previously  owned shares of Common  Stock,  only the net
number of additional  shares issued and which remain  outstanding  in connection
with such exercise shall be deemed "issued" for purposes of the Plan.

2.       STOCK OPTIONS

         2.1      Option Price.

     The exercise  price of each  Incentive  Stock option granted under the Plan
shall be  determined  by the  Committee,  but shall not be less than 100% of the
"Fair Market Value" (as defined below) of Common Stock on the date of grant.  If
an Incentive  Stock Option is granted to an employee who at the time such option
is granted owns (within the meaning of section 424(d) of the Code) more than 10%
of the total  combined  voting  power of all  classes  of  capital  stock of the
Company,  the option  exercise  price  shall be at least 110% of the Fair Market
Value of Common Stock on the date of grant and the option by its terms shall not
be  exercisable  after the  expiration  of 5 years from the date such  option is
granted. The exercise price of each Nonstatutory Option also shall be determined
by the  committee,  but shall not be less than 85% of the Fair  Market  Value of
Common Stock on the date of grant.  The status of each option  granted under the
Plan as either an Incentive Stock Option or a Nonstatutory Stock Option shall be
determined by the Committee at the time the Committee acts to grant the options,
and shall be clearly  identified as such in the Stock Option Agreement  relating
thereto.

     "Fair Market  Value" for  purposes of the Plan shall mean:  (i) the closing
price of a share of Common  Stock on the  principal  exchange on which shares of
Common Stock are then trading,  if any, on the day previous to such date, or, if
shares  were not  traded  on the day  previous  to such  date,  then on the next
preceding  trading day during which a sale occurred;  or (ii) if Common Stock is
not  traded on an  exchange  but is quoted  on Nasdaq or a  successor  quotation
system,  (1) the last sales price (if Common  Stock is then listed on the Nasdaq
Stock Market) or (2) the mean between the closing  representative  bid and asked
price (in all other  cases)  for  Common  Stock on the day prior to such date as
reported by Nasdaq or such successor  quotation  system; or (iii) if there is no
listing  or  trading  of  Common  Stock   either  on  a  national   exchange  or
over-the-counter, that price determined in good faith by the Committee to be the
fair  value per share of Common  Stock,  based  upon such  evidence  as it deems
necessary or advisable.

     In the  discretion  of the  Committee  exercised  at the time the option is
exercised,  the exercise  price of any options  granted  under the Plan shall be
paid in full in cash, by check or by the optionee's  interest-bearing promissory
note (subject to any limitations of applicable state corporations law) delivered
at the  time  of  exercise;  provided,  however,  that  subject  to  the  timing
requirements of Section 2.7, in the discretion of the Committee and upon receipt
of all regulatory  approvals,  the person  exercising the options may deliver as
payment in whole or in part of such


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     exercise price  certificates for Common Stock of the Company (duly endorsed
or with duly executed stock powers attached),  which shall be valued at its Fair
Market  Value on the day of  exercise of the option,  or other  property  deemed
appropriate by the Committee; and, provided further, that subject to Section 422
of the Code so-called cashless exercises as permitted under applicable rules and
regulations of the Securities  and Exchange  Commission and the Federal  Reserve
Board shall be permitted in the discretion of the Committee or the Board..

     Irrespective of the form of payment, the delivery of shares pursuant to the
exercise of an option shall be  conditioned  upon payment by the optionee to the
Company of amounts  sufficient to enable the Company to pay all federal,  state,
and local  withholding  taxes  applicable,  in the  Company's  judgment,  to the
exercise. In the discretion of the Committee, such payment to the Company may be
effected  through  (i) the  Company's  withholding  from the number of shares of
Common Stock that would otherwise be delivered to the optionee by the Company on
exercise  of the  option a number of shares of Common  Stock  equal in value (as
determined  by the Fair Market Value of Common Stock on the date of exercise) to
the aggregate  withholding  taxes,  (ii)  withholding  by the Company from other
amounts  contemporaneously  owned by the  Company to the  optionee,  or (iv) any
combination  of these three  methods,  as  determined  by the  Committee  in its
discretion.

         2.2      Option Period.

     (a)  The  Committee  shall  provide,  in the  terms  of each  Stock  Option
Agreement,  when the  option  subject  to such  agreement  expires  and  becomes
unexercisable,  but in no event will an Incentive Stock Option granted under the
Plan be  exercisable  after  the  expiration  of ten  years  from the date it is
granted.  Without  limiting the generality of the  foregoing,  the Committee may
provide in the Stock Option  Agreement that the option  thereto  expires 30 days
following a  Termination  of  Employment  for any reason other than the death or
disability or sic months following a Termination of Employment for disability or
following an optionee's death.

     (b)  Notwithstanding  any  provision of this Section 2.2, in no event shall
any option granted under the Plan be exercised after the expiration date of such
option set forth in the applicable Stock Option Agreement.

         2.3      Exercise of Options.

     Each option granted under the Plan shall become  exercisable  and the total
number  of  shares  subject  thereto  be  purchasable,  in a lump sum or in such
installments,  which  need  not be  equal,  as the  Committee  shall  determine;
provided,  however,  that each option shall become  exercisable in full no later
than ten years  after such  option is  granted,  and each  option  shall  become
exercisable as to at least 10% of the shares of Common Stock covered  thereby on
each anniversary of the date such option is granted; and provided, further, that
if the holder of an option shall not in any given  installment  period  purchase
all of the shares which such holder is entitled to purchase in such  installment

period, such holder's right to purchase any shares not

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     purchased in such installment period shall continue until the expiration or
sooner termination of such holder's option. The Committee may, at any time after
grant of the option and from to time,  increase the number of shares purchasable
in any installment,  subject to the total number of shares subject to the option
and the  limitations set forth in Section 2.5. At any time and from time to time
prior to the time when any  exercisable  option or exercisable  portion  thereof
becomes  unexercisable  under the Plan or the applicable Stock Option Agreement,
such option or portion  thereof may be exercised in whole or in part;  provided,
however,  that the  Committee  may, by the terms of option,  require any partial
exercise to be with respect to a specified  minimum number of shares.  No option
or installment thereof shall be exercisable except with respect to whole shares.
Fractional  share  interests  shall  be  disregarded,  except  that  they may be
accumulated  as  provided  above  and  except  that if such a  fractional  share
interest  constitutes the total shares of Common Stock  remaining  available for
purchase under an option at the time of exercise, the optionee shall be entitled
to receive on exercise a certified or bank cashier's check in an amount equal to
the Fair Market Value of such fractional share of stock.

         2.4      Transferability of Options.

     Except as the Committee may determine as aforesaid, an option granted under
the Plan shall, by its terms, be  nontransferable  by the optionee other than by
will or the  laws of  descent  and  distribution,  or  pursuant  to a  qualified
domestic  relations  order (as  defined by the Code),  and shall be  exercisable
during the optionee's lifetime only by the optionee or by his or her guardian or
legal representative.  More particularly, but without limiting the generality of
the immediately preceding sentence,  an option may not be assigned,  transferred
(except as provided in the preceding sentence), pledged or hypothecated (whether
by  operation  of law or  otherwise),  and shall not be  subject  to  execution,
attachment or similar  process.  Any  attempted  assignment,  transfer,  pledge,
hypothecation  or other  disposition of any option contrary to the provisions of
the  Plan  and the  applicable  Stock  Option  Agreement,  and  any  levy of any
attachment  or  similar  process  upon an  option,  shall be null and void,  and
otherwise  without effect,  and the Committee may, in its sole discretion,  upon
the happening of any such event, terminate such option forthwith.

         2.5      Limitation on Exercise of Incentive Stock Options.

     To the extent that the aggregate Fair Market Value  (determined on the date
of grant) of the Common  Stock with  respect to which  Incentive  Stock  Options
granted  hereunder  (together with all other Incentive Stock Option plans of the
Company) are  exercisable for the first time by an optionee in any calendar year
under the Plan exceeds $100,000, such options granted hereunder shall be treated
as  Nonstatutory  Options to the extent required by Section 422 of the Code. The
rule set forth in the preceding  sentence  shall be applied  taking options into
account in the order in which they were granted.




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         2.6      Disqualifying Dispositions of Incentive Stock Options.

     If Common Stock  acquired upon  exercise of any  Incentive  Stock Option is
disposed of in a disposition  that, under Section 422 of the Code,  disqualifies
the option holder from the application of Section 421(a) of the code, the holder
of the Common Stock  immediately  before the  disposition  shall comply with any
requirements imposed by the Company in order to enable the Company to secure the
related income tax deduction to which it is entitled in such event.

         2.7      Certain Timing Requirements.

     At the discretion of the Committee,  shares of Common Stock issuable to the
optionee upon  exercise of an option may be used to satisfy the option  exercise
price  or the tax  withholding  consequences  of such  exercise,  in the case of
persons subject to Section 6 of the Securities Exchange Act of 1934, as amended,
only (i) during the period  beginning on the third  business day  following  the
date of  release  of the  quarterly  or annual  summary  statement  of sales and
earnings of the Company and ending on the twelfth  business day  following  such
date or (ii) pursuant to an irrevocable  written election by the optionee to use
shares of Common Stock  issuable to the optionee  upon exercise of the option to
pay all or part of the option price or the  withholding  taxes made at least six
months prior to the payment of such option price or withholding taxes.

         2.8      No Affect on Employment.

     Nothing in the Plan or in any Stock Option Agreement hereunder shall confer
upon any optionee any right to continue in the employ of the Company, any Parent
Corporation or any subsidiary or shall interfere with or restrict in any way the
rights of the Company,  its Parent  Corporation and its Subsidiaries,  which are
hereby expressly reserved,  to discharge any optionee at any time for any reason
whatsoever, with or without cause.

     For purposes of the Plan,  "Parent  corporation" shall mean any corporation
in an  unbroken  chain of  corporations  ending  with the Company if each of the
corporations  other than the Company then owns stock  possessing  50% or more of
the total  combined  voting  power of all  classes  of stock in one of the other
corporations in such chain.  For purposes of the Plan,  "Subsidiary" shall mean
any corporation in an unbroken chain of corporations  beginning with the Company
if each of the  corporations  other than the last  corporation  in the  unbroken
chain then owns stock  possessing 50% or more of the total combined voting power
of all classes of stock on one of the other corporations in such chain.

3.       OTHER PROVISIONS

         3.1      Sick Leave and Leaves of Absence.

     Unless otherwise provided in the Stock Option Agreement,  and to the extent
permitted  by Section 422 of the Code,  an  optionee's  employment  shall not be
deemed to terminate by reason of

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     sick  leave,  military  leave or other  leave of  absence  approved  by the
Company if the period of any such leave does not exceed a period approved by the
Company,  or, if longer,  if the optionee's right to reemployment by the Company
is guaranteed either  contractually or by statute.  A Stock Option Agreement may
contain such additional or different provisions with respect to leave of absence
as the Committee  may approve,  either at the time of grant of an option or at a
later time.

         3.2      Termination of Employment.

     For purposes of the Plan  "Termination of Employment,"  shall mean the time
when the  employee-employer  relationship  between the optionee and the Company,
any  Subsidiary  or  any  Parent  Corporation  is  terminated  for  any  reason,
including,  but  not  by  way  of  limitation,  a  termination  by  resignation,
discharge, death, disability or retirement; but excluding (i) terminations where
there is a simultaneous  reemployment or continuing employment of an optionee by
the Company, any Subsidiary or any Parent corporation, (ii) at the discretion of
the  Committee,  terminations  which  result  in a  temporary  severance  of the
employee-employer  relationship,  and (iii) at the  discretion of the Committee,
terminations  which  are  followed  by  the  simultaneous   establishment  of  a
consulting  relationship by the Company,  a Subsidiary or any Parent Corporation
with the former employee. Subject to Section 3.1, the Committee, in its absolute
discretion,  shall determine the affect of all matters and questions relating to
Termination of Employment;  provided,  however,  that, with respect to Incentive
Stock  Options,  a leave of  absence  or other  change in the  employee-employer
relationship  shall constitute a Termination of Employment if, and to the extent
that  such  leave of  absence  or other  change  interrupts  employment  for the
purposes of Section  422(a)(2) of the code and  then-applicable  regulations and
revenue rulings under said Section.

         3.3      Issuance of Stock Certificates.

     Upon  exercise  of an  option,  the  Company  shall  deliver  to the person
exercising such option a stock certificate evidencing the shares of Common Stock
acquired  upon  exercise.  Notwithstanding  the  forgoing,  the Committee in its
discretion  may  require  the Company to retain  possession  of any  certificate
evidencing  stock  acquired upon exercise of an option which remains  subject to
repurchase  under the  provisions  of the Stock  Option  Agreement  or any other
agreement  signed  by the  optionee  in  order  to  facilitate  such  repurchase
provisions.

         3.4      Terms and Conditions of Options.

     Each option  granted  under the Plan shall be evidenced by a written  Stock
Option Agreement  ("Stock Option  Agreement") between the option holder and the
Company  providing that the option is subject to the terms and conditions of the
Plan and to such other terms and  conditions not  inconsistent  therewith as the
Committee may deem appropriate in each case.

     3.5 Adjustments Upon Changes in Capitalization; Merger and Consolidation.


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     If the outstanding shares of Common Stock are changed into, or exchange for
cash or a different  number or kind of shares or securities of the Company or of
another   corporation   through   reorganization,    merger,   recapitalization,
reclassification,  stock split-up,  reverse stock split,  stock dividend,  stock
consolidation, stock combination, stock reclassification or similar transaction,
an appropriate  adjustment shall be made by the Committee in the number and kind
of shares as to which options and restricted  stock may be granted.  In the vent
of such a change or  exchange,  other than for shares or  securities  of another
corporation  or by reason of  reorganization,  the  Committee  shall also make a
corresponding  adjustment changing the number or kind of shares and the exercise
price per share  allocated to  unexercised  options or portions  thereof,  which
shall have been granted prior to any such change,  shall  likewise be made.  Any
such  adjustment,  however,  shall be made  without  change in the  total  price
applicable  to the  unexercised  portion of the option but with a  corresponding
adjustment  in the price for each share  (except for any change in the aggregate
price resulting from rounding-off of share quantities or prices).

     In the event of a "spin-off" or other substantial distribution of assets of
the Company which has a material diminutive effect upon the Fair Market Value of
the Common Stock,  the Committee in its discretion shall make an appropriate and
equitable  adjustment to the exercise prices of options then  outstanding  under
the Plan.

     Where an adjustment  under this Section 3.5 of the type described  above is
made to an Incentive Stock Option, the adjustment will be made in a manner which
will not be  considered a  "modification" under the  provisions  of  subsection
424(b)(3) of the Code.

     In  connection  with the  dissolution  or  liquidation  of the Company or a
partial  liquidation  involving  50% or more of the  assets  of The  Company,  a
reorganization of The Company in which another entity is the survivor,  a merger
or  reorganization  of The Company under which more than 50% of the Common Stock
outstanding prior to the merger or reorganization is converted into cash or into
another security,  a sale of more than 50% of the Company's assets, or a similar
event that the Committee determines,  in its discretion,  would materially alter
the structure of The Company,  or its  ownership,  the  Committee,  upon 30 days
prior written notice to the option holders,  may, in its  discretion,  do one or
more  of the  following:  (i)  shorten  the  period  during  which  options  are
exercisable  (provided  they remain  exercisable  for at least 30 days after the
date the notice is given);  (ii)  accelerate  any  vesting  schedule to which an
option is subject; (iii) arrange to have the surviving or successor entity grant
replacement  options  with  appropriate  adjustments  in the  number and kind of
securities to each option to the extent then exercisable  (including any options
as to which the exercise has been  accelerated  as  contemplated  in clause (ii)
above),  of any amount that is the  equivalent  of the Fair Market  Value of the
Common Stock (at the effective  time of the  dissolution,  liquidation,  merger,
reorganization,  sale or other event) or the fair market value of the option. In
the case of a change in corporate control, the Committee may, in considering the
advisability   or  the  terms  and  conditions  of  any   acceleration   of  the
exercisability of any option pursuant to this Section 3.5, take into account the
penalties  that may result  directly or  indirectly  from such  acceleration  to
either the Company or the option holder, or both, under


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     Section 280G of the Code, and may decide to limit such  acceleration to the
extent necessary to avoid or mitigate such penalties or their effects.

     No  fractional  share of Common  Stock  shall be  issued  under the Plan on
account of any adjustment under this Section 3.5.

         3.6      Rights of Participants and Beneficiaries.

     The Company  shall pay all  amounts  payable  hereunder  only to the option
holder or beneficiaries entitled thereto pursuant to the Plan. The Company shall
not be liable for the debts,  contracts or engagements of any optionee or his or
her  beneficiaries,  and rights to cash payments under the Plan may not be taken
in execution by  attachment or  garnishment,  or by any other legal or equitable
proceeding while in the hands of the Company.

         3.7      Government Regulations.

     The Plan,  and the grant and  exercise  of  options  and the  issuance  and
delivery of shares of Common Stock under  options  granted  hereunder,  shall be
subject to  compliance  with all  applicable  federal and state laws,  rules and
regulations  including but not limited to state and federal  securities law) and
federal margin requirements and to such approvals by any listing,  regulatory or
governmental  authority  as may, in the opinion of counsel for the  Company,  be
necessary or advisable in connection  therewith.  Any securities delivered under
the Plan shall be subject to such  restrictions,  and the person  acquiring such
securities  shall,  if  requested by the Company,  provide such  assurances  and
representations to the Company as the Company may deem necessary or desirable to
assure  compliance  with  all  applicable  legal  requirements.  To  the  extent
permitted by applicable  law, the Plan and options  granted  hereunder  shall be
deemed  amended to the  extent  necessary  to  conform  to such laws,  rules and
regulations.

         3.8      Amendment and Termination.

     The Board or the Committee may at any time suspend,  amend or terminate the
Plan and may, with the consent of the option holder,  make such modifications of
the  terms and  conditions  of such  option  holder's  option  as it shall  deem
advisable,   provided,   however,   that,  without  approval  of  the  Company's
stockholders  given within twelve months before or after the action by the Board
or the  Committee,  no action of the Board or the Committee  may, (A) materially
increase the benefits  accruing to  participants  under the Plan; (B) materially
increase the number of  securities  which may be issued  under the Plan;  or (C)
materially  modify the  requirements as to eligibility for  participation in the
Plan. No option may be granted  during any  suspension of the Plan or after such
termination.  The  amendment,  suspension or  termination of the Plan shall not,
without the consent of the option holder affected  thereby,  alter or impair any
rights or obligations  under any option  theretofore  granted under the Plan. No
option may be granted during any period of suspension  nor after  termination of
the Plan,  and in no event may any  option be  granted  under the Plan after the
expiration of ten years from the date the Plan is adopted by the Board.


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         3.9      Time of Grant and Exercise of Option.

     An option shall be deemed to be exercised when the Secretary of the Company
receives written notice from an option holder of such exercised,  payment of the
purchase price  determined  pursuant to Section 2.1 of the Plan and set forth in
the  Stock  Option  Agreement,  and all  representations,  indemnifications  and
documents reasonably requested by the Committee.

     3.10 Privileges of Stock  Ownership;  Non-Distributive  Intent;  Reports to
Option Holders.

     A  participant  in the Plan shall be  entitled  to the  privilege  of stock
ownership as to any shares of Common Stock not actually  issued to the optionee.
Upon  exercise  of an  option at a time  when  there is not in effect  under the
Securities  Act of 1933, as amended,  a Registration  Statement  relating to the
Common  Stock  issuable  upon  exercise or payment  therefor and  available  for
delivery a Prospectus  meeting the requirements of Section 10(a)(3) of said Act,
the  optionee  shall  represent  and warrant in writing to the Company  that the
shares  purchased are being  acquired for  investment and not with a view to the
distribution thereof.

     The Company  shall  furnish to each  optionee  under the Plan the Company's
annual repot and such other periodic reports, if any, as are disseminated by the
Company in the ordinary course to its stockholders.

         3.11     Legending Share Certificates.

     In order to enforce any restrictions  imposed upon Common Stock issued upon
exercise of an option  granted  under the Plan or to which such Common Stock may
be  subject,  the  Committee  may cause a legend or  legends to be placed on any
share certificates representing such Common Stock, which legend or legends shall
make appropriate reference to such restrictions,  including, but not limited to,
a restriction  against all or such Common Stock for any period of time as may be
required by applicable laws or regulations.  If any restriction  with respect to
which a legend was  placed on any  certificate  ceases to apply to Common  Stock
represented by such  certificate,  the owner of the Common Stock  represented by
such  certificates  may  require  the  Company  to cause the  issuance  of a new
certificate not bearing the legend.

     Additionally,  and not by way of limitation,  the Committee may impose such
restrictions  on any Common  Stock  issued  pursuant  to the Plan as it may deem
advisable, including, without limitation, restrictions under the requirements of
any stock exchange or market upon which Common Stock is then traded.

         3.12     Use of Proceeds.

     Proceeds  realized pursuant to the exercise of options under the Plan shall
constitute general funds of the Company.

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<PAGE>

     3.13 Changes in Capital Structure; No Impediment to Corporate Transactions.

     The  existence of  outstanding  options under the Plan shall not affect the
Company's right to effect adjustment, recapitalization, reorganizations or other
changes in its or any other  corporation's  capital  structure or business,  any
merger or consolidation,  any issuance of bonds, debentures,  preferred or prior
preference  stock  ahead  of or  affecting  Common  Stock,  the  dissolution  or
liquidation of the Company's or any other  corporations  assets or business,  or
any other  corporate  act,  whether  similar  to the events  described  above or
otherwise.

         3.14     Effective Date of the Plan.

     The  Plan  shall  be  effective  as of  the  date  of its  approval  by the
stockholders  of The Company  within twelve months after the date of the Board's
initial adoption of the Plan.  Options may be granted but not exercised prior to
stockholder  approval of the Plan. If any options are so granted and stockholder
approval  shall  not have  been  obtained  within  twelve  months of the date of
adoption of this Plan by the Board of Directors,  such options  shall  terminate
retroactively as of the date they were granted.

         3.15     Termination.

     The Plan shall terminate  automatically  as of the close of business on the
day preceding the tenth anniversary date of its adoption by the Board or earlier
as provided in Section 3.8. Unless otherwise provided herein, the termination of
the Plan shall not affect the validity of any option  agreement  outstanding  at
the date of such termination.

         3.16     Effective Date of the Plan.

     The  adoption  of the Plan  shall  not  affect  any other  compensation  or
incentive  plans  in  effect  for the  Company,  any  subsidiary  or any  Parent
Corporation.  Nothing in the Plan shall be  construed  to limit the right of the
Company (i) to  establish  any other forms of  incentives  or  compensation  for
employees of the company,  any  Subsidiary or any Parent  Corporation or (ii) to
grant or  assume  options  or other  rights  otherwise  than  under  the Plan in
connection  with any  proper  corporation  purpose  including  but not by way of
limitation,   the  grant  or  assumption  of  options  in  connection  with  the
acquisition  by purchase,  lease,  merger,  consolidation  or otherwise,  of the
business, stock or assets of any corporation, partnership, firm or association.



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