dELiA*s Inc.





                            1998 STOCK INCENTIVE PLAN



<PAGE>

                                  dELiA*s Inc.
                            1998 STOCK INCENTIVE PLAN

                                   ARTICLE I.

                                     PURPOSE

     The purpose of this dELiA*s Inc. 1998 Stock Incentive Plan, (the "Plan"),
is to enhance the profitability and value of dELiA*s Inc. (the "Company") for
the benefit of its stockholders by enabling the Company (i) to offer employees
and Consultants of the Company and its Subsidiaries stock based incentives and
other equity interests in the Company, thereby creating a means to raise the
level of stock ownership by employees and Consultants in order to attract,
retain and reward such individuals and strengthen the mutuality of interests
between such individuals and the Company's stockholders and (ii) to make equity
based awards to non-employee directors thereby attracting, retaining and
rewarding such non-employee directors and strengthening the mutuality of
interests between non-employee directors and the Company's stockholders.

                                   ARTICLE II.

                                   DEFINITIONS

     For purposes of this Plan, the following terms shall have the following
meanings:

     2.1. "Award" shall mean any award under this Plan of any Stock Option,
Stock Appreciation Right or Restricted Stock. All Awards shall be confirmed by,
and subject to the terms of, a written agreement executed by the Company and the
Participant.

     2.2. "Board" shall mean the Board of Directors of the Company.

     2.3. "Cause" shall mean, with respect to a Participant's Termination of
Employment or Termination of Consultancy, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter,
termination due to a Participant's dishonesty, fraud, insubordination, willful
misconduct, refusal to perform services (for any reason other than illness or
incapacity) or materially unsatisfactory performance of his or her duties for
the Company as determined by the Committee in its sole discretion. With respect
to a Participant's Termination of Directorship, Cause shall mean an act or
failure to act that constitutes "cause" for removal of a director under
applicable Delaware law.

     2.4. "Change in Control" shall have the meaning set forth in Article XI.

     2.5. "Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision.

     2.6. "Committee" shall mean a committee of the Board appointed from time to
time by the Board. Solely to the extent required under Rule 16b-3 and Section
162(m) of the Code, such committee shall consist of two or more non-employee
directors, each of whom shall be a non-employee director as defined in Rule
16b-3 and an outside director as defined under Section 162(m) of the Code. To
the extent that no Committee exists which has the authority to administer the
Plan, the functions of the Committee shall be exercised by the Board. If for any
reason the appointed Committee does not meet the requirements of Rule 16b-3 or
Section 162(m) of the Code, such noncompliance with the requirements of Rule
16b-3 or Section 162(m) of the Code shall not affect the validity of the awards,
grants, interpretations or other actions of the Committee.

     2.7. "Common Stock" means the Common Stock, $.01 par value per share, of
the Company.

                                       2
<PAGE>

     2.8. "Consultant" shall mean any adviser or consultant to the Company and
its Subsidiaries.

     2.9. "Disability" shall mean total and permanent disability, as defined in
Section 22(e)(3) of the Code.

     2.10. "Effective Date" shall mean the date on which this Plan is approved
and adopted by the Board.

     2.11. "Eligible Employees" shall mean the employees of the Company and its
Subsidiaries who are eligible pursuant to Section 5.1 to be granted Awards under
this Plan.

     2.12. "Exchange Act" shall mean the Securities Exchange Act of 1934.

     2.13. "Fair Market Value" for purposes of this Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the last sales price reported for the
Common Stock on the applicable date (i) as reported by the principal national
securities exchange in the United States on which it is then traded, or (ii) if
not traded on any such national securities exchange, as quoted on an automated
quotation system sponsored by the National Association of Securities Dealers. If
the Common Stock is not readily tradable on a national securities exchange or
any system sponsored by the National Association of Securities Dealers, its Fair
Market Value shall be set in good faith by the Committee on the advice of a
registered investment adviser (as defined under the Investment Advisers Act of
1940). For purposes of the grant of any Award, the applicable date shall be the
date for which the last sales price is available at the time of grant. For
purposes of the exercise of any Stock Appreciation Right, the applicable date
shall be the date a notice of exercise is received by the Committee or if not a
day on which the applicable market is open, the next day that it is open.

     2.14. "Good Reason" shall mean, with respect to a Participant's Termination
of Employment or Termination of Consultancy unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter,
a voluntary termination due to "good reason," as the Committee, in its sole
discretion, decides to treat as a Good Reason termination.

     2.15. "Incentive Stock Option" shall mean any Stock Option awarded under
this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code.

     2.16. "Non-Qualified Stock Option" shall mean any Stock Option awarded
under this Plan that is not an Incentive Stock Option.

     2.17. "Participant" shall mean the following persons to whom an Award has
been made pursuant to this Plan: Eligible Employees and Consultants of the
Company and its Subsidiaries and non-employee directors of the Company;
provided, however, that non-employee directors shall be Participants for
purposes of the Plan solely with respect to awards of Stock Options pursuant to
Article IX.

     2.18. "Restricted Stock" shall mean an award of shares of Common Stock
under the Plan that is subject to restrictions under Article VII.

     2.19. "Restriction Period" shall have the meaning set forth in Subsection
7.3(a) with respect to Restricted Stock for Eligible Employees.

     2.20. "Retirement" with respect to a Participant's Termination of
Employment shall mean a Termination of Employment or Termination of Consultancy
without Cause from the Company by a Participant who has attained (i) at least
age sixty-five (65); or (ii) such earlier date after age fifty-five (55) as
approved by the Committee with regard to such Participant. With respect to a
Participant's Termination of Directorship, Retirement shall mean the failure to
stand for reelection or the failure to be reelected after a Participant has
attained age sixty-five (65).

                                       3
<PAGE>

     2.21. "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the
Exchange Act as then in effect or any successor provisions.

     2.22. "Section 162(m) of the Code" shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any Treasury
regulations thereunder.

     2.23. "Stock Appreciation Right" shall mean the right pursuant to an Award
granted under Article IX. A Tandem Stock Appreciation Right shall mean the right
to surrender to the Company all (or a portion) of a Stock Option in exchange for
an amount in cash or stock equal to the excess of (i) the Fair Market Value, on
the date such Stock Option (or such portion thereof) is surrendered, of the
Common Stock covered by such Stock Option (or such portion thereof), over (ii)
the aggregate exercise price of such Stock Option (or such portion thereof). A
Non-Tandem Stock Appreciation Right shall mean the right to receive an amount in
cash or stock equal to the excess of (x) the Fair Market Value of a share of
Common Stock on of the date such right is exercised, over (y) the aggregate
exercise price of such right, otherwise than on surrender of a Stock Option.

     2.24. "Stock Option" or "Option" shall mean any Option to purchase shares
of Common Stock granted to Eligible Employees or Consultants pursuant to Article
VI or non-employee directors of the Company pursuant to Article IX..

     2.25. "Subsidiary" shall mean any corporation that is defined as a
subsidiary corporation in Section 424(f) of the Code.

     2.26. "Ten Percent Stockholder" shall mean a person owning Common Stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company as defined in Section 422 of the
Code.

     2.27. "Termination of Directorship" shall mean, with respect to a
non-employee director, that the non-employee director has ceased to be a
director of the Company.

     2.28. "Termination of Consultancy" shall mean, with respect to a
Consultant, that the Consultant is no longer acting as a Consultant to the
Company and its Subsidiaries. In the event an entity shall cease to be a
Subsidiary, there shall be deemed a Termination of Consultancy of any individual
who is not otherwise a Consultant of the Company or another Subsidiary at the
time the entity ceases to be a Subsidiary.

     2.29. "Termination of Employment" shall mean (i) a termination of service
(for reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Subsidiaries; or (ii) when an
entity which is employing a Participant ceases to be a Subsidiary, unless the
Participant thereupon becomes employed by the Company or another Subsidiary.

     2.30. "Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.

     2.31. "Withholding Election" shall have the meaning set forth in Section
14.4.


                                  ARTICLE III.

                                 ADMINISTRATION

     3.1. The Committee. The Plan shall be administered and interpreted by the
Committee.

     3.2. Awards. The Committee shall have full authority to grant, pursuant to
the terms of this Plan, (i) Stock Options, (ii) Stock Appreciation Rights, both
Tandem and Non-Tandem and (iii) Restricted Stock

                                       4
<PAGE>

to Eligible Employees or Consultants. Stock Options shall be granted to
non-employee directors of the Company pursuant to Article IX. In particular, the
Committee shall have the authority:

          (a) to select the Eligible Employees and Consultants to whom Stock
     Options, Stock Appreciation Rights and Restricted Stock may from time to
     time be granted hereunder;

          (b) to determine whether and to what extent Stock Options, Stock
     Appreciation Rights and Restricted Stock or any combination thereof, are to
     be granted hereunder to one or more Eligible Employees or Consultants;

          (c) to determine, in accordance with the terms of this Plan, the
     number of shares of Common Stock to be covered by each Award to an Eligible
     Employee or Consultant granted hereunder;

          (d) to determine the terms and conditions, not inconsistent with the
     terms of this Plan, of any Award granted hereunder to an Eligible Employee
     or Consultant (including, but not limited to, the share price, any
     restriction or limitation, any vesting schedule or acceleration thereof, or
     any forfeiture restrictions or waiver thereof, regarding any Stock Option
     or other Award, and the shares of Common Stock relating thereto, based on
     such factors, if any, as the Committee shall determine, in its sole
     discretion);

          (e) to determine whether and under what circumstances a Stock Option
     may be settled in cash, Common Stock and/or Restricted Stock under
     Subsection 6.3(d);

          (f) to determine whether, to what extent and under what circumstances
     to provide loans (which shall be on a recourse basis and shall bear a
     reasonable rate of interest) to Eligible Employees or Consultants in order
     to exercise Options under the Plan;

          (g) to determine whether a Stock Appreciation Right is Tandem or Non-
     Tandem; and

          (h) to determine whether to require an Eligible Employee or
     Consultant, as a condition of the granting of any Award, to not sell or
     otherwise dispose of shares acquired pursuant to the exercise of an Option
     or as an Award for a period of time as determined by the Committee, in its
     sole discretion, following the date of the acquisition of such Option or
     Award.

     3.3. Guidelines. Subject to Article XII hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including the delegation
of its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Award issued under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this Plan or
in any agreement relating thereto in the manner and to the extent it shall deem
necessary to carry this Plan into effect, but only to the extent any such action
would be permitted under the applicable provisions of Rule 16b-3 (if any) and
the applicable provisions of Section 162(m) of the Code (if any). The Committee
may adopt special guidelines and provisions for persons who are residing in, or
subject to, the taxes of, countries other than the United States to comply with
applicable tax and securities laws. If and to the extent applicable, this Plan
is intended to comply with Section 162(m) of the Code and the applicable
requirements of Rule 16b-3 and shall be limited, construed and interpreted in a
manner so as to comply therewith.

     3.4. Decisions Final. Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, binding and conclusive on the Company and all employees
and Participants and their respective heirs, executors, administrators,
successors and assigns.

                                       5
<PAGE>

     3.5. Reliance on Counsel. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.

     3.6. Procedures. If the Committee is appointed, the Board shall designate
one of the members of the Committee as chairman and the Committee shall hold
meetings, subject to the By-Laws of the Company, at such times and places as it
shall deem advisable. A majority of the Committee members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by all
Committee members in accordance with the By-Laws of the Company shall be fully
effective as if it had been made by a vote at a meeting duly called and held.
The Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.

     3.7. Designation of Consultants Liability.

          (a) The Committee may designate employees of the Company and
     professional advisors to assist the Committee in the administration of the
     Plan and may grant authority to employees to execute agreements or other
     documents on behalf of the Committee.

          (b) The Committee may employ such legal counsel, consultants and
     agents as it may deem desirable for the administration of the Plan and may
     rely upon any opinion received from any such counsel or consultant and any
     computation received from any such consultant or agent. Expenses incurred
     by the Committee or Board in the engagement of any such counsel, consultant
     or agent shall be paid by the Company. The Committee, its members and any
     person designated pursuant to paragraph (a) above shall not be liable for
     any action or determination made in good faith with respect to the Plan. To
     the maximum extent permitted by applicable law, no officer of the Company
     or member or former member of the Committee or of the Board shall be liable
     for any action or determination made in good faith with respect to the Plan
     or any Award granted under it. To the maximum extent permitted by
     applicable law and the Certificate of Incorporation and By-Laws of the
     Company and to the extent not covered by insurance, each officer and member
     or former member of the Committee or of the Board shall be indemnified and
     held harmless by the Company against any cost or expense (including
     reasonable fees of counsel reasonably acceptable to the Company) or
     liability (including any sum paid in settlement of a claim with the
     approval of the Company), and advanced amounts necessary to pay the
     foregoing at the earliest time and to the fullest extent permitted, arising
     out of any act or omission to act in connection with the Plan, except to
     the extent arising out of such officer's, member's or former member's own
     fraud or bad faith. Such indemnification shall be in addition to any rights
     of indemnification the officers, directors or members or former officers,
     directors or members may have under applicable law or under the Certificate
     of Incorporation or By-Laws of the Company or Subsidiary. Notwithstanding
     anything else herein, this indemnification will not apply to the actions or
     determinations made by an individual with regard to Awards granted to him
     or her under this Plan.

                                   ARTICLE IV.

                           SHARE AND OTHER LIMITATIONS

     4.1. Shares.

          (a) General Limitation. The aggregate number of shares of Common Stock
     which may be issued or used for reference purposes under this Plan or with
     respect to which other Awards may be granted shall not exceed 1,000,000
     shares (subject to any increase or decrease pursuant to Section 4.2) which
     may be either authorized and unissued Common Stock or Common Stock held in
     or acquired for the treasury of the Company. If any Option or Stock
     Appreciation Right granted under this Plan expires, terminates or is
     cancelled for any reason without having been exercised in full or, with
     respect to Options, the Company repurchases any Option pursuant to Section
     6.3(f), the number of shares of Common Stock underlying the repurchased
     Option, and/or the number of shares of Common Stock underlying any

                                       6
<PAGE>

     unexercised Stock Appreciation Right or Option shall again be available for
     the purposes of Awards under the Plan. If a Tandem Stock Appreciation Right
     or a limited Stock Appreciation Right is granted in tandem with an Option,
     such grant shall only apply once against the maximum number of shares of
     Common Stock which may be issued under this Plan.

          (b) Individual Participant Limitations. (i) The maximum number of
     shares of Common Stock subject to any Option which may be granted under
     this Plan to each Participant shall not exceed 400,000 shares (subject to
     any increase or decrease pursuant to Section 4.2) during each fiscal year
     of the Company.

               (i) There are no annual individual Participant limitations on
          Restricted Stock.

               (ii) The maximum number of shares of Common Stock subject to any
          Stock Appreciation Right which may be granted under this Plan to each
          Participant shall not exceed 400,000 shares (subject to any increase
          or decrease pursuant to Section 4.2) during each fiscal year of the
          Company. If a Tandem Stock Appreciation Right or limited Stock
          Appreciation Right is granted in tandem with an Option it shall apply
          against the Eligible Employee's or Consultant's individual share
          limitations for both Stock Appreciation Rights and Options.

     4.2. Changes.

          (a) The existence of the Plan and the Awards granted hereunder shall
     not affect in any way the right or power of the Board or the stockholders
     of the Company to make or authorize any adjustment, recapitalization,
     reorganization or other change in the Company's capital structure or its
     business, any merger or consolidation of the Company or Subsidiary, any
     issue of bonds, debentures, preferred or prior preference stock ahead of or
     affecting Common Stock, the dissolution or liquidation of the Company or
     Subsidiary, any sale or transfer of all or part of its assets or business
     or any other corporate act or proceeding.

          (b) In the event of any such change in the capital structure or
     business of the Company by reason of any stock dividend or distribution,
     stock split or reverse stock split, recapitalization, reorganization,
     merger, consolidation, split-up, combination or exchange of shares,
     distribution with respect to its outstanding Common Stock or capital stock
     other than Common Stock, sale or transfer of all or part of its assets or
     business, reclassification of its capital stock, or any similar change
     affecting the Company's capital structure or business and the Committee
     determines an adjustment is appropriate under the Plan, then the aggregate
     number and kind of shares which thereafter may be issued under this Plan,
     the number and kind of shares or other property (including cash) to be
     issued upon exercise of an outstanding Option or other Awards granted under
     this Plan and the purchase price thereof shall be appropriately adjusted
     consistent with such change in such manner as the Committee may deem
     equitable to prevent substantial dilution or enlargement of the rights
     granted to, or available for, Participants under this Plan or as otherwise
     necessary to reflect the change, and any such adjustment determined by the
     Committee shall be binding and conclusive on the Company and all
     Participants and employees and their respective heirs, executors,
     administrators, successors and assigns.

          (c) Fractional shares of Common Stock resulting from any adjustment in
     Options or Awards pursuant to Section 4.2(a) or (b) shall be aggregated
     until, and eliminated at, the time of exercise by rounding-down for
     fractions less than one-half ( 1/2) and rounding-up for fractions equal to
     or greater than one-half ( 1/2). No cash settlements shall be made with
     respect to fractional shares eliminated by rounding. Notice of any
     adjustment shall be given by the Committee to each Participant whose Option
     or Award has been adjusted and such adjustment (whether or not such notice
     is given) shall be effective and binding for all purposes of the Plan.

          (d) In the event of a merger or consolidation in which the Company is
     not the surviving entity or in the event of any transaction that results in
     the acquisition of substantially all of the Company's outstanding Common
     Stock by a single person or entity or by a group of persons and/or entities
     acting in concert, or in the event of the sale or transfer of all of the
     Company's assets (all of the foregoing being

                                       7
<PAGE>

     referred to as "Acquisition Events"), then the Committee may, in its sole
     discretion, terminate all outstanding Options and Stock Appreciation Rights
     of Eligible Employees and Consultants, effective as of the date of the
     Acquisition Event, by delivering notice of termination to each such
     Participant at least twenty (20) days prior to the date of consummation of
     the Acquisition Event; provided, that during the period from the date on
     which such notice of termination is delivered to the consummation of the
     Acquisition Event, each such Participant shall have the right to exercise
     in full all of his or her Options and Stock Appreciation Rights that are
     then outstanding (without regard to any limitations on exercisability
     otherwise contained in the Option or Award Agreements) but contingent on
     occurrence of the Acquisition Event, and, provided that, if the Acquisition
     Event does not take place within a specified period after giving such
     notice for any reason whatsoever, the notice and exercise shall be null and
     void.

          Notwithstanding the foregoing and solely to the extent required by
     Section 16 of the Exchange Act, at the discretion of the Committee, the
     provisions contained in this subsection shall be adjusted as they apply to
     Options and Stock Appreciation Rights granted to Eligible Employees and
     Consultants within six (6) months before the occurrence of an Acquisition
     Event if the holder of such Award is subject to the reporting requirements
     of Section 16(a) of the Exchange Act in such manner as determined by the
     Committee, including without limitation, terminating Options and Stock
     Appreciation Rights at specific dates after the Acquisition Event, in order
     to give the holder the benefit of the Option.

          If an Acquisition Event occurs, to the extent the Committee does not
     terminate the outstanding Options and Stock Appreciation Rights pursuant to
     this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.

     4.3. Purchase Price. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.

                                   ARTICLE V.

                                   ELIGIBILITY

     5.1. All employees and Consultants of the Company and its Subsidiaries are
eligible to be granted Options, Stock Appreciation Rights and Restricted Stock
under this Plan. Eligibility under this Plan shall be determined by the
Committee in its sole discretion.

     5.2. Non-employee directors of the Company are only eligible to receive an
Award of Stock Options in accordance with Article IX of the Plan.

                                   ARTICLE VI.

                   EMPLOYEE AND CONSULTANT STOCK OPTION GRANTS

     6.1. Options. Each Stock Option granted hereunder shall be one of two
types: (i) an Incentive Stock Option intended to satisfy the requirements of
Section 422 of the Code or (ii) a Non-Qualified Stock Option.

     6.2. Grants. The Committee shall have the authority to grant to any
Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options (in each case with or without Stock
Appreciation Rights). To the extent that any Stock Option does not qualify as an
Incentive Stock Option (whether because of its provisions or the time or manner
of its exercise or otherwise), such Stock Option or the portion thereof which
does not qualify, shall constitute a separate Non-Qualified Stock Option. The
Committee shall have the authority to grant to any Consultant one or more
Non-Qualified Stock Options (with or without Stock Appreciation Rights).
Notwithstanding any other provision of the Plan to the contrary or any provision
in an agreement evidencing the grant of an Option to the contrary, any Option
granted to a Consultant shall be a Non-Qualified Stock Option.

                                       8
<PAGE>

     6.3. Terms of Options. Options granted under this Plan shall be subject to
the following terms and conditions, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:

          (a) Option Price. The option price per share of Common Stock
     purchasable under an Incentive Stock Option shall be determined by the
     Committee at the time of grant but shall not be less than 100% of the Fair
     Market Value of the share of Common Stock at the time of grant; provided,
     however, if an Incentive Stock Option is granted to a Ten Percent
     Stockholder, the purchase price shall be no less than 110% of the Fair
     Market Value of the Common Stock. The purchase price of shares of Common
     Stock subject to a Non-Qualified Stock Option shall be determined by the
     Committee. Notwithstanding the foregoing, if an Option is modified,
     extended or renewed and, thereby, deemed to be the issuance of a new Option
     under the Code, the exercise price of an Option may continue to be the
     original exercise price even if less than the Fair Market Value of the
     Common Stock at the time of such modification, extension or renewal.

          (b) Option Term. The term of each Stock Option shall be fixed by the
     Committee, but no Stock Option shall be exercisable more than ten (10)
     years after the date the Option is granted, provided, however, the term of
     an Incentive Stock Option granted to a Ten Percent Stockholder may not
     exceed five (5) years.

          (c) Exercisability. Stock Options shall be exercisable at such time or
     times and subject to such terms and conditions as shall be determined by
     the Committee at grant. If the Committee provides, in its discretion, that
     any Stock Option is exercisable subject to certain limitations (including,
     without limitation, that it is exercisable only in installments or within
     certain time periods), the Committee may waive such limitations on the
     exercisability at any time at or after grant in whole or in part
     (including, without limitation, that the Committee may waive the
     installment exercise provisions or accelerate the time at which Options may
     be exercised), based on such factors, if any, as the Committee shall
     determine, in its sole discretion.

          (d) Method of Exercise. Subject to whatever installment exercise and
     waiting period provisions apply under subsection (c) above, Stock Options
     may be exercised in whole or in part at any time during the Option term, by
     giving written notice of exercise to the Company specifying the number of
     shares to be purchased. Such notice shall be accompanied by payment in full
     of the purchase price in such form, or such other arrangement for the
     satisfaction of the purchase price, as the Committee may accept. If and to
     the extent determined by the Committee in its sole discretion at or after
     grant, payment in full or in part may also be made in the form of Common
     Stock withheld from the shares to be received on the exercise of a Stock
     Option hereunder, Common Stock owned by the Participant (and for which the
     Participant has good title free and clear of any liens and encumbrances) or
     Restricted Stock based, in each case, on the Fair Market Value of the
     Common Stock on the payment date as determined by the Committee (without
     regard to any forfeiture restrictions applicable to such Restricted Stock).
     No shares of Common Stock shall be issued until payment, as provided
     herein, therefor has been made or provided for. If payment in full or in
     part has been made in the form of Restricted Stock, an equivalent number of
     shares of Common Stock issued on exercise of the Option shall be subject to
     the same restrictions and conditions, during the remainder of the
     Restriction Period, applicable to the Restricted Stock surrendered
     therefor.

          (e) Incentive Stock Option Limitations. To the extent that the
     aggregate Fair Market Value (determined as of the time of grant) of the
     Common Stock with respect to which Incentive Stock Options are exercisable
     for the first time by an Eligible Employee during any calendar year under
     the Plan and/or any other stock option plan of the Company or any
     Subsidiary or parent corporation (within the meaning of Section 424(e) of
     the Code) exceeds $100,000, such Options shall be treated as Options which
     are not Incentive Stock Options.

          Should the foregoing provision not be necessary in order for the Stock
     Options to qualify as Incentive Stock Options, or should any additional
     provisions be required, the Committee may amend the Plan accordingly,
     without the necessity of obtaining the approval of the stockholders of the
     Company.

                                       9
<PAGE>

          (f) Buy Out and Settlement Provisions. The Committee may at any time
     on behalf of the Company offer to buy out an Option previously granted,
     based on such terms and conditions as the Committee shall establish and
     communicate to the Participant at the time that such offer is made.

          (g) Form, Modification, Extension and Renewal of Options. Subject to
     the terms and conditions and within the limitations of the Plan, an Option
     shall be evidenced by such form of agreement or grant as is approved by the
     Committee, and the Committee may modify, extend or renew outstanding
     Options granted under the Plan (provided that the rights of a Participant
     are not reduced without his consent), or accept the surrender of
     outstanding Options (up to the extent not theretofore exercised) and
     authorize the granting of new Options in substitution therefor (to the
     extent not theretofore exercised).

          (h) Other Terms and Conditions. Options may contain such other
     provisions, which shall not be inconsistent with any of the foregoing terms
     of the Plan, as the Committee shall deem appropriate including, without
     limitation, permitting "reloads" such that the same number of Options are
     granted as the number of Options exercised, shares used to pay for the
     exercise price of Options or shares used to pay withholding taxes
     ("Reloads"). With respect to Reloads, the exercise price of the new Stock
     Option shall be the Fair Market Value on the date of the "reload" and the
     term of the Stock Option shall be the same as the remaining term of the
     Options that are exercised, if applicable, or such other exercise price and
     term as determined by the Committee.

     6.4. Termination of Employment or Termination of Consultancy. The following
rules apply with regard to Options upon the Termination of Employment of a
Participant:

          (a) Termination by Reason of Death. If a Participant's Termination of
     Employment or Termination of Consultancy is by reason of death, any Stock
     Option held by such Participant, unless otherwise determined by the
     Committee at grant or, if no rights of the Participant's estate are
     reduced, thereafter, may be exercised, to the extent exercisable at the
     Participant's death, by the legal representative of the estate, at any time
     within a period of one (1) year from the date of such death, but in no
     event beyond the expiration of the stated term of such Stock Option.

          (b) Termination by Reason of Disability. If a Participant's
     Termination of Employment or Termination of Consultancy is by reason of
     Disability, any Stock Option held by such Participant, unless otherwise
     determined by the Committee at grant or, if no rights of the Participant
     are reduced, thereafter, may be exercised, to the extent exercisable at the
     Participant's termination, by the Participant (or the legal representative
     of the Participant's estate if the Participant dies after termination) at
     any time within a period of one (1) year from the date of such termination,
     but in no event beyond the expiration of the stated term of such Stock
     Option.

          (c) Termination by Reason of Retirement. If a Participant's
     Termination of Employment or Termination of Consultancy is by reason of
     Retirement, any Stock Option held by such Participant, unless otherwise
     determined by the Committee at grant, or, if no rights of the Participant
     are reduced, thereafter, shall be fully vested and may thereafter be
     exercised by the Participant at any time within a period of one (1) year
     from the date of such termination, but in no event beyond the expiration of
     the stated term of such Stock Option; provided, however, that, if the
     Participant dies within such exercise period, any unexercised Stock Option
     held by such Participant shall thereafter be exercisable, to the extent to
     which it was exercisable at the time of death, for a period of one (1) year
     (or such other period as the Committee may specify at grant or, if no
     rights of the Participant's estate are reduced, thereafter) from the date
     of such death, but in no event beyond the expiration of the stated term of
     such Stock Option.

          (d) Involuntary Termination Without Cause or Termination for Good
     Reason. If a Participant's Termination of Employment or Termination of
     Consultancy is by involuntary termination without Cause or for Good Reason,
     any Stock Option held by such Participant, unless otherwise determined by
     the Committee at grant or, if no rights of the Participant are reduced,
     thereafter, may be exercised, to the extent exercisable at termination, by
     the Participant at any time within a period of ninety (90) days from the
     date of such termination, but in no event beyond the expiration of the
     stated term of such Stock Option.

                                       10
<PAGE>

          (e) Termination Without Good Reason. If a Participant's Termination of
     Employment or Termination of Consultancy is voluntary but without Good
     Reason and occurs prior to, or more than ninety (90) days after, the
     occurrence of an event which would be grounds for Termination of Employment
     by the Company for Cause (without regard to any notice or cure period
     requirements), any Stock Option held by such Participant, unless otherwise
     determined by the Committee at grant or, if no rights of the Participant
     are reduced, thereafter, may be exercised, to the extent exercisable at
     termination, by the Participant at any time within a period of thirty (30)
     days from the date of such termination, but in no event beyond the
     expiration of the stated term of such Stock Option.

          (f) Other Termination. Unless otherwise determined by the Committee at
     grant or, if no rights of the Participant are reduced, thereafter, if a
     Participant's Termination of Employment or Termination of Consultancy is
     for any reason other than death, Disability, Retirement, Good Reason,
     involuntary termination without Cause or voluntary termination as provided
     in subsection (e) above, any Stock Option held by such Participant shall
     thereupon terminate and expire as of the date of termination, provided that
     (unless the Committee determines a different period upon grant or, if, no
     rights of the Participant are reduced, thereafter) in the event the
     termination is for Cause or is a voluntary termination without Good Reason
     within ninety (90) days after occurrence of an event which would be grounds
     for Termination of Employment or Termination of Consultancy by the Company
     for Cause (without regard to any notice or cure period requirement), any
     Stock Option held by the Participant at the time of occurrence of the event
     which would be grounds for Termination of Employment or Termination of
     Consultancy by the Company for Cause shall be deemed to have terminated and
     expired upon occurrence of the event which would be grounds for Termination
     of Employment or Termination of Consultancy by the Company for Cause.

                                  ARTICLE VII.

                             RESTRICTED STOCK AWARDS

     7.1. Awards of Restricted Stock. Shares of Restricted Stock may be issued
to Eligible Employees or Consultants either alone or in addition to other Awards
granted under the Plan. The Committee shall determine the eligible persons to
whom, and the time or times at which, grants of Restricted Stock will be made,
the number of shares to be awarded, the price (if any) to be paid by the
recipient (subject to Section 7.2), the time or times within which such Awards
may be subject to forfeiture, the vesting schedule and rights to acceleration
thereof, and all other terms and conditions of the Awards.

     7.2. Awards and Certificates. The prospective Participant selected to
receive a Restricted Stock Award shall not have any rights with respect to such
Award, unless and until such Participant has delivered a fully executed copy of
the Restricted Stock Award agreement evidencing the Award to the Company and has
otherwise complied with the applicable terms and conditions of such Award.
Further, such Award shall be subject to the following conditions:

          (a) Purchase Price. The purchase price of Restricted Stock shall be
     fixed by the Committee. Subject to Section 4.3, the purchase price for
     shares of Restricted Stock may be zero to the extent permitted by
     applicable law, and, to the extent not so permitted, such purchase price
     may not be less than par value.

          (b) Acceptance. Awards of Restricted Stock must be accepted within a
     period of sixty (60) days (or such shorter period as the Committee may
     specify at grant) after the Award date, by executing a Restricted Stock
     Award agreement and by paying whatever price (if any) the Committee has
     designated thereunder.

          (c) Legend. Each Participant receiving a Restricted Stock Award shall
     be issued a stock certificate in respect of such shares of Restricted
     Stock, unless the Committee elects to use another system, such as book
     entries by the transfer agent, as evidencing ownership of a Restricted
     Stock Award. Such certificate shall be registered in the name of such
     Participant, and shall bear an appropriate legend referring to the terms,
     conditions, and restrictions applicable to such Award, substantially in the
     following form:

                                       11
 <PAGE>

          "The anticipation, alienation, attachment, sale, transfer, assignment,
     pledge, encumbrance or charge of the shares of stock represented hereby are
     subject to the terms and conditions (including forfeiture) of the dELiA*s
     Inc. (the "Company") 1998 Stock Incentive Plan and an Agreement entered
     into between the registered owner and the Company, dated ________. Copies
     of such Plan and Agreement are on file at the principal office of the
     Company."

          (d) Custody. The Committee may require that any stock certificates
     evidencing such shares be held in custody by the Company until the
     restrictions thereon shall have lapsed, and that, as a condition of any
     Restricted Stock Award, the Participant shall have delivered a duly signed
     stock power, endorsed in blank, relating to the Common Stock covered by
     such Award.

     7.3. Restrictions and Conditions on Restricted Stock Awards. The shares of
Restricted Stock awarded pursuant to this Plan shall be subject to Article X and
the following restrictions and conditions:

          (a) Restriction Period; Vesting and Acceleration of Vesting. The
     Participant shall not be permitted to Transfer shares of Restricted Stock
     awarded under this Plan during a period set by the Committee (the
     "Restriction Period") commencing with the date of such Award, as set forth
     in the Restricted Stock Award agreement and such agreement shall set forth
     a vesting schedule and any events which would accelerate vesting of the
     shares of Restricted Stock. Within these limits, based on service, or other
     criteria determined by the Committee, the Committee may provide for the
     lapse of such restrictions in installments in whole or in part, or may
     accelerate the vesting of all or any part of any Restricted Stock Award.

          (b) Rights as Stockholder. Except as provided in this subsection (b)
     and subsection (a) above and as otherwise determined by the Committee, the
     Participant shall have, with respect to the shares of Restricted Stock, all
     of the rights of a holder of shares of Common Stock of the Company
     including, without limitation, the right to receive any dividends, the
     right to vote such shares and, subject to and conditioned upon the full
     vesting of shares of Restricted Stock, the right to tender such shares.
     Notwithstanding the foregoing, the payment of dividends shall be deferred
     until, and conditioned upon, the expiration of the applicable Restriction
     Period, unless the Committee, in its sole discretion, specifies otherwise
     at the time of the Award.

          (c) Lapse of Restrictions. If and when the Restriction Period expires
     without a prior forfeiture of the Restricted Stock subject to such
     Restriction Period, the certificates for such shares shall be delivered to
     the Participant. All legends shall be removed from said certificates at the
     time of delivery to the Participant except as otherwise required by
     applicable law.

     7.4. Termination of Employment for Restricted Stock. Subject to the
applicable provisions of the Restricted Stock Award agreement and this Plan,
upon a Participant's Termination of Employment or Termination of Consultancy for
any reason during the relevant Restriction Period, all Restricted Stock still
subject to restriction will vest or be forfeited in accordance with the terms
and conditions established by the Committee at grant or thereafter.

                                  ARTICLE VIII.

                            STOCK APPRECIATION RIGHTS

     8.1. Tandem Stock Appreciation Rights. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a "Reference Stock
Option") granted under this Plan ("Tandem Stock Appreciation Rights"). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the grant
of such Reference Stock Option. Consultants shall not be eligible for a grant of
Tandem Stock Appreciation Rights granted in conjunction with all or part of an
Incentive Stock Option.

                                       12
<PAGE>

     8.2. Terms and Conditions of Tandem Stock Appreciation Rights. Tandem Stock
Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee, including Article X and the following:

          (a) Term. A Tandem Stock Appreciation Right or applicable portion
     thereof granted with respect to a Reference Stock Option shall terminate
     and no longer be exercisable upon the termination or exercise of the
     Reference Stock Option, except that, unless otherwise determined by the
     Committee, in its sole discretion, at the time of grant, a Tandem Stock
     Appreciation Right granted with respect to less than the full number of
     shares covered by the Reference Stock Option shall not be reduced until and
     then only to the extent the exercise or termination of the Reference Stock
     Option causes the number of shares covered by the Tandem Stock Appreciation
     Right to exceed the number of shares remaining available and unexercised
     under the Reference Stock Option.

          (b) Exercisability. Tandem Stock Appreciation Rights shall be
     exercisable only at such time or times and to the extent that the Reference
     Stock Options to which they relate shall be exercisable in accordance with
     the provisions of Article VI and this Article VIII.

          (c) Method of Exercise. A Tandem Stock Appreciation Right may be
     exercised by an optionee by surrendering the applicable portion of the
     Reference Stock Option. Upon such exercise and surrender, the Participant
     shall be entitled to receive an amount determined in the manner prescribed
     in this Section 8.2. Stock Options which have been so surrendered, in whole
     or in part, shall no longer be exercisable to the extent the related Tandem
     Stock Appreciation Rights have been exercised.

          (d) Payment. Upon the exercise of a Tandem Stock Appreciation Right a
     Participant shall be entitled to receive up to, but no more than, an amount
     in cash and/or Common Stock (as chosen by the Committee in its sole
     discretion) equal in value to the excess of the Fair Market Value of one
     share of Common Stock over the option price per share specified in the
     Reference Stock Option multiplied by the number of shares in respect of
     which the Tandem Stock Appreciation Right shall have been exercised, with
     the Committee having the right to determine the form of payment.

          (e) Deemed Exercise of Reference Stock Option. Upon the exercise of a
     Tandem Stock Appreciation Right, the Reference Stock Option or part thereof
     to which such Stock Appreciation Right is related shall be deemed to have
     been exercised for the purpose of the limitation set forth in Article IV of
     the Plan on the number of shares of Common Stock to be issued under the
     Plan.

     8.3. Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation
Rights may also be granted without reference to any Stock Options granted under
this Plan.

     8.4. Terms and Conditions of Non-Tandem Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article X and the
following:

          (a) Term. The term of each Non-Tandem Stock Appreciation Right shall
     be fixed by the Committee, but shall not be greater than ten (10) years
     after the date the right is granted.

          (b) Exercisability. Non-Tandem Stock Appreciation Rights shall be
     exercisable at such time or times and subject to such terms and conditions
     as shall be determined by the Committee at grant. If the Committee
     provides, in its discretion, that any such right is exercisable subject to
     certain limitations (including, without limitation, that it is exercisable
     only in installments or within certain time periods), the Committee may
     waive such limitation on the exercisability at any time at or after grant
     in whole or in part (including, without limitation, that the Committee may
     waive the installment exercise provisions or accelerate the time at which
     rights may be exercised), based on such factors, if any, as the Committee
     shall determine, in its sole discretion.

                                       13
<PAGE>

          (c) Method of Exercise. Subject to whatever installment exercise and
     waiting period provisions apply under subsection (b) above, Non-Tandem
     Stock Appreciation Rights may be exercised in whole or in part at any time
     during the option term, by giving written notice of exercise to the Company
     specifying the number of Non-Tandem Stock Appreciation Rights to be
     exercised.

          (d) Payment. Upon the exercise of a Non-Tandem Stock Appreciation
     Right a Participant shall be entitled to receive, for each right exercised,
     up to, but no more than, an amount in cash and/or Common Stock (as chosen
     by the Committee in its sole discretion) equal in value to the excess of
     the Fair Market Value of one share of Common Stock on the date the right is
     exercised over the Fair Market Value of one (1) share of Common Stock on
     the date the right was awarded to the Participant.

     8.5. Limited Stock Appreciation Rights. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a limited Stock Appreciation Right.
Limited Stock Appreciation Rights may be exercised only upon the occurrence of a
Change in Control or such other event as the Committee may, in its sole
discretion, designate at the time of grant or thereafter. Upon the exercise of
limited Stock Appreciation Rights, except as otherwise provided in an Award
agreement, the Participant shall receive in cash or Common Stock, as determined
by the Committee, an amount equal to the amount (1) set forth in Section 8.2(d)
with respect to Tandem Stock Appreciation Rights or (2) set forth in Section
8.4(d) with respect to Non-Tandem Stock Appreciation Rights.

     8.6. Termination of Employment. The following rules apply with regard to
Stock Appreciation Rights upon the Termination of Employment or Termination of
Consultancy of a Participant.

          (a) Termination by Death. If a Participant's Termination of Employment
     or Termination of Consultancy is by reason of death, any Stock Appreciation
     Right held by such Participant, unless otherwise determined by the
     Committee at grant or if no rights of the Participant's estate are reduced,
     thereafter, may be exercised, to the extent exercisable at the
     Participant's death, by the legal representative of the estate, at any time
     within a period of one (1) year from the date of such death or until the
     expiration of the stated term of such Stock Appreciation Right, whichever
     period is the shorter.

          (b) Termination by Reason of Disability. If a Participant's
     Termination of Employment or Termination of Consultancy is by reason of
     Disability, any Stock Appreciation Right held by such participant, unless
     otherwise determined by the Committee at grant or, if no rights of the
     Participant are reduced, thereafter, may be exercised, to the extent
     exercisable at the Participant's termination, by the Participant (or the
     legal representative of the Participant's estate if the Participant dies
     after termination) at any time within a period of one (1) year from the
     date of such termination or until the expiration of the stated term of such
     Stock Appreciation Right, whichever period is the shorter.

          (c) Termination by Reason of Retirement. If a Participant's
     Termination of Employment or Termination of Consultancy is by reason of
     Retirement, any Stock Appreciation Right held by such Participant, unless
     otherwise determined by the Committee at grant or, if no rights of the
     Participant are reduced, thereafter, shall be fully vested and may
     thereafter be exercised by the Participant at any time within a period of
     one (1) year from the date of such termination or until the expiration of
     the stated term of such right, whichever period is the shorter; provided,
     however, that, if the Participant dies within such one (1) year period, any
     unexercised Non- Tandem Stock Appreciation Right held by such Participant
     shall thereafter be exercisable, to the extent to which it was exercisable
     at the time of death, for a period of one (1) year (or such other period as
     the Committee may specify at grant or if no rights of the Participant are
     reduced, thereafter) from the date of such death or until the expiration of
     the stated term of such right, whichever period is the shorter.

          (d) Involuntary Termination Without Cause or Termination for Good
     Reason. If a Participant's Termination of Employment or Termination of
     Consultancy is by involuntary termination without Cause or for Good Reason,
     any Stock Appreciation Right held by such participant, unless otherwise
     determined by the Committee at grant or if no rights of the participant are
     reduced, thereafter, may be exercised, to the extent exercisable at
     termination, by the Participant at any time within a period of

                                       14
<PAGE>

     ninety (90) days from the date of such termination or until the expiration
     of the stated term of such right, whichever period is shorter.

          (e) Termination Without Good Reason. If a Participant's Termination of
     Employment or Termination of Consultancy is voluntary but without Good
     Reason and occurs prior to, or more than ninety (90) days after, the
     occurrence of an event which would be grounds for Termination of Employment
     by the Company for Cause (without regard to any notice or cure period
     requirements), any Stock Appreciation Right held by such Participant,
     unless greater or lesser exercise rights are provided by the Committee at
     the time of grant or, if no rights of the participant are reduced,
     thereafter, may be exercised, to the extent exercisable at termination, by
     the Participant at any time within a period of thirty (30) days from the
     date of such termination, but in no event beyond the expiration of the
     stated term of such Stock Appreciation Right.

          (f) Other Termination. Unless otherwise determined by the Committee at
     grant, or, if no rights of the Participant are reduced thereafter, if a
     Participant's Termination of Employment or Termination of Consultancy is
     for any reason other than death, Disability, Retirement, Good Reason,
     involuntary termination without Cause or voluntary termination as provided
     in subsection (e) above, any Stock Appreciation Right held by such
     Participant shall thereupon terminate or expire as of the date of
     termination, provided, that (unless the Committee determines a different
     period upon grant, or, if no rights of the Participant are reduced,
     thereafter) in the event the termination is for Cause or is a voluntary
     termination as provided in subsection (e) above, within ninety (90) days
     after occurrence of an event which would be grounds for Termination of
     Employment or Termination of Consultancy by the Company for Cause (without
     regard to any notice or cure period requirement), any Stock Appreciation
     Right held by the Participant at the time of the occurrence of the event
     which would be grounds for Termination of Employment or Termination of
     Consultancy by the Company for Cause shall be deemed to have terminated and
     expired upon occurrence of the event which would be grounds for Termination
     of Employment or Termination of Consultancy by the Company for Cause.

                                   ARTICLE IX.

                    NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS

     9.1. Options. The terms of this Article IX shall apply only to Options
granted to non-employee directors.

     9.2. Grants. Without further action by the Board or the stockholders of the
Company, each non-employee director other than Geraldine Karetsky and Sidney S.
Kahn elected subsequent to the Effective Date shall subject to the terms of the
Plan, be granted Options to purchase 40,000 shares of Common Stock upon the date
the non-employee director begins service as a director on the Board.

     9.3. Non-Qualified Stock Options. Stock Options granted under this Article
IX shall be Non-Qualified Stock Options.

     9.4. Terms of Options. Options granted under this Article shall be subject
to the following terms and conditions and shall be in such form and contain such
additional terms and conditions, not inconsistent with terms of this Plan, as
the Committee shall deem desirable:

          (a) Option Price. The purchase price per share deliverable upon the
     exercise of an Option granted pursuant to Section 9.2(a)(1) shall be the
     Price to the Public and the purchase price per share deliverable upon the
     exercise of an Option granted pursuant to Section 9.2(a)(2) shall be 100%
     of the Fair Market Value of such Common Stock at the time of the grant of
     the Option, or the par value of the Common Stock, whichever is greater.

          (b) Exercisability. Except as otherwise provided herein, twenty
     percent (20%) of any Option granted under this Article IX shall be
     exercisable on or after each of the five anniversaries following the date
     of grant. All Options shall fully vest upon a Change in Control.

                                       15
<PAGE>

          (c) Method for Exercise. A non-employee director electing to exercise
     one or more Options shall give written notice of exercise to the Company
     specifying the number of shares to be purchased. Common Stock purchased
     pursuant to the exercise of Options shall be paid for at the time of
     exercise in cash or by delivery of unencumbered Common Stock owned by the
     non-employee director or a combination thereof or by such other method as
     approved by the Board.

          (d) Option Term. Except as otherwise provided herein, if not
     previously exercised each Option shall expire upon the tenth anniversary of
     the date of the grant thereof.

     9.5. Termination of Directorship. The following rules apply with regard to
Options upon the Termination of Directorship:

          (a) Death, Disability or Otherwise Ceasing to be a Director Other than
     for Cause. Except as otherwise provided herein, upon the Termination of
     Directorship, on account of Disability, death, Retirement, resignation,
     failure to stand for reelection or failure to be reelected or otherwise
     other than as set forth in (b) below, all outstanding Options then
     exercisable and not exercised by the Participant prior to such Termination
     of Directorship shall remain exercisable, to the extent exercisable at the
     Termination of Directorship, by the Participant or, in the case of death,
     by the Participant's estate or by the person given authority to exercise
     such Options by his or her will or by operation of law, for the remainder
     of the stated term of such Options.

          (b) Cause. Upon removal, failure to stand for reelection or failure to
     be renominated for Cause, or if the Company obtains or discovers
     information after Termination of Directorship that such Participant had
     engaged in conduct that would have justified a removal for Cause during
     such directorship, all outstanding Options of such Participant shall
     immediately terminate and shall be null and void.

          (c) Cancellation of Options. No Options that were not exercisable
     during the period such person serves as a director shall thereafter become
     exercisable upon a Termination of Directorship for any reason or no reason
     whatsoever, and such Options shall terminate and become null and void upon
     a Termination of Directorship.

     9.6. Changes. (a) The Awards to a non-employee director shall be subject to
Sections 4.2(a), (b) and (c) of the Plan and this Section 9.6, but shall not be
subject to Section 4.2(d).

          (b) If the Company shall not be the surviving corporation in any
     merger or consolidation, or if the Company is to be dissolved or
     liquidated, then, unless the surviving corporation assumes the Options or
     substitutes new Options which are determined by the Board in its sole
     discretion to be substantially similar in nature and equivalent in terms
     and value for Options then outstanding, upon the effective date of such
     merger, consolidation, liquidation or dissolution, any unexercised Options
     shall expire without additional compensation to the holder thereof;
     provided, that, the Committee shall deliver notice to each non-employee
     director at least twenty (20) days prior to the date of consummation of
     such merger, consolidation, dissolution or liquidation which would result
     in the expiration of the Options and during the period from the date on
     which such notice of termination is delivered to the consummation of the
     merger, consolidation, dissolution or liquidation, such Participant shall
     have the right to exercise in full effective as of such consummation all
     Options that are then outstanding (without regard to limitations on
     exercise otherwise contained in the Options) but contingent on occurrence
     of the merger, consolidation, dissolution or liquidation, and, provided
     that, if the contemplated transaction does not take place within a ninety
     (90) day period after giving such notice for any reason whatsoever, the
     notice, accelerated vesting and exercise shall be null and void and, if and
     when appropriate, new notice shall be given as aforesaid.

                                   ARTICLE X.

                               NON-TRANSFERABILITY

                                       16
<PAGE>

     No Stock Option or Stock Appreciation Right shall be Transferable by the
Participant otherwise than by will or by the laws of descent and distribution.
All Stock Options and all Stock Appreciation Rights shall be exercisable, during
the Participant's lifetime, only by the Participant. Tandem Stock Appreciation
Rights shall be Transferable, to the extent permitted above, only with the
underlying Stock Option. Shares of Restricted Stock under Article VII may not be
Transferred prior to the date on which shares are issued, or, if later, the date
on which any applicable restriction lapses. No Award shall, except as otherwise
specifically provided by law or herein, be Transferable in any manner, and any
attempt to Transfer any such Award shall be void, and no such Award shall in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Award, nor
shall it be subject to attachment or legal process for or against such person.

                                   ARTICLE XI.

                          CHANGE IN CONTROL PROVISIONS

     11.1. Benefits. In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Award, the Participant shall be entitled to the following benefits:

          (a) Subject to paragraph (c) below with regard to Options granted to
     Eligible Employees and Consultants, all outstanding Options and the related
     Tandem Stock Appreciation Rights and Non-Tandem Stock Appreciation Rights
     of such Participant granted prior to the Change in Control shall be fully
     vested and immediately exercisable in their entirety. The Committee, in its
     sole discretion, may provide for the purchase of any such Stock Options by
     the Company for an amount of cash equal to the excess of the Change in
     Control price (as defined below) of the shares of Common Stock covered by
     such Stock Options, over the aggregate exercise price of such Stock
     Options. For purposes of this Section 11.1, Change in Control price shall
     mean the higher of (i) the highest price per share of Common Stock paid in
     any transaction related to a Change in Control of the Company, or (ii) the
     highest Fair Market Value per share of Common Stock at any time during the
     sixty (60) day period preceding a Change in Control.

          (b) The restrictions to which any shares of Restricted Stock of such
     Participant granted prior to the Change in Control are subject shall lapse
     as if the applicable Restriction Period had ended upon such Change in
     Control.

          (c) Notwithstanding anything to the contrary herein, unless the
     Committee provides otherwise at the time an Option is granted to an
     Eligible Employee or Consultant hereunder or thereafter, no acceleration of
     exercisability shall occur with respect to such Option if the Committee
     reasonably determines in good faith, prior to the occurrence of the Change
     in Control, that the Options shall be honored or assumed, or new rights
     substituted therefor (each such honored, assumed or substituted option
     hereinafter called an "Alternative Option"), by a Participant's employer
     (or the parent or a subsidiary of such employer) immediately following the
     Change in Control, provided that any such Alternative Option must meet the
     following criteria:

               (i) the Alternative Option must be based on stock which is traded
          on an established securities market, or which will be so traded within
          thirty (30) days of the Change in Control;

               (ii) the Alternative Option must provide such Participant with
          rights and entitlements substantially equivalent to or better than the
          rights, terms and conditions applicable under such Option, including,
          but not limited to, an identical or better exercise schedule; and

               (iii) the Alternative Option must have economic value
          substantially equivalent to the value of such Option (determined at
          the time of the Change in Control).

          For purposes of Incentive Stock Options, any assumed or substituted
     Option shall comply with the requirements of Treasury regulation
     ss. 1.425-1 (and any amendments thereto).

                                       17
<PAGE>

          (d) Notwithstanding anything else herein, the Committee may, in its
     sole discretion, provide for accelerated vesting of an Award (other than a
     grant to a non-employee director pursuant to Article IX hereof), upon a
     Termination of Employment during the Pre-Change in Control Period. Unless
     otherwise determined by the Committee, the Pre-Change in Control Period
     shall be the one hundred eighty (180) day period prior to a Change in
     Control.

     11.2. Change in Control. A "Change in Control" shall be deemed to have
occurred:

          (a) upon any "person" as such term is used in Sections 13(d) and 14(d)
     of the Exchange Act (other than the Company, any trustee or other fiduciary
     holding securities under any employee benefit plan of the Company, any
     company owned, directly or indirectly, by the stockholders of the Company
     in substantially the same proportions as their ownership of Common Stock of
     the Company, or as a group or individually Stephen I. Kahn, his spouse and
     their issue and any trusts for the benefit of any of them), becoming the
     owner (as defined in Rule 13d-3 under the Exchange Act), directly or
     indirectly, of securities of the Company representing fifty percent (50%)
     or more of the combined voting power of the Company's then outstanding
     securities (including, without limitation, securities owned at the time of
     any increase in ownership);

          (b) a change in the composition of the Board of Directors of the
     Company such that the individuals who, as of the date hereof, comprise the
     Board (the "Incumbent Board") cease for any reason to constitute at least a
     majority of the Board; provided, however, for purposes of this subsection
     that any individual who becomes a member of an Incumbent Board subsequent
     to the date hereof whose election, or nomination for election by the
     Company's stockholders, was approved in advance or contemporaneously with
     such election by a vote of at least a majority of those individuals who are
     members of the Incumbent Board (or deemed to be such pursuant to this
     proviso) shall be considered as though such individual were a member of the
     Incumbent Board; but, provided further, that any such individual whose
     initial assumption of office occurs as a result of either an actual or
     threatened election contest (as such terms are used in Rule 14a-11 of
     Regulation 14A promulgated under the Exchange Act) or other actual or
     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board of Directors of the Company or actual or threatened
     tender offer for shares of the Company or similar transaction or other
     contest for corporate control (other than a tender offer by the Company)
     shall not be so considered as a member of the Incumbent Board; or

          (c) upon the merger or consolidation of the Company with any other
     corporation, other than a merger or consolidation which would result in the
     voting securities of the Company outstanding immediately prior thereto
     continuing to represent (either by remaining outstanding or by being
     converted into voting securities of the surviving entity) more than fifty
     percent (50%) of the combined voting power of the voting securities of the
     Company or such surviving entity outstanding immediately after such merger
     or consolidation; provided, however, that a merger or consolidation
     effected to implement a recapitalization of the Company (or similar
     transaction) in which no person (other than those covered by the exceptions
     in (a) above) acquires more than fifty percent (50%) of the combined voting
     power of the Company's then outstanding securities shall not constitute a
     Change in Control of the Company; or

          (d) upon the stockholder's of the Company approval of 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 other than the sale of all or substantially all of the assets of the
     Company to a person or persons who beneficially own, directly or
     indirectly, at least fifty percent (50%) or more of the combined voting
     power of the outstanding voting securities of the Company at the time of
     the sale.

                                  ARTICLE XII.

                      TERMINATION OR AMENDMENT OF THE PLAN

     12.1. Termination or Amendment. Notwithstanding any other provision of this
Plan, the Board may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of the Plan, or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise

                                       18
<PAGE>

required by law or specifically provided herein, the rights of a Participant
with respect to Awards granted prior to such amendment, suspension or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the stockholders of the Company, if
and to the extent required by the applicable provisions of Rule 16b-3 or, if and
to the extent required, under the applicable provisions of Section 162(m) of the
Code, or with regard to Incentive Stock Options, Section 422 of the Code, no
amendment may be made which would (i) increase the aggregate number of shares of
Common Stock that may be issued under this Plan; (ii) increase the maximum
individual Participant limitations for a fiscal year under Section 4.1(b); (iii)
change the classification of employees, Consultants and non-employee directors
eligible to receive Awards under this Plan; (iv) decrease the minimum option
price of any Stock Option; (v) extend the maximum option period under Section
6.3; (vi) change any rights under the Plan with regard to non-employee
directors; or (vii) require stockholder approval in order for the Plan to
continue to comply with the applicable provisions, if any, of Rule 16b-3,
Section 162(m) of the Code or, with regard to Incentive Stock Options, Section
422 of the Code. In no event may the Plan be amended without the approval of the
stockholders of the Company in accordance with the applicable laws or other
requirements to increase the aggregate number of shares of Common Stock that may
be issued under the Plan, decrease the minimum option price of any Stock Option,
or to make any other amendment that would require stockholder approval under the
rules of any exchange or system on which the Company's securities are listed or
traded at the request of the Company.

Except with respect to the award of Stock Options to non-employee directors
under Article IX, the Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action by the
Committee shall impair the rights of any holder without the holder's consent.


                                  ARTICLE XIII.

                                  UNFUNDED PLAN

     13.1. Unfunded Status of Plan. This Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments as to
which a Participant has a fixed and vested interest but which are not yet made
to a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

                                  ARTICLE XIV.

                               GENERAL PROVISIONS

     14.1. Legend. The Committee may require each person receiving shares
pursuant to an Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer.

     All certificates for shares of Common Stock delivered under the Plan shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

     14.2. Other Plans. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

                                       19
<PAGE>

         14.3. No Right to Employment/Consultancy/Directorship. Neither this
Plan nor the grant of any Award hereunder shall give any Participant or other
employee any right with respect to continuance of employment or consultancy by
the Company or any Subsidiary, nor shall they be a limitation in any way on the
right of the Company or any Subsidiary by which an employee is employed or a
Consultant is retained to terminate his employment or consultancy, as
applicable, at any time. Neither this Plan nor the grant of any Award hereunder
shall impose any obligations on the Company to retain any Participant as a
director nor shall it impose on the part of any Participant any obligation to
remain as a director of the Company.

         14.4. Withholding of Taxes. The Company shall have the right to deduct
from any payment to be made to a Participant, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Upon the vesting of Restricted Stock, or upon
making an election under Code Section 83(b), a Participant shall pay all
required withholding to the Company.

         The Committee may permit, as it decides to approve in its sole
discretion, any such withholding obligation with regard to any Participant to be
satisfied by reducing the number of shares of Common Stock otherwise deliverable
or by delivering shares of Common Stock already owned. Any fraction of a share
of Common Stock required to satisfy such tax obligations shall be disregarded
and the amount due shall be paid instead in cash by the Participant.

         14.5.  Listing and Other Conditions.

          (a) If the Common Stock becomes listed on a national securities
     exchange or system sponsored by a national securities association, the
     issue of any shares of Common Stock pursuant to an Award shall be
     conditioned upon such shares being listed on such exchange or system. The
     Company shall have no obligation to issue such shares unless and until such
     shares are so listed, and the right to exercise any Option with respect to
     such shares shall be suspended until such listing has been effected.

          (b) If at any time counsel to the Company shall be of the opinion that
     any sale or delivery of shares of Common Stock pursuant to an Award is or
     may in the circumstances be unlawful or result in the imposition of excise
     taxes on the Company under the statutes, rules or regulations of any
     applicable jurisdiction, the Company shall have no obligation to make such
     sale or delivery, or to make any application or to effect or to maintain
     any qualification or registration under the Securities Act of 1933, as
     amended, or otherwise with respect to shares of Common Stock or Awards, and
     the right to exercise any Option shall be suspended until, in the opinion
     of said counsel, such sale or delivery shall be lawful or will not result
     in the imposition of excise taxes on the Company.

          (c) Upon termination of any period of suspension under this Section
     14.5, any Award affected by such suspension which shall not then have
     expired or terminated shall be reinstated as to all shares available before
     such suspension and as to shares which would otherwise have become
     available during the period of such suspension, but no such suspension
     shall extend the term of any Option.

     14.6. Governing Law. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).

     14.7. Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.

     14.8. Other Benefits. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation.

                                       20
<PAGE>

     14.9. Costs. The Company shall bear all expenses included in administering
this Plan, including expenses of issuing Common Stock pursuant to any Awards
hereunder.

     14.10. No Right to Same Benefits. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.

     14.11. Death/Disability. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of the Plan.

     14.12. Section 16(b) of the Exchange Act. All elections and transactions
under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
the Plan and the transaction of business thereunder.

     14.13. Severability of Provisions. If any provision of the Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.

     14.14. Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.

                                   ARTICLE XV.

                                  TERM OF PLAN

     No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the date the Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.

                                  ARTICLE XVI.

                                  NAME OF PLAN

     This Plan shall be known as the dELiA*s Inc. 1998 Stock Incentive Plan.