[Version reflecting 1998
                                                          Amendment to this Plan
                                                           as of April 6, 1998.]


                              RADICA GAMES LIMITED

                              AMENDED AND RESTATED

                             1994 STOCK OPTION PLAN


         This amended and restated 1994 Stock Option Plan, dated as of May 19,
1994, is intended to amend and restate in its entirety the 1994 Stock Option
Plan adopted by the Board of Directors on April 17, 1994, and further reflects
the 1997 and 1998 Amendments to such Plan as of April 9, 1997 and April 6, 1998.


1.   PURPOSE OF THE 1994 STOCK OPTION PLAN (THE "1994 PLAN").

         The 1994 Plan is intended to promote the growth and general prosperity
of Radica Games Limited (the "Company") and its Subsidiaries and Affiliates (as
defined below) by attracting and retaining the best available personnel for
positions of substantial responsibility and by providing directors and certain
key employees with an additional incentive to contribute to the success of the
Company and its Subsidiaries and Affiliates. For purposes of the 1994 Plan,
"Subsidiary" shall mean any corporation of which the Company owns, directly or
indirectly, stock possessing not less than a majority of the total combined
voting power of all classes of stock in such corporation and "Affiliate" means
any corporation controlled by any combination of the Company and its
shareholders.


2.   ADMINISTRATION.

         The 1994 Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") consisting of
at least two members of the Board. Members of the Committee shall be
disinterested persons within the meaning of Rule 16b-3(c)(2)(i) of the
Securities Exchange Act of 1934 (the "Exchange Act"). Subject to the provisions
of the 1994 Plan, the Committee shall have sole authority, in its absolute
discretion, to determine which of the eligible directors and employees of the
Company, its Subsidiaries and Affiliates shall receive stock options, the time
when stock options shall be granted, the terms of such options, and the number
of shares for which options shall be granted. The Committee shall have



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the authority to do everything necessary or appropriate to administer the 1994
Plan including, without limitation, interpreting the 1994 Plan. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all optionees.

         Notwithstanding any other provision of the 1994 Plan, the members, from
time to time, of the Committee shall be ineligible to receive stock options,
except to the following extent and on the following terms:

         Each member of the Committee shall receive non-qualified stock options
    to purchase 30,000 shares of Common Stock of the Company upon initial
    election to the Board of Directors at an exercise price equal to $11.00 per
    share and exercisable after one year from the date of the grant. Upon
    re-election to the Board of Directors, each such member will receive
    non-qualified stock options to purchase 5,000 shares, provided that, at and
    after the Company's 1997 Annual Meeting of Shareholders, such number shall
    be increased to 15,000 shares, of Common Stock of the Company at an exercise
    price equal to the then current market price of the Company's Common Stock
    and exercisable after one year from the date of the grant. The term "market
    price" shall mean the closing price per share of the Company's Common Stock
    on the date immediately prior to the date of the grant. The term "closing
    price" shall mean the last reported sales price or, in case no such reported
    sale takes place on such date, the average of the reported closing bid and
    asked prices on the National Association of Securities Dealers Automated
    Quotations National Market System ("NASDAQ"), provided, that if such shares
    are not quoted on NASDAQ, the net book value per share as determined in
    accordance with United States generally accepted accounting principles. Each
    option granted pursuant to this provision shall expire ten years from the
    date the option is granted. With respect to the options granted to the
    members of the Committee, the full Board of Directors, excluding such
    Committee members, shall have the authority to do everything necessary or
    appropriate to administer or interpret the 1994 Plan.

         The provisions contained in the preceding two paragraphs shall not be
amended more than once every six months, other than to comport with changes in
the Internal Revenue Code, the Employee Retirement Income Security Act, or the
rules thereunder.



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3.   ELIGIBILITY.

         The Committee may grant stock options to any director, key employee or
officer of the Company or any Subsidiary or any Affiliate unless such person is
a member of the Committee.


4.   STOCK SUBJECT TO THE 1994 PLAN.

         The stock subject to the options and other provisions of the 1994 Plan
shall be shares of the Company's authorized and unissued or reacquired Common
Stock. Subject to Section 8 hereof, the total number of shares of the Company's
Common Stock that may be purchased pursuant to stock options under the 1994 Plan
shall not exceed in the aggregate 2,800,000 shares.


5.   TERMS AND CONDITIONS OF OPTIONS.

         All stock options granted pursuant to the 1994 Plan shall be in such
form as the Committee shall from time to time determine and shall be subject to
the following terms and conditions:

    (a)  Price:

         The option price per share with respect to each option shall be
    determined by the Committee but shall be not less than 100% of the fair
    market value of the Company's Common Stock on the date the option is granted
    as determined by the Committee.

    (b)  Term:

         Each stock option shall expire no later than ten years from the date
    the option is granted.

    (c)  Exercise and Payment for Shares:

         Subject to Section 7 hereof, stock options shall be exercisable on such
    dates as the Committee may specify at the time of grant. The Committee may,
    in its discretion, accelerate in whole or in part the exercisability of any
    outstanding stock options. In no event (including those specified in Section
    7) shall any stock option be exercisable after the expiration of ten years
    from the date on which the stock option is granted.

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         To exercise a stock option, the optionee shall give written notice to
the Company specifying the number of shares to be purchased and accompanied by
payment either (i) in cash or by a certified or official bank check, (ii)
through the delivery of shares of Common Stock of the Company with a value equal
to the total option price, or (iii) by a combination of the methods described in
(i) and (ii) for the full purchase price therefor. The value of a share of
Common Stock of the Company delivered in accordance with the above shall be the
average of the closing price on each of the five business days immediately prior
to the date of delivery. The closing price for each day shall be the last
reported sales price or, in case no such reported sale takes place on such day,
the average of the reported closing bid and asked prices on NASDAQ, provided,
that if such shares are not quoted on NASDAQ during such five-day period only
the method described in (i) above may be used to make payment for the purchase
price of any such stock option. Any person exercising a stock option shall make
such representations and agreements and furnish such information as the
Committee may in its discretion deem necessary or desirable to assure compliance
by the Company, on terms acceptable to the Company, with the provisions of the
Securities Act of 1933 and any other applicable legal requirements. Each stock
option granted under the 1994 Plan shall be subject to the requirement that the
listing, registration or qualification of the shares subject thereto upon any
securities exchange or under state or federal law, or the consent or approval of
any governmental regulatory body, are necessary or desirable in connection with
the issue or purchase of the shares subject thereto, no such option may be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee. If an optionee so requests, shares purchased
may be issued in the name of the optionee and another jointly with the right of
survivorship.


6.   NON-TRANSFERABILITY.

         Stock options under the 1994 Plan may not be sold, pledged, assigned or
transferred in any manner otherwise than by will or the laws of descent or
distribution, and may be exercised during the lifetime of a holder of a stock
option only by such holder.



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7.   EXERCISE UPON TERMINATION OR DEATH.

     (a) No stock option granted under the 1994 Plan may be exercised at any
     time after the termination of employment or director status, as the case
     may be, of a holder with the Company or any Subsidiary or any Affiliate,
     except that:

               (i)  if such termination of employment or director status, as the
                    case may be, is on or after the holder's 62nd birthday or
                    due to disability, any portion of an option, whether or not
                    exercisable at the time of such termination, may be
                    exercised by the holder within ninety days after such
                    termination (or such longer period as may be designated by
                    the Committee); and

               (ii) if such termination of employment or director status, as the
                    case may be, is prior to the holder's 62nd birthday and not
                    due to disability or death, any portion of an option may be
                    exercised by the holder within ninety days of such
                    termination (or such longer period as may be designated by
                    the Committee), but only to the extent such option was
                    exercisable at the time of such termination.

     (b) In the event of the death of the holder, whether during or after the
     termination of his employment or director status, as the case may be, any
     portion of an option exercisable at the time of death may be exercised by
     the holder's beneficiary or estate within twelve months from the date of
     the holder's death or such longer period as the Committee may determine.

     (c) Notwithstanding this Section 7, in no event shall any stock option be
     exercisable more than ten years from the date the option is granted.


8.   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

         The aggregate number of shares of Common Stock which may be purchased
pursuant to the options granted under the 1994 Plan as provided in Section 4
hereof, the number of shares covered by each outstanding option and the price
per share in each such option shall be proportionately adjusted for any increase
or decrease in the number of issued shares

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of the Company's Common Stock resulting from a division or consolidation of
shares or other capital adjustment, or the payment of a stock dividend or other
increase or decrease in such shares, effected without receipt of consideration
by the Company; provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated.

         Subject to any required action by the stockholders, if the Company
shall be the surviving or resulting corporation in any merger, any option
granted hereunder shall pertain to and apply to the securities or rights to
which a holder of the number of shares of Common Stock subject to the option
would have been entitled.


9.   MERGER INTO ANOTHER CORPORATION OR SALE OF
     SUBSTANTIALLY ALL OF COMPANY'S ASSETS.

         If the Company shall be merged with another corporation and shall not
be the surviving or resulting corporation in such merger or if the Company shall
sell substantially all of its assets, any option granted hereunder shall become
exercisable sufficiently prior to the effective date of such merger or such sale
of assets to permit the exercise thereof by the holders thereof, unless under
the terms of such merger or sale of its assets, any option granted hereunder
shall pertain to and apply to the securities or rights to which a holder of the
number of shares of Common Stock subject to the option would have been entitled.


10.  RIGHTS AS A STOCKHOLDER.

         A holder of a stock option shall have no rights as a stockholder with
respect to any shares covered by such option until the date of issuance of a
stock certificate for such shares.


11.  WITHHOLDING TAXES.

         Whenever shares of the Company's Common Stock are to be issued in
satisfaction of stock options granted under the 1994 Plan, the Company shall
have the right to require the recipient to remit to the Company an amount
sufficient to satisfy all applicable withholding tax requirements prior to the
delivery of any certificate or certificates for such shares.


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12.  TERM OF 1994 PLAN.

         The 1994 Plan shall become effective upon its adoption by the Board,
subject to approval by majority vote of the stockholders of the Company. It
shall continue in effect until October 31, 2004 unless sooner terminated.


13.  AMENDMENT OR TERMINATION OF THE 1994 PLAN.

     (a) The Board may amend the 1994 Plan from time to time in such respects as
     the Board may deem advisable, provided that no change may be made in any
     option theretofore granted which would impair the rights of a holder
     without consent of the holder, and provided further, that without the
     approval of stockholders, no alteration or amendment may be made if such
     approval would be required by Rule 16b-3 under the Exchange Act for
     transactions pursuant to the 1994 Plan to continue to be exempt thereunder.

     (b) The Board may at any time terminate the 1994 Plan. Any such termination
     of the 1994 Plan shall not affect options already granted and such options
     shall remain in full force and effect as if the 1994 Plan had not been
     terminated.


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