PROPHET 21, INC.

                           1993 STOCK PLAN, AS AMENDED


     1.   Purposes of the Plan.  The purposes of this Stock Plan are to  attract
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and  retain  the  best   available   personnel  for  positions  of   substantial
responsibility,  to provide additional incentive to Employees and Consultants of
the Company  and its  Subsidiaries  and to promote the success of the  Company's
business.  Options  granted  under the Plan may be incentive  stock  options (as
defined  under  Section  422 of the Code) or  non-statutory  stock  options,  as
determined by the Administrator at the time of grant of an option and subject to
the  applicable  provisions  of Section  422 of the Code,  as  amended,  and the
regulations  promulgated  thereunder.  Stock purchase rights may also be granted
under the Plan.

      2.  Certain  Definitions.  As used herein, the following definitions shall
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apply:

            (a)  "Administrator"  means  the  Board  or any  of  its  Committees
appointed pursuant to Section 4 of the Plan.

            (b)  "Board" means the Board of Directors of the Company

            (c)  "Code" means the Internal Revenue Code of 1986, as amended

            (d)  "Committee"  means  the  Committee  appointed  by the  Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.

            (e)  "Common Stock" means the Common Stock of the Company.

            (f)  "Company" means Prophet 21, Inc., a Delaware corporation.

            (g)  "Consultant"  means any person,  including  an advisor,  who is
engaged by the Company or any Parent or  subsidiary  to render  services  and is
compensated  for  such  services,  and  any  director  of  the  Company  whether
compensated  for such  services  or not  provided  that if and in the  event the
Company registers any class of any equity security pursuant to the Exchange Act,
the  term  Consultant  shall  thereafter  not  include  directors  who  are  not
compensated for their services or are paid only a director's fee by the Company.

            (h)  "Continuous  Status as an  Employee"  means the  absence of any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave;  (ii) military  leave;  (iii) any other leave of
absence  approved by the Board,  provided that such leave is for a period of not
more than ninety (90) days,  unless  reemployment  upon the  expiration  of such
leave is  guaranteed  by  contract  or  statute,  or unless  provided  otherwise
pursuant to Company policy adopted from time to time; or (iv) transfers  between
locations  of the  Company or  between  the  Company,  its  Subsidiaries  or its
successor.

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            (i)  "Employee" means any person, including  officers and directors,
employed by the Company or any Parent or Subsidiary of the Company.  The payment
of a  director's  fee by the  Company  shall  not be  sufficient  to  constitute
"employment" by the Company.

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

            (k)  "Fair market Value" means, as of any date,  the value of Common
Stock determined as follows:

                  (i) If the  Common  Stock is listed on any  established  stock
exchange or a national market system including  without  limitation the National
Market System of the National Association of Securities Dealers,  Inc. Automated
Quotation  ("NASDAQ")  System,  its Fair Market Value shall be the closing sales
price for such stock (or the closing  bid, if no sales were  reported) as quoted
on such system or exchange for the last market  trading day prior to the time of
determination as reported in the Wall Street Journal or such other source as the
Administrator deems reliable or;

                  (ii) If the Common  Stock is quoted on the NASDAQ  System (but
not on the National Market System  thereof) or regularly  quoted by a recognized
securities  dealer but selling  prices are not  reported,  its Fair Market Value
shall be the mean between the high and low asked prices for the Common Stock or;

                  (iii) In the absence of an  established  market for the Common
Stock,  the Fair Market Value  thereof  shall be determined in good faith by the
Administrator.

            (1)  "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.

            (m)  "Nonstatutory  Stock  Option"  means an Option not  intended to
qualify as an Incentive Stock Option.

            (n)  "Option" means a stock option granted pursuant to the Plan.

            (o)  "Optioned Stock" means the Common Stock subject to an Option.

            (p)  "Optionee"  means an Employee  or  Consultant  who  receives an
option.

            (q)  "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.

            (r)  "Plan" means this 1993 Stock Plan.

            (s)  "Restricted  Stock"  means  shares  of  Common  Stock  acquired
pursuant to a grant of stock purchase rights under Section 11 below.

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            (t)  "Share"  means a share of the  Common  Stock,  as  adjusted  in
accordance with Section 13 of the Plan.

            (u)  "Subsidiary" means a "subsidiary  corporation",  whether now or
hereafter existing, as defined in Section 424(f) of the Code.

      3.  Stock Subject to the Plan.  Subject to the provisions of Section 13 of
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the Plan, the maximum  aggregate number of shares which may be optioned and sold
under  the  Plan  is  1,000,000  shares  of  Common  Stock.  The  shares  may be
authorized, but unissued, or reacquired Common Stock.

          If an option  should  expire or become  unexercisable  for any  reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated,  become available for
future grant under the Plan.

      4.  Administration of the Plan.
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          (a)   Procedure.

                  (i)  Administration  With Respect to Directors  and  officers.
With respect to grants of Options or stock purchase  rights to Employees who are
also officers or directors of the Company, the Plan shall be administered by (A)
the Board if the Board may  administer  the Plan in  compliance  with Rule 16b-3
promulgated  under the Exchange Act or any successor thereto ("Rule 16b-3") with
respect to a plan intended to qualify thereunder as a discretionary plan, or (B)
a Committee  designated by the Board to  administer  the Plan,  which  Committee
shall be  constituted in such a manner as to permit the Plan to comply with Rule
16b-3 with respect to a plan intended to qualify  thereunder as a  discretionary
plan. Once  appointed,  such Committee shall continue to serve in its designated
capacity until otherwise  directed by the Board. From time to time the Board may
increase  the size of the  Committee  and appoint  additional  members  thereof,
remove members (with or without  cause) and appoint new members in  substitution
therefor,  fill  vacancies,  however  caused,  and  remove  all  members  of the
Committee  and  thereafter  directly  administer  the  Plan,  all to the  extent
permitted by Rule 16b-3 with respect to a plan intended to qualify thereunder as
a discretionary plan.

                  (ii)  Multiple  Administrative  Bodies.  If  permitted by Rule
16b-3,  the Plan  may be  administered  by  different  bodies  with  respect  to
directors,  non-director  officers and Employees  who are neither  directors nor
officers.

                  (iii)  Administration  With Respect to  Consultants  and Other
Employees.  With  respect  to  grants of  Options  or stock  purchase  rights to
Employees or Consultants who are neither  directors nor officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board,  which  Committee shall be constituted in such a manner as to satisfy
the legal requirements  relating to the administration of incentive stock option
plans,  if any, of Delaware  corporate and securities  laws and of the Code (the
"Applicable  Laws").  Once

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<PAGE>

appointed,  such Committee  shall  continue to serve in its designated  capacity
until otherwise  directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution  therefor,  fill
vacancies,  however  caused,  and  remove  all  members  of  the  Committee  and
thereafter  directly  administer  the Plan,  all to the extent  permitted by the
Applicable Laws.

          (b)    Powers of the  Administrator.  Subject to the provisions of the
Plan and in the case of a Committee,  the specific duties delegated by the Board
to  such  Committee,   the  Administrator  shall  have  the  authority,  in  its
discretion:

                  (i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(k) of the Plan;

                  (ii) to select the officers, Consultants and Employees to whom
Options and stock purchase rights may from time to time be granted hereunder;

                  (iii) to  determine  whether  and to what  extent  Options and
stock purchase rights or any combination thereof, are granted hereunder;

                  (iv) to  determine  the number of shares of Common Stock to be
covered by each such award granted hereunder;

                  (v)   to approve forms of agreement for use under the Plan;

                  (vi) to determine the terms and conditions,  not  inconsistent
with the terms of the Plan, of any award granted hereunder  (including,  but not
limited  to, the share  price and any  restriction  or  limitation  or waiver of
forfeiture restrictions regarding any Option or other award and/or the shares of
Common  Stock  relating  thereto,  based  in each  case on such  factors  as the
Administrator shall determine, in its sole discretion);

                  (vii) to  determine  whether and under what  circumstances  an
Option may be settled in cash under subsection 9(f) instead of Common Stock;

                  (viii) to  determine  whether,  to what  extent and under what
circumstances  Common Stock and other  amounts  payable with respect to an award
under this Plan shall be deferred either automatically or at the election of the
participant  (including providing for and determining the amount, if any, of any
deemed earnings on any deferred amount during any deferral period);

                  (ix) to reduce  the  exercise  price of any Option to the then
current Fair Market  Value if the Fair Market Value of the Common Stock  covered
by such Option shall have declined since the date the Option was granted; and

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                  (x) to  determine  the terms and  restrictions  applicable  to
stock purchase  rights and the  Restricted  Stock  purchased by exercising  such
stock purchase rights.

          (c)   Effect of Committee's  Decision.  All decisions,  determinations
and  interpretations  of the  Administrator  shall be final and  binding  on all
Optionees and any other holders of any Options.

      5.  Eligibility.
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          (a)   Nonstatutory  Stock  Options  may be  granted to  Employees  and
Consultants.  Incentive  Stock  Options  may be granted  only to  Employees.  An
Employee or  Consultant  who has been  granted an option may, if he is otherwise
eligible, be granted an additional Option or Options.

          (b)   Each Option shall be designated in the written option  agreement
as either an Incentive  Stock Option or a  Nonstatutory  Stock Option.  However,
notwithstanding such designations,  to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options  designated as Incentive Stock
Options are  exercisable  for the first time by any optionee during any calendar
year  (under  all plans of the  Company  or any  Parent or  Subsidiary)  exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.

          (c)   For purposes of Section 5 (b)  Incentive  Stock options shall be
taken into account in the order in which they were granted,  and the Fair Market
Value of the Shares shall be  determined  as of the time the Option with respect
to such Shares is granted.

          (d)   The Plan  shall not  confer  upon any  Optionee  any right  with
respect to  continuation  of  employment  or  consulting  relationship  with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate  his  employment or consulting  relationship  at any time,  with or
without cause.

      6.  Term of Plan.  The Plan  shall  become  effective upon the  earlier to
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occur  of its  adoption  by the  Board  of  Directors  or  its  approval  by the
shareholders  of the Company as  described  in Section 19 of the Plan.  It shall
continue in effect for a term of ten (10) years unless sooner  terminated  under
Section 15 of the Plan.

      7.  Term of Option.  The term of each  Option shall be the  term stated in
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the Option Agreement;  provided, however, that in the case of an Incentive Stock
Option,  the term  shall be no more than ten (10)  years  from the date of grant
thereof  or  such  shorter  term as may be  provided  in the  Option  Agreement.
However,  in the case of an Option  granted to an Optionee  who, at the time the
Option is granted,  owns stock  representing  more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.



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      8.  Option Exercise Price and Consideration.
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          (a)   The per  share  exercise  price  for the  Shares  to  be  issued
pursuant to exercise of an Option  shall be such price as is  determined  by the
Board, but shall be subject to the following:

                  (i)   In the case of an Incentive Stock Option

                        (A)   granted to  an  Employee  who, at the  time of the
grant of such  Incentive  Stock Option,  owns stock  representing  more than ten
percent  (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                        (B)   granted to  any  Employee, the per  Share exercise
price shall be no less than 100% of the Fair Market  Value per Share on the date
of grant.

                  (ii)  In the case of a Nonstatutory Stock Option

                        (A)   granted  to a  person  who,  at the  time of the
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of the grant.

                        (B) granted to any person, the per Share exercise
price shall be no less than 75% of the Fair  Market  Value per Share on the date
of grant.

          (b)   The  consideration  to be paid for the Shares to be issued  upon
exercise of an Option,  including the method of payment,  shall be determined by
the  Administrator  (and,  in the case of an Incentive  Stock  Option,  shall be
determined  at the time of grant)  and may  consist  entirely  of (1) cash,  (2)
check,  (3)  promissory  note,  (4) other Shares which (x) in the case of Shares
acquired  upon  exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired,  directly or
indirectly,  from the  Company,  and (y) have a Fair Market Value on the date of
surrender  equal to the aggregate  exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise  equal to the exercise  price
for the total number of Shares as to which the option is exercised, (6) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly  deliver to the Company the amount of sale or loan proceeds
required  to  pay  the  exercise   price,   (7)  by  delivering  an  irrevocable
subscription  agreement  for the Shares which  irrevocably  obligates the option
holder to take and pay for the Shares not more than twelve months after the date
of delivery of the subscription agreement,  (8) any combination of the foregoing
methods of payment,  or (9) such other  consideration  and method of payment for
the issuance of Shares to the extent  permitted under Applicable Laws. In making
its determination as to the type of consideration to



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accept,  the Board shall  consider if  acceptance of such  consideration  may be
reasonably expected to benefit the Company.

      9.  Exercise of Option.
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          (a)    Procedure  for Exercise;  Rights as a  Shareholder.  Any Option
granted  hereunder  shall be exercisable at such times and under such conditions
as determined by the Board,  including  performance criteria with respect to the
Company and/or the Optionee,  and as shall be permissible under the terms of the
Plan.

                 An Option may not be exercised for a fraction of a Share.

                 An Option shall be deemed to be exercised  when  written notice
of such exercise has been given to the Company in  accordance  with the terms of
the Option by the person  entitled to exercise  the Option and full  payment for
the Shares with  respect to which the Option is exercised  has been  received by
the  Company.  Full  payment  may, as  authorized  by the Board,  consist of any
consideration  and method of payment  allowable under Section 8 (b) of the Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued)  such stock  certificate  promptly  upon  exercise of the Option.  No
adjustment  will be made for a dividend or other right for which the record date
is prior to the date the stock  certificate  is issued,  except as  provided  in
Section 11 of the Plan.

                 Exercise of an Option in any manner shall result in a  decrease
in the number of Shares which thereafter may be available,  both for purposes of
the Plan and for sale under the Option,  by the number of Shares as to which the
Option is exercised.

          (b)    Termination  of  Employment.  In the event of termination of an
Optionee's consulting  relationship or Continuous Status as an Employee with the
Company (as the case may be),  such  Optionee  may, but only within  ninety (90)
days (or such other  period of time as is  determined  by the  Board,  with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not  exceeding  ninety (90) days) after the date of such
termination  (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement),  exercise his Option to the extent
that  Optionee was entitled to exercise it at the date of such  termination.  To
the extent that  Optionee was not entitled to exercise the Option at the date of
such termination,  or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.

          (c)    Disability  of  Optionee.  Notwithstanding  the  provisions  of
Section 9(b) above,  in the event of  termination  of an  Optionee's  consulting
relationship  or  Continuous  Status as an Employee as a result of his total and
permanent  disability  (as defined in Section 22 (e) (3) of the Code),  Optionee
may, but only within twelve (12) months from the date of such  termination  (but
in no event  later than the  expiration  date of the term of such  Option as set
forth in the Option



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Agreement),  exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such  Option to the extent so entitled  within the time  specified  herein,  the
Option shall terminate.

          (d)   Death of Optionee. In the event of the death of an Optionee, the
Option may be  exercised,  at any time within  twelve (12) months  following the
date of death  (but in no event  later than the  expiration  date of the term of
such Option as set forth in the Option  Agreement),  by the Optionee's estate or
by a person  who  acquired  the  right to  exercise  the  Option by  bequest  or
inheritance,  but only to the extent the  Optionee  was entitled to exercise the
Option at the date of death.  To the extent that  Optionee  was not  entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such  Option to the extent so entitled  within the time  specified  herein,  the
Option shall terminate.

          (e)   Rule 16b-3.  Options granted to persons subject to Section 16(b)
of the  Exchange  Act must  comply  with  Rule  16b-3  and  shall  contain  such
additional  conditions or restrictions as may be required  thereunder to qualify
for the maximum  exemption  from  Section 16 of the Exchange Act with respect to
Plan transactions.

          (f)   Buyout  Provisions.  The  Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted,  based on
such terms and conditions as the  Administrator  shall establish and communicate
to the Optionee at the time that such offer is made.

      10.  Non-Transferability  of Options. The Option may not be sold, pledged,
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assigned, hypothecated,  transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised,  during the
lifetime of the Optionee, only by the Optionee. The terms of the Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.

      11.  Stock Purchase Rights.
           ---------------------

           (a)  Rights to Purchase.  Stock purchase  rights may be issued either
alone,  in addition  to, or in tandem with other awards  granted  under the Plan
and/or cash awards made outside of the Plan. After the Administrator  determines
that it will offer stock  purchase  rights  under the Plan,  it shall advise the
offeree  in writing of the terms,  conditions  and  restrictions  related to the
offer,  including  the number of Shares  that such  person  shall be entitled to
purchase,  the price to be paid  (which  price shall not be less than 50% of the
Fair  Market  Value of the  Shares  as of the date of the  offer),  and the time
within which such person must accept such offer,  which shall in no event exceed
thirty  (30)  days  from  the  date  upon  which  the  Administrator   made  the
determination  to grant the stock purchase right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator.

           (b)  Repurchase   Option.   Unless  the   Administrator   determines
otherwise,  the Restricted  Stock purchase  agreement  shall grant the Company a
repurchase option  exercisable



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<PAGE>

upon the voluntary or involuntary termination of the purchaser's employment with
the Company for any reason  (including death or Disability).  The purchase price
for Shares repurchased pursuant to the Restricted Stock purchase agreement shall
be the original price paid by the purchaser and may be paid by  cancellation  of
any  indebtedness of the purchaser to the Company.  The repurchase  option shall
lapse at such rate as the Committee may determine.

           (c)  Other Provisions.  The Restricted Stock purchase agreement shall
contain such other terms,  provisions and conditions not  inconsistent  with the
Plan as may be  determined  by the  Administrator  in its  sole  discretion.  In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.

           (d)  Rights  as a  Shareholder.   Once the  stock  purchase  right is
exercised,  the  purchaser  shall  have  the  rights  equivalent  to  those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized  transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock purchase right is exercised, except as provided in Section 13
of the Plan.

      12.  Stock Withholding  to Satisfy  Withholding  Tax  Obligations.  At the
           ------------------------------------------------------------
discretion of the Administrator,  Optionees may satisfy withholding  obligations
as  provided  in this  paragraph.  When an  Optionee  incurs  tax  liability  in
connection  with an Option or stock  purchase  right,  which  tax  liability  is
subject to tax  withholding  under  applicable  tax laws,  and the  Optionee  is
obligated to pay the Company an amount required to be withheld under  applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing to
have the  Company  withhold  from the Shares to be issued  upon  exercise of the
Option,  or the Shares to be issued in connection with the stock purchase right,
if any,  that number of Shares  having a Fair  Market  Value equal to the amount
required  to be  withheld.  The Fair  Market  Value of the Shares to be withheld
shall be  determined  on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").

      All  elections  by an Optionee to have Shares  withheld  for this  purpose
shall be made in writing in a form acceptable to the  Administrator and shall be
subject to the following restrictions:

           (a)  the  election must be  made on or  prior to the  applicable  Tax
Date;

           (b)  once  made,   the  election  shall  be  irrevocable  as  to  the
particular Shares of the Option or Right as to which the election is made;

           (c)  all elections  shall be subject to the consent or disapproval of
the Administrator;

           (d)  if the  Optionee is subject to Rule  16b-3,  the  election  must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional  conditions or restrictions as may be required  thereunder to qualify
for the maximum  exemption  from  Section 16 of the Exchange Act with respect to
Plan transactions.

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      In the event the  election to have Shares  withheld is made by an Optionee
and the Tax Date is deferred under Section 83 of the Code because no election is
filed under  Section 83 (b) of the Code,  the  Optionee  shall  receive the full
number of Shares  with  respect to which the Option or stock  purchase  right is
exercised but such Optionee shall be unconditionally obligated to tender back to
the Company the proper number of Shares on the Tax Date.

      13.  Adjustments Upon Changes in Capitalization or Merger.  Subject to any
           ----------------------------------------------------
required  action by the  shareholders  of the  Company,  the number of shares of
Common Stock  covered by each  outstanding  Option,  and the number of shares of
Common Stock which have been  authorized  for issuance  under the Plan but as to
which no Options have yet been  granted or which have been  returned to the Plan
upon  cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding  Option,  shall be proportionately
adjusted for any  increase or decrease in the number of issued  shares of Common
Stock  resulting  from a stock  split,  reverse  stock  split,  stock  dividend,
combination or  reclassification  of the Common Stock,  or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of  consideration  by the Company;  provided,  however,  that  conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of  consideration."  Such adjustment shall be made by the Board,
whose  determination  in that respect  shall be final,  binding and  conclusive.
Except as  expressly  provided  herein,  no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

      In the event of the proposed  dissolution  or  liquidation of the Company,
the Board shall  notify the  Optionee at least  fifteen  (15) days prior to such
proposed action. To the extent it has not been previously exercised,  the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger  or  consolidation  of the  Company  with or into  another
corporation  or the sale of all or  substantially  all of the  Company's  assets
(hereinafter,  a "merger"),  the Option shall be assumed or an equivalent option
shall be substituted by such successor  corporation or a parent or subsidiary of
such successor  corporation.  In the event that such successor  corporation does
not agree to assume the option or to substitute an equivalent  option, the Board
shall, in lieu of such assumption or  substitution,  provide for the Optionee to
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be  exercisable.  If the Board
makes an option fully  exercisable in lieu of assumption or  substitution in the
event of a merger,  the Board shall notify the Optionee that the option shall be
fully  exercisable  for a period  of  fifteen  (15)  days  from the date of such
notice,  and the Option will terminate  upon the expiration of such period.  For
the  purposes of this  paragraph,  the Option  shall be  considered  assumed if,
following  the merger,  the Option or right  confers the right to purchase,  for
each Share of stock subject to the Option  immediately prior to the merger,  the
consideration (whether stock, cash, or other securities or property) received in
the merger by holders of Common Stock for each Share held on the effective  date
of the transaction (and if holders were offered a choice of  consideration,  the
type of  consideration  chosen by the holders of a majority  of the  outstanding
Shares);  provided,  however, that if such consideration  received in the merger
was not solely common stock of the successor corporation or its Parent,

                                     - 10 -
<PAGE>

the  Board  may,  with  the  consent  of  the  successor   corporation  and  the
participant,  provide for the  consideration to be received upon the exercise of
the Option,  for each Share of stock subject to the Option,  to be solely common
stock of the successor  corporation  or its Parent equal in Fair Market Value to
the per share consideration received by holders of Common Stock in the merger or
sale of assets.

      14.  Time of Granting Options.   The date of grant of an Option shall, for
           ------------------------
all purposes,  be the date on which the  Administrator  makes the  determination
granting such Option,  or such other date as is determined by the Board.  Notice
of the  determination  shall be given to each  Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.

      15.  Amendment and Termination of the Plan.
           -------------------------------------

           (a)  Amendment  and  Termination.   The Board may at any time  amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or  discontinuation  shall be made which would impair the rights of any Optionee
under any grant theretofore made,  without his or her consent.  In addition,  to
the extent  necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other  applicable law or regulation,
including the requirements of the NASD or an established  stock  exchange),  the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.

           (b)  Effect of  Amendment  or  Termination.   Any such  amendment  or
termination  of the Plan  shall not  affect  options  already  granted  and such
Options  shall  remain  in full  force  and  effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

      16.  Conditions  Upon  Issuance  of  Shares.  Shares  shall  not be issued
           --------------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance  and  delivery of such Shares  pursuant  thereto  shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933,  as amended,  the  Exchange  Act,  the rules and  regulations  promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed,  and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

      As a condition to the  exercise of an Option,  the Company may require the
person  exercising  such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present  intention  to sell or  distribute  such  Shares  if, in the  opinion of
counsel  for  the  Company,  such a  representation  is  required  by any of the
aforementioned relevant provisions of law.

                                     - 11 -
<PAGE>

      17.  Reservation  of Shares.  The Company,  during the  term of this Plan,
           ----------------------
will at all times reserve and keep  available  such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

           The inability of the Company to obtain  authority from any regulatory
body having jurisdiction,  which authority is deemed by the Company's counsel to
be necessary  to the lawful  issuance  and sale of any Shares  hereunder,  shall
relieve the Company of any  liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

      18.  Agreements.  Options and stock purchase  rights shall be evidenced by
           ----------
written agreements in such form as the Board shall approve from time to time.

       19.  Shareholder  Approval.  Continuance  of the Plan shall be subject to
           ----------------------
approval by the  shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.

       20. Information to Optionees. The Company shall provide to each Optionee,
           ------------------------
during the period for which such  Optionee has one or more Options  outstanding,
copies of all annual  reports and other  information  which are  provided to all
shareholders  of the Company.  The Company shall not be required to provide such
information  if the  issuance  of  Options  under  the  Plan is  limited  to key
employees  whose duties in  connection  with the Company  assure their access to
equivalent information.


                                     - 12 -