NOCOPI TECHNOLOGIES, INC.

                            1999 STOCK INCENTIVE PLAN


     1. Name, Purpose and Eligibility. This plan shall be known as the Nocopi
Technologies, Inc. 1999 Stock Incentive Plan (the "Plan"). The purpose of the
Plan is to advance the interests of Nocopi Technologies, Inc. (the "Company") by
encouraging the acquisition of its common stock by directors and key employees
of the Company and its subsidiaries upon whose judgment and ability the Company
depends for its long term growth and development. Accordingly, the Plan is
intended to promote a close identity of interests between the Company and its
directors and employees as well as a means to attract and retain outstanding
management. All salaried employees of the Company and its subsidiaries and all
non-employee directors of the Company shall be eligible to receive options under
and in accordance with the terms of the Plan. In addition, consultants and
advisors to the Company may receive options under the Plan to the extent that
such persons are deemed to be employees for the purposes of registering shares
issuable upon the exercise of options under the Securities Act of 1933 (the
"Act") through the use of Form S-8 promulgated thereunder. Persons who may
receive options granted under this Plan are hereinafter referred to as "Eligible
Persons."

                                    ARTICLE I
                         EFFECTIVE DATE AND TERM OF PLAN

     1.1 Term of Plan. This Plan became effective as of the Effective Date and
shall continue in effect until the Expiration Date, at which time this Plan
shall automatically terminate.

     1.2 Effect on Awards. Awards may be granted during the Plan Term, but no
Awards may be granted after the Plan Term. Notwithstanding the foregoing, each
Award properly granted under this Plan during the Plan Term shall remain in
effect after termination of this Plan until such Award has been exercised,
terminated, or expired in accordance with its terms and the terms of this Plan.


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                                   ARTICLE II
                             SHARES SUBJECT TO PLAN

     2.1 Number of Shares. The maximum number of shares of Common Stock that may
be issued pursuant to Awards granted under this Plan shall be 2,000,000, subject
to adjustment as set forth in Section 2.4.

     2.2 Source of Shares. The Common Stock to be issued under this Plan will be
made available, at the discretion of the Board, either from authorized but
unissued shares of Common Stock or from previously issued shares of Common Stock
reacquired by the Company, including without limitation shares purchased on the
open market.

     2.3 Availability of Unused Shares. Shares of Common Stock subject to
unexercised portions of any Award granted under this Plan that expire, terminate
or are cancelled, and shares of Common Stock issued pursuant to an Award under
this Plan that are reacquired by the Company pursuant to the terms of the Award
under which such shares were issued, will again become available for the grant
of further Awards under this Plan.

     2.4 Adjustment Provisions.

          If (i) the outstanding shares of Common Stock of the Company are
          increased, decreased or exchanged for a different number or kind of
          shares or other securities, or if additional shares or new or
          different shares or other securities are distributed in respect of
          such shares of Common Stock (or any stock or securities received with
          respect to such Common Stock), through merger, consolidation, sale or
          exchange of all or substantially all of the properties of the Company,
          reorganization, recapitalization, reclassification, stock dividend,
          stock split, reverse stock split, spin-off or other distribution with
          respect to such shares of Common Stock (or any stock or securities
          received with respect to such Common Stock), or (ii) the value of the
          outstanding shares of Common Stock of the Company is reduced by reason
          of an extraordinary cash dividend, an appropriate and proportionate
          adjustment may be made in (1) the maximum number and kind of shares
          subject to this Plan as provided in Section 2.1, (2) the number and
          kind of shares or other securities subject to then outstanding awards,
          and/or (3) the



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          price for each share or other unit of any other securities subject to
          then outstanding Awards.

          (b)  No fractional interests will be issued under the Plan resulting
               from any adjustments.

          (c)  To the extent any adjustments relate to stock or securities of
               the Company, such adjustments shall be made by the Administering
               Body, whose determination in that respect shall be final, binding
               and conclusive.

          (d)  The grant of an Award pursuant to this Plan shall not affect in
               any way the right or power of the Company to make adjustments,
               reclassifications, reorganizations or changes of its capital or
               business structure or to merge or to consolidate or to dissolve,
               liquidate or sell, or transfer all or any part of its business or
               assets.

          (e)  No adjustment to the terms of an Incentive Stock Option shall be
               made unless such adjustment either (i) would not cause the Option
               to lose its status as an Incentive Stock Option or (ii) is agreed
               to in writing by the Administering Body and the Recipient.

     2.5 Reservation of Shares. The Company will at all times reserve and keep
available such number of shares of Common Stock as shall equal at least the
number of shares of Common Stock subject to then outstanding Awards issuable in
shares of Common Stock under this Plan.


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                                   ARTICLE III
                             ADMINISTRATION OF PLAN

     3.1 Administering Body.

          (a)  Subject to the provisions of Section 3.1(b)(ii), this Plan shall
               be administered by the Board or by a Committee of the Board
               appointed pursuant to Section 3.1(b).

          (b)(i) The Board in its sole discretion may from time to time appoint
                 a Committee of not less than two Board members to administer
                 this Plan and, subject to applicable law, to exercise all of
                 the powers, authority and discretion of the Board under this
                 Plan. The Board may from time to time increase or decrease (but
                 not below two) the number of members of the Committee, remove
                 from membership on the Committee all or any portion of its
                 members, and/or appoint such person or persons as it desires to
                 fill any vacancy existing on the Committee, whether caused by
                 removal, resignation or otherwise. The Board may disband the
                 Committee at any time and revest in the Board the
                 administration of this Plan.

            (ii) Notwithstanding the foregoing provisions of this Section
                 3.1(b) to the contrary, as long as the Company is an Exchange
                 Act Registered Company, (1) the Board shall appoint the
                 Committee, (2) this Plan shall be administered by the
                 Committee, and (3) each of the Committee's members shall be
                 Disinterested Directors, and in additions, if Awards are to be
                 made to persons subject to Section 162(m) of the IRC and such
                 Awards are intended to constitute Performance Based
                 Compensation, then each of the Committee's members shall, in
                 addition to being a Disinterested Director, shall also be an
                 Outside Director.


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         (iii)  The Committee shall report to the Board the names of Eligible 
                 Persons granted Awards, the number of shares of Common Stock
                 covered by each Award, and the terms and conditions of each
                 such Award.

     3.2 Authority of Administering Body.

          (a)  Subject to the express provisions if this Plan, the Administering
               Body shall have the power to interpret and construe this Plan and
               any Award Documents or other documents defining the rights and
               obligations of the Company and Recipients hereunder and
               thereunder to determine all questions arising hereunder and
               thereunder, to adopt and amend such rules and regulations for the
               administration hereof and thereof as it may deem desirable, and
               otherwise to carry out the terms of this Plan and such Award
               Documents and other documents. The interpretation and
               construction by the Administering Body of any provisions of this
               Plan or any Award shall be conclusive and binding. Any action
               taken by, or inaction of, the Administering Body relating to this
               Plan or any Awards shall be within the absolute discretion of the
               Administering Body and shall be conclusive and binding upon all
               persons. Subject only to compliance with the express provisions
               hereof, the Administering Body may act in its absolute discretion
               in matters related to this Plan and any and all Awards.

          (b)  Subject to the express provisions of this Plan, the Administering
               Body may from time to time in its discretion select the Eligible
               Persons to whom, and the time or times at which, Incentive Awards
               shall be granted or sold, the nature of each Incentive Award, the
               number of shares of Common Stock or the number of rights that
               make up or underlie each Incentive Award, the period for the
               exercise of each Incentive Award, and such other terms and
               conditions applicable to each individual Incentive Award as the
               Administering Body shall determine. The Administering Body may
               grant at any time new Incentive Awards to an 




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               Eligible Person who has previously received Incentive Awards or
               other grants (including other stock options) whether such prior
               Incentive Awards or other grants (including other stock options)
               whether such prior Incentive Awards or such other grants are
               still outstanding, have previously been exercised as a whole or
               in part, or are cancelled in connection with the issuance of new
               Incentive Awards. The Administering Body may grant Incentive
               Awards singly or in combination or in tandem with other Incentive
               Awards as it determines in its discretion. The purchase price,
               exercise price, initial value and any and all other terms and
               conditions of the Incentive Awards may be established by the
               Administering Body without regard to existing Incentive Awards or
               other grants.

          (c)  Any action of the Administering Body with respect to the
               administration of this Plan shall be taken pursuant to a majority
               vote of the authorized number of members of the Administering
               Body or by the unanimous written consent of its members;
               provided, however, that (i) if the Administering Body is the
               Committee and consists of two members, then actions of the
               Administering Body must be unanimous, and (ii) if the
               Administering Body is the Board, actions taken at a meeting of
               the Board shall be valid if approved by directors constituting a
               majority of the required quorum for such meeting.

     3.3 No Liability. No member of the Board or the Committee or any designee
thereof will be liable for any action or inaction with respect to this Plan or
any Award or any transaction arising under this Plan or any Award except in
circumstances constituting bad faith of such member.


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     3.4 Amendments.

          (a)  The Administering Body may, insofar as permitted by applicable
               law, rule or regulation, from time to time suspend or discontinue
               this Plan or revise or amend it in any respect whatsoever, and
               this Plan as so revised or amended will govern all Awards
               hereunder, including those granted before such revision or
               amendment; provided, however, that no such revision or amendment
               shall alter, impair or diminish any rights or obligations under
               any Award theretofore granted under this Plan without the written
               consent of the Recipient to whom such Award was granted. Without
               limiting the generality of the foregoing, the Administering Body
               is authorized to amend this Plan to comply with or take advantage
               of amendments to applicable laws, rules or regulations, including
               amendments to the Securities Act, Exchange Act the IRC or any
               rules or regulations promulgated thereunder. No stockholder
               approval of any amendment or revision shall be required unless
               (i) such approval is required by applicable law, rule or
               regulation or (ii) an amendment or revision to this Plan would
               materially increase the number of shares subject to this Plan (as
               Adjusted under Section 4.4), materially modify the requirements
               as to eligibility for participation in this Plan, extend the
               final date upon which Awards may be granted under this Plan, or
               otherwise materially increase the benefits accruing to Recipients
               in a manner not specifically contemplated herein, or affect this
               Plan's compliance with Rule 16b-3 or applicable provisions of or
               regulations under the IRC, and stockholder approval of the
               amendment or revision is required to comply with Rule 16b-3 or
               applicable provisions of or rules under the IRC.

          (b)  The Administering Body may, with the written consent of a
               Recipient, make such modifications in the terms and conditions of
               an Incentive Award as it deems advisable. Without limiting the
               generality of the foregoing, the Administering Body may, in its
               discretion with the written consent of the Recipient, at any time
               and from time to time 


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               after the grant of any Incentive Award accelerate or extend the
               vesting or exercise price of Incentive Awards held by such
               Recipient by cancellation of such Incentive Awards and granting
               of Incentive Awards at lower purchase or exercise prices or by
               modification, extension or renewal of such Incentive Awards. In
               the case of Incentive Stock Options, Recipients acknowledge that
               extensions of the exercise period may result in the loss of the
               favorable tax treatment afforded incentive stock options under
               Section 422 of the IRC.

          (c)  Except as otherwise provided in this Plan or in the applicable
               Award Document, no amendment, revision, suspension or termination
               of this Plan will, without the written consent of the Recipient,
               alter, terminate, impair or adversely affect any right or
               obligation under any Award previously granted under this Plan.

     3.5 Other Compensation Plans. The adoption of this Plan shall not affect
any other forms of incentive or other compensation for employees, directors,
advisors or consultants of the Company, whether or not approved by stockholders.

     3.6 Plan Binding on Successors. This Plan shall be binding upon the
successors and assigns of the Company.

     3.7 References to Successor Statutes, Regulations and Rules. Any reference
in this Plan to a particular statute, regulation or rule shall also refer to any
successor provision of such statute, regulation or rule.

     3.8 Issuances for Compensation Purposes Only. This Plan constitutes an
"employee benefit plan" as defined in Rule 405 promulgated under the Securities
Act. Awards to eligible employees or directors shall be made for any lawful
consideration, including compensation for services rendered, promissory notes or
otherwise. Awards to consultants and advisors shall be made only in exchange for
bona fide services rendered by such consultants or advisors and such services
must be in connection with the offer and sale of securities in a capital-raising
transaction.


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     3.9 Invalid Provisions. In the event that any provisions of this Plan is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision were not contained herein.

     3.10 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of Maryland, without giving
effect to the principles of the conflicts of laws thereof.

                                   ARTICLE IV
                            GENERAL AWARD PROVISIONS

     4.1 Participation in Plan.

          (a)  A person shall be eligible to receive grants of Incentive Awards
               under this Plan if, at the time of the grant of the Incentive
               Award, such person is an Eligible Person.

          (b)  Incentive Stock Options may be granted only to Eligible Persons
               meeting the employment requirements of Section 422 of the IRC.

          (c)  Notwithstanding anything to the contrary herein, the
               Administering Body may, in order to fulfill the purposes of this
               Plan, modify grants of Incentive Awards to Recipients who are
               foreign nationals or employed outside of the United States to
               recognize differences in applicable law, tax policy or local
               custom.

     4.2 Award Documents.

          (a)  Each Award granted under this Plan shall be evidenced by an
               agreement duly executed on behalf of the Company and by the
               Recipient or, in the Committee's discretion, a confirming
               memorandum issued by the Company to the Recipient, setting forth
               such terms and conditions applicable to the Award as the
               Committee may in its discretion 



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               determine. Award Documents may but need not be identical and
               shall comply with and be subject to the terms and conditions of
               this Plan, a copy of which shall be provided to each Recipient
               and incorporated by reference into each Award Document. Any Award
               Document may contain such other terms, provisions and conditions
               not inconsistent with this Plan as may be determined by the
               Committee.

          (b)  In case of any conflict between this Plan and any Award Document,
               this Plan shall control.

     4.3 Exercise of Stock Options. No Stock Option shall be exercisable except
in respect of whole shares, and fractional share interests shall be disregarded.
Not less than 100 shares of Common Stock (or such other amount as is set forth
in the applicable Award Documents) may be purchased at one time and Stock
Options must be exercised in multiples of 100 unless the number purchased is the
total number at the time available for purchase under the terms of the Stock
Option. A Stock Option shall be deemed to be exercised when the Secretary or
other designated official of the Company receives written notice of such
exercise from the Recipient, together with payment of the exercise price made in
accordance with Section 4.4 and any amounts required under Section 4.11.
Notwithstanding any other provision of this Plan, the Administering Body may
impose, by rule and/or in Award Documents, such conditions upon the exericise of
Stock Options (including without limitation conditions limiting the time of
exercise to specified periods) as may be required to satisfy applicable
regulatory requirements, including without limitation Rule 16b-3 and Rule 10b-5
under the Exchange Act, and any amounts required under Section 4.12 or other
applicable section of or regulation under the IRC.

     4.4 Payment For Awards.

          (a)  Payment of Exercise Price. The exercise price or other payment
               for an Award shall be payable upon the exercise of a Stock Option
               or upon other purchase of shares pursuant to an Award granted
               hereunder by delivery of legal tender of the United States or
               payment of such other consideration as the Administering Body may
               from time to time deem acceptable in any particular instance.


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          (b)  The Company may assist any person to whom an Award is granted
               hereunder (including without limitation any officer or eligible
               director of the Company) in the payment of the purchase price or
               other amounts payable in connection with the receipt or exercise
               of that Award, by lending such amounts to such person on such
               terms and at such rates of interest and upon such security (if
               any) as shall be approved by the Administering Body.

          (c)  In the discretion of the Administering Body, Awards may be
               exercised by capital stock of the Company delivered in transfer
               to the Company by or on behalf of the person exercising the Award
               and duly endorsed in blank or accompanied by stock powers duly
               endorsed in blank, with signatures guaranteed in accordance with
               the Exchange Act if required by the Administering Body, or
               retained by the Company from the stock otherwise issuable upon
               exercise or surrender of vested and/or exercisable Awards or
               other equity incentive awards previously granted to the Recipient
               and being exercised (if applicable) (in either case valued at
               Fair Market Value as of the exercise date); or such other
               consideration as the Administering Body may from time to time in
               the exercise of its discretion deem acceptable in any particular
               instance; provided, however, that the Administering Body may, in
               the exercise of its discretion, (i) allow exercise of an Award in
               a broker-assisted or similar transaction in which the exercise
               price is not received by the Company until promptly after
               exercise, and/or (ii) allow the Company to loan the exercise
               price to the person entitled to exercise the Award, if the
               exercise will be followed by a prompt sale of some or all of the
               underlying shares and a portion of the sale proceeds is dedicated
               to full payment of the exercise price and amounts required
               pursuant to Section 4.11.

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     4.5 No Employment Rights. Nothing contained in this Plan (or in Award
Documents or in any other documents related to this Plan or to Awards granted
hereunder) shall confer upon any Eligible Person or Recipient any right to
continue in the employ of the Company or any Affiliated Entity or constitute any
contract or agreement of employment or engagement of such Eligible Person or
Recipient, with or without cause. Except as expressly provided in this Plan or
in any statement evidencing the grant of an Award pursuant to this Plan, the
Company shall have the right to deal with each Recipient in the same manner as
if this Plan and any such statement evidencing the grant of an Award pursuant to
this Plan did not exist, including without limitation with respect to all
matters related to the hiring, discharge, compensation and conditions of the
employment or engage of the Recipient. Any question(s) as to whether and when
there has been a termination of a Recipient's employment or engagement, the
reason (if any) for such termination, and/or the consequences thereof under the
terms of this Plan or any statement evidencing the grant of an Award pursuant to
this Plan shall be determined by the Administering Body and the Administering
Body's determination thereof shall be final and binding.

     4.6 Restrictions Under Applicable Laws and Regulations.

          (a)  All Awards granted under this Plan shall be subject to the
               requirement that, if at any time the Company shall determine, in
               its discretion, that the listing, registration or qualification
               of the shares subject to Awards granted under this Plan upon any
               securities exchange or under any federal, state or foreign law,
               or the consent or approval of any government regulatory body, is
               necessary or desirable as a condition of, or in connection
               therewith, such Award may not be exercised as a whole or in part
               unless and until such listing, registration, qualification,
               consent or approval shall have been effected or obtained free of
               any conditions not acceptable to the Company. During the term of
               this Plan, the Company will use its reasonable efforts to seek to
               obtain from the appropriate regulatory agencies any requisite
               qualifications, consents, approvals or authorizations in order to
               issue and sell such number of shares of its Common Stock as shall
               be sufficient to satisfy the requirements of this Plan. The
               inability of the Company to obtain from any 


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               such regulatory agency having jurisdiction thereof the
               qualifications, consents, approvals or authorizations deemed by
               the Company to be necessary for the lawful issuance and sale of
               any shares of its Common Stock hereunder shall relieve the
               Company of any liability in respect of the nonissuance or sale of
               such stock as to which such requisite authorization shall not
               have been obtained.

          (b)  The Company shall be under no obligation to register or qualify
               the issuance of Awards or underlying shares under the Securities
               Act or applicable state securities laws. Unless the issuance of
               Awards and underlying shares have been registered under the
               Securities Act and qualified or registered under applicable state
               securities laws, the Company shall be under no obligation to
               issue any Awards or underlying shares of Common Stock covered by
               any Award unless the Awards and underlying shares may be issued
               pursuant to applicable exemptions from such registration or
               qualification requirements. In connection with any such exempt
               issuance, the Administering Body may require the Recipient to
               provide a written representation and undertaking to the Company,
               satisfactory in form and scope to the Company and upon which the
               Company may reasonably rely, that such Recipient is acquiring
               such Awards and underlying shares for such Recipient's own
               account as an investment and not with a view to, or for sale in
               connection with, the distribution of any such shares of stock,
               and that such person will make no transfer of the same except in
               compliance with any rules and regulations in force at the time of
               such transfer under the Securities Act and other applicable law,
               and that if shares of stock are issued without such registration,
               a legend to this effect (together with any other legends deemed
               appropriate by the Administering Body) may be endorsed upon the
               securities so issued. The Company may also order its transfer
               agent to stop transfers of such shares. The Administering Body
               may also require the Recipient to provide the Company such
               information and other documents as the Administering Body may
               request in order to satisfy 



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               the Administering Body as to the investment sophistication and
               experience of the Recipient and as to any other conditions for
               compliance with any such exemptions from registration or
               qualification.

     4.7 Additional Conditions. Any Incentive Award may also be subject to such
other provisions (whether or not applicable to any other Award or Recipient) as
the Administering Body determines appropriate including without limitation
provisions to assist the Recipient in financing the purchase of Common Stock
through the exercise of Stock Options, provisions for the forfeiture of or
restrictions on resale or other disposition of shares of Common Stock acquired
under any form of benefit in the event the Recipient elects to dispose of such
shares, and provisions to comply with federal and state income tax withholding
requirements.

     4.8 No Privileges of Stock Ownership. Except as otherwise set forth herein,
a Recipient or a permitted transferee of an Award shall have no rights as a
stockholder with respect to any shares issuable or issued in connection with the
Award until the date of the receipt by the Company of all amounts payable in
connection with exercise of the Award and performance by the Recipient of all
obligations thereunder. Status as an Eligible Person shall not be construed as a
commitment that any Award will be granted under this Plan to an Eligible Person
or to Eligible Persons generally. No person shall have any right, title or
interest in any fund or in any specific asset (including shares of capital
stock) of the Company by reason of any Award granted hereunder. Neither this
Plan (or any documents related hereto) nor any action taken pursuant hereto
shall be construed to create a trust of any kind or a fiduciary relationship
between the Company and any person. To the extent that any person acquires a
right to receive an Award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Company.

     4.9 Nonassignability. No Award granted under this Plan shall be assigned or
transferable except (i) by will or by the laws of descent and distribution, or
(ii) subject to the final sentence of this Section 5.9, upon dissolution of
marriage pursuant to a qualified domestic relations order or, in the discretion
of the Administering Body and under circumstances that would not adversely
affect the interests of the Company, pursuant to a nominal transfer that does
not result in a change in beneficial ownership. 



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During the lifetime of a Recipient, an Award granted to such person shall be
exercisable only by Recipient (or the Recipient's permitted transferee) or such
person's guardian or legal representative. Notwithstanding the foregoing, (i) no
Award owned by a Recipient subject to Section 16 of the Exchange Act may be
assigned or transferred in any manner inconsistent with Rule 16b-3, and (ii)
Incentive Stock Options (or other Awards subject to transfer restrictions under
the IRC) may not be assigned or transferred in violation of Section 422(b)(5) of
the IRC (or any comparable or successor provision) or the regulations
thereunder, and nothing herein is intended to allow such assignment or transfer.

     4.10 Information To Recipients.

          (a)  The Administering Body in its sole discretion shall determine
               what, if any, financial and other information shall be provided
               to Recipients and when such financial and other information shall
               be provided after giving consideration to applicable federal and
               state laws, rules and regulations, including without limitation
               applicable federal and state securities laws, rules and
               regulations.

          (b)  The furnishing of financial and other information that is
               confidential to the Company shall be subject to the Recipient's
               agreement that the Recipient shall maintain the confidentiality
               of such financial and other information, shall not disclose such
               information to third parties, and shall not use the information
               for any purpose other than evaluating an investment in the
               Company's securities under this Plan. The Administering Body may
               impose other restrictions on the access to and use of such
               confidential information and may require a Recipient to
               acknowledge the Recipient's obligations under this Section
               4.10(b) (which acknowledgment shall not be a condition to
               Recipient's obligations under this Section 4.10(b).



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     4.11 Withholding Taxes. Whenever the granting, vesting or exercise of any
Award granted under this Plan, or the transfer of any shares issued upon
exercise of any Award, gives rise to tax withholding liabilities or obligations,
the Administering Body shall have the right to require the Recipient to remit to
the Company an amount sufficient to satisfy any federal, state and local
withholding tax requirements prior to issuance of such shares. The Administering
Body may, in the exercise of its discretion, allow satisfaction of tax
withholding requirements by accepting delivery of stock of the Company or by
withholding a portion of the stock otherwise issuable in connection with an
Award.

     4.12 Legends on Awards and Stock Certificates. Each Award Document and each
certificate representing shares acquired upon vesting or exercise of an Award
shall be endorsed with all legends, if any, required by applicable federal and
state securities and other laws to be placed on the Award Document and/or the
certificate. The determination of which legends, if any, shall be placed upon
Award Documents or the certificates shall be made by the Administering Body in
its sole discretion and such decision shall be final and binding.

     4.13 Effect of Termination of Employment on Incentive Awards.

          (i)  Termination for Just Cause. Subject to subsection (iii) below,
               and except as otherwise provided in a written agreement between
               the Company and Recipient, which may be entered into at any time
               before or after termination of employment, in the event of a Just
               Cause Dismissal of a Recipient all of the Recipient's unexercised
               Stock Options, whether or not vested, shall expire and become
               unexercisable as of the date of such Just Cause Dismissal.

          (ii) Termination other than for Just Cause. Subject to subsection
               (iii) below, and except as otherwise provided in a written
               agreement between the Company and the Recipient, which may be
               entered into at any time before or after termination of
               employment, in the event of a Recipient's termination of
               employment for:


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               (A)  any reason other than for Just Cause Dismissal, death,
                    Permanent Disability or normal retirement, the Recipient's
                    Stock Options, whether or not vested, shall expire and
                    become unexercisable as of the earlier of (1) the date such
                    Stock Options would expire in accordance with their terms
                    had the Recipient remained employed and (2) thirty days
                    after the date of employment termination.

               (B)  death, Permanent Disability or normal retirement, the
                    Recipient's unexercised Options shall, whether or not
                    vested, expire and become unexercisable as of the earlier of
                    (1) the date such Stock Options would expire in accordance
                    with their terms had the Recipient remained employed and (2)
                    six months after the date of employment termination.


          (iii) Alteration of Vesting and Exercise Periods. Notwithstanding
                anything to the contrary in subsections (i) or (ii) above, the
                Administering Body may in its discretion designate shorter or
                longer periods to exercise Stock Options following a Recipient's
                termination of employment; Provided, however, that any shorter
                periods determined by the Administering Body shall be effective
                only if provided for in the instrument that evidences the grant
                to the recipient of such Stock Options or if such shorter period
                is agreed to in writing by the Recipient. Notwithstanding
                anything to the contrary herein, Stock Options shall be
                exercisable by a Recipient (or the Recipient's successor in
                interest) following such Recipient's termination of employment
                only to the extent that installments thereof had become
                exercisable on or prior to the date of such termination;
                provided, however, the Administering Body may, in its
                discretion, elect to accelerate the vesting of all or any
                portion of any Stock Options that had not become exercisable on
                or prior to the date of such termination.


                                       17
<PAGE>


          (iv)  Leave of Absence. In the case of any employee on an approved
                leave of absence, the Administering Body may make such provision
                respecting continuance of a Stock Option as the Administering
                Body in its discretion deems appropriate, except that in no
                event shall a Stock Option be exercisable after the date such
                Stock Options would expire in accordance with its terms had the
                Recipient remained continuously employed.

     4.15 Limits on Awards to Certain Eligible Persons. Notwithstanding any
other provisions of this Plan, no one Eligible Person shall be granted any
Awards with respect to more then 200,000 shares of Common Stock in any one
calendar year; Provided, however, that this limitation shall not apply if it is
not required in order for the compensation attributable to Awards hereunder to
qualify as Performance-Based Compensation. The limitation set forth in this
Section 4.15 shall be subject to adjustment as provided in Section 2.4 or under
Article VII, but only to the extent such adjustment would not affect the status
of compensation attributable to Awards hereunder as Performance-Based
Compensation.

                                    ARTICLE V
                                INCENTIVE AWARDS

     6.1 Stock Options.

          (a)  Nature of Stock Options. Stock Options may be Incentive Stock
               Options or Nonqualified Stock Options.

          (b)  Option Exercise Price. The exercise price for each Stock Option
               shall be determined by the Administering Body as of the date such
               Stock Option is granted. The exercise price may be greater than
               or less than the Fair Market Value of the Common Stock subject to
               the Option, provided that in no event shall the exercise price be
               less than the par value of the shares of Common Stock subject to
               the Stock Option. The Administering Body may, with the consent of
               the Recipient and subject to the compliance with statutory or
               administrative requirements applicable to Incentive Stock



                                       18
<PAGE>


               Options, amend the terms of any Stock Option to provide that the
               exercise price of the shares remaining subject to the Stock
               Option shall be re-established at a price not less than 100% of
               the Fair Market Value of the Common Stock on the effective date
               of the amendment. No modification of any term or of any Stock
               Option which is amended in accordance with the foregoing shall be
               required, although the Administering Body may, in its discretion,
               make such further modifications of any such Stock Option as are
               not inconsistent with this Plan.

          (c)  Option Period and Vesting. Stock Options granted hereunder shall
               vest and may be exercised as determined by the Administering
               Body, except that exercise of such Stock Options after
               termination of the Recipient's employment shall be subject to
               Section 4.13. Each Stock Option granted hereunder and all rights
               or obligations thereunder shall expire on such date as shall be
               determined by the Administering Body, but no later than 10 years
               after the date the Stock Option is granted and shall be subject
               to earlier termination as provided herein or in the Award
               Document. The Administering Body may in its discretion at any
               time and from time to time after the grant of a Stock Option
               accelerate vesting of such Option as a whole or part by
               increasing the number of shares then purchasable, provided that
               the total number of shares subject to such Stock Option may not
               be increased. Except as otherwise provided herein, a Stock Option
               shall become exercisable, as a whole or in part, on the date or
               dates specified by the Administering Body and thereafter shall
               remain exercisable until the expiration or earlier termination of
               the Stock Option.

          (d)  Special Provisions Regarding Incentive Stock Options.

               (i)  Notwithstanding anything in this Section 5.1 to the
                    contrary, the exercise price and vesting period of any Stock
                    Option intended to qualify as an Incentive Stock Option
                    shall comply with the provisions of Section 422 of the IRC
                    and the regulations 



                                       19
<PAGE>

                    thereunder. As of the Effective Date, such provisions
                    require, among other matters, that (A) the exercise price
                    must not be less than the Fair Market Value of the
                    underlying stock as of the date the Incentive Stock Option
                    is granted, and not less than 110% of the Fair Market Value
                    as of such date in the case of a grant to a Significant
                    Stockholder; and (B) at the Incentive Stock Option not be
                    exercisable after the expiration of five years from the date
                    of grant in the case of an Incentive Stock Option granted to
                    a Significant Stockholder.

               (ii) The aggregate Fair Market Value (determined as of the
                    respective date or dates of grant) of the Common Stock for
                    which one or more Options granted to any Recipient under
                    this Plan (or any other option plan of the Company or any or
                    its subsidiaries or affiliates) may for the first time
                    become exercisable as Incentive Stock Options under the
                    federal tax laws during any one calendar year shall not
                    exceed $100,000.

              (iii) Any Options granted as Incentive Stock Options pursuant to
                    this Plan that for any reason fail or cease to qualify as
                    such shall be treated as Nonqualified Stock Options.

     5.2 Restricted Stock.

          (a)  Award of Restricted Stock. The Administering Body shall determine
               the Purchase Price (if any), the terms of payment of the Purchase
               Price, the restrictions upon the Restricted Stock, and when such
               restrictions shall lapse.

          (b)  Requirements of Restricted Stock. All shares of Restricted Stock
               granted or sold pursuant to this Plan will be subject to the
               following conditions:


                                       20
<PAGE>


                  (i)   No Transfer. The shares may not be sold, assigned,
                        transferred, pledged, hypothecated or otherwise disposed
                        of, alienated or encumbered until the restrictions are
                        removed or expire;

                  (ii)  Certificates. The Administering Body may require that
                        the certificates representing Restricted Stock granted
                        or sold to a Recipient pursuant to this Plan remain in
                        the physical custody of an escrow holder or the Company
                        until all restrictions are removed or expire;

                  (iii) Restrictive Legends. Each certificate representing
                        Restricted Stock granted or sold to a Recipient pursuant
                        to this Plan will bear such legend or legends making
                        reference to the restrictions imposed upon such
                        Restricted Stock as the Administering Body in its
                        discretion deems necessary or appropriate to enforce
                        such restrictions; and

                  (iv)  Other Restrictions. The Administering Body may impose
                        such other conditions on Restricted Stock as the
                        Administering Body may deem advisable including without
                        limitation restrictions under the Securities Act, under
                        the Exchange Act, under the requirements of any stock
                        exchange upon which such Restricted Stock or shares of
                        the same class are then listed and under any blue sky or
                        other securities laws applicable to such shares.

          (c)  Lapse of Restrictions. The restrictions imposed upon Restricted
               Stock will lapse in accordance with such terms or other
               conditions as are determined by the Administering Body.



                                       21
<PAGE>



          (d)  Rights of Recipient. Subject to the provisions of Section 5.2(b)
               and any restrictions imposed upon the Restricted Stock, the
               Recipient will have all rights of a stockholder with respect to
               the Restricted Stock granted or sold to such Recipient under this
               Plan, including without limitation the right to vote the shares
               and receive all dividends and other distributions paid or made
               with respect thereto.

          (e)  Termination of Employment. Unless the Administering Body may at
               any time and from time to time approve the grant to Eligible
               Persons of Stock Appreciation Rights, related or unrelated to
               Stock Options.

     5.3 Stock Appreciation Rights.

          (a)  Granting of Stock Appreciation Rights. The Administering Body may
               at any time and from time to time approve the grant to Eligible
               Persons of Stock Appreciation Rights, related or unrelated to
               Stock Options.

          (b)  SARs Related to Options.

                  (i)   A Stock Appreciation Right granted in connection with a
                        Stock Option granted under this Plan will entitle the
                        holder of the related Stock Option, upon exercise of the
                        Stock Appreciation Right, to surrender such Stock
                        Option, or any portion thereof to the extent previously
                        vested but unexercised, with respect to the numbner of
                        shares as to which such Stock Appreciation Right is
                        exercised, and to receive payment of an amount computed
                        pursuant to Section 5.3(b)(iii). Such Stock Option will,
                        to the extent surrendered, then cease to be exercisable.




                                       22
<PAGE>



                  (ii)  A Stock Appreciation Right granted in connection with a
                        Stock Option hereunder will be exercisable at such time
                        or times, and only to the extent that, the related Stock
                        Option is exercisable, and will not be transferable
                        except to the extent that such related Stock Option may
                        be transferable.

                  (iii) Upon the exercise of a Stock Appreciation Right related
                        to a Stock Option, the Recipient will be entitled to
                        receive payment of an amount determined by multiplying:
                        (i) the difference obtained by subtracting the exercise
                        price of a share of Common Stock specified in the
                        related Stock Option from the Fair Market Value of a
                        share of Common Stock on the date of exercise of such
                        Stock Appreciation Right (or as of such other date or as
                        of the occurrence of such event as may have been
                        specified in the instrument evidencing the grant of the
                        Stock Appreciation Right), by (ii) the number of shares
                        as to which such Stock Appreciation Right is exercised.

          (c)  SARs Unrelated to Options. The Administering Body may grant Stock
               Appreciation Rights unrelated to Stock Options to Eligible
               Persons. Section 5.3(b)(iii) shall be used to determine the
               amount payable at exercise under such Stock Appreciation Right,
               except that in lieu of the Option the initial base amount
               specified in the Incentive Award shall be used.

          (d)  Limits. Notwithstanding the foregoing, the Administering Body, in
               its discretion, may place a dollar limitation on the maximum
               amount that will be payable upon the exercise of a Stock
               Appreciation Right under this Plan.

          (e)  Payments. Payment of the amount determined under the foregoing
               provisions may be made solely in whole shares of Common Stock
               valued at their Fair Market Value on the date of exercise of the
               Stock Appreciation Right or, alternatively, at the sole
               discretion of the Administering 


                                       23
<PAGE>


               Body, in cash or in a combination of cash and shares of Common
               Stock as the Administering Body deems advisable. The
               Administering Body has full discretion to determine the form
               in which payment of a Stock Appreciation Right will be made
               and to consent to or disapprove the election of a Recipient to
               receive cash in full or partial settlement of a Stock
               Appreciation Right. If the Administering Body decides to make
               full payment in shares of Common Stock, and the amount payable
               results in a fractional share, payment for the fractional
               shares will be made in cash.


          (f)  Rule 16b-3. The Administering Body may, at the time a Stock
               Appreciation Right is granted, impose such conditions on the
               exercise of the Stock Appreciation Right as may be required to
               satisfy the requirements of Rule 16b-3 (or any other comparable
               provisions in effect at the time or times in question).

     5.4 Stock Payments. The Administering Body may approve Stock Payments of
the Company's Common Stock to any Eligible Person for all or any portion of the
compensation (other than base salary) or other payment that would otherwise
become payable by the Company to the Eligible Person in cash.

     5.5 Dividend Equivalents. The Administering Body may grant Dividend
Equivalents to any Recipient who has received a Stock Option, SAR or other
Incentive Award denominated in shares of Common Stock. Such Dividend Equivalents
shall be effective and shall entitle the recipients thereof to payments during
the Applicable Dividend Period. Dividend Equivalents may be paid in cash, Common
Stock or other Incentive Awards; the amount of Dividend Equivalents paid other
than in cash shall be determined by the Administering Body by application of
such formula as the Administering Body may deem appropriate to translate the
cash value of dividends paid to the alternative form of payment of the Dividend
Equivalent. Dividend Equivalents shall be computed as of each dividend record
date and shall be payable to recipients thereof at such time as the
Administering Body may determine.


                                       24
<PAGE>

     5.6 Stock Bonuses. The Administering Body may issue shares of Common Stock
to Eligible Persons as bonuses for services rendered or for any other valid
consideration on such terms and conditions as the Administering Body may
determine.

     5.7 Stock Sales. The Administering Body may sell to Eligible Persons shares
of Common Stock on such terms and conditions as the Administering Body may
determine.

     5.8 Phantom Stock. The Administering Body is authorized to grant Awards of
Phantom Stock. Phantom Stock is a cash bonus granted under this Plan measured by
the Fair Market Value of a specified number of shares of Common Stock on a
specified date, or measured by excess of such Fair Market Value over a specified
minimum, which may but need not include a Dividend Equivalent.

     5.9 Other Stock-Based Benefits. The Administering Body is authorized to
grant Other Stock-Based Benefits. Other Stock-Based Benefits are any
arrangements granted under this Plan not otherwise described above which (i) by
their terms might involve the issuance or sale of Common Stock or (ii) involve a
benefit that is measured, as a whole or in part, by the value, appreciation,
dividend yield or other features attributable to a specified number of shares of
Common Stock.

                                   ARTICLE VI
                                 REORGANIZATIONS

     6.1 Corporate Transactions Not Involving a Change In Control. If the
Company shall consummate any Reorganization not involving a Change in Control in
which holders of shares of Common Stock are entitled to receive in respect of
such shares any securities, cash or other consideration (including without
limitation a different number of shares of Common Stock), each Award outstanding
under this Plan shall thereafter be exercisable, in accordance with this Plan,
only for the kind and amount of securities, cash and/or other consideration
receivable upon such Reorganization by a holder of the same number of shares of
Common Stock as are subject to that Award immediately prior to such
Reorganization, and any adjustments will be made in the sole discretion of the
Administering 


                                       25
<PAGE>

Body to the terms of the Award as the Administering Body may deem appropriate to
give effect to the Reorganization.

     6.2 Corporate Transactions Involving a Change in Control. As of the
effective time and date of any Change in Control this Plan and any then
outstanding Awards (whether or not vested) shall automatically terminate unless
(i) provision is made in writing in connection with such transaction for the
continuance of this Plan and for the assumption of such Awards, or for the
substitution for such Awards of new awards covering the securities of a
successor entity or an affiliate thereof, with appropriate adjustments as to the
number and kind of securities and exercise prices, in which event this Plan and
such outstanding Awards shall continue or be replaced, as the case may be, in
the manner and under the terms so provided; or (ii) the Board otherwise shall
provide in writing for such adjustments as it deems appropriate in the terms and
conditions of the then-outstanding Awards, and/or (B) providing for the
cancellation of Awards and their automatic conversion into the right to receive
the securities, cash or other consideration that a holder of the shares
underlying such Awards would have been entitled to receive upon consummation of
such Change in Control had such shares been issued and outstanding immediately
prior to the effective date and time of the Change in Control (net of the
appropriate option exercise prices). If, pursuant to the foregoing provisions of
this Section 6.2, this Plan and the Awards shall terminate by reason of the
occurrence of a Change in Control without provision for any of the action(s)
described in clause (i) or (ii) hereof, then any Recipient holding outstanding
Awards shall have the right, at such time immediately prior to the consummation
of the Change in Control as the Board shall designate, to exercise the
Recipient's Awards to the full extent not theretofore exercised, including any
installments which have not yet become vested.

                                   ARTICLE VII
                                   DEFINITIONS

     Capitalized terms used in this Plan and not otherwise defined shall have
the meanings set forth below:

     "Administering Body" shall mean the Board as long as no Committee has been
appointed and is in effect and shall mean the Committee once the Committee has
been appointed and is in effect.


                                       26
<PAGE>


     "Affiliated Entity" means any Parent Corporation or Subsidiary Corporation.

     "Applicable Dividend Period" means (i) the period between the date a
Dividend Equivalent is granted and the date the related Stock Option, SAR, or
other Incentive Award is exercised, terminates, or is converted to Common Stock,
or (ii) such other time as the Administering Body may specify in the written
instrument evidencing the grant of the Dividend Equivalent.

     "Award" means any Incentive Award.

     "Award Document" means the agreement or confirming memorandum setting forth
the terms and conditions of an Award.

     "Board" means the Board of Directors of the Company.

     "Change in Control" means the following and shall be deemed to occur if any
of the following events occur:

          (i)  Any Person becomes the beneficial owner (within the meaning of
               Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
               either the then outstanding shares of Common Stock or the
               combined voting power of the Company's then outstanding
               securities entitled to vote generally in the election of
               directors; or

          (ii) Individuals who, as of the effective date hereof, constitute the
               Board of Directors of the Company ("Incumbent Board") cease for
               any reason to constitute at least a majority of the Board of
               Directors of the Company, provided that any individual who
               becomes a director after the effective date hereof whose
               election, or nomination for election by the Company's
               stockholders, is approved by a vote of at least a majority of the
               directors then comprising the Incumbent Board shall be considered
               to be a member of the Incumbent Board unless that individual was
               nominated or elected by any Person having the power to exercise,
               through beneficial 


                                       27
<PAGE>


                ownership, voting agreement and/or proxy, 20% or more of
                either then outstanding shares of Common Stock or the combined
                voting power of the Company's then outstanding voting
                securities entitled to vote generally in the election of
                directors, in which case that individual shall not be
                considered to be a member of the Incumbent Board unless such
                individual's election or nomination for election by the
                Company's stockholders is approved by a vote of at least
                two-thirds of the directors then comprising the Incumbent
                Board; or

          (iii) Consummation by the Company of the sale or other disposition by
                the Company of all or substantially all of the Company's assets
                or a Reorganization of the Company with any other person,
                corporation or other entity, other than

               (A)  a Reorganization that would result in the voting securities
                    of the Company outstanding immediately prior thereto (or, in
                    the case of a reorganization or merger or consolidation that
                    is preceded or accomplished by an acquisition or series of
                    related acquisitions by any Person, by tender or exchange
                    offer or otherwise, of voting securities representing 5% or
                    more of the combined voting power of all securities of the
                    Company, immediately prior to such acquisition or the first
                    acquisition in such series of acquisitions) continuing to
                    represent, either by remaining outstanding or by being
                    converted into voting securities of another entity, more
                    than 50% of the combined voting power of the voting
                    securities of the Company or such other entity outstanding
                    immediately after such securities of the Company or such
                    other entity outstanding immediately after such
                    reorganization or merger or consolidation (or series of
                    related transactions involving such a reorganization or
                    merger or consolidation), or


                                       28
<PAGE>


               (B)  a Reorganization effected to implement a recapitalization or
                    reincorporation of the Company (or similar transaction) that
                    does nor result in a material change in beneficial ownership
                    of the voting securities of the Company or its successor; or

          (iv) Approval by the stockholders of the Company or an order by a
               court of competent urisdiction of a plan of liquidation of the
               Company.

     "Commission" means the Securities and Exchange Commission.

     "Committee" means the committee appointed by the Board to administer this
Plan pursuant to Section 3.1.

     "Common Stock" means the common stock of the Company, par value $0.01 per
share, as constituted on the Effective Date of this Plan, and as thereafter
adjusted as a result of any one or more events requiring adjustment of
outstanding Awards under Section 2.4 above.

     "Company" means Nocopi Technologies, Inc., a Maryland corporation.

     "Disinterested Director" means any non-employee director of the Company who
qualifies as "disinterested" within the meaning of Rule 16b-3. 

     "Dividend Equivalent" means a right granted by the Company under Section
5.5 to a holder of a Stock Option, Stock Appreciation Right or other Incentive
Award denominated in shares of Common Stock to receive from the Company during
the Applicable Dividend Period payments equivalent to the amount of dividends
payable to holders of the number of shares of Common Stock underlying such Stock
Option, Stock Appreciation Right, or other Incentive Award.

     "Effective Date" means February 24, 1999, which is the date this Plan
was adopted by the Board.


                                       29
<PAGE>


     "Eligible Person" shall include directors, officers, employees, consultants
and advisors of the Company or of any Affiliated Entity; provided, however, that
Disinterested Directors shall not be Eligible Persons at any time the Company is
an Exchange Act Registered Company.

     "ERISA" means the Employee Retirement Income Act of 1974, as amended.

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

     "Exchange Act Registered Company" means that the Company has any class of
any equity security registered pursuant to Section 12 of the Exchange Act.

     "Expiration Date" means the tenth anniversary of the Effective Date.

     "Fair Market Value" of a share of the Company's capital stock of a
particular date shall be: if the stock is listed on an established stock
exchange or exchanges (including or this purpose, the Nasdaq National Market),
the mean between the highest and lowest sale prices of the stock quoted for such
date in the Transactions Index of each such exchange as averaged with such mean
price as reported on any and all other exchanges, as published in The Wall
Street Journal and determined by the Administering Body, or if no sale price was
quoted in any such Index for such date, then as of the next preceding date on
which such a sale price was quoted; or (ii) if the stock is not then listed on
an exchange or the Nasdaq National Market, the average of the closing bid and
asked prices per share or the stock in the over-the-counter market as quoted on
The Nasdaq Small Cap Market on such date (in the case of (i) or (ii), subject to
adjustment as and if necessary and appropriate to set an exercise price not less
than 100% of the fair market value of the stock on the date an option is
granted); or (iii) if the stock is not then listed on an exchange or quoted in
the over-the-counter market, am amount determined in good faith by the
Administering Body; provided, however, that (A) when appropriate, the
Administering Body in determining Fair Market Value of capital stock of the
Company may take into account such other factors as it may deem appropriate
under the circumstances and (B) if the stock is traded in the Nasdaq Small Cap
Market and both sales prices and bid and asked prices are quoted or


                                       30
<PAGE>

available, the Administering Body may elect to determine Fair Market Value under
either clause (i) or (ii) above. Notwithstanding the foregoing, the Fair Market
Value of capital stock for purposes of grants of Incentive Stock Options shall
be determined in compliance with applicable provisions of the IRC. The Fair
Market Value of rights or property other than capital stock of the Company means
the fair market value thereof as determined by the Committee on the basis of
such factors as it may deem appropriate.

     "Incentive Award" means any Stock Option, Restricted Stock, Stock
Appreciation Right, Stock Payment, Stock Bonus, Stock Sale, Phantom Stock,
Dividend Equivalent, or Other Stock-Based Benefit granted or sold to an Eligible
Person under this Plan.

     "Incentive Stock Option" means a Stock Option that qualifies as an
incentive stock option under Section 422 of the IRC.

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

     "Just Cause Dismissal" shall mean a termination of a Recipient's employment
for any of the following reasons: (i) the Recipient violated any reasonable rule
or regulation of the Board, the Company's Chief Executive Officer or the
Recipient's superiors that results in damage to the Company or which, after
written notice to do so, the Recipient fails to correct within a reasonable
time; (ii) any willful misconduct or gross negligence by the Recipient in the
responsibilities assigned to the Recipient (iii) any willful failure to perform
the Recipient's job as required to meet Company objectives; (iv) any wrongful
conduct of a Recipient which has an adverse impact on the Company or which
constitutes a misappropriation of Company assets; (v) the Recipient is employed
by the Company, without the written approval of the Chief Executive Officer of
the Company; or (vi) any other conduct that the Administering Body determined
constitutes Just Cause for Dismissal; provided, however, that if a Recipient is
party to an employment agreement with the Company providing for just cause
dismissal (or some comparable notion) of Recipient from Recipient's employment
with the Company, "Just Cause Dismissal" for purposes of this Plan shall have
the same meaning as ascribed thereto or to such comparable notion in such
employment agreement.


                                       31
<PAGE>

     "Nonqualified Stock Option" means a Stock Option that is not an Incentive
Stock Option.

     "Other Stock-Based Benefits" means an Incentive Award granted under Section
5.9 if this Plan.

     "Outside Director" means an "outside director" as defined in Section 424(e)
of the IRC.

     "Parent Corporation" means any Parent Corporation as defined in Section
424(e) of the IRC.

     "Payment Event" means the event or events giving rise to the right to
payment of a Performance Award.

     "Performance-Based Compensation" means performance-based compensation as
described in Section 162(m) of the IRC.

     "Person" means any person, entity or group, within the meaning of Section
13(d) of the Exchange Act, but excluding (i) the Company and its subsidiaries,
(ii) any employee stock ownership or other employee benefit plan maintained by
the Company that is qualified under ERISA and (iii) an underwriter or
underwriting syndicate that has acquired the Company's securities solely in
connection with a public offering thereof.

     "Permanent Disability" shall mean that the Recipient becomes physically or
mentally incapacitated or disabled so that the Recipient is unable to perform
substantially the same services as the Recipient performed prior to incurring
such incapacity or disability (the Company, at its option and expense, being
entitled to retain a physician to confirm the existence of such incapacity or
disability, and the determination of such physician to be binding upon the
Company and the Recipient), and such incapacity or disability continues for a
period of three consecutive months or six months in an 12-month period or such
other period(s) as may be determined by the Committee with respect to any Award,
provided that for purposes of determining the period during which an Incentive
Stock Option may be exercised pursuant to Section 4.13(ii) hereof, Permanent
Disability shall mean "permanent and total disability" as defined in Section
22(e) of the IRC.


                                       32
<PAGE>

     "Phantom Stock" means an Incentive Award granted under Section 5.8 of this
Plan.

     "Plan" means this 1998 Stock Incentive Plan of the Company.

     "Plan Term" means the period during which this Plan remains in effect
(commencing the Effective Date and ending on the Expiration Date).

     "Purchase Price" means the purchase price (if any) to be paid by a
Recipient for Restricted Stock as determined by the Committee (which price shall
be at least equal to the minimum price required under applicable laws and
regulations for the issuance of Common Stock which is nontransferable and
subject to a substantial risk of forfeiture until specific conditions are met.

     "Recipient" means a person who has received an Award under this Plan.

     "Reorganization" means any merger, consolidation or other reorganization.

     "Restricted Stock" means Common Stock that is the subject of an Award made
under Section 5.2 and which is nontransferable and subject to substantial risk
of forfeiture until specific conditions are net as set forth in this Plan and in
any statement evidencing the grant of such Incentive Award.

     "Rule 16b-3" means Rule 16b-3 under the Exchange Act.

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

     "Significant Stockholder" is an individual who, at the time a Stock Option
is granted to such individual under this Plan, owns more than ten percent (10%)
of the combined voting power of all classes of stock of the Company or of any
Parent Corporation or Subsidiary Corporation (after application of the
attribution rules set forth in Section 424(d) of the IRC).


                                       33
<PAGE>


     "Stock Appreciation Right" or "SAR" means a right granted under Section 5.3
to receive a payment that is measured with reference to the amount by which the
Fair Market Value of a specified number of shares of Common Stock appreciates
from a specified date, such as the date of grant of the SAR, to the date of the
exercise.

     "Stock Bonus" means an issuance or delivery of unrestricted or restricted
shares of Common Stock under Section 5.6 of this Plan as a bonus for services
rendered or for any other valid consideration under applicable law.

     "Stock Payment" means a payment in shares of the Company's Common Stock to
replace all or any portion of the compensation (other than base salary) that
would otherwise become payable to a Recipient.

     "Stock Option" means a right to purchase stock of the Company granted under
Section 5.1 of this Plan.

     "Stock Sale" means a sale of Common Stock to a Eligible Person under
Section 5.7 of this Plan.

     "Subsidiary Corporation" means any Subsidiary Corporation as defined in
Section 425(f) of the IRC.




                                       34