NOCOPI TECHNOLOGIES, INC.

                             1996 STOCK OPTION PLAN

     1. Name, Purpose and Eligibility. This plan shall be known as the Nocopi
Technologies, Inc. 1996 Stock Option 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
non-employee directors of the Company ("Eligible Employees") shall be eligible
to receive options under and in accordance with the terms of the Plan. In
addition, consultants and advisers 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.

     2. Plan Administration.

        (a) The Plan shall be administered by a committee (the "Committee")
which shall consist of not less than two non-employee directors appointed by the
Company's Board of Directors (the "Board"). No member of the Committee shall be,
or within one year before having become a member thereof shall have been,
eligible for selection as a person to whom stock options may be granted by the
Committee under the Plan. Non-employee directors, including members of the
Committee, may, however, participate under the Plan to the extent, and on the
terms, specified in Section 7 hereof.

        (b) Subject to the terms of the Plan, the Committee shall have the
authority, in its sole discretion and from time to time, to: (i) designate the
Eligible Employees (other than non-employee directors) to whom options to
purchase ("Options") the Company's common stock, par value $.01 per share (such
common stock, and any other common stock or other securities which may be
issuable upon the exercise of Options granted hereunder by virtue of any
adjustment made pursuant to Section 11 hereof is herein referred to as "Common
Stock") shall be granted under the Plan; (ii) grant Options provided for in the
Plan in such form and amount as the Committee shall determine; (iii) impose such
limitations, restrictions and conditions upon any such Option as the Committee
shall deem appropriate; and (iv) interpret the Plan, adopt, amend and rescind
rules and regulations relating to the Plan, and make all other determinations
and take all other actions necessary and advisable for the administration of the
Plan.


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        (c) Decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be conclusive. No
member of the Committee shall be liable for any action taken or decision made in
good faith relating to this Plan or any award hereunder.

     3. Types of Options Under Plan. The Committee may designate Options granted
to a person who (i) is an employee of the Company or a subsidiary of the Company
and (ii) does not own stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company as "incentive stock
options" within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"). A stock option agreement for any Option intended
to qualify as an incentive stock option shall contain a statement of such
intent. All Options granted under the Plan which are not designated as incentive
stock options shall be non-qualified stock options.

     4. Shares Subject to the Plan. The aggregate number of shares of the
Company's common stock, par value $.01 per share which may be issued upon the
exercise of Options granted under the Plan is 700,000 subject to adjustment as
provided in Section 11 hereof. Such shares may be authorized and unissued shares
or may be treasury shares. If an Option expires or terminates for any reason
during the term of the Plan and prior to its exercise in full, the number of
shares previously subject to but not delivered under such Option shall again be
available for the grant of Options thereafter.

     5. Effective Date and Term of Plan. The Plan shall become effective at such
time as there shall have been filed and become effective articles of amendment
to the Company's articles of incorporation effecting a one for five reverse
stock split, setting the number of authorized shares of the Company's common
stock at 50,000,000, and setting the par value of such shares at $.01 per share,
provided that on such date, the adoption of the Plan shall have been approved by
the affirmative vote of the holders of a majority of the Company's Common Stock
present or represented and entitled to vote at a meeting duly held in accordance
with the provisions of the Maryland General Corporation Law, as amended, and
shall remain in effect for a period of ten years thereafter, or until
termination by the Board, whichever occurs first. The effectiveness of the Plan
shall constitute its adoption for the purposes of Section 422A of the Code.

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     6. Stock Options.

        (a) Options granted under the Plan shall be evidenced by stock option
agreements in such form, not inconsistent with this Plan, as the Committee shall
approve from time to time. At the time of the grant the Committee shall
determine for each Option the exercise period, which shall not continue for more
than ten years from the date of Option grant, the appropriate Option price (as
specified below) and such other conditions to or restrictions on the exercise of
the Option, including but not limited to vesting provisions, if any, as the
Committee deems appropriate.

        (b) The per share price at which a share of Common Stock may be
purchased upon the exercise of an Option (the "Option Price") shall be
determined as follows:

            (i)  In the case of an Option designated as an incentive stock
option, the Option Price shall be not less than 100% of the fair market value
(on the date such Option is granted) of the Common Stock issuable upon the
exercise thereof, as determined by the Committee in the reasonable exercise of
its discretion.

            (ii) In the case of a non-qualified Option, the Option Price shall
be any amount established by the Committee in its discretion or, in the case of
Discounted Options (as hereafter defined), the amount determined in accordance
with Section 7(a)(iii) of this Plan.

        (c) The aggregate Option Price payable to the Company in connection with
the exercise of Option(s) may be paid in cash or, in whole or in part, with
unrestricted shares of Company Common Stock, as the Committee may determine.

     7. Non-Employee Director Options.

        (a) If, during the term of this Plan, the Company shall adopt a policy
of compensating non-employee directors for their service as directors on an
annual basis, the Company shall issue discounted options ("Discounted Options")
to any non-employee director of the Company electing to receive such Discounted
Options in lieu of the payment to said non-employee director of any specified
portion of the Annual Retainer (as defined hereinbelow) otherwise payable to
such non-employee director, provided that in the particular case all of the
limitations and provisions of this Section shall have been complied with:

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            (i)  A Discounted Option shall be issued automatically on June 1
(or if June 1 is not a business day, on the next succeeding business day) of
each year to any non-employee director who, prior to January 1 of such year,
files with the Committee or its designee an irrevocable, written election to
receive such Discounted Option in lieu of all or a specified portion of the
Annual Retainer to be earned in such year by such non-employee director.

            (ii) The number of shares subject to a Discounted Option issued to a
non-employee director pursuant to this Section shall be equal to the nearest
number of whole shares determined in accordance with the following formula:

         Dollar Amount of Annual Retainer to
         be Received as Discounted Option        =  Number
         Fair Market Value of Common Stock          of Shares
         on Date of Issue - Per Share
         Option Price

"Annual Retainer" shall mean the amount which the non-employee director will be
entitled to receive for serving as a director in the relevant calendar year, but
shall not include fees or expenses for attendance at meetings of the Board or
any committee of the Board or for any other services to be provided to the
Company.

            (iii) The Option price per share for the shares covered by
Discounted Options issued in accordance with this Section shall be Seventy Five
Percent (75%) of the fair market value of the Common Stock. For the purpose of
this subsection 7(a)(iii), the fair market value of the Common Stock shall be
deemed to be the closing selling price of the Common Stock on the trading day
immediately preceding the date on which the Discounted Option is issued, or, if
no sale of Common Stock occurred on such day, the mean average of the low
"asked" and high "bid" prices for the Common Stock on such day, in either case,
as reported by the National Quotation Bureau, Inc.

            (iv)  No Discounted Option issued under this Section may be
exercised before the first anniversary of the date upon which it was issued;
provided, however, that any Discounted Option so issued shall become exercisable
upon the retirement of the non-employee director because of age or upon the
death or disability of the director, as provided in paragraphs (v) and (vi) of
this Section. No Discounted Option issued under this Section shall be
exercisable after the expiration of ten years from the date upon which such
Discounted Option is issued. Each Discounted Option shall be subject to
termination before its date of expiration as hereinafter provided.

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            (v)   Except as herein provided, the rights of a non-employee 
director in a Discounted Option issued under this Section shall not terminate
upon such director's termination as a director for any reason (including death,
retirement or disability). That portion of any Discounted Option granted under
this Section which is attributable to a portion of an Annual Retainer which is
not earned due to termination as a director (for any reason) shall automatically
abate and be canceled.

            (vi)  Any Discounted Option issued to a non- employee director and
outstanding on the date of his or her death may be exercised by the
administrator of such director's estate, the executor under his or her will, or
the person or persons to whom such Discounted Option shall have been validly
transferred by such executor or administrator pursuant to the will of the
deceased non-employee director or the laws of intestate succession (but not
beyond the specified expiration date of such Discounted Option).

            (vii) Discounted Options issued under this Section may be exercised
only by written notice to the Company accompanied by payment in cash of the full
consideration for the shares as to which they are exercised.

        (b) The provisions of this Section shall apply only to Discounted
Options issued or to be issued to non-employee directors, and shall not be
deemed to modify, limit or otherwise apply to any other provision of this Plan
or any Option issued under this Plan to a participant who is not a non-employee
director of the Company.

     8. Termination of Employment. Except as the Committee otherwise determines
in a particular case, Options held by a participant whose employment with the
Company or a subsidiary terminates for reasons other than (i) retirement at the
normal retirement date then in effect for employees of the Company or such
subsidiary, (ii) early retirement with the consent of the Board, (iii)
disability, or (iv) death shall terminate upon the expiration of thirty days
after such participant's termination of employment. This Section shall not apply
to Discounted Options awarded to non-employee directors.

     9. Death of a Participant. In the event of the death of a participant, if
the deceased participant holds Options some portion of one or more of which is
exercisable at the time of his or her death, the administrator of such
participant's estate, the executor under his or her will, or the person or
persons to whom



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such Options shall have been validly transferred by such executor or
administrator pursuant to the participant's will or the laws of intestate
succession shall have the right, within twelve months from the date of such
participant's death, to exercise all Options (or any portion thereof) held by
such participant on the date of death which were then exercisable, but not yet
exercised; provided, however, that no Option shall be exercised after its
specified expiration date.

     10. Retirement and Disability. In the event of termination of the
employment of a participant (or the termination of a participant's service as a
non-employee director) due to retirement at the normal retirement date then in
effect for employees or non-employee directors of the Company or early
retirement with the consent of the Board, or in the event a participant becomes
disabled, a participant who, upon retirement or disability, holds Options some
portion of one or more of which is then exercisable shall have the right, within
three years of the date of such retirement or disability, to exercise all
Options (or any portion thereof) held by such participant on the date of
retirement or disability which were then exercisable but not yet exercised;
provided, however, that no Option shall be exercised after its specified
expiration date.

     11. Changes in Capitalization. The (i) total number of shares of Common
Stock of the Company for which Options may be granted, (ii) number of shares
subject to each outstanding Option, and (iii) Option prices and Discount Option
prices per share shall be subject to appropriate adjustment by the Committee for
any changes in the number of outstanding shares of Common Stock resulting from a
merger, recapitalization, stock split, stock dividend or other change in the
Company's corporate or capital structure.

     12. Withholding Taxes. Whenever shares of Company Common Stock are to be
issued or delivered upon the exercise of Options granted hereunder, the
Committee shall have the right, at or prior to the delivery of any certificate
or certificates for shares, to require the exercising participant to remit to
the Company, in cash, in shares of Company Common Stock, or in other
consideration deemed satisfactory to the Committee, as the Committee may
determine, an amount sufficient to satisfy withholding requirements, with
respect to federal, state and local income and employment taxes.

     13. Employment. The establishment of the Plan and awards hereunder shall
not be construed as conferring on any participant any right to continued
employment, and the employment of any participant may be terminated without
regard to the effect which such action might have upon him or her as a
participant.

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     14. Transferability.

         (a) Options are not transferable other than by will, by the laws of
intestate succession or pursuant to a qualified domestic relations order. No
transfer shall be effective to bind the Company unless the Committee shall have
been furnished with a copy of the deceased participant's will and such other
evidence as the Committee may deem necessary to establish the validity of the
transfer or, if applicable, a certified copy of such qualified domestic
relations order.

         (b) Only the participant or his or her guardian, or in the event of
death, his or her legal representative or beneficiary, may exercise Options or
Discounted Options and receive deliveries of shares.

     15. Non-Uniform Determinations. The Committee's determinations under this
Plan (including without limitation determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and provisions of
such awards and the agreements evidencing the same, and the establishment of
performance standards) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.

     16. Effect on Other Plans. Participation in this Plan shall not affect a
participant's eligibility to participate in any other benefit or incentive plan
of the Company.

     17. Amendment, Modification, and Termination. The Board, at any time, may
terminate and in any respect amend or modify the Plan; provided, however, that
no such action by the Board, without approval of the Company's shareholders, may
(i) increase the total number of shares of Common Stock available under the Plan
in the aggregate (except as otherwise provided in Section 11), (ii) materially
increase the benefits accruing to participants under the Plan, or (iii)
materially modify the requirements as to eligibility for participation under the
Plan. No amendment, modification or termination of the Plan shall in any manner
adversely affect the rights of any participant under an award previously
granted. Section 7 of this Plan shall not be amended more than once in any six
month period, except to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended.

     18. Governing Law. This Plan shall be governed by the laws of the State of
Maryland.

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