Exhibit 10.4


                          NEW HORIZON KIDS QUEST, INC.
                            1994 LONG-TERM INCENTIVE
                                       AND
                                STOCK OPTION PLAN

1.       Purpose of Plan.

         This Plan shall be known as the "NEW HORIZON KIDS QUEST, INC. 1994
LONG-TERM INCENTIVE AND STOCK OPTION PLAN" and is hereinafter referred to as the
"Plan". The purpose of the Plan is to aid in maintaining and developing
personnel capable of assuring the future success of New Horizon Kids Quest,
Inc., a Minnesota corporation (the "Company"), to offer such personnel
additional incentives to put forth maximum efforts for the success of the
business, and to afford them an opportunity to acquire a proprietary interest in
the Company through stock options and performance awards as provided herein.
Options granted under this Plan may be either incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code'), or options which do not qualify as Incentive
Stock Options.

2.       Stock Subject to Plan.

         Subject to the provisions of Section 13 hereof, the stock to be subject
to options or other awards under the Plan shall be the Company's authorized
Common Stock, par value $.Ol per share. Such shares may be either authorized but
unissued shares, or issued shares which have been reacquired by the Company.
Subject to adjustment as provided in Section 13 hereof, the maximum number of
shares on which options may be exercised or other awards issued under this Plan
shall be 750,000 shares. If an option or award under the Plan expires, or for
any reason is terminated or unexercised with respect to any shares, such shares
shall again be available for options or awards thereafter granted during the
term of the Plan.

3.       Administration of Plan.

         (a) The Plan shall be administered by the Board of Directors or a
committee appointed by the Board of Directors (the "Committee") of the Company.

         (b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan: (i) to determine the purchase
price of the Common Stock covered by each option or award, (ii) to determine the
employees to whom and the time or times at which such options and awards shall
be granted and the number of shares to be subject to each, (iii) to determine
the form of payment to be made in connection with performance awards, either
cash, Common Stock of the Company or a combination thereof, (iv) to determine
the terms of exercise of each option and award, (v) to accelerate the time at
which all or any part of an option or award may be exercised, (vi) to amend or
modify the terms of any option or award with the consent of the optionee, (vii)
to interpret the Plan, (viii) to prescribe, amend and rescind rules and
regulations relating to the Plan, (ix) to determine the terms and provisions of
each option and award agreement under the Plan (which agreements need not be
identical), including the designation of those options intended to be Incentive
Stock Options, and (x) to make all other determinations necessary or advisable
for the administration of the Plan, subject to the exclusive authority of the
Board of Directors under Section 14 herein to amend or terminate the Plan.

         (c) All determinations of the Committee shall be made by not less than
a majority of its members, provided that if the Committee is comprised of no
more than two members, such determinations may not be made by less than all of
its members. Any decision or determination reduced

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to writing and signed by all of the members of the Committee shall be fully
effective as if it had been made by a majority vote at a meeting duly called and
held. The grant of an option or award shall be effective only if a written
agreement shall have been duly executed and delivered by and on behalf of the
Company following such grant. The Committee may appoint a Secretary and may make
such rules and regulations for the conduct of its business as it shall deem
advisable.

4.       Eligibility.

         Incentive Stock Options may only be granted under this Plan to any full
or part-time employee (which term as used herein includes, but is not limited
to, officers and directors who are also employees) of the Company and of its
present and future subsidiary corporations within the meaning of Section 424(f)
of the Code (herein called "subsidiaries"). Full or part-time employees,
directors, consultants or independent contractors to the Company or one of its
subsidiaries, shall be eligible to receive options which do not qualify as
Incentive Stock Options and awards. In determining the persons to whom options
and awards shall be granted and the number of shares subject to each, the
Committee may take into account the nature of services rendered by the
respective employees or consultants, their present and potential contributions
to the success of the Company and such other factors as the Committee in its
discretion shall deem relevant. A person who has been granted an option or award
under this Plan may be granted additional options or awards under the Plan if
the Committee shall so determine provided, however, that for Incentive Stock
Options granted after December 31, 1986, to the extent the aggregate Fair Market
Value (as defined in Section 5 below) (determined at the time the Incentive
Stock Option is granted) of the Common Stock with respect to which all Incentive
Stock Options are exercisable for the first time by an employee during any
calendar year (under all plans described in subsection (d) of Section 422 of the
Code of his employer corporation and its parent and subsidiary corporations)
exceeds $100,000, such options shall be treated as options which do not quality
as Incentive Stock Options. Nothing in the Plan or in any agreement thereunder
shall confer on any employee any right to continue in the employ of the Company
or any of its subsidiaries or affect, in any way, the right of the Company or
any of its subsidiaries to terminate his or her employment at any time.

5.       Price.

         The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the Fair
Market Value of the Common Stock at the date of grant of such option. The option
price for options granted under the Plan which do not qualify as Incentive Stock
Options and, if applicable, the price for all awards shall also be determined by
the Committee. For purposes of the preceding sentence and for all other
valuation purposes under the Plan, the "Fair Market Value" of shares of Common
Stock shall be (i) the closing price of the Common Stock as reported for
composite transactions if the Common Stock is then traded on a national
securities exchange, (ii) the last sale price if the Common Stock is then quoted
on the Nasdaq National Market, or (iii) the average of the closing
representative bid and asked prices of the Common Stock as reported on Nasdaq on
the date as of which the Fair Market Value is being determined. If on the date
of grant of any option or award hereunder the Common Stock is not traded on an
established securities market, the Committee shall make a good faith attempt to
satisfy the requirements of this Section 5 and in connection therewith shall
take such action as it deems necessary or advisable.

6.       Term.

         Each option and award and all rights and obligations thereunder shall
expire on the date determined by the Committee and specified in the option or
award agreement. The Committee shall be under no duty to provide terms of like
duration for options or awards granted under the Plan, but the term of an
Incentive Stock Option may not extend more than ten (10) years from the date of
grant of such

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option and the term of options granted under the Plan which do not qualify as
Incentive Stock Options may not extend more than fifteen (15) years from the
date of grant of such option.

7.       Exercise of Option or Award.

         (a) The Committee shall have full and complete authority to determine
whether an option or award will be exercisable in full at any time or from time
to time during the term thereof, or to provide for the exercise thereof in such
installments, upon the occurrence of such events (such as termination of
employment for any reason) and at such times during the term of the option as
the Committee may determine and specify in the option or award agreement.

         (b) The exercise of any option or award granted hereunder shall only be
effective at such time that the sale of Common Stock pursuant to such exercise
will not violate any state or federal securities or other laws.

         (c) An optionee or grantee electing to exercise an option or award
shall give written notice to the Company of such election and of the number of
shares to such exercise. The full purchase price of such shares shall be
tendered with such notice of exercise. Payment shall be made to the Company in
cash (including bank check, certified check, personal check, or money order),
or, at the discretion of the Committee and as specified by the Committee (i) by
delivering certificates for the Company's Common Stock already owned by the
optionee or grantee having a Fair Market Value as of the date of grant equal to
the full purchase price of the shares, or (ii) by delivering the optionee's or
grantee's promissory note, which shall provide for interest at a rate not less
than the minimum rate required to avoid the imputation of income, original issue
discount or a below-market-rate loan pursuant to Sections 483,1274 or 7872 of
the Code or any successor provisions thereto, or (iii) a combination of cash and
such shares. The Fair Market Value of such tendered shares shall be determined
as provided in Section 5 herein. Until such person has been issued the shares
subject to such exercise, he or she shall possess no rights as a shareholder
with respect to such shares.

8.       Restricted Stock Awards.

         Awards of Common Stock subject to forfeiture and transfer restrictions
may be granted by the Committee. Any restricted stock award shall be evidenced
by an agreement in such form as the Committee shall from time to time approve,
which agreement shall comply, with and be subject to the following terms and
conditions and any additional terms and conditions established by the Committee
that are consistent with the terms of the Plan:

         (a) Grant of Restricted Stock Awards. Each restricted stock award made
under the Plan shall be for such number of shares of Common Stock as shall be
determined by the Committee and set forth in the agreement containing the terms
of such restricted stock award. Such agreement shall set forth a period of time
during which the grantee must remain in the continuous employment of the Company
in order for the forfeiture and transfer restrictions to lapse. If the Committee
so determines, the restrictions may lapse during such restricted period in
installments with respect to specified portions of the shares covered by the
restricted stock award. The agreement may also, in the discretion of the
Committee, set forth performance or other conditions that will subject the
Common Stock to forfeiture and transfer restrictions. The Committee may, at its
discretion, waive all or any part of the restrictions applicable to any or all
outstanding restricted stock awards.

         (b) Delivery of Common Stock and Restrictions. At the time of a
restricted stock award, a certificate representing the number of shares of
Common Stock awarded thereunder shall be registered in the name of the grantee.
Such certificate shall be held by the Company or any custodian appointed

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by the Company for the account of the grantee subject to the terms and
conditions of the Plan, and shall bear such a legend setting forth the
restrictions imposed thereon as the Committee, in its discretion, may determine.
The grantee shall have all rights of a shareholder with respect to the Common
Stock, including the right to receive dividends and the right to vote such
shares, subject to the following restrictions: (i) the grantee shall not be
entitled to delivery of the stock certificate until the expiration of the
restricted period and the fulfillment of any other restrictive conditions set
forth in the restricted stock agreement with respect to such Common Stock; (ii)
none of the shares of Common Stock may be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of during such restricted
period or until after the fulfillment of any such other restrictive conditions;
and (iii) except as otherwise determined by the Committee, all of the Common
Stock shall be forfeited and all rights of the grantee to such Common Stock
shall terminate, without further obligation on the part of the Company, unless
the grantee remains in the continuous employment of the Company for the entire
restricted period in relation to which such shares of Common Stock were granted
and unless any other restrictive conditions relating to the restricted stock
award are met. Any Common Stock, any other securities of the Company and any
other property (except for cash dividends) distributed with respect to the
Common Stock subject to restricted stock awards shall be subject to the same
restrictions, terms and conditions as such restricted Common Stock.

         (c) Termination of Restrictions. At the end of the restricted period
and provided that any other restrictive conditions of the restricted stock award
are met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in the agreement relating to the restricted stock award
or in the Plan shall lapse as to the restricted Common Stock subject thereto,
and a stock certificate for the appropriate number of shares of Common Stock,
free of the restrictions and the restricted stock legend, shall be delivered to
the grantee or his beneficiary or estate, as the case may be.

9.       Performance Awards.

         (a) The Committee is further authorized to grant performance awards
("Performance Awards"). Subject to the terms of this Plan and any applicable
award agreement, a Performance Award granted under the Plan (i) may be
denominated or payable in cash, Common Stock (including without limitation
restricted stock), other securities, other awards, or other property and (ii)
shall confer on the holder thereof rights valued as determined by the Committee
in its discretion, and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such performance
goals during such performance periods as the Committee in its discretion, shall
establish. Subject to the terms of this Plan and any applicable award agreement,
the performance goals to be achieved during any performance period, the length
of any performance period, the amount of any Performance Award granted, and the
amount of any payment or transfer to be made by the grantee and by the Company
under any Performance Award shall be determined by the Committee.

         (b) For purposes of this Section 9, (i) if a Performance Award entitles
the holder thereof to receive or purchase the Company's Common Stock, the number
of shares covered by such Performance Award or to which such Performance Award
relates shall be counted on the date of grant of such Performance Award against
the aggregate number of shares available for granting, Performance Awards under
the Plan, and (ii) if a Performance Award entitles the holder to receive cash
payments but the amount of such payments are denominated in or based on a number
of shares of the Company's Common Stock, such number of shares shall be counted
on the date of grant of such Performance Award against the aggregate number of
shares available for granting Performance Awards under the Plan; provided,
however, that Performance Awards that operate in tandem with (whether granted
simultaneously with or at a different time from), or that are substituted for,
other Performance Awards may be counted or not counted under procedures adopted
by the Committee in order to avoid double counting.

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10.      Income Tax Withholding and Tax Bonuses.

         (a) In order to comply with all applicable federal or state income tax
laws or regulations, the Company may take such action as it deems appropriate to
ensure that all applicable federal or state payroll, withholding income or other
taxes, which are the sole and absolute responsibility of an optionee or grantee
under the Plan, are withheld or collected from such optionee or grantee. In
order to assist an optionee or grantee in paying all federal and state taxes to
be withheld or collected upon exercise of an option or award which does not
qualify as an Incentive Stock Option hereunder, the Committee in its absolute
discretion and subject to such additional terms and conditions as it may adopt,
shall permit the optionee or grantee to satisfy such tax obligation by (i)
electing to have the Company withhold a portion of the shares otherwise to be
delivered upon exercise of such option or award with a Fair Market Value,
determined in accordance with Section 5 herein, equal to such taxes or (ii)
delivering to the Company Common Stock other than the shares issuable upon
exercise of such option or award with a Fair Market Value, determined in
accordance with Section 5, equal to such taxes.

         (b) The Committee shall have the authority, at the time of grant of an
option under the Plan or at any time thereafter, to approve tax bonuses to
designated optionees or grantees to be paid upon their exercise of options or
awards granted hereunder. The amount of any such payments shall be determined by
the Committee. The Committee shall have full authority in its absolute
discretion to determine the amount of any such tax bonus and the terms and
conditions affecting the vesting and payment thereafter.

11.      Additional Restrictions.

         The Committee shall have full and complete authority to determine
whether all or any part of the Common Stock of the Company acquired upon
exercise of any of the options or awards granted under the Plan shall be subject
to restrictions on the transferability thereof or any other restrictions
affecting in any manner the optionee's or grantee's rights with respect thereto,
but any such restriction shall be contained in the agreement relating to such
options or awards.

12.      Ten Percent Shareholder Rule.

         Notwithstanding any other provision in the Plan, if at the time an
option is otherwise to be granted pursuant to the Plan the optionee owns
directly or indirectly (within the meaning of Section 424(d) of the Code) 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 or its parent or
subsidiary corporations, if any (within the meaning, of Section 422(b)(6) of the
Code), then any Incentive Stock Option to be granted to such optionee pursuant
to the Plan shall satisfy the requirements of Section 422(c)(5) of the Code, and
the option price shall be not less than 110% of the Fair Market Value of the
Common Stock of the Company determined as described herein, and such option by
its terms shall not be exercisable after the expiration of five (5) years from
the date such option is granted.

13.      Non-Transferability.

         No option or award granted under the Plan shall be transferable by an
optionee or grantee, otherwise than by will or the laws of descent or
distribution. Except as otherwise provided in an option or award agreement,
during the lifetime of an optionee or grantee, the option shall be exercisable
only by such optionee or grantee.

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14.      Dilution or Other Adjustments.

         If there shall be any change in the Common Stock through merger,
consolidation, reorganization, recapitalization, dividend in the form of stock
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding options and awards shall be
made by the Committee. In the event of any such changes, adjustments shall
include, where appropriate, changes in the aggregate number of shares subject to
the Plan, the number of shares and the price per share subject to outstanding
options and awards and the amount payable upon exercise of outstanding awards,
in order to prevent dilution or enlargement of option or award rights.

15.      Amendment or Discontinuance of Plan.

         The Board of Directors may amend or discontinue the Plan at any time.
Subject to the provisions of Section 14 no amendment of the Plan, however, shall
without shareholder approval: (i) increase the maximum number of shares under
the Plan as provided in Section 2 herein, (ii) decrease the minimum price
provided in Section 5 herein, (iii) extend the maximum term under Section 6, or
(iv) modify the eligibility requirements for participation in the Plan. The
Board of Directors shall not alter or impair any option or award theretofore
granted under the Plan without the consent of the holder of the option.

16.      Time of Granting.

         Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board of Directors or by the shareholders of the Company, and no
action taken by the Committee or the Board of Directors (other than the
execution and delivery of an option or award agreement), shall constitute the
granting of an option or award hereunder.

17.      Effective Date and Termination of Plan.

         (a) The Plan was approved by the Board of Directors and shareholders of
the Company on May 13, 1994.

         (b) Unless the Plan shall have been discontinued as provided in Section
15 hereof, the Plan shall terminate May 13, 2004. No option or award may be
granted after such termination, but termination of the Plan shall not, without
the consent of the optionee or grantee, alter or impair any rights or
obligations under any option or award theretofore granted.