Ixion Biotechnology, Inc.

                             1994 Stock Option Plan,
                          as amended December xx, 1999

1. Purpose of Plan. The purpose of the Ixion Biotechnology, Inc. 1994 Stock
Option Plan (the "Plan") is to provide a means by which Ixion Biotechnology,
Inc. (the "Company") may attract and retain directors, executive officers, other
key employees who have been or who will be given responsibility for the
management or administration of the Company's business and the growth of the
Company, Consultants, and Members of the Scientific Advisory Board, by providing
those personnel with an opportunity to participate in the growth, development
and financial success of the Company which their efforts, initiative, and skill
have helped produce.

2. Definitions. Wherever the following capitalized terms are used in the Plan,
they shall have the following respective meaning:

          2.1  "Board of Directors" means the board of directors of the Company.

          2.2  "Change in Control" shall be deemed to have occurred if:

                  (a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of the Common Stock, becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding securities which vote
generally in the election of Directors (referred to herein as "Voting
Securities"); or

                  (b) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors and any
new Directors whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the Directors then still in office who either were Directors
at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

                  (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of surviving
entity) more then 50% of the total voting power represented by the Voting
Securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or

                  (d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one transaction or
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a series of transactions) all or substantially all of the Company's assets.

          2.3  "Code" means the Internal Revenue Code of 1986, as amended.

          2.4  "Committee" means the Audit and Benefits Committee of the
               Company.

2.5 "Common Stock" means the Common Stock of the Company, par value $0.01 per
share. 2.6 "Company" means Ixion Biotechnology, Inc., a Delaware corporation. In
addition, "Company" shall mean any corporation assuming or issuing new employee
stock options in substitution for Incentive Stock Options outstanding under the
Plan, in a transaction to which Section 424(a) of the Code applies.

         2.7 "Consultant" means any person designated a consultant by the Board
of Directors providing services in connection with the Company's business or
research.

         2.8      "Director" means a member of the Board of Directors.

         2.9 "Disability" or "disabled" means, with respect to an Employee, a
physical or mental condition resulting from any medically determinable physical
or mental impairment that renders such Employee incapable of engaging in any
substantial gainful employment and that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not less
than six consecutive months.

         2.10 "Disinterested Person" means a person who, pursuant to Rule 16b-3
has not been granted stock, stock options, or stock appreciation rights of the
Company, under the Plan or any other plan during the period beginning one year
prior to his appointment to the Committee, and during his period of service on
the Committee (except grants made pursuant to Section 4.3 or 4.4).

         2.11 "Employee" means any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of the Company, or of its subsidiaries or affiliated entities, or of
members of its Affiliated Group, whether such employee is so employed at the
time this Plan is adopted or becomes so employed subsequent to the adoption of
this Plan.

          2.12 "Exchange Act" means the Securities Exchange Action of 1934, as
               amended.

          2.13 "Fair Market Value" means the per share value of the Common Stock
               as of a given date, determined as follows:


                  (a) If the Common Stock is listed or admitted for trading on
any national securities exchange, the Fair Market Value of the Common Stock is
the closing quotation for such
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stock on the day preceding such date, or, if shares were not traded on the day
preceding such date, then on the next preceding trading day during which a sale
occurred.

                  (b) If the Common Stock is not traded on any national
securities exchange, but is quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System (Nasdaq System) or any similar system
of automated dissemination of quotations of prices in common use, the Fair
Market Value of the Common Stock is the last sales price (if the stock is then
listed as a national market issue under the Nasdaq System) or the mean between
the closing representative bid and asked prices (in all other cases) for the
stock on the day preceding such date as reported by Nasdaq System (or such
similar quotation system).

                  (c) If neither clause (a) nor clause (b) of this Section 2.13
is applicable, the Fair Market Value of the Common Stock is the fair market
value per share as of such valuation date, as determined by the Board of
Directors in good faith and in accordance with uniform principles consistently
applied. Such Fair Market Value shall be determined on a regular basis, not less
than annually.

         2.14 "Incentive Stock Option" means an Option which qualifies under
Section 422 of the Code and which is designated as an Incentive Stock Option by
the Committee.

         2.15     "Member of the Scientific Advisory Board" means a member of
the Company's Scientific Advisory Board.

         2.16 "Nonqualified Option" means an Option which is not an Incentive
Stock Option and which is designated as a Nonqualified Option by the Committee.

         2.17 "Officer" means an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such rule may be amended from time to time.

         2.18     "Option" means the Incentive Stock Options and Nonqualified
Options granted under this Plan.

         2.19     "Optionee" means an Employee or an Outside Director to whom
an Option is granted under this Plan.

         2.20 "Outside Director" means a Director who is Independent (if the
Common Stock is listed or admitted for trading on any national securities
exchange, then "Independent" as such term is defined in the applicable rules and
regulations of such exchange, or if the Common Stock is not listed or admitted
for trading on any national securities exchange, then "Independent" as such term
is defined in applicable rules and regulations of the New York Stock Exchange,
Inc.)

         2.21     "Participant" means an Optionee who is granted Options
pursuant to Section 4 of the Plan.



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         2.22     "Plan" means the Ixion Biotechnology, Inc. 1994 Stock Option
Plan, as it may be amended from time to time.

         2.23     "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange
Act, as such rule may be amended from time to time.

         2.24     "Secretary" means the Secretary of the Company.

         2.25     "Securities Act" means the Securities Act of 1933, as amended.

         2.26     "Termination of Employment" means:

                  (a) With respect to any Employee, the time when the
employee-employer relationship between the Optionee and the Company, its
subsidiaries or affiliated entities, is terminated for any reason, with or
without cause. The Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to Termination of Employment,
including without limitation, the question of whether a particular leave of
absence constitutes a Termination of Employment; provided, however, that, with
respect to Incentive Stock Options, a leave of absence shall constitute a
Termination of Employment if, and to the extent that, such leave of absence
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
Notwithstanding any other provision of this Plan, and subject to any applicable
agreements between the Optionee and the Company, the Company has an absolute and
unrestricted right to terminate the Optionee's employment at any time for any
reason whatsoever, with or without cause.

         (b) With respect to any Outside Director, Consultant, or Member of the
Scientific Advisory Board, the time when such person ceases to be a Director,
Consultant, or Member of the Scientific Advisory Board of the Company for any
reason, with or without cause, including without limitation, a termination by
resignation, removal, death, disability, or failure to be nominated or reelected
by the Company's stockholders. Nothing in this Plan or any Stock Option
Agreement hereunder shall confer upon any such person, Consultant, or Member of
the Scientific Advisory Board, any right to continue his or her association with
the Company or shall interfere with or restrict in any way the rights of the
Company and its stockholders, which are hereby expressly reserved, to remove any
such person at any time for any reason whatsoever, with or without cause.

3.       Stock Subject to Plan.

         3.1 Stock Subject to Plan. The stock subject to an Option shall be
shares of the Company's Common Stock. The aggregate number of such shares which
may be issued upon exercise of Options granted to Directors, Members of the
Scientific Advisory Board, Employees, and Consultants shall not exceed 500,000.
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         3.2 Types of Awards. Options granted under the Plan may be intended to
qualify for favorable tax treatment as Incentive Stock Options, and as
Nonqualified Options, being those not qualified or intended for such favorable
tax treatment under the Code.


         3.3 Unexercised options. If any Option expires or is canceled without
having been fully exercised, additional Options for the number of shares of
Common Stock that would have been issued upon exercise of such Option may be
re-granted under this Plan, subject to limitations of Section 3.1.

         3.4 Changes in Company Capitalization. In the event that (i) the
outstanding shares of Common Stock are hereafter changed into or exchanged for a
different number or kind of shares or other securities of the Company, or of
another entity, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, or (ii) the number of shares is increased or
decreased by reason of a stock split, stock dividend, combination of shares or
any other increase or decrease in the number of such shares of Common Stock
effected without receipt of consideration by the Company (provided, however,
that conversion or exchange of any convertible or exchangeable securities of the
Company shall not be deemed to have been "effected without receipt of
consideration"), then the Committee shall make appropriate adjustments in the
number and kind of shares for the purchase of which options may be granted,
including adjustments to the limitations in Section 3.1 on the maximum number
and kind of shares which may be issued on exercise of an Option.

4.       Granting of Options.

         4.1 Eligibility. Any Officer or other key Employee of the Company and
any Outside Director, Consultant, or Member of the Scientific Advisory Board
shall be eligible to be granted Options. Each Outside Director, including a
member of the Committee, each Member of the Scientific Advisory Board, and each
Consultant shall be eligible to be granted only Nonqualified Options.

         4.2      Incentive Stock Options.  No Incentive  Stock Option shall b
 granted unless it qualifies as an "incentive  stock option"
under Section 422 of the Code when granted.

         4.3      Grants.  (a)

                  (a)      The Committee shall from time to time, in its
absolute discretion:

                          (i) Determine which Employees are key Employees,
taking into account the nature of the services rendered by the particular
Employee, the Employee's potential contribution to the long-term success of the
Company, and such other factors as the Committee deems relevant, and select from
among the key Employees (including those to whom Options have been previously
granted under the Plan, Outside Directors who are not members of the Committee,
Consultants, and Members of the Scientific Advisory Board, such of them as in
its opinion should be granted Options; and
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                           (ii)     Determine the number of shares to be subject
to such Options granted to such selected individuals,  and determine whether
such Options are to be Incentive Stock Options or Nonqualified Options; and



                           (iii)    Determine the terms and conditions of such
Options.

                  (b) Upon the selection of such individual to be granted an
Option, the Committee shall instruct the Secretary to issue such Option and may
impose such conditions on the grant of such Option as it deems appropriate.
Without limiting the generality of the preceding sentence, the Committee may, in
its discretion and on such terms as it deems appropriate, require as a condition
of the grant of an Option to an individual that the individual surrender for
cancellation some or all of the unexercised Options which have been previously
granted to him. An Option, the grant of which is conditioned upon such
surrender, may have an Option price lower (or higher) than the Option price of
the surrendered Option, may cover the same (or a lesser or greater) number of
shares as the surrendered Option, may contain such other terms as the Committee
deems appropriate and shall be exercisable in accordance with its terms, without
regard to the number of shares, price, Option period or any other term or
condition of the surrendered Option.

         4.4      Granting of Nonqualified Options to Outside Directors.

                  (a) Each person who is an Outside Director of the Company at
the date of the adoption of this Plan shall be granted Nonqualified Options to
purchase 2,000 shares of Common Stock.

                           The  Committee  shall grant to each Outside  Director
annually (so long as he or she is an Outside  Director on each such anniversary
date) Nonqualified Options to purchase an additional 2,500 shares of Common
Stock.

         4.5      Administration of the Plan.

                  (a) The Plan shall be administered by the Committee. The
Committee shall consist of at least two Outside Directors (if there are such)
selected by the Board of Directors, one of whom, if possible, shall be a
Disinterested Person. Committee members may resign by delivering written notice
to the Secretary. Vacancies on the Committee shall be filled by the Board of
Directors.

                  (b) Except as otherwise provided in the Plan and except as
otherwise expressly stated to the contrary in the Company's Certificate of
Incorporation, Bylaws, or elsewhere, the Committee shall have the sole
discretionary authority (i) to select the Officers, other key Employees,
Directors, Consultants, or Members of the Scientific Advisory Board who are to
be granted Options under the Plan, (ii) to determine the number of Options to be
granted to any person at any time, (iii) to authorize the granting of Options,
(iv) to impose such conditions and restrictions on Options as

<PAGE>

it determines appropriate, (v) to interpret the Plan and the Options, (vi) to
prescribe, amend and rescind rules and regulations relating to the Plan, and
(vii) to take any other actions in connection with the Plan and to make all
determinations under the Plan as it may deem necessary or advisable for the
administration of the Plan. The determinations of the Committee on the matters
referred to in this Section 4 shall be binding and conclusive on all persons.


<PAGE>


                  (c) A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by all of the members of the Committee shall be fully effective as if it
had been made by a majority vote at a meeting duly called and held.

                  (d) The Committee may delegate to one or more persons any of
its powers, other than its power to authorize the granting of Options, or
designate one or more persons to do or perform those matters to be done or
performed by the Committee, including administration of the Plan. Any person or
persons delegated or designated by the Committee shall be subject to the same
obligations and requirements imposed on the Committee and its members under the
Plan.

                  (e) Members of the Committee shall receive such compensation
for their services as members as may be determined by the Board of Directors.
All expenses and liabilities incurred by members of the Committee in connection
with the administration of the Plan shall be borne by the Company. The Committee
may employ attorneys, consultants, accountants, appraisers, brokers, or other
persons. The Committee, the Company, and its Officers and Directors shall be
entitled to rely upon the advice, opinions, or valuations of any such persons.
All elections taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Optionees, the
Company, and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan. Members of the Committee and each person or
persons designed or delegated by the Committee shall be entitled to
indemnification by the Company for any action or any failure to act in
connection with services performed by or on behalf of the Committee for the
benefit of the Company to the fullest extent provided or permitted by the
Company's Certificate of Incorporation, Bylaws, any insurance policy or other
agreement intended for the benefit of the Committee, or by any applicable law.

5.       Terms of Options.

         5.1 Option Agreement. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
Officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with the Plan. Stock Option Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to qualify such Options as "incentive stock options" under
Section 422 of the Code.

         5.2      Vesting of Options.
<PAGE>

                  (a) Options granted to Outside Directors in accordance with
Section 4.4 hereof shall vest 20% at the end of the first year of service after
the grant and 1/12 of 20% for each month thereafter. All other Options granted
under the Plan shall vest as determined by the Committee and as set forth in the
respective Stock Option Agreement, whether such vesting is based on the
attainment of performance goals, chronologically, or otherwise.

                  (b) Options which have been granted but not yet vested under
this Section 5.2 shall be forfeited if the Optionee dies, becomes disabled, or
leaves the employment of the Company, its subsidiary, or affiliated entity for
any or no reason, with or without cause, or otherwise, unless provided to the
contrary in any agreement approved by the Committee between the Optionee and the
Company, its subsidiary, or affiliated entity, which agreement shall govern any
further vesting of Options.

         5.3      Option Exercise Price.

                  (a) The price per share for Options granted pursuant to
Section 4.3 shall be set by the Committee; provided, however, that the price per
share shall be not less than 100% of the Fair Market Value of such shares on the
date such Option is granted; provided, further, that, in the case of an
Incentive Stock Option, the price per share shall not be less than 110% of the
Fair Market Value of such shares on the date such Option is granted in the case
of an individual then owning (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary of the Company.

                  (b) The price of shares subject to each Nonqualified Option
granted pursuant to Section 4.4 shall be the Fair Market Value of such shares on
the date such Option is granted.

         5.4      Exercise Periods.

                  (a) No Option may be exercised in whole or in part until it
has vested, except as may be provided in Sections 5.4(c) or 5.6 or as may
otherwise be provided for in a Stock Option Agreement which has been approved by
the Committee.

                  (b) Subject to the provisions of Sections 5.2, 5.4(c), 5.4(d)
and 5.6, Options shall become exercisable at such times and in such installments
(which may be cumulative) as the Committee shall provide in the terms of each
individual Stock Option Agreement; provided, however, that by resolution adopted
after an Option is granted the Committee may, on such terms and conditions as it
may determine to be appropriate and subject to Sections 5.2, 5.4(c), 5.4(d) and
5.6, accelerate the time at which such Option or any portion thereof may be
exercised, or such rights may be set forth in an agreement between the Optionee
and the Company which has been approved by the Committee.

                  (c) No portion of an Option which is unexercisable at
Termination of

<PAGE>

Employment shall thereafter become exercisable; provided,
however, that provision may be made that such Option shall become exercisable in
the event of a Termination of Employment as may be determined by the Committee,
or such rights may be set forth in an agreement between the Optionee and the
Company which has been approved by the Committee.

                  (d) To the extent the aggregate Fair Market Value of Common
Stock with respect to which Incentive Stock Options (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company) exceeds
$100,000, such options shall be treated as Nonqualified Options. The rule set
forth in the preceding sentence shall be applied by taking Options into account
in the order in which they were granted. For purposes of this Section 5.4(d),
the Fair Market Value of Common Stock shall be determined as of the time the
Option with respect to such Common Stock is granted.

                  (e)      No Option may be exercised to any extent by anyone
 after the first to occur of the following events:

                           (i)      In the case of an Incentive Stock Option:

                                    (A)     the expiration of ten years from the
date the Option was granted;

                                    (B)     in the case of an Optionee  owning
 (within the meaning of Section  424(d) of the Code),  on the Date of Grant,
more than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary of the Company, the expiration of ten years from the
date the Option was granted;

                                    (C)     except in the case of any Optionee
who is disabled  (within the meaning of Section  22(a)(3) of the Code), the
expiration of three months from the date of the Optionee's Termination of
Employment for any reason other than such Optionee's death unless the Optionee
dies within said three-month period;

                                    (D)     in the case of an  Optionee  who is
disabled  (within  the  meaning of Section  22(a)(3) of the Code), the
expiration of one year from the date of the Optionee's Termination of
Employment for any reason other than such Optionee's death unless the Optionee
dies within said one-year period;

                                    (E) the expiration of one year from the date
of the Optionee's death.

                           (ii)     In the case of a Nonqualified Option:

                                    (A)     the expiration of ten years and one
 day from the

<PAGE>

date the Option was granted; or

                                    (B)     the expiration of one year from the
 date of the Optionee's  Termination of Employment  (whether
by death or otherwise).


                  (f) Subject to the provisions of Section 5.4(a), the Committee
shall provide, in terms of each individual stock Option Agreement when such
Option expires and when it becomes unexercisable, and (without limiting the
generality of the foregoing) the Committee may provide in the terms of
individual Stock Option Agreements that said Options expire immediately upon a
Termination of Employment; provided, however, that provision may be made that
such options shall become exercisable in the event of a Termination of
Employment because of the Optionee's retirement, death, disability, or as may
otherwise be determined by the Committee.

         5.5 Adjustments in outstanding Options. In the event that the
outstanding shares of Common Stock subject to Options are changed into or
exchanged for a different number or kind of shares of the Company or other
securities of the Company by reason of merger, consolidation, recapitalization,
reclassification, or the number of shares is increased or decreased by reason of
a stock split, stock dividend, combination of shares or any other increase or
decrease in the number of such shares of Common Stock effected without receipt
of consideration by the Company (provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration"), the Committee shall make appropriate
adjustments in the number and kind of shares as to which all outstanding
Options, or portions thereof then unexercised, shall be exercisable, to the end
that after such event the Optionee's proportionate interest shall be maintained
as before the occurrence of such event. Such adjustment in an outstanding Option
shall be made without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the price resulting
from rounding-off share quantities or prices) and with any necessary
corresponding adjustment in Option price per share; provided, however, that, in
the case of Incentive Stock Options, each such adjustment shall be made in such
manner as not to constitute a "modification" within the meaning of Section
424(h)(3) of the Code. Any such adjustment made by the Committee shall be final
and conclusive upon all Optionees, the Company, and all other interested
persons.

         5.6 Change of Control, Merger, Consolidation, Acquisition, Liquidation
or Dissolution. Notwithstanding the provisions of Section 5.5, in its absolute
discretion, and on such terms and conditions as it deems appropriate, the
Committee may provide by the terms of any Option that such Option cannot be
exercised after a change of control or the merger or consolidation of the
Company with or into another entity, the acquisition by another entity
(excluding any employee benefit plan of the Company or any or other fiduciary
holding securities under an employee benefit plan of the Company) of all or
substantially all of the Company's assets or 51% or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company, and
if the Committee so provides, it may, in its absolute discretion and on such
terms and conditions as it deems appropriate, also provide, either by the terms
of such Option or by a resolution adopted prior to the occurrence of such change
of control, merger, consolidation, acquisition, liquidation or dissolution,
that, for

<PAGE>

some period of time prior to such event, such Option shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in Section 5.4(a), Section 5.4(b) and/or any installment provision of
such Option; and if the Committee so provides, it may, in its absolute
discretion and on such terms and conditions as it deems appropriate, also
consent to, cause or otherwise effectuate an assumption, assignment, or other
transfer of the Plan and any outstanding Stock Option Agreements by or to the
successor entity.

         5.7 No Right to Continued Employment. Nothing in this Plan or in any
Stock Option Agreement issued hereunder shall confer upon any Optionee any right
to continue in the employ of the Company or its subsidiaries or shall interfere
with or restrict in any way the rights of the Company, and its subsidiaries,
which are hereby expressly reserved, to terminate or discharge any optionee at
any time for any reason whatsoever, with or without cause.


<PAGE>


6.       Exercise of Options.

         6.1 Person Eligible to Exercise. During the lifetime of the Optionee,
only such Optionee may exercise an Option (or any portion thereof) granted to
such Optionee. After the death of the Optionee, any exercisable portion of an
Option may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement, be exercised by the personal
representative of such Optionee or by any person empowered to do so under the
deceased Optionee's will or under the then applicable laws of descent and
distribution.

         6.2 Partial Exercise. 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 Company shall not be required to issue fractional shares and
the Committee may, by the terms of the Stock Option Agreement, require any
partial exercise to be with respect to a specified minimum number of shares.

         6.3 Manner of Exercise. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery to the Secretary of all of
the following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:

                  (a) Notice in writing signed by the Optionee or other person
then entitled to exercise such Option or portion stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Committee; and

                  (b)      either:

                           (i)      Full  payment  (in cash or by check) for the
shares  with  respect to which such  Option or portion is thereby exercised; or

                           (ii)     With the consent of the Committee,  (A)
shares of the Company's

<PAGE>

Common Stock owned by the Optionee duly endorsed for
transfer to the Company, or (B) subject to the timing requirements of Section
6.4, shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option, with a Fair Market Value on the date of Option exercise equal to
the aggregate Option price of the shares with respect to which such Option or
 portion is thereby exercised; or

                           (iii)    With the consent of the Committee,  a full
recourse  promissory note bearing interest (at least at such rate as shall then
preclude the imputation of interest under the Code or any successor provision)
and payable upon such terms as may be prescribed by the Committee. The Committee
may also prescribe the form of such note and the security to be given for such
note. No Option may, however, be exercised by delivery of a promissory note or
by a loan from the Company when or where such loan or other extension of credit
is prohibited by law; or


<PAGE>


                           (iv)     With the consent of the  Committee,  any
combination  of the  consideration  provided in the foregoing subsections (i),
(ii) and (iii); and

                  (c) The payment of the Company (or other employer) of all
amounts which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; with the consent of the Committee,
(i) shares of the Company's Common Stock owned by the Optionee duly endorsed for
transfer, or (ii) subject to the timing requirements of Section 6.4, shares of
the Company's Common Stock issuable to the Optionee upon exercise of the Option,
valued at Fair Market Value as of the date of Option exercise, may be used to
make all or part of such payment; and

                  (d) Such representations and documents as the Committee, in
its absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Committee may, in its absolute discretion,
also take whatever additional actions it deems appropriate to effect such
compliance including without limitation, placing legends on share certificates
and issuing stop-transfer orders to transfer agents and registrars; and

                  (e) In the event that the Option or portion thereof shall be
exercised pursuant to Section 6.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option or portion thereof.

         6.4 Timing Requirements. Shares of the Company's Common Stock issuable
to the Optionee upon exercise of the Option may be used to satisfy the Option
price or the tax withholding consequences of such exercise 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 the Company's
Common Stock issuable to the Optionee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Committee) made at least six months prior to the

<PAGE>

payment of such option price or withholding taxes.

         6.5 Conditions to Issuance of Stock Certificates. The shares of Common
Stock issuable and deliverable upon the exercise of an Option, or any portion
thereof, may be either previously authorized but unissued shares or issued
shares which have then been reacquired by the Company. The Company shall not be
required to issue or deliver any certificate or certificates for shares of
Common Stock purchased upon the exercise of any Option or portion thereof prior
to fulfillment of all of the following conditions:

                  (a) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute
discretion determine to be necessary or advisable; and


<PAGE>


                  (b) The payment to the Company (or other employer corporation)
of all amounts which it is required to withhold under federal, state or local
law in connection with the exercise of the Option; and

                  (c) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience.

         6.6 No Rights as Stockholders. The holders of Options shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
to any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders. Except in accordance with Section 3.4 hereof, no adjustment shall
be made for dividends (ordinary or extraordinary, whether cash or other
property) or distributions or other rights for which the record date is prior to
the date on which the exercise price has been received by the Company and shares
have been issued.

         6.7 Transfer Restrictions. Unless otherwise approved in writing by the
Committee, no shares of Common Stock acquired upon exercise of any Option by any
Officer or Director may be sold, assigned, pledged, encumbered, or otherwise
transferred until at least six months have elapsed from (but excluding) the date
that such Option was exercised. The Committee, in its absolute discretion, may
impose such other restrictions on the transferability of the shares purchasable
upon the exercise of an Option as it deems appropriate. Any such other
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares. The Committee may
require any Optionee to give the Company prompt notice of any disposition of
shares of stock, acquired by exercise of an Incentive Stock Option, within two
years from the date of granting such Option or one year after the transfer of
such shares to such optionee. The Committee may direct that the certificates
evidencing shares acquired by exercise of an Option refer to such requirement to
give prompt notice of disposition.

7.       Additional Provisions.
<PAGE>

         7.1 Approval of Plan by Stockholders. This Plan will be submitted for
the approval of the Company's stockholders within twelve months before or after
the date of the Board of Director's initial adoption of the Plan. Options may be
granted prior to such stockholder approval; provided, however, that such Options
shall not be exercisable prior to the time when the Plan is approved by the
stockholders; provided, further, that if such approval has not been obtained at
the end of said twelve-month period, all Options previously granted under the
Plan shall thereupon be canceled and become null and void. The Company shall
take such actions with respect to the Plan as may be necessary to satisfy the
requirements of Rule 16b-3(b).


         7.2 Nontransferability. No Option or interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy and divorce proceeding), and any attempted
disposition thereof shall be null and void and of no effect; provided, however,
that nothing in this Section 7.2 shall prevent transfers by will or by the
applicable laws of descent and distribution.

         7.3 Securities Act. Upon issuance of Common Stock of the Company to the
Participant, or his heirs, the recipient of that stock shall represent that the
shares of stock are taken for investment and not resale and shall make such
other representations as may be necessary to qualify the issuance of the shares
as exempt from the Securities Act and applicable federal and state securities
laws and regulations, or to permit registration of the shares and shall
represent that he or she shall not dispose of those shares in violation of the
Securities Act or of applicable federal and state securities laws and
regulations. The Company reserves the right to place a legend on any stock
certificate issued pursuant to the Plan to assure compliance with this Section
and with the vesting requirements of Section 5.2. No shares of Common Stock of
the Company shall be required to be distributed until the Company shall have
taken such action, if any, as is then required to comply with the provisions of
the Securities Act or any other then applicable federal or state securities law
or regulation.

         7.4 Withholding of Tax. The Company shall have the right to deduct from
any payment made under the Plan any federal, state or local income or other
taxes required by law to be withheld with respect to such payment. It shall be a
condition to the obligation of the Company to deliver Common Stock upon exercise
of an Option that the Optionee pay to the Company such amount as may be
requested by the Company for the purpose of satisfying any liability for such
withholding taxes. Any grant under this Plan may provide by its terms that the
Optionee may elect, in accordance with any applicable regulations, to pay a
portion or all of the amount of such minimum required or additional permitted
withholding taxes in shares of Common Stock, subject to the timing restrictions
set forth in Section 6.4 hereof. The Optionee shall authorize the Company to
withhold, or shall agree to surrender back to the Company, on or about the date
such withholding tax liability is determinable, shares of Common Stock
previously owned by such Optionee or a portion of the shares that were or
otherwise would be distributed to such Optionee pursuant to such award having a
Fair Market Value equal to the amount of such required or permitted withholding
taxes to be paid

<PAGE>

in shares.


          7.5 Termination and Amendment of Plan. The Committee may at any time
suspend or terminate the Plan, or make such modifications of the Plan as it
shall deem advisable, provided that the Plan not be changed to increase the cost
of the Plan to the Company. However, without approval of the Company's
stockholders given within twelve (12) months before or after the action by the
Committee, no action of the Committee may, except as provided in Section 3.4,
increase any limit imposed in Section 3.1 on the maximum number of shares which
may be issued upon exercise of Options, materially modify the eligibility
requirements of Section 4.1, reduce the minimum Option price requirements of
Section 5.3, extend the limit imposed on this Section 7.5 on the period during
which Options may be granted or amend or modify the Plan in a manner requiring
stockholder approval under Rule 16b-3. Notwithstanding anything to the contrary
contained herein, the Committee shall not amend or modify the Plan more than
once every six (6) months or in any other manner inconsistent with the
requirements of Rule 16b-3(c)(2)(ii) except to the extent required by changes in
the Code, the Employee Retirement Income Security Act of 1974, or regulations
and rules issued thereunder. No termination or amendment of the Plan may,
without the consent of a Participant, adversely affect the rights of such
Participant notwithstanding anything to the contrary herein. No Option may be
granted during any period of suspension of the Plan nor after termination of the
Plan, and in no event may any Option be granted under this Plan after the first
to occur of the following events:

                  (a)      The expiration of ten years from the date the Plan is
adopted by the Board of Directors; or

                  (b)      The expiration of ten years from the date the Plan is
approved by the Company's stockholders under Section 7.1.

         7.6 Duties of the Company. The Company shall, at all times during the
term of each Option, reserve and keep available for issuance or delivery such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of all Options at the time outstanding, shall pay all original
issue taxes with respect to the issuance or delivery of shares pursuant to the
exercise of such Option and all other fees and expenses necessarily incurred by
the Company in connection therewith.

         7.7 Absence of a Committee. Should the Board of Directors fail to
appoint the Committee or should there be no Committee for any other reason, then
the Plan shall be administered by the Board of Directors. All action with
respect to Options granted to any Officer or key Employee who is subject to
Section 16 of the Exchange Act shall be taken by the Board of Directors if each
member is a Disinterested Person, or if the entire Board of Directors is not
comprised of Disinterested Persons, then by not less than two of the Directors
who are Disinterested Persons. In the absence of a Committee, the Board of
Directors (or that portion thereof comprised in accordance with this Section
7.7) shall have all the powers of the Committee as set forth herein in
administration of the Plan.
<PAGE>

         7.8 Effective Date of Plan. In accordance with Section 7.5 hereof, the
effective date of the Plan will be the date on which it was approved by the
stockholders of the Company. The Plan was adopted by the Board of Directors,
subject to stockholder approval on August 31, 1994.

8.       General Provisions.

         8.1 No Rights. No Employee shall have any claim or right to be granted
Options under the Plan. Neither the adoption and maintenance of the Plan nor the
granting of Options pursuant to the Plan shall be deemed to constitute a
contract of employment between the Company and any Employee or to be a condition
of the employment of any person. The Plan and any Options granted under the Plan
shall not confer upon any Participant any right with respect to continued
employment by the Company, nor shall they interfere in any way with the right of
the Company to terminate the employment of any Participant at any time, and for
any reason, with or without cause, it being acknowledged, unless expressly
provided otherwise in writing, that the employment of any Participant is "at
will".

         8.2      Costs of Administration.  The Company shall pay all costs and
expenses of administering the Plan.

         8.3 Controlling Laws. The granting of Options and the issuance of
shares of Common Stock under the Plan shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required. The provisions of this Plan
shall be interpreted so as to comply with the conditions and requirements of the
Securities Act, the Exchange Act, and rules and regulations issued thereunder,
including without limitation Rule 16b-3, unless a contrary interpretation of any
such provisions otherwise required by applicable law. Except to the extent
preempted by Federal law, this Plan and all Stock Option Agreements entered into
pursuant hereto shall be construed and enforced in accordance with, and governed
by, the laws of the State of Delaware, determined without regard to its conflict
of laws rules.

         8.4      No  Obligation  to Exercise.  The granting of an Option shall
impose no  obligation  upon the Optionee to exercise  such Option.

         8.5 Language. Whenever the context so indicates, the singular or plural
number, and the masculine, feminine or neuter gender shall each be deemed to
include the other.

         8.6 No Employment Contract. The Plan is not a contract of employment,
and the terms of employment of any recipient of any award hereunder shall not be
affected in any way by the Plan or related instruments except as specifically
provided therein. The establishment of the Plan shall not be construed as
conferring any legal rights upon any recipient of any award hereunder for a
continuation of employment, nor shall interfere with the right of the Company or
any subsidiary to discharge any recipient of any award hereunder and to treat
him or here without regard to the effect with such treatment might have upon him
or her as the recipient of any award hereunder.

<PAGE>

         8.7 No Rights as Stockholder. No Optionee of any Option shall have any
rights as a stockholder with respect to any shares subject to his or her Option
prior to the date on which he or she is recorded as the holder of such shares on
the records of the Company. No Optionee of any Option shall have the rights of a
stockholder until he or she has paid in full the Option price.