AMENDED AND RESTATED
                               EXCELON CORPORATION

                         1996 INCENTIVE AND NONQUALIFIED
                                STOCK OPTION PLAN

SECTION 1.      PURPOSE

      This 1996  Incentive  and  Nonqualified  Stock Option Plan (the "Plan") is
intended as a  performance  incentive  for  officers  and  employees  of eXcelon
Corporation,  a Delaware  corporation (the  "Company"),  or its Subsidiaries (as
hereinafter defined) and for certain other individuals  providing services to or
acting as Directors of the Company or its Subsidiaries, to enable the persons to
whom options are granted (an "Optionee" or "Optionees") to acquire or increase a
proprietary  interest in the Company and its success.  The Company  intends that
this  purpose  will be  effected  by the  granting of  incentive  stock  options
("Incentive  Options") as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and other stock options ("Nonqualified  Options")
under the Plan. The term  "Subsidiaries"  means any  corporations in which stock
possessing  50% or more of the total  combined  voting  power of all  classes of
stock of such corporation or corporations is owned directly or indirectly by the
Company.

SECTION 2.      OPTIONS TO BE GRANTED AND ADMINISTRATION

      2.1.  OPTIONS TO BE GRANTED.  Options granted under the Plan may be either
Incentive  Options or  Nonqualified  Options.  If an option is intended to be an
Incentive  Option,  and if for any reason such  option (or any portion  thereof)
shall  not  qualify  as an  Incentive  Option,  then,  to  the  extent  of  such
nonqualification,  such  option (or  portion  thereof)  shall be  regarded  as a
Nonqualified  Option  appropriately  granted  under the Plan  provided that such
option (or portion thereof) otherwise meets the Plan's requirements  relating to
Nonqualified Options.

      2.2.  ADMINISTRATION.  This Plan shall be administered by the Compensation
Committee  or any other  committee of the Board of Directors of the Company (the
"Board"),  consisting of two or more  "Outside  Directors"  (such  committee may
hereinafter  be referred to as the "Plan  Administrator").  As used herein,  the
term  "Outside  Director"  means any Director who: (i) is not an employee of the
Company or of any "affiliated group" (as such term is defined in Section 1504(a)
of the Code) which includes the Company (an  "Affiliate");  (ii) is not a former
employee of the Company or any Affiliate who is receiving compensation for prior
services (other than benefits under a tax-qualified  retirement plan) during the
Company's or any Affiliate's  taxable year; (iii) has not been an officer of the
Company  or any  Affiliate;  and (iv)  does not  receive  remuneration  from the
Company or any Affiliate,  either directly or indirectly,  in any capacity other
than as a Director.

      Except as specifically  reserved to the Board under the terms of the Plan,
the Plan  Administrator  shall have full and final authority to operate,  manage
and administer the Plan on behalf of the Company.  This authority includes,  but
is  not  limited  to:  (i)  the  power  to  grant   options   conditionally   or
unconditionally;  (ii)  the  power  to  prescribe  the  form  or  forms  of  the
instruments  evidencing  options  granted  under this  Plan;  (iii) the power to
interpret the Plan;  (iv) the power to provide  regulations for the operation of
the incentive  features of the Plan, and otherwise to prescribe  regulations for
interpretation,  management  and  administration  of the Plan;  (v) the power to
delegate to other persons the responsibility for performing  ministerial acts in
furtherance  of the  Plan's  purpose;  (vi)  the  power  to  make,  in its  sole
discretion,  changes to any outstanding option granted under the Plan, including
the power to reduce the exercise price, to accelerate the vesting  schedule,  or
to extend the  expiration  date;  and (vii) the power to engage the  services of
persons or organizations in furtherance of the Plan's purpose, including but not
limited to banks, insurance companies, brokerage firms and consultants.

      In addition, as to each option, the Plan Administrator shall have full and
final authority,  in its sole discretion:  (i) to determine the number of shares
subject to each  option;  (ii) to determine  the time or times at which  options
will be granted;  (iii) to determine  the  conditions  on which  options will be
granted or may be  exercised;  (iv) to determine the option price for the shares
subject  to  each  option,  which  price  shall  be  subject  to the  applicable
requirements, if any, of Section 5.1(c) hereof; and (v) to determine the time or
times when each option shall become exercisable and the duration of the exercise
period, which shall not exceed the limitations specified in Section 5.1(a).

      No member of the committee serving as Plan  Administrator  shall be liable
for any action or  determination  made in good faith with respect to the Plan or
any option granted thereunder.

<PAGE>

      2.3. APPOINTMENT AND PROCEEDINGS OF COMMITTEE. The Board may, from time to
time,  appoint  members  of the  committee  serving  as  Plan  Administrator  in
substitution for, or in addition to, members  previously  appointed and may fill
vacancies, however caused, in such committee;  provided, however, that each such
appointee  will be an  Outside  Director,  as  described  in  Section  2.2.  The
committee  serving as Plan  Administrator  shall hold its meetings at such times
and  places  as it  shall  deem  advisable.  A  majority  of its  members  shall
constitute  a quorum,  and all  actions  of such  committee  shall  require  the
affirmative  vote of a  majority  of its  members.  Any action may be taken by a
written  instrument signed by all of the members,  and any action so taken shall
be as fully  effective  as if it had been taken by a vote of a  majority  of the
members at a meeting duly called and held.

SECTION 3.      STOCK

      3.1.  SHARES  SUBJECT TO PLAN.  The stock  subject to the options  granted
under the Plan shall be shares of the Company's  authorized but unissued  common
stock,  par value $.001 per share ("Common  Stock"),  or shares of the Company's
Common  Stock held in  treasury.  The total  number of shares that may be issued
pursuant  to options  granted  under the Plan shall not exceed an  aggregate  of
4,700,000 shares of Common Stock, PROVIDED, HOWEVER, that (i) prior to the first
anniversary  of the adoption of the Plan,  no more than an aggregate  maximum of
3,200,000  shares may be issued pursuant to options granted under the Plan, (ii)
prior to the second  anniversary  of the  adoption of the Plan,  no more than an
aggregate  maximum of 3,500,000 shares may be issued pursuant to options granted
under the Plan,  (iii)  prior to the third  anniversary  of the  adoption of the
Plan,  no more than an  aggregate  maximum  of  3,800,000  shares  may be issued
pursuant to options granted under the Plan, (iv) prior to the fourth anniversary
of the  adoption of the Plan,  no more than an  aggregate  maximum of  4,100,000
shares may be issued  pursuant to options  granted under the Plan,  (v) prior to
the fifth  anniversary  of the  adoption of the Plan,  no more than an aggregate
maximum of 4,400,000  shares may be issued pursuant to options granted under the
Plan.  After the fifth  anniversary of the adoption of the Plan, no more than an
aggregate  maximum of 4,700,000 shares may be issued pursuant to options granted
under the Plan. Such number of shares shall be subject to adjustment as provided
in Section 7 hereof.

      3.2. LAPSED OR UNEXERCISED OPTIONS.  Whenever any outstanding option under
the Plan  expires,  is  cancelled  or is  otherwise  terminated  (other  than by
exercise),  the shares of Common Stock allocable to the  unexercised  portion of
such option shall be restored to the Plan and shall again become  available  for
the grant of other options under the Plan.

      3.3. LIMITATION ON GRANTS. In no event may any Plan participant be granted
options with  respect to more than 500,000  shares of Common Stock in any fiscal
year.  The  number  of shares of Common  Stock  issuable  pursuant  to an option
granted to a Plan  participant in a fiscal year that is subsequently  forfeited,
cancelled or otherwise  terminated  shall continue to count toward the foregoing
limitation in such fiscal year. In addition,  if the exercise price of an option
is subsequently  reduced,  the transaction shall be deemed a cancellation of the
original option and the grant of a new one so that both transactions shall count
toward  the  maximum  shares  issuable  in the  fiscal  year of each  respective
transaction.

SECTION 4.      ELIGIBILITY

      4.1. ELIGIBLE OPTIONEES. Incentive Options may be granted only to officers
and other employees of the Company or its Subsidiaries, including members of the
Board  who are also  employees  of the  Company  or a  Subsidiary.  Nonqualified
Options  may be granted to  officers  or other  employees  of the Company or its
Subsidiaries,  to  members  of  the  Board  or the  Board  of  Directors  of any
Subsidiary  whether or not employees of the Company or such  Subsidiary,  and to
consultants  and other  individuals  providing  services  to the  Company or its
Subsidiaries.

      4.2. LIMITATIONS ON 10% STOCKHOLDERS. No Incentive Option shall be granted
to an  individual  who,  at the time  the  Incentive  Option  is  granted,  owns
(including  ownership  attributed  pursuant to 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  parent  or  Subsidiary  of  the  Company  (a  "greater-than-10%
stockholder"), unless such Incentive Option provides that (i) the purchase price
per share  shall not be less than 110% of the fair  market  value of the  Common
Stock at the time such Incentive Option is granted, and (ii) that such Incentive
Option shall not be exercisable to any extent after the expiration of five years
from the date on which it is granted.

      4.3.  LIMITATION ON EXERCISABLE  OPTIONS.  The aggregate fair market value
(determined  at the time the  Incentive  Option is granted) of the Common  Stock
with respect to which  Incentive  Options are  exercisable for the first time by
any person  during any  calendar  year under the Plan and under any other option
plan of the Company (or a parent or  subsidiary as defined in Section 424 of the
Code) shall not exceed  $100,000.  Any option granted in excess of the foregoing
limitation shall be specifically designated as being a Nonqualified Option.

<PAGE>

      4.4.  OPTION  GRANTS TO  DIRECTORS.  As  compensation  for services to the
Company,  each Director of the Company who is not an employee of the Company (an
"Outside  Director")  and who is elected  to the Board  shall  automatically  be
granted upon his or her initial election a fully-vested  Nonqualified Option (an
"Initial  Option") to purchase 15,000 shares of Common Stock of the Company.  In
addition,  immediately  following  each annual  meeting of  stockholders  of the
Company or special meeting in lieu thereof, there shall automatically be granted
to each Outside Director  reelected at or remaining in office after such meeting
a  fully-vested  Nonqualified  Option to purchase  5,000 shares of Common Stock.
Each Nonqualified Option granted to an Outside Director pursuant to this Section
4.4 shall  expire on the tenth  anniversary  of the date of grant.  The exercise
price of each Nonqualified  Option granted pursuant to this Section 4.4 shall be
equal to the fair market value of the Common Stock on the date the  Nonqualified
Option is granted,  such fair market value to be determined  in accordance  with
the provisions of Section 5.1(c).

SECTION 5.      TERMS OF THE OPTION AGREEMENTS

      5.1.  MANDATORY TERMS. Each option agreement shall contain such provisions
as the Plan  Administrator  shall  from  time to time deem  appropriate.  Option
agreements  need not be  identical,  but each option  agreement  by  appropriate
language shall include the substance of all of the following provisions:

            (a) EXPIRATION.  Notwithstanding  any other provision of the Plan or
of any option  agreement,  each option shall expire on the date specified in the
option  agreement,  which date shall not be later than the tenth  anniversary of
the date on which the option was granted  (fifth  anniversary  in the case of an
Incentive Option granted to a greater-than-10% stockholder).

            (b)  EXERCISE.  Each  option  shall  be  exercisable  in  full or in
installments  (which need not be equal) and at such times as  designated  by the
Plan Administrator.  To the extent not exercised,  installments shall accumulate
and be exercisable, in whole or in part, at any time after becoming exercisable,
but not later than the date the option expires.

            (c) PURCHASE PRICE. The purchase price per share of the Common Stock
under each Incentive  Option shall be not less than the fair market value of the
Common Stock on the date the option is granted (110% of the fair market value in
the case of a  greater-than-10%  stockholder).  The price at which shares may be
purchased  pursuant  to  Nonqualified  Options  shall be  specified  by the Plan
Administrator at the time the option is granted, and shall be not less than fair
market value of the shares of Common Stock on the date such Nonqualified  Option
is  granted.  For the purpose of the Plan,  the fair market  value of the Common
Stock shall be the closing price per share on the date of grant of the option as
reported by a nationally  recognized stock exchange,  or, if the Common Stock is
not listed on such an  exchange,  as reported  by the  National  Association  of
Securities  Dealers Automated  Quotation  System,  Inc.  ("Nasdaq"),  or, if the
Common Stock is not quoted on Nasdaq, the fair market value as determined by the
Plan Administrator.

            (d)  TRANSFERABILITY OF OPTIONS.  Options granted under the Plan and
the rights and privileges  conferred  thereby may not be transferred,  assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by applicable laws of descent and distribution,  and shall
not be subject to execution,  attachment or similar process. Upon any attempt so
to transfer,  assign,  pledge,  hypothecate  or otherwise  dispose of any option
under the Plan or any  right or  privilege  conferred  hereby,  contrary  to the
provisions  of the Plan,  or upon the sale or levy or any  attachment or similar
process  upon the rights and  privileges  conferred  hereby,  such option  shall
thereupon terminate and become null and void.

            (e)  TERMINATION  OF  EMPLOYMENT OR DISABILITY OR DEATH OF OPTIONEE.
Except as may be otherwise expressly provided in the terms and conditions of the
option granted to an Optionee:

                (i)   Options granted  hereunder shall terminate on the earliest
                      to occur of:

                      (A) the date of expiration thereof;

                      (B) the date of termination  of the Optionee's  employment
with or  performance  of services for the Company by the Optionee for any reason
(other than as a result of retirement,  death or permanent and total  disability
of the Optionee) or by the Company for cause (as hereinafter defined);

                      (C)  thirty  days  after  the date of  termination  of the
Optionee's  employment  with or  performance  of services  for the Company  upon
retirement  or by the Company  without cause (other than as a result of death or
permanent and total disability of the Optionee);

<PAGE>

                      (D) twelve  months  after the date of  termination  of the
Optionee's  employment  with or  performance  of  services  for the Company as a
result of the  death or  permanent  and  total  disability  of an  Optionee.  An
Optionee is  permanently  and totally  disabled if he is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental  impairment which can be expected to last for a continuous  period of not
less than twelve months;  permanent and total  disability shall be determined in
accordance  with  Section  22(e)(3)  of the  Code  and  the  regulations  issued
thereunder.

                (ii) In the event of the termination of an Optionee's employment
with or  performance  of services for the Company by the Company  without  cause
(other  than as a result  of death or  permanent  and  total  disability  of the
Optionee) or upon the  Optionee's  retirement,  the  Optionee's  option shall be
exercisable during the thirty-day post-termination period described in Paragraph
5.1(e)(i)(C)  only to the  extent  that it was  exercisable  at the time of such
termination  of  employment  or  performance  of  services.  In the event of the
termination of the Optionee's employment with or performance of services for the
Company as a result of the  permanent and total  disability of an Optionee,  the
Optionee's option shall be exercisable during the twelve-month  post-termination
period  referred  to in  Paragraph  5.1(e)(i)(D)  only to the extent that it was
exercisable  at the time of such  termination  of employment or  performance  of
services.  In the event of the termination of the Optionee's  employment with or
performance  of  services  for the  Company  as a  result  of the  death  of the
Optionee,  the Optionee's  executor,  administrator  or any person or persons to
whom  his  option  may  be  transferred  by  will  or by  laws  of  descent  and
distribution   shall  have  the  right  at  any  time  during  the  twelve-month
post-termination  period referred to in Paragraph  5.1(e)(i)(D) to exercise such
option, but only to the extent the Optionee was entitled to exercise such option
at the time of such  termination  of  employment  or  performance  of  services.
Notwithstanding  the  foregoing,   should  the  termination  of  the  Optionee's
employment  with or performance of services for the Company as a result of death
or permanent and total disability occur after the first  anniversary of the date
on which  the  Optionee  was  first  employed  or  otherwise  began to serve the
Company,  the option may be  exercised  for up to the  greater of (A) 50% of all
option  shares  (and such  shares  shall be deemed  vested) or (B) the number of
shares that had vested as of the date of such  termination of employment with or
performance of services for the Company.

                (iii) An  employment  relationship  between  the Company and the
Optionee  shall be deemed to exist  during any period in which the  Optionee  is
employed in any capacity by the Company or by any Subsidiary. Whether authorized
leave of absence or absence on military or government  service shall  constitute
termination of the employment  relationship between the Company and the Optionee
shall be determined by the Plan Administrator at the time thereof.  For purposes
of this Section  5.1(e),  the term "cause" shall mean (A) any material breach by
the  Optionee of any  agreement  to which the  Optionee and the Company are both
parties,  (B) any act (other than retirement) or omission to act by the Optionee
which may have a material and adverse effect on the Company's business or on the
Optionee's  ability to perform  services  for the  Company,  including,  without
limitation,  the commission of any crime (other than minor traffic  violations),
or (C) any material  misconduct or material neglect of duties by the Optionee in
connection  with the  business  or affairs of the Company or any  Subsidiary  or
affiliate of the Company.

            (f) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose
to be the owner of any shares of Common Stock  subject to any option  unless and
until (i) the  option  shall have been  exercised  with  respect to such  shares
pursuant  to the terms  thereof,  and (ii) the  Company  shall  have  issued and
delivered a certificate representing such shares.  Thereupon, the Optionee shall
have full  voting,  dividend  and other  ownership  rights with  respect to such
shares of Common Stock.

     5.2. CERTAIN OPTIONAL TERMS. The Plan  Administrator  may in its discretion
provide, upon the grant of any option hereunder,  that the Company shall have an
option to repurchase all or any number of shares purchased upon exercise of such
option.  The  repurchase  price per share  payable by the Company  shall be such
amount or be determined by such formula as is fixed by the Plan Administrator at
the time the option for the shares subject to repurchase  was granted.  The Plan
Administrator  may also  provide  that the  Company  shall have a right of first
refusal  with  respect  to the  transfer  or  proposed  transfer  of any  shares
purchased  upon exercise of an option granted  hereunder.  In the event the Plan
Administrator shall grant options subject to the Company's  repurchase rights or
rights of first refusal, the certificate or certificates representing the shares
purchased  pursuant  to the  exercise  of  such  option  shall  carry  a  legend
satisfactory to counsel for the Company referring to such rights.

SECTION 6.      METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

      6.1.  NOTICE  OF  EXERCISE.  Any  option  granted  under  the  Plan may be
exercised  by the  Optionee by  delivering  to the Company on any business day a
written notice specifying the option being exercised and the number of shares of
Common Stock the Optionee then desires to purchase and specifying the address to
which the certificates for such shares are to be mailed,  accompanied by payment
for such shares.

<PAGE>

      6.2. MEANS OF PAYMENT AND DELIVERY.  Common Stock purchased on exercise of
an option must be paid for as follows:  (a) in cash or by check  (acceptable  to
the Company in accordance  with guidelines  established for this purpose),  bank
draft or money  order  payable to the order of the  Company,  or (b) through the
delivery of shares of Common  Stock (which in the case of shares  acquired  from
the Company upon exercise of an option,  have been  outstanding for at least six
months)  having a fair market value on the last  business day preceding the date
of exercise equal to the purchase price, or (c) by delivery of an  unconditional
and  irrevocable  undertaking  by a broker to deliver  promptly  to the  Company
sufficient  funds  to pay the  exercise  price,  or (d) if so  permitted  by the
instrument  evidencing the option (or in the case of a Nonqualified  Option,  by
the Plan  Administrator  on or after  grant of the  option),  by  delivery  of a
promissory  note of the  Optionee to the  Company,  payable on such terms as are
specified  by  the  Plan  Administrator,  or  (e)  by  any  combination  of  the
permissible forms of payment;  PROVIDED, that if the Common Stock delivered upon
exercise of the option is an original issue of authorized Common Stock, at least
so much of the exercise  price as represents  the par value of such Common Stock
must be paid other than by the Optionee's  promissory note or personal check. In
the event that  payment of the  option  price is made under (b) above,  the Plan
Administrator  may provide  that the  Optionee be granted an  additional  option
covering the numbers of shares  surrendered,  at an exercise  price equal to the
fair market value of a share of Common Stock on the date of  surrender.  For the
purpose of this Section,  the fair market value of the shares of Common Stock so
delivered to the Company shall be determined in the manner  specified in Section
5.1(c)  hereof.  As  promptly  as  practicable  after  receipt  of such  written
notification and payment, the Company shall deliver to the Optionee certificates
for the  number  of  shares  with  respect  to  which  such  Option  has been so
exercised,  issued in the Optionee's name; provided, however, that such delivery
shall be deemed  effected for all purposes when the Company or a stock  transfer
agent of the Company shall have deposited such certificates in the United States
mail,  addressed to the Optionee,  at the address specified  pursuant to Section
6.1.

SECTION 7.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION

      7.1  NO  EFFECT  OF  OPTIONS  UPON  CERTAIN  CORPORATE  TRANSACTIONS.  The
existence of outstanding  options shall not affect in any way the right or power
of the Company or its  stockholders to make or authorize any or all adjustments,
recapitalizations,  reorganizations  or other changes in the  Company's  capital
structure or its business, or any merger or consolidation of the Company, or any
issue of Common  Stock,  or any issue of bonds,  debentures,  preferred or prior
preference  stock ahead of or affecting the Common Stock or the rights  thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

      7.2. STOCK DIVIDENDS, RECAPITALIZATIONS,  ETC. If the Company shall effect
a subdivision  or  consolidation  of shares or other capital  readjustment,  the
payment of a stock  dividend,  or other  increase or  reduction of the number of
shares of the Common Stock outstanding,  without receiving compensation therefor
in money, services or property,  then: (i) the number, class and per share price
of shares of stock subject to outstanding  options hereunder,  and the number of
shares as to which  automatic  formula  grants of  options  are to be made under
Section  4.4  above,  shall be  appropriately  adjusted  in such a manner  as to
entitle  an  Optionee  to  receive  upon  exercise  of an  option,  for the same
aggregate cash consideration, the same total number and class of shares that the
owner of an equal  number of  outstanding  shares of Common Stock would own as a
result of the event  requiring  the  adjustment;  the number and class of shares
with respect to which options may be granted under the Plan shall be adjusted by
substituting  for the total number of shares of Common  Stock then  reserved for
issuance  under the Plan that number and class of shares of stock that the owner
of an equal number of outstanding shares of Common Stock would own as the result
of the event requiring the adjustment.

      7.3. DETERMINATION OF ADJUSTMENTS.  Adjustments under this Section 7 shall
be  determined  by the  Plan  Administrator  and  such  determinations  shall be
conclusive.  The Plan  Administrator  shall have the discretion and power in any
such event to determine and to make effective  provision for acceleration of the
time or times at which any option or portion  thereof shall become  exercisable.
No  fractional  shares of Common Stock shall be issued under the Plan on account
of any adjustment specified above.

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

SECTION 8.      EFFECT OF CERTAIN TRANSACTIONS

      If the Company is a party to a  reorganization  or merger with one or more
other  corporations,  whether or not the Company is the  surviving  or resulting
corporation,  or if the  Company  consolidates  with or into  one or more  other

<PAGE>

corporations,  or if the Company is liquidated or sells or otherwise disposes of
substantially  all  of its  assets  to  another  corporation  (each  hereinafter
referred to as a  "Transaction"),  in any such event while  unexercised  options
remain outstanding under the Plan, then: (i) subject to the provisions of clause
(iii) below,  after the effective date of such Transaction  unexercised  options
shall remain outstanding and shall be exercisable in shares of Common Stock, or,
if applicable, shares of such stock or other securities, cash or property as the
holders  of  shares  of  Common  Stock  received  pursuant  to the terms of such
Transaction; (ii) the Plan Administrator may accelerate the time for exercise of
all unexercised and unexpired options to and after a date prior to the effective
date of such Transaction;  or (iii) any outstanding  options may be cancelled by
the Plan  Administrator as of the effective date of such  Transaction,  provided
that:  (x)  notice  of such  cancellation  shall be given to each  holder  of an
option; (y) the Plan Administrator  shall have accelerated the time for exercise
of all  unexercised  and unexpired  options that it proposes to cancel;  and (z)
each holder of an option shall have the right to exercise such option in full.

SECTION 9.      AMENDMENT OR TERMINATION OF THE PLAN

      The Board may  terminate  the Plan at any time,  and may amend the Plan at
any time and from  time to time,  subject  to the  limitation  that,  except  as
provided in Sections 7 and 8 hereof,  no  amendment  shall be  effective  unless
approved by the  stockholders  of the Company in accordance  with applicable law
and  regulations,  at an annual or special  meeting  held within  twelve  months
before or after the date of adoption of such amendment, in any instance in which
such  amendment  would:  (i) increase the number of shares of Common Stock as to
which options may be granted  under the Plan;  or (ii) modify the  provisions of
Section 4 hereof relating to eligibility to receive  Incentive Options under the
Plan.

      Except as  provided  in  Sections 7 and 8 hereof,  rights and  obligations
under any option granted  before  termination or amendment of the Plan shall not
be altered or impaired by such  termination or amendment except with the consent
of the Optionee.

SECTION 10.     NON-EXCLUSIVITY OF THE PLAN; NON-UNIFORM DETERMINATIONS

      Neither the adoption of the Plan by the Board nor the approval of the Plan
by  the  stockholders  of  the  Company  shall  be  construed  as  creating  any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem  desirable,  including  without  limitation the granting of stock
options  otherwise  than  under the Plan,  and such  arrangements  may be either
applicable generally or only in specific cases.

      The Plan Administrator's determinations under the Plan need not be uniform
and may be made by it  selectively  among persons who receive or are eligible to
receive  options  under the Plan  (whether  or not such  persons  are  similarly
situated).   Without  limiting  the  generality  of  the  foregoing,   the  Plan
Administrator  shall be entitled,  among other things,  to make  non-uniform and
selective  determinations,  and to enter into  non-uniform and selective  option
agreements,  as to (i) the persons to receive  options under the Plan,  (ii) the
terms and provisions of options, (iii) the exercise by the Plan Administrator of
its  discretion  in respect of the exercise of options  pursuant to the terms of
the Plan, and (iv) the treatment of leaves of absence pursuant to Section 5.1(e)
hereof.

SECTION 11.   GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW; WITHHOLDING TAXES

      The  obligation of the Company to sell and deliver  shares of Common Stock
with  respect  to  options  granted  under  the  Plan  shall be  subject  to all
applicable  laws, rules and  regulations,  including all applicable  federal and
state  securities  laws,  and the obtaining of all such  approvals by government
agencies as may be deemed  necessary or appropriate  by the Plan  Administrator.
All shares sold under the Plan shall bear appropriate  legends. The Company may,
but shall in no event be obligated to, register or qualify any shares covered by
options under  applicable  federal and state  securities  laws; and in the event
that any shares are so registered or qualified the Company may remove any legend
on certificates  representing such shares. The Company shall not be obligated to
take any other affirmative action in order to cause the exercise of an option or
the issuance of shares pursuant  thereto to comply with any law or regulation of
any  governmental  authority.  The Plan shall be  governed by and  construed  in
accordance with the laws of The Commonwealth of Massachusetts.

      Whenever  under the Plan shares are to be  delivered  upon  exercise of an
option, the Company shall be entitled to require as a condition of delivery that
the Optionee remit an amount sufficient to satisfy all federal,  state and other
governmental withholding tax requirements related thereto. An employee may elect
to have such tax withholding obligation satisfied,  in whole or in part, by: (i)
authorizing  the  Company to withhold  from shares of Common  Stock to be issued
pursuant  to the  exercise of a  Nonqualified  Option a number of shares with an
aggregate fair market value (as defined in Section  5.1(c) hereof  determined as
of the date the  withholding  is effected)  that would  satisfy the  withholding
amount due with respect to such exercise;  or (ii)  transferring  to the Company
shares of Common Stock owned by the employee with an aggregate fair market value
(as defined in Section 5.1(c) hereof  determined as of the date the  withholding
is effected) that would satisfy the withholding  amount due. With respect to any

<PAGE>

employee  who is  subject  to  Section 16 of the  Exchange  Act,  the  following
additional restrictions shall apply:

            (a) the election to satisfy tax withholding  obligations relating to
an option exercise in the manner  permitted by Section 11(i) above shall be made
either (1) during the period  beginning on the third  business day following the
date of release of quarterly or annual summary  statements of sales and earnings
of the Company and ending on the twelfth business day following such date or (2)
at least six months prior to the date of exercise of the option;

            (b) such election shall be irrevocable;

            (c) such election shall be subject to the consent or approval of the
Plan Administrator; and

            (d) the Common Stock withheld to satisfy tax withholding, if granted
at the discretion of the Plan Administrator, must pertain to an option which has
been held by the  employee for at least six months from the date of grant of the
option.

SECTION 12.     "LOCKUP" AGREEMENT

      The Plan  Administrator  may in its  discretion  specify upon  granting an
option that the Optionee  shall  agree,  for a period of time (not to exceed 180
days) from the effective date of any  registration of securities of the Company,
upon  request of the Company or the  underwriter  or  underwriters  managing any
underwritten offering of the Company's  securities,  not to sell, make any short
sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such option, without the prior written
consent of the Company or such underwriter or underwriters, as the case may be.

SECTION 13.     EFFECTIVE DATE AND DURATION OF PLAN

      The Plan shall become  effective  upon its adoption by the Board  provided
that the  stockholders of the Company shall have approved the Plan within twelve
months  prior to or following  the adoption of the Plan by the Board.  No option
may be granted under the Plan after the tenth anniversary of the effective date.
The Plan shall  terminate (i) when the total amount of the Stock with respect to
which options may be granted shall have been issued upon the exercise of options
or (ii) by action of the Board  pursuant  to Section 9 hereof,  whichever  shall
first occur.