EXHIBIT 10.1



                                      GENTA INCORPORATED

                                   1998 STOCK INCENTIVE PLAN


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                              Table of Contents
                                                                            Page
                                  ARTICLE I
                                   GENERAL

1.1   Purpose...............................................................   1
1.2   Administration........................................................   1
1.3   Persons Eligible for Awards...........................................   2
1.4   Types of Awards Under Plan............................................   2
1.5   Shares Available for Awards...........................................   2
1.6   Definitions of Certain Terms..........................................   4

                                 ARTICLE II
                            AWARDS UNDER THE PLAN

2.1   Agreements Evidencing Awards..........................................   5
2.2   No Rights as a Shareholder............................................   6
2.3   Grant of Stock Options, Stock Appreciation Rights and Reload Options..   6
2.4   Exercise of Options and Stock Appreciation Rights.....................   8
2.5   Termination of Employment; Death......................................   9
2.6   Grant of Restricted Stock.............................................   9
2.7   Grant of Restricted Stock Units.......................................  10
2.8   Other Stock-Based Awards..............................................  10
2.9   Grant of Dividend Equivalent Rights...................................  11
2.10  Right of Recapture....................................................  11

                                 ARTICLE III
                                MISCELLANEOUS

3.1   Amendment of the Plan; Modification of Awards.........................  11
3.2   Tax Withholding.......................................................  12
3.3   Restrictions..........................................................  12
3.4   Nonassignability......................................................  13
3.5   Requirement of Notification of Election
      Under Section 83(b) of the Code.......................................  13
3.6   Requirement of Notification Upon Disqualifying Disposition Under
        Section 421(b) of the Code..........................................  13
3.7   Change in Control, Dissolution, Liquidation, Merger...................  13
3.8   Right of Discharge Reserved...........................................  15
3.9   Nature of Payments....................................................  15
3.10  Non-Uniform Determinations............................................  16
3.11  Other Payments or Awards..............................................  16
3.12  Section Headings......................................................  16
3.13  Effective Date and Term of Plan.......................................  16
3.14  Governing Law.........................................................  16

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                                           ARTICLE I
                                            GENERAL

1.1 Purpose

        The purpose of the Genta  Incorporated  1998 Stock  Incentive  Plan (the
"Plan") is to provide  for  officers,  other  employees  and  directors  of, and
consultants  to, Genta  Incorporated  (the  "Company") and its  subsidiaries  an
incentive  (a) to enter into and remain in the  service of the  Company,  (b) to
enhance  the  long-term  performance  of  the  Company,  and  (c) to  acquire  a
proprietary interest in the success of the Company.

1.2 Administration

        1.2.1 Subject to Section 1.2.6,  the Plan shall be  administered  by the
Compensation  Committee  (the  "Committee")  of the  board of  directors  of the
Company (the "Board"),  which shall consist of not less than two directors.  The
members of the  Committee  shall be appointed  by, and serve at the pleasure of,
the Board. To the extent required for transactions under the Plan to qualify for
the exemptions  available under Rule 16b-3 ("Rule 16b-3")  promulgated under the
Securities Exchange Act of 1934 (the "1934 Act"), all actions relating to awards
to  persons  subject  to  Section 16 of the 1934 Act shall be taken by the Board
unless  each person who serves on the  Committee  is a  "non-employee  director"
within the meaning of Rule 16b-3 or such actions are taken by a sub-committee of
the Committee (or the Board) comprised solely of  "non-employee  directors".  To
the extent required for  compensation  realized from awards under the Plan to be
deductible  by the Company  pursuant to section  162(m) of the Internal  Revenue
Code of 1986 (the  "Code"),  the  members  of the  Committee  shall be  "outside
directors" within the meaning of section 162(m).

        1.2.2 The Committee  shall have the authority (a) to exercise all of the
powers  granted to it under the Plan;  (b) to construe,  interpret and implement
the Plan and any plan  agreements  executed  pursuant  to  Section  2.1;  (c) to
prescribe,  or amend and  rescind  rules and  regulations  relating to the Plan,
including  rules governing its own  operations;  (d) to make all  determinations
necessary  or advisable in  administering  the Plan;  (e) to correct any defect,
supply any omission and reconcile any  inconsistency  in the Plan;  (f) to amend
the Plan to reflect changes in applicable law; (g) to determine whether, to what
extent and under what circumstances  awards may be settled or exercised in cash,
Shares of Common Stock,  other  securities,  other awards or other property,  or
canceled,  forfeited or suspended  and the method or methods by which awards may
be settled,  canceled,  forfeited or suspended; and (h) to determine whether, to
what extent and under what  circumstances  cash,  shares of Common Stock,  other
securities,  other  awards or other  property  and other  amounts  payable  with
respect to an award shall be deferred either automatically or at the election of
the holder thereof or of the Committee.

        1.2.3 Actions of the Committee  shall be taken by the vote of a majority
of its  members.  Any  action may be taken by a written  instrument  signed by a
majority of the

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Committee members,  and action so taken shall be fully as effective as if it had
been taken by a vote at a meeting.

        1.2.4 The  determination of the Committee on all matters relating to the
Plan or any plan agreement shall be final, binding and conclusive.

        1.2.5 No  member of the  Committee  shall be  liable  for any  action or
determination  made  in  good  faith  with  respect  to the  Plan  or any  award
thereunder.

        1.2.6  Notwithstanding  anything to the contrary  contained herein:  (a)
until the Board shall  appoint the members of the  Committee,  the Plan shall be
administered by the Board; and (b) the Board may, in its sole discretion, at any
time and from time to time,  grant awards or resolve to administer  the Plan. In
either of the  foregoing  events,  the Board shall have all of the authority and
responsibility granted to the Committee herein.

1.3 Persons Eligible for Awards

        Awards under the Plan may be made to such directors (including directors
who are not  employees),  officers  and other  employees  of the Company and its
subsidiaries  (including  prospective  employees  conditioned  on their becoming
employees), and to such consultants,  advisers and other independent contractors
of the  Company  and its  subsidiaries  (collectively,  "key  persons"),  as the
Committee shall select in its discretion.

1.4 Types of Awards Under Plan

        Awards  may be made  under the Plan in the form of (a)  incentive  stock
options (within the meaning of section 422 of the Code); (b) non-qualified stock
options;  (c) stock  appreciation  rights;  (d) dividend  equivalent rights; (e)
restricted stock; (f) restricted stock units; and (g) other stock-based  awards,
all as more fully set forth in Article  II.  The term  "award"  means any of the
foregoing.  No incentive stock option (other than an incentive stock option that
may be assumed or issued by the  Company in  connection  with a  transaction  to
which section  424(a) of the Code applies) may be granted to a person who is not
an employee of the Company on the date of grant.

1.5 Shares Available for Awards

        1.5.1 Total shares available. The total number of shares of common stock
of the  Company,  par  value  $.001  per share  ("Common  Stock"),  which may be
transferred  pursuant  to  awards  granted  under  the  Plan  shall  not  exceed
6,750,000; provided, however, that such number of shares may be increased at any
time or from time to time, at the  discretion  of the Board of Directors,  by an
aggregate  amount  up to the  product  of (x)  .15  and  (y)  the sum of (1) the
difference  between  (A) the  number  of shares  of  Common  Stock  which may be
obtained upon conversion of the Series D Convertible Preferred Stock pursuant to
the modification in the

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conversion  price  effected by the Reset,  as defined in the fifth  paragraph of
Subsection 4 (a) of the Certificate of Designations for the Series D Convertible
Preferred  Stock, as amended from time to time, or any contractual  modification
to such  Reset  (collectively,  the  "Reset");  and (B) the  number of shares of
Common Stock  obtainable upon  conversion of the Series D Convertible  Preferred
Stock  immediately  prior to such  Reset and (2) the  number of shares of Common
Stock  which may be obtained  upon the  exercise  of any  Penalty  Warrants  (as
defined in the Company's  Annual Report on Form 10-K for the year ended December
31, 1997).  Notwithstanding  the foregoing,  the total number of incentive stock
options  (as  defined in  Section  1.6.2)  which may be  granted  may not exceed
5,000,000  shares.  Such shares may be authorized  but unissued  Common Stock or
authorized and issued Common Stock held in the Company's treasury or acquired by
the Company  for the  purposes of the Plan.  The  Committee  may direct that any
stock  certificate  evidencing  shares issued  pursuant to the Plan shall bear a
legend setting forth such restrictions on  transferability  as may apply to such
shares pursuant to the Plan. If, after the effective date of the Plan, any award
is  forfeited or any award  otherwise  terminates  or is  cancelled  without the
delivery of shares of Common Stock,  then the shares covered by such award or to
which such award relates shall again become  available for transfer  pursuant to
awards  granted or to be granted  under  this Plan.  Any shares of Common  Stock
delivered  by the  Company,  any shares of Common  Stock  with  respect to which
awards are made by the  Company and any shares of Common  Stock with  respect to
which the Company becomes  obligated to make awards,  through the assumption of,
or in substitution for,  outstanding  awards  previously  granted by an acquired
entity,  shall not be counted against the shares available for awards under this
Plan.

        1.5.2 Individual  Limit. The total number of shares of Common Stock with
respect to which stock options and stock  appreciation  rights may be granted to
any one employee of the Company or a subsidiary during any two-year period shall
not exceed 8,000,000 shares.

        1.5.3 Adjustments. Subject to any required action by the shareholders of
the Company,  the number of shares of Common Stock  covered by each  outstanding
award, the number of shares available for awards,  the number of shares that may
be  subject  to  awards to any one  employee,  and the price per share of Common
Stock covered by each such outstanding award shall be  proportionately  adjusted
for any  increase  or decrease  in the number of issued  shares of Common  Stock
resulting from a stock split,  reverse stock split, stock dividend,  combination
or  reclassification  of the Common Stock,  or any other increase or decrease in
the  number  of issued  shares  of Common  Stock  effected  without  receipt  of
consideration  by  the  Company;  provided,  however,  that  conversion  of  any
convertible securities of the Company shall not be deemed to have been "effected
without  receipt  of  consideration."  Such  adjustment  shall  be  made  by the
Committee,  whose  determination  in that  respect  shall be final,  binding and
conclusive.  Except  as  expressly  provided  herein or in the  applicable  plan
agreement,  no  issuance  by the  Company  of shares of stock of any  class,  or
securities  convertible into shares of stock of any class,  shall affect, and no
adjustment by reason  thereof shall be made with respect to, the number or price
of  shares of Common  Stock  subject  to an  award.  After any  adjustment  made
pursuant to this Section 1.5.3, the number of shares subject to each outstanding
award

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shall be rounded to the nearest whole number.

        1.5.4 Except as provided in this Section 1.5 and in Section 2.3.8, there
shall be no limit on the number or the value of the shares of Common  Stock that
may be subject to awards to any individual under the Plan.

1.6 Definitions of Certain Terms

        1.6.1 The  "Fair  Market  Value"  of a share of Common  Stock on any day
shall be determined as follows.

               (a) If the principal  market for the Common Stock (the  "Market")
is a national  securities  exchange or the National  Association  of  Securities
Dealers  Automated  Quotation  System  ("NASDAQ")  National  Market or Small Cap
Market,  the  last  sale  price  or,  if no  reported  sales  take  place on the
applicable date, the average of the high bid and low asked price of Common Stock
as  reported  for such Market on such date or, if no such  quotation  is made on
such date, on the next  preceding day on which there were  quotations,  provided
that such  quotations  shall have been made  within the ten (10)  business  days
preceding the applicable date;

               (b) If the Common Stock is actively traded but paragraph (a) does
not apply,  the average of the high bid and low asked price for Common  Stock on
the  applicable  date,  or, if no such  quotations  shall have been made on such
date, on the next  preceding day on which there were  quotations,  provided that
such quotations shall have been made within the ten (10) business days preceding
the applicable date; or,

               (c) In the event that neither  paragraph (a) nor (b) shall apply,
the Fair Market Value of a share of Common Stock on any day shall be  determined
in good faith by the Committee.

        1.6.2 The term "incentive stock option" means an option that is intended
to qualify for special federal income tax treatment pursuant to sections 421 and
422 of the Code, as now  constituted or subsequently  amended,  or pursuant to a
successor  provision of the Code,  and which is so designated in the  applicable
plan agreement.  Any option that is not specifically  designated as an incentive
stock option  shall under no  circumstances  be  considered  an incentive  stock
option.  Any option that is not an incentive  stock option is referred to herein
as a "nonqualified stock option."

        1.6.3 The term "employment"  means, in the case of a grantee of an award
under the Plan who is not an employee of the Company, the grantee's  association
with the Company or a  subsidiary  as a  director,  consultant,  adviser,  other
independent contractor or otherwise.

        1.6.4 A grantee shall be deemed to have a  "termination  of  employment"
upon

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ceasing  to be  employed  by the  Company  and all of its  subsidiaries  or by a
corporation assuming awards in a transaction to which section 424(a) of the Code
applies.  The Committee may in its discretion determine (a) whether any leave of
absence  constitutes a termination  of employment  for purposes of the Plan; (b)
the  impact,  if any,  of any such leave of absence on awards  theretofore  made
under the Plan; and (c) when a change in a  non-employee's  association with the
Company  constitutes a termination  of employment  for purposes of the Plan. The
Committee shall have the right to determine  whether a grantee's  termination of
employment  is a dismissal for cause and the date of  termination  in such case,
which date the  Committee  may  retroactively  deem to be the date of the action
that is cause for  dismissal.  Such  determinations  of the  Committee  shall be
final, binding and conclusive.

        1.6.5 The term "cause," when used in connection  with  termination  of a
grantee's  employment,  shall have the meaning  set forth in any  then-effective
employment  agreement  between  the  grantee  and the  Company  or a  subsidiary
thereof.  In the  absence of such an  employment  agreement  provision,  "cause"
means:  (a) conviction of any crime (whether or not involving the Company or its
subsidiaries)  constituting a felony in the jurisdiction  involved; (b) engaging
in any act which, in each case,  subjects,  or if generally known would subject,
the  Company  or its  subsidiaries  to public  ridicule  or  embarrassment;  (c)
material  violation of the  Company's  or a  subsidiary's  policies,  including,
without  limitation,  those  relating to sexual  harassment or the disclosure or
misuse of  confidential  information;  (d) serious  neglect or misconduct in the
performance  of the grantee's  duties for the Company or a subsidiary or willful
or  repeated  failure  or  refusal  to  perform  such  duties;  in each  case as
determined by the Committee,  which  determination  shall be final,  binding and
conclusive.


                                   ARTICLE II
                              AWARDS UNDER THE PLAN

2.1 Agreements Evidencing Awards

        Each  award  granted  under the Plan  (except  an award of  unrestricted
stock) shall be evidenced by a written agreement ("plan  agreement") which shall
contain such  provisions as the Committee in its discretion  deems  necessary or
desirable.  Such provisions may include,  without limitation, a requirement that
the grantee  become a party to a  shareholders'  agreement  with  respect to any
shares of Common Stock acquired  pursuant to the award,  a requirement  that the
grantee  acknowledge that such shares are acquired for investment purposes only,
and a right of first  refusal  exercisable  by the Company in the event that the
grantee  wishes to transfer any such shares.  The  Committee may grant awards in
tandem with or in substitution  for any other award or awards granted under this
Plan or any award granted under any other plan of the Company or any subsidiary.
Payments  or  transfers  to be made by the  Company or any  subsidiary  upon the
grant, exercise or payment of an award may be made in such form as the Committee
shall determine, including cash, shares of Common Stock, other securities, other
awards or other  property and may be made in a single  payment or  transfer,  in
installments or


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on a deferred basis,  in each case in accordance  with rules  established by the
Committee.  By accepting an award pursuant to the Plan, a grantee thereby agrees
that the award shall be subject to all of the terms and  provisions  of the Plan
and the applicable plan agreement.

2.2 No Rights as a Shareholder

        No grantee  of an option or stock  appreciation  right (or other  person
having  the right to  exercise  such  award)  shall  have any of the rights of a
shareholder  of the Company with  respect to shares  subject to such award until
the issuance of a stock  certificate  to such person for such shares.  Except as
otherwise  provided in Section 1.5.3, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash,  securities  or other  property) for which the record date is prior to the
date such stock certificate is issued.

2.3 Grant of Stock Options, Stock Appreciation 
    Rights and Reload Options
 
        2.3.1 The Committee may grant incentive  stock options and  nonqualified
stock options (collectively,  "options") to purchase shares of Common Stock from
the Company,  to such key persons, in such amounts and subject to such terms and
conditions,  as the Committee shall determine in its discretion,  subject to the
provisions of the Plan.

        2.3.2 The  Committee  may grant  stock  appreciation  rights to such key
persons,  in such  amounts  and  subject  to such terms and  conditions,  as the
Committee shall  determine in its  discretion,  subject to the provisions of the
Plan.  Stock  appreciation  rights may be granted in connection  with all or any
part of, or  independently  of,  any  option  granted  under  the Plan.  A stock
appreciation right granted in connection with a nonqualified stock option may be
granted at or after the time of grant of such option. A stock appreciation right
granted in connection  with an incentive stock option may be granted only at the
time of grant of such option.

        2.3.3 The  grantee of a stock  appreciation  right shall have the right,
subject to the terms of the Plan and the applicable plan  agreement,  to receive
from the Company an amount equal to (a) the excess of the Fair Market Value of a
share of Common  Stock on the date of exercise of the stock  appreciation  right
over (b) the exercise price of such right as set forth in the plan agreement (or
over the option  exercise  price if the stock  appreciation  right is granted in
connection with an option),  multiplied by (c) the number of shares with respect
to which the stock appreciation  right is exercised.  Payment upon exercise of a
stock  appreciation  right shall be in cash or in shares of Common Stock (valued
at their Fair Market  Value on the date of  exercise  of the stock  appreciation
right) or both, all as the Committee shall determine in its discretion. Upon the
exercise of a stock appreciation right granted in connection with an option, the
number of shares subject to the option shall be  correspondingly  reduced by the
number  of  shares  with  respect  to  which  the  stock  appreciation  right is
exercised.  Upon the  exercise  of an option in  connection  with  which a stock
appreciation right has been granted, the number of


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shares subject to the stock appreciation right shall be correspondingly  reduced
by the number of shares with respect to which the option is exercised.

        2.3.4 Each plan  agreement with respect to an option shall set forth the
amount (the "option  exercise price") payable by the grantee to the Company upon
exercise of the option  evidenced  thereby.  The option exercise price per share
shall be determined by the Committee in its discretion;  provided, however, that
the option exercise price of an incentive stock option shall be at least 100% of
the Fair  Market  Value of a share of  Common  Stock on the date the  option  is
granted  (except as permitted in connection  with the  assumption or issuance of
options in a  transaction  to which  section  424(a) of the Code  applies),  and
provided  further that in no event shall the option  exercise price be less than
the par value of a share of Common Stock.

        2.3.5  Each  plan   agreement   with  respect  to  an  option  or  stock
appreciation  right shall set forth the periods during which the award evidenced
thereby shall be exercisable, whether in whole or in part. Such periods shall be
determined  by the  Committee  in its  discretion;  provided,  however,  that no
incentive stock option (or a stock appreciation right granted in connection with
an incentive  stock  option) shall be  exercisable  more than 10 years after the
date of grant.

        2.3.6 The Committee may in its discretion  include in any plan agreement
with respect to an option (the "original option") a provision that an additional
option (the "additional  option") shall be granted to any grantee who,  pursuant
to Section 2.4.3(b),  delivers shares of Common Stock in partial or full payment
of the exercise price of the original option. The additional option shall be for
a number of shares of Common  Stock  equal to the number thus  delivered,  shall
have an exercise price equal to the Fair Market Value of a share of Common Stock
on the date of exercise of the  original  option,  and shall have an  expiration
date no later than the expiration date of the original option. In the event that
a plan agreement provides for the grant of an additional option,  such Agreement
shall also  provide that the  exercise  price of the original  option be no less
than the Fair Market Value of a share of Common Stock on its date of grant,  and
that any shares that are  delivered  pursuant to Section  2.4.3(b) in payment of
such exercise price shall have been held for at least six months.

        2.3.7 To the extent that the aggregate Fair Market Value  (determined as
of the time the option is granted) of the stock with respect to which  incentive
stock options granted under this Plan and all other plans of the Company and any
subsidiary are first  exercisable by any employee during any calendar year shall
exceed the maximum limit  (currently,  $100,000),  if any,  imposed from time to
time  under  section  422  of  the  Code,  such  options  shall  be  treated  as
nonqualified stock options.

        2.3.8 Notwithstanding the provisions of Sections 2.3.4 and 2.3.5, to the
extent required under section 422 of the Code, an incentive stock option may not
be  granted  under  the Plan to an  individual  who,  at the time the  option is
granted,  owns stock possessing more than 10% of the total combined voting power
of all classes of stock of his employer corporation or


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of its parent or subsidiary  corporations  (as such  ownership may be determined
for  purposes  of  section  422(b)(6)  of the Code)  unless (a) at the time such
incentive  stock option is granted the option exercise price is at least 110% of
the Fair Market Value of the shares subject  thereto and (b) the incentive stock
option by its terms is not  exercisable  after the  expiration of five (5) years
from the date it is granted.

2.4 Exercise of Options and Stock Appreciation Rights

        Subject to the  provisions  of this  Article  II,  each  option or stock
appreciation right granted under the Plan shall be exercisable as follows:

        2.4.1 Unless the applicable plan agreement otherwise provides, an option
or stock appreciation right shall become exercisable in four substantially equal
installments,  on each of the first,  second,  third and fourth anniversaries of
the date of grant,  and each  installment,  once it becomes  exercisable,  shall
remain exercisable until expiration, cancellation or termination of the award.

        2.4.2 Unless the applicable plan agreement otherwise provides, an option
or stock appreciation right may be exercised from time to time as to all or part
of the  shares as to which such award is then  exercisable  (but,  in any event,
only for whole shares). A stock appreciation right granted in connection with an
option may be  exercised  at any time when,  and to the same  extent  that,  the
related option may be exercised.  An option or stock appreciation right shall be
exercised by the filing of a written  notice with the Company,  on such form and
in such manner as the Committee shall prescribe.

        2.4.3 Any written  notice of exercise of an option shall be  accompanied
by payment for the shares being  purchased.  Such payment shall be made:  (a) by
certified or official bank check (or the  equivalent  thereof  acceptable to the
Company) for the full option  exercise  price; or (b) unless the applicable plan
agreement provides  otherwise,  by delivery of shares of Common Stock (which, if
acquired  pursuant  to exercise of a stock  option,  were  acquired at least six
months  prior to the  option  exercise  date)  and  having a Fair  Market  Value
(determined as of the exercise date) equal to all or part of the option exercise
price  and a  certified  or  official  bank  check  (or the  equivalent  thereof
acceptable to the Company) for any remaining portion of the full option exercise
price; or (c) at the discretion of the Committee and to the extent  permitted by
law, by such other method as the Committee may from time to time prescribe.

        2.4.4  Promptly  after  receiving  payment of the full  option  exercise
price, or after receiving notice of the exercise of a stock  appreciation  right
for which payment will be made partly or entirely in shares,  the Company shall,
subject to the  provisions  of Section 3.3  (relating to certain  restrictions),
deliver to the  grantee  or to such  other  person as may then have the right to
exercise the award, a certificate or certificates for the shares of Common Stock
for which the award has been exercised.  If the method of payment  employed upon
option exercise so requires,


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and if applicable law permits, an optionee may direct the Company to deliver the
certificate(s) to the optionee's stockbroker.

2.5 Termination of Employment; Death

        2.5.1 Except to the extent otherwise  provided in Section 2.5.2 or 2.5.3
or in the applicable plan agreement,  all options and stock appreciation  rights
not  theretofore  exercised  shall  terminate upon  termination of the grantee's
employment for any reason (including death).

        2.5.2 Except to the extent  otherwise  provided in the  applicable  plan
agreement,  if a grantee's employment terminates for any reason other than death
or dismissal for cause, the grantee may exercise any outstanding option or stock
appreciation  right on the following terms and  conditions:  (a) exercise may be
made only to the extent that the grantee was  entitled to exercise  the award on
the date of  employment  termination;  and (b) exercise must occur within ninety
(90) days after employment terminates,  except that this ninety day period shall
be increased to one year if the  termination is by reason of disability,  but in
no  event  after  the  expiration  date of the  award  as set  forth in the plan
agreement.  In the case of an incentive stock option,  the term "disability" for
purposes of the preceding sentence shall have the meaning given to it by section
422(c)(6) of the Code.

        2.5.3 Except to the extent  otherwise  provided in the  applicable  plan
agreement, if a grantee dies while employed by the Company or any subsidiary, or
after employment termination but during the period in which the grantee's awards
are  exercisable  pursuant to Section  2.5.2,  any  outstanding  option or stock
appreciation  right shall be exercisable on the following  terms and conditions:
(a)  exercise  may be made only to the extent that the  grantee was  entitled to
exercise  the award on the date of death;  and (b)  exercise  must  occur by the
earlier of the first  anniversary of the grantee's  death or the expiration date
of the award. Any such exercise of an award following a grantee's death shall be
made only by the grantee's executor or administrator,  unless the grantee's will
specifically  disposes of such award,  in which case such exercise shall be made
only by the  recipient of such  specific  disposition.  If a grantee's  personal
representative  or the recipient of a specific  disposition  under the grantee's
will shall be entitled to exercise any award pursuant to the preceding sentence,
such  representative or recipient shall be bound by all the terms and conditions
of the Plan and the applicable  plan  agreement  which would have applied to the
grantee.

2.6 Grant of Restricted Stock

        2.6.1 The Committee may grant restricted  shares of Common Stock to such
key persons,  in such amounts,  and subject to such terms and  conditions as the
Committee shall  determine in its  discretion,  subject to the provisions of the
Plan. Restricted stock awards may be made independently of or in connection with
any other award under the Plan. A grantee of a restricted stock award shall have
no rights  with  respect to such award  unless  such  grantee  accepts the award
within such period as the Committee shall specify by executing a plan


                                       9

<PAGE>



agreement in such form as the Committee  shall  determine  and, if the Committee
shall so require,  makes  payment to the Company by certified  or official  bank
check (or the  equivalent  thereof  acceptable to the Company) in such amount as
the Committee may determine.

        2.6.2 Promptly  after a grantee  accepts a restricted  stock award,  the
Company shall issue in the grantee's name a certificate or certificates  for the
shares  of  Common  Stock  covered  by the  award.  Upon  the  issuance  of such
certificate(s),  the grantee shall have the rights of a shareholder with respect
to the restricted  stock,  subject to the  non-transferability  restrictions and
Company  repurchase  rights  described  in Sections  2.6.4 and 2.6.5 and to such
other restrictions and conditions as the Committee in its discretion may include
in the applicable plan agreement.

        2.6.3 Unless the Committee  shall otherwise  determine,  any certificate
issued  evidencing  shares of restricted stock shall remain in the possession of
the Company  until such  shares are free of any  restrictions  specified  in the
applicable plan agreement.

        2.6.4 Shares of restricted stock may not be sold, assigned, transferred,
pledged or otherwise  encumbered or disposed of except as specifically  provided
in this Plan or the  applicable  plan  agreement.  The  Committee at the time of
grant shall  specify  the date or dates  (which may depend upon or be related to
the  attainment  of  performance  goals  and  other  conditions)  on  which  the
non-transferability  of the restricted stock shall lapse.  Unless the applicable
plan agreement  provides  otherwise,  additional shares of Common Stock or other
property distributed to the grantee in respect of shares of restricted stock, as
dividends or otherwise,  shall be subject to the same restrictions applicable to
such restricted stock.

        2.6.5  During  the  120  days  following  termination  of the  grantee's
employment  for any  reason,  the  Company  shall have the right to require  the
return of any shares to which restrictions on transferability apply, in exchange
for which the Company shall repay to the grantee (or the  grantee's  estate) any
amount paid by the grantee for such shares.

2.7 Grant of Restricted Stock Units

        2.7.1 The Committee  may grant awards of restricted  stock units to such
key persons,  in such amounts,  and subject to such terms and  conditions as the
Committee shall  determine in its  discretion,  subject to the provisions of the
Plan.  Restricted  stock units may be awarded  independently of or in connection
with any other award under the Plan.

        2.7.2 At the time of grant,  the  Committee  shall  specify  the date or
dates on which  the  restricted  stock  units  shall  become  fully  vested  and
nonforfeitable,  and  may  specify  such  conditions  to  vesting  as  it  deems
appropriate.  In the event of the termination of the grantee's employment by the
Company and its  subsidiaries  for any reason,  restricted stock units that have
not become nonforfeitable shall be forfeited and cancelled.

                                       10

<PAGE>



        2.7.3 At the time of grant,  the  Committee  shall  specify the maturity
date applicable to each grant of restricted stock units, which may be determined
at the election of the grantee.  Such date may be later than the vesting date or
dates of the award.  On the maturity  date,  the Company  shall  transfer to the
grantee one  unrestricted,  fully  transferable  share of Common  Stock for each
restricted  stock unit  scheduled to be paid out on such date and not previously
forfeited. The Committee shall specify the purchase price, if any, to be paid by
the grantee to the Company for such shares of Common Stock.

2.8 Other Stock-Based Awards

        The Committee may grant other types of stock-based awards (including the
grant of unrestricted  shares) to such key persons,  in such amounts and subject
to  such  terms  and  conditions,  as the  Committee  shall  in  its  discretion
determine,  subject to the  provisions  of the Plan.  Such awards may entail the
transfer of actual  shares of Common Stock to Plan  participants,  or payment in
cash or otherwise of amounts based on the value of shares of Common Stock.

2.9 Grant of Dividend Equivalent Rights

        The Committee may in its  discretion  include in the plan agreement with
respect  to any award a  dividend  equivalent  right  entitling  the  grantee to
receive amounts equal to the ordinary  dividends that would be paid,  during the
time such award is outstanding  and  unexercised,  on the shares of Common Stock
covered by such award if such shares were then outstanding.  In the event such a
provision is included in a plan agreement, the Committee shall determine whether
such  payments  shall be made in cash,  in shares of Common  Stock or in another
form,  whether they shall be conditioned upon the exercise of the award to which
they relate, the time or times at which they shall be made, and such other terms
and conditions as the Committee shall deem appropriate.

2.10 Right of Recapture

        2.10.1  If at any  time  within  one  year  after  the  date on  which a
participant  exercises  an  option  or  stock  appreciation  right,  or on which
restricted stock vests, or which is the maturity date of restricted stock units,
or on which income is realized by a  participant  in  connection  with any other
stock-based  award  (each  of  which  events  is  a  "realization  event"),  the
participant  (a) is  terminated  for  cause  or  (b)  engages  in  any  activity
determined  in the  discretion of the  Committee to be in  competition  with any
activity  of the  Company,  or  otherwise  inimical,  contrary or harmful to the
interests of the Company  (including,  but not limited to, accepting  employment
with or serving as a consultant,  adviser or in any other  capacity to an entity
that is in  competition  with or acting  against the  interests of the Company),
then any gain realized by the participant  from the  realization  event shall be
paid by the  participant to the Company upon notice from the Company.  Such gain
shall be determined as of the date of the realization  event,  without regard to
any subsequent change in the Fair Market Value of a share of Common Stock.


  s                                     11

<PAGE>



The  Company  shall  have the right to  offset  such gain  against  any  amounts
otherwise  owed to the  participant by the Company  (whether as wages,  vacation
pay, or pursuant to any benefit plan or other compensatory arrangement).


                                   ARTICLE III
                                  MISCELLANEOUS

3.1 Amendment of the Plan; Modification of Awards

        3.1.1 The Board may from time to time  suspend,  discontinue,  revise or
amend the Plan in any respect  whatsoever,  except that no such amendment  shall
materially  impair any rights or materially  increase any obligations  under any
award  theretofore  made under the Plan  without the consent of the grantee (or,
after the grantee's  death,  the person having the right to exercise the award).
For purposes of this Section 3.1, any action of the Board or the Committee  that
alters or affects  the tax  treatment  of any award shall not be  considered  to
materially impair any rights of any grantee.

        3.1.2  Shareholder  approval of any  amendment  shall be obtained to the
extent  necessary to comply with section 422 of the Code  (relating to incentive
stock options) or other applicable law or regulation.

        3.1.3 The Committee may amend any outstanding plan agreement, including,
without  limitation,  by amendment  which would  accelerate the time or times at
which the award becomes unrestricted or may be exercised,  or waive or amend any
goals, restrictions or conditions set forth in the Agreement.  However, any such
amendment (other than an amendment pursuant to Section 3.7.2, relating to change
in control)  that  materially  impairs the rights or  materially  increases  the
obligations of a grantee under an outstanding  award shall be made only with the
consent of the grantee (or,  upon the  grantee's  death,  the person  having the
right to exercise the award).

3.2 Tax Withholding

        3.2.1 As a  condition  to the  receipt  of any  shares of  Common  Stock
pursuant  to any  award or the  lifting  of  restrictions  on any  award,  or in
connection  with  any  other  event  that  gives  rise  to a  federal  or  other
governmental  tax withholding  obligation on the part of the Company relating to
an award  (including,  without  limitation,  FICA  tax),  the  Company  shall be
entitled to require that the grantee  remit to the Company an amount  sufficient
in the opinion of the Company to satisfy such withholding obligation.

        3.2.2  If the  event  giving  rise to the  withholding  obligation  is a
transfer of shares of Common  Stock,  then,  unless  otherwise  specified in the
applicable  plan agreement,  the grantee may satisfy the withholding  obligation
imposed under Section 3.2.1 by electing to have the


                                       12

<PAGE>



Company  withhold shares of Common Stock having a Fair Market Value equal to the
amount of tax to be  withheld.  For this  purpose,  Fair  Market  Value shall be
determined  as of the  date  on  which  the  amount  of tax  to be  withheld  is
determined (and any fractional share amount shall be settled in cash).

3.3 Restrictions

        3.3.1 If the Committee  shall at any time determine that any consent (as
hereinafter  defined)  is  necessary  or  desirable  as a  condition  of,  or in
connection  with,  the  granting  of any award under the Plan,  the  issuance or
purchase of shares or other rights thereunder, or the taking of any other action
thereunder  (each such action a "plan action"),  then such plan action shall not
be taken,  in whole or in part,  unless and until such  consent  shall have been
effected or obtained to the full satisfaction of the Committee.

        3.3.2 The term  "consent" as used herein with respect to any plan action
means (a) any and all  listings,  registrations  or  qualifications  in  respect
thereof upon any securities  exchange or under any federal,  state or local law,
rule or regulation,  (b) any and all written  agreements and  representations by
the grantee with respect to the  disposition  of shares,  or with respect to any
other matter,  which the Committee  shall deem  necessary or desirable to comply
with the terms of any such listing,  registration or  qualification or to obtain
an  exemption  from the  requirement  that any such  listing,  qualification  or
registration  be made and (c) any and all consents,  clearances and approvals in
respect of a plan action by any governmental or other regulatory bodies.

3.4 Nonassignability

        Except  to  the  extent  otherwise   provided  in  the  applicable  plan
agreement,  no award or right  granted  to any  person  under the Plan  shall be
assignable  or  transferable  other than by will or by the laws of  descent  and
distribution,  and all such awards and rights  shall be  exercisable  during the
life of the grantee only by the grantee or the grantee's legal representative.

3.5 Requirement of Notification of
    Election Under Section 83(b) of the Code

        If any grantee shall,  in connection  with the  acquisition of shares of
Common Stock under the Plan, make the election  permitted under section 83(b) of
the Code  (that  is,  an  election  to  include  in gross  income in the year of
transfer the amounts specified in section 83(b)),  such grantee shall notify the
Company of such  election  within ten (10) days of filing notice of the election
with the Internal  Revenue  Service,  in addition to any filing and notification
required  pursuant to  regulations  issued  under the  authority of Code section
83(b).

3.6 Requirement of Notification Upon Disqualifying


                                       13

<PAGE>



        Disposition Under Section 421(b) of the Code

        If any  grantee  shall make any  disposition  of shares of Common  Stock
issued  pursuant  to  the  exercise  of an  incentive  stock  option  under  the
circumstances  described  in  section  421(b) of the Code  (relating  to certain
disqualifying  dispositions),  such  grantee  shall  notify the  Company of such
disposition within 10 days thereof.


3.7 Change in Control, Dissolution, Liquidation, Merger

        3.7.1 For purposes of this Section 3.7, a "change in control" shall have
occurred if:

               (a) any  "person",  as such  term is used in  Sections  13(d) and
14(d) of the 1934 Act (other than (i) the  shareholders of the Company as of the
effective  date of the Plan (the  "Current  Shareholders",  such term to include
their heirs or estates, or trusts or other entities the primary beneficiaries of
which are the Current  Shareholders  or persons  designated  by them),  (ii) the
Company or any subsidiary of the Company,  (iii) any trustee or other  fiduciary
holding  securities  under  an  employee  benefit  plan  of the  Company  or any
subsidiary of the Company, or (iv) any company owned, directly or indirectly, by
the shareholders of the Company in  substantially  the same proportions as their
ownership of stock of the  Company),  is or becomes the  "beneficial  owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities
of the Company  representing  more than 50% of the combined  voting power of the
Company's then outstanding  securities  without the prior written consent of the
Committee or the Board; or

               (b) during any period of  twenty-four  (24)  consecutive  months,
individuals  who at the effective date of the Plan  constitute the Board and any
new  director  whose  election by the Board or  nomination  for  election by the
Company  shareholders  was  approved  by a vote of at  least a  majority  of the
directors then still in office who either were directors at the beginning of the
period or whose  election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;

               (c)  the   shareholders  of  the  Company  approve  a  merger  or
consolidation  of the Company with any other company  (other than a wholly-owned
subsidiary of the Company), other than (i) a merger or consolidation which would
result in the voting  securities of the Company  outstanding  immediately  prior
thereto  continuing to represent  (either by remaining  outstanding  or by being
converted  into voting  securities of the  surviving  entity) 50% or more of the
combined  voting  power of voting  securities  of the Company or such  surviving
entity  outstanding  immediately  after such merger or  consolidation  or (ii) a
merger or consolidation  effected to implement a recapitalization of the Company
(or similar  transaction)  in which no "person" (as defined in Section  3.7.1(a)
above with the exceptions noted in section  3.7.1(a))  acquires more than 50% of
the combined voting power of the Company's then outstanding

                                       14

<PAGE>



securities; or

               (d) the  shareholders  of the Company  approve a plan of complete
liquidation  of the Company or an agreement for the sale or  disposition  by the
Company of all or substantially  all of the Company's assets (or any transaction
having a similar effect).

        3.7.2 Upon the happening of a change in control:

               (a)  notwithstanding any other provision of this Plan, any option
or stock  appreciation  right then  outstanding  shall  become  fully vested and
immediately  exercisable  upon the  subsequent  termination of employment of the
grantee by the Company or its  successors  without cause within one year of such
change in control  unless  the  applicable  plan  agreement  expressly  provides
otherwise;

               (b) to the fullest extent permitted by law, the Committee may, in
its  sole  discretion,  amend  any plan  agreement  in such  manner  as it deems
appropriate, including, without limitation, by amendments that advance the dates
upon which any or all outstanding awards of any type shall terminate.

        3.7.3 In the event of the proposed  dissolution  or  liquidation  of the
Company,  all  outstanding  awards  will  terminate  immediately  prior  to  the
consummation  of  such  proposed  action,   unless  otherwise  provided  by  the
Committee.  The  Committee  may, in the exercise of its sole  discretion in such
instances,  accelerate the date on which any award becomes  exercisable or fully
vested and/or declare that any award shall terminate as of a specified date.

        3.7.4 In the  event  of a  merger  or  consolidation  ("merger")  of the
Company with or into any other corporation or entity ("successor  corporation"),
outstanding  awards shall be assumed or an  equivalent  option or right shall be
substituted  by such  successor  corporation  or a parent or  subsidiary of such
successor corporation,  unless the Committee determines,  in the exercise of its
sole discretion, to accelerate the date on which an award becomes exercisable or
fully vested. In the absence of an assumption or substitution of awards,  awards
shall,  to the extent not exercised,  terminate as of the date of the closing of
the merger. For the purposes of this Section 3.7.4, an award shall be considered
assumed if, for every share of Common Stock subject thereto immediately prior to
the  merger,  the grantee has the right,  following  the merger,  to acquire the
consideration  received in the merger transaction by holders of shares of Common
Stock  (and if  holders  were  offered  a choice of  consideration,  the type of
consideration  chosen by the holders of a majority of the  outstanding  shares);
provided,  however,  that if such  consideration  received in the merger was not
solely common stock of the successor  corporation  or its parent,  the Committee
may, with the consent of the successor corporation and the participant,  provide
for the  consideration  to be acquired  pursuant to the award, for each share of
Common  Stock  subject  thereto,  to be  solely  common  stock of the  successor
corporation  or  its  parent  equal  in  fair  market  value  to the  per  share
consideration  received by holders of Common  Stock in the merger.  For purposes
hereof, the term "merger" shall include any transaction in which another


                                       15

<PAGE>



corporation  acquires  all of the issued  and  outstanding  Common  Stock of the
Company.

3.8     Right of Discharge Reserved

        Nothing  in the  Plan or in any plan  agreement  shall  confer  upon any
grantee the right to continue in the employ of the Company or any  subsidiary or
affect any right which the Company or any  subsidiary may have to terminate such
employment.

3.9 Nature of Payments

        3.9.1 Any and all  grants of awards  and  issuances  of shares of Common
Stock under the Plan shall be in  consideration  of services  performed  for the
Company by the grantee.

        3.9.2 All such grants and issuances shall constitute a special incentive
payment to the  grantee  and shall not be taken into  account in  computing  the
amount of salary or  compensation  of the grantee for the purpose of determining
any  benefits  under  any  pension,  retirement,   profit-sharing,  bonus,  life
insurance or other benefit plan of the Company or of any subsidiary or under any
agreement with the grantee,  unless such plan or agreement specifically provides
otherwise.

3.10 Non-Uniform Determinations

        The  Committee's  determinations  under the Plan need not be uniform and
may be made by it  selectively  among  persons who  receive,  or are eligible to
receive,  awards  under the Plan  (whether  or not such  persons  are  similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be  entitled,   among  other   things,   to  make   non-uniform   and  selective
determinations,  and to enter into non-uniform and selective Plan agreements, as
to (a) the  persons  to  receive  awards  under  the  Plan,  (b) the  terms  and
provisions  of awards under the Plan and (c) the  treatment of leaves of absence
pursuant to Section 1.6.4.

3.11 Other Payments or Awards

        Nothing  contained  in the Plan  shall be  deemed in any way to limit or
restrict  the Company  from making any award or payment to any person  under any
other plan,  arrangement or understanding,  whether now existing or hereafter in
effect.

3.12 Section Headings

        The section headings contained herein are for the purpose of convenience
only and are not intended to define or limit the contents of the sections.

3.13 Effective Date and Term of Plan

                                       16

<PAGE>



        3.13.1  The  Plan  was  adopted  by the  Board  on May  ___,  1998  (the
"effective date"), subject to approval by the Company's shareholders. All awards
under the Plan prior to such shareholder  approval are subject in their entirety
to  such  approval.  If  such  approval  is not  obtained  prior  to  the  first
anniversary  of the date of  adoption  of the  Plan,  the  Plan  and all  awards
thereunder shall terminate on that date.

        3.13.2 Unless sooner terminated by the Board, the provisions of the Plan
respecting  the grant of  incentive  stock  options  shall  terminate on the day
before the tenth anniversary of the effective date of the Plan, and no incentive
stock option  awards shall  thereafter  be made under the Plan.  All awards made
under the Plan prior to its termination shall remain in effect until such awards
have been satisfied or terminated in accordance with the terms and provisions of
the Plan and the applicable plan agreements.

3.14 Governing Law

        All  rights  and  obligations  under  the Plan  shall be  construed  and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of laws.

                                       17