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                                                                  Exhibit 10.8

                         WORLDGATE COMMUNICATIONS, INC.

                             1996 STOCK OPTION PLAN

                          (AMENDED AS OF MAY 17, 1999)

                  The purpose of this 1996 Stock Option Plan (the "Plan") of
WorldGate Communications (the "Company") is to advance the interests of the
Company by encouraging the acquisition of an equity interest in the Company and
providing designated key employees, officers, directors, consultants and
advisors to the Company with the opportunity to receive grants of incentive
stock options and non qualified stock options. The Company believes that the
Plan will serve as an incentive for the participants to contribute materially to
the growth of the Company, thereby benefitting the Company's stockholders and
will align the economic interests of the participants with those of the
stockholders.

1.      ADMINISTRATION

                  The Plan shall be administered and interpreted by a
committee (the "Committee") appointed by the board of directors of the
Company (the "Board") consisting of not less than two persons. On and after
the effective date specified in Section 17(b), the Committee shall consist of
not less than two persons appointed by the Board, all of whom shall be
"independent or disinterested persons" as defined under Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Exchange Act") and "outside directors"
as defined under section 162(m) of the Code and related Treasury regulations.

                  Subject to the provisions of Section 4, the Committee shall
have the sole authority to (i) determine to whom options shall be granted under
the Plan (the "Optionee" or "Optionees"), (ii) determine the type, quantity and
terms of the options to be granted to each Optionee, (iii) determine when the
options will be granted and the duration of the exercise period, including the
criteria for vesting and the acceleration of vesting (if any), (iv) select the
"Valuation Expert," as defined below and (v) make determinations with respect to
any other matters arising under the Plan. Notwithstanding the foregoing, on and
after the effective date specified in Section 17(b), the Committee shall not
have the authority to make grants to Non-Employee Directors, except pursuant to
provisions of the Plan as then in effect that satisfy the requirements for
making exempt grants in accordance with Rule 16b-3 of the Exchange Act.

                  The Committee shall have full power and authority to
administer and interpret the Plan, to make factual determinations and to adopt
or amend such rules, regulations, agreements and instruments for implementing
the Plan and for conduct of its business as it deems necessary or advisable, in
its sole discretion. The Committee's interpretations of the Plan and all
determinations made by the Committee pursuant to the powers vested in it
hereunder shall be conclusive and binding on all persons having any interests in
the Plan or in any awards granted hereunder. All powers of the Committee shall
be executed in its sole discretion, in the best interest of the Company and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals.

                  Notwithstanding anything herein to the contrary, the Board may
exercise any power or authority of the Committee under the Plan and, in such
case, any reference to the Committee hereunder shall be deemed to include the
Board as a whole.

2.       GRANTS

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                  Awards under the Plan shall consist of options intended to
qualify as incentive stock options ("Incentive Stock Options") within the
meaning of section 422 of the Code or options which are not intended to so
qualify ("Non qualified Stock Options") (hereinafter collectively referred to as
"Stock Options"). All Stock Options shall be subject to the terms and conditions
set forth herein and to those other terms and conditions consistent with this
Plan as the Committee deems appropriate and as are specified in writing by the
Committee to the Optionees. Grants under a particular section of the Plan need
not be uniform as among the Optionees.

3.       SHARES SUBJECT TO THE PLAN

                  (a) Subject to the adjustment specified below, the aggregate
number of shares of the Common Stock of the Company, par value $0.01 per share
(the "Company Stock") that have been or may be issued or transferred under the
Plan is one million six hundred thousand shares. Notwithstanding anything in the
Plan to the contrary, during the term of the Plan, the maximum aggregate number
of shares of Company Stock that shall be subject to options granted under the
Plan annually to any one Optionee shall be two hundred thousand shares
(representing approximately 12.5% of the aggregate number of shares that have
been or may be issued or transferred under the Plan.) The shares may be
authorized but unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market or
otherwise, for purposes of the Plan. If and to the extent options granted under
the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered
without having been exercised, the shares subject to such options shall again be
available for purposes of the Plan; provided, however, that (a) if a Stock
Option is canceled, the canceled Stock Option is counted against the maximum
number of shares for which Stock Options may be granted to an Optionee, and (b)
if the Stock Option price is reduced after the date of grant, the transactions
is treated as a cancellation of a Stock Option and the grant of a new Stock
Option for purposes of counting the maximum number of shares for which Stock
Options may be granted to an Optionee.

                  (b) If there is any change in the number or kind of shares of
Company Stock outstanding by reason of a stock dividend, recapitalization, stock
split, combination or exchange of such shares, merger, reorganization or
consolidation in which the Company is the surviving corporation,
reclassification or change in par value or by reason of any other extraordinary
or unusual events affecting the outstanding Company Stock as a class without the
Company's receipt of consideration, or if the value of outstanding shares of
Company Stock is substantially reduced due to the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Stock Options, the maximum number of shares of Company Stock
for which any one Optionee participating in the Plan may be granted over the
term of the Plan, the number of shares covered by outstanding Stock Options, and
the price per share or the applicable market value of such Stock Options, shall
be proportionately adjusted by the Committee to reflect any increase or decrease
in the number or kind of issued shares of Company Stock to preclude the
enlargement or dilution of rights and benefits under such Stock Options;
provided, however, that any fractional shares resulting from such adjustment
shall be eliminated. The adjustments determined by the Committee shall be final,
binding and conclusive. Notwithstanding the foregoing, no adjustment shall be
authorized or made pursuant to this Section to the extent that such authority or
adjustment would cause any Incentive Stock Option to fail to comply with section
422 of the Code.

4.       ELIGIBILITY FOR PARTICIPATION
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                  All employees who hold positions of responsibility and whose
performance, in the judgment of the Committee, can have a significant effect on
the long-term success of the Company ("Employees"), all directors of the Company
who are not also employees of the Company ("Non-Employee Directors") and all
advisors and consultants ("Consultants") whose services, in the judgement of the
Committee, can have a significant effect on the long-term success of the Company
shall be eligible to participate in the Plan. Employees as used herein shall
include employees of the Company's "parent corporation" or "subsidiary
corporations" as those terms are defined in section 424(e) or 424(f) of the
Internal Revenue Code of 1986 (the "Code"), as well as directors of the Company
who are also employees of the Company. Except as provided in Section 6, the
Committee shall select the Employees, Non-Employee Directors and Consultants to
receive Stock Options and determine the number of shares of Company Stock
subject to a particular Stock Option in such manner as the Committee determines.

                  Nothing contained in this Plan shall be construed to limit the
right of the Company to grant options otherwise in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including options
granted to employees thereof who become Employees of the Company, or for any
other proper corporate purpose.

5.       AGREEMENTS WITH OPTIONEES

                  Each Stock Option made under this Plan shall be evidenced by a
letter to the Optionee containing such terms and conditions as the Committee
shall approve (the "Grant Letter").

6.       GRANTING OF OPTIONS

                  (a) NUMBER OF SHARES. The Committee, in its sole discretion,
shall determine the number of shares of Company Stock that will be subject to
each Stock Option grant.

                  (b) TYPE OF OPTION AND PRICE. The Committee may grant
Incentive Stock Options, Non qualified Stock Options or any combination of
Incentive Stock Options and Non qualified Stock Options, all in accordance with
the terms and conditions set forth herein; provided, however, that neither
Non-Employee Directors nor Consultants shall be eligible to receive grants of
Incentive Stock Options.

                  The purchase price of Company Stock subject to a Stock Option
shall be determined by the Committee and may be equal to, greater than, or less
than the fair market value of a share of such Stock on the date such Stock
Option is granted; provided, however, that the purchase price of Company Stock
subject to an Incentive Stock Option shall be equal to, or greater than, the
fair market value of a share of such Stock on the date such Stock Option is
granted. Prior to the effective date specified in Section 17(b) of the Plan, the
Committee shall inform the Optionees as to the fair market value of the Company
Stock on a periodic basis, but not less frequently than once per calendar year.

                  During such time that the Company Stock is not listed on an
established stock exchange or traded in the over-the-counter-market, including
the NASDAQ National Market System published in the WALL STREET JOURNAL, the
"fair market value" of Company Stock shall be determined by an independent firm,
I.E., a firm not otherwise engaged in consulting work for the Company, unless
determined otherwise by the Committee, with expertise in the valuation of
business entities and the securities thereof, selected by the Committee (the
"Valuation Expert") or as otherwise determined by the Committee in good faith
based on the best available facts and


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circumstances. Such determination of "fair market value" shall be made on a
periodic basis, but no less frequently than once a calendar year. If the Company
Stock is listed on an established stock exchange or traded in the
over-the-counter market, as determined by the Committee, "fair market value" on
any date of reference shall be the closing price of a share of Company Stock (on
a consolidated basis) on the principal exchange or such other over-the counter
market on the last previous day on which a sale is reported.

                  (c) EXERCISE PERIOD. The Committee shall determine the option
exercise period of each Stock Option. The exercise period shall not exceed ten
years from the date of grant.

                  (d) VESTING AND EXERCISABILITY OF OPTIONS. Stock Options shall
become vested and exercisable in accordance with the terms and conditions
determined by the Committee, in its sole discretion, and specified the Grant
Letter. All outstanding Stock Options shall become immediately exercisable upon
a Change in Control (as defined herein), unless the Committee, in its sole
discretion, determines otherwise in accordance with Section 9 of the Plan.

                  (e) MANNER OF EXERCISE. An Optionee may exercise a Stock
Option which has become exercisable by delivering a notice of exercise to the
Committee with accompanying payment of the option price in accordance with
Subsection (g) below. Should a Stock Option become exercisable on and after the
effective date specified in Section 17(b), such notice may instruct the Company
to deliver shares of Company Stock due upon the exercise of the Stock Option to
any registered broker or dealer designated by the Company ("Designated Broker")
in lieu of delivery to the Optionee. Such instructions must designate the
account into which the shares are to be deposited. The Optionee may tender this
notice of exercise, which has been properly executed by the Optionee, and the
aforementioned delivery instructions to any Designated Broker.

                  (f)      TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH.

                           (1)      EMPLOYEES AND CONSULTANTS.

                                    (i) In the event the Optionee during the
Optionee's lifetime ceases to be an Employee or a Consultant for any reason
other than death, disability (within the meaning of Section 22(e)(3) of the
Code), voluntary termination without the consent of the Company, or termination
for cause by the Company (as defined below), any Stock Option which is otherwise
exercisable by the Optionee shall terminate unless exercised within three (3)
months of the date on which the Optionee ceases to be an Employee or Consultant
(or within such other period of time as may be specified in the Grant Letter),
but in any event no later than the date of expiration of the option exercise
period. For purposes of this Section 6(f)(1), if an Optionee ceases to be an
Employee or a Consultant for reasons other than voluntary termination without
the consent of the Company or termination for cause, but continues to serve as a
member of the Board, such Optionee's service as a member of the Board shall be
considered as continued employment or service with the Company. In addition, for
purposes of this Section 6(f), a leave of absence at the request, or with the
approval, of the Company shall not be deemed a termination of employment so long
as the period of such leave does not exceed 90 days, or, if longer, so long as
the Optionee's right to re-employment with the Company is guaranteed by
contract. Any of the Optionee's Stock Options which are not otherwise vested and
exercisable as of the date on which the Optionee ceases to be an Employee or
Consultant shall terminate as of such date (except as the Committee may
otherwise provide in writing).
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                                    (ii) In the event the Optionee ceases to be
an Employee or a Consultant on account of a "termination for cause" by the
Company (or the applicable parent or subsidiary corporation), as determined in
accordance with the personnel policies of the Company (or such corporation) in
effect before any Change in Control of the Company or as determined by a written
contract between the Consultant and the Company, or on account of a voluntary
separation from the Company (or the applicable parent or subsidiary corporation)
without the consent of the Company (or such corporation), any Stock Option held
by the Optionee shall terminate as of the date the Optionee ceases to be an
Employee or a Consultant (except as the Committee may otherwise provide in
writing).

                                    (iii) In the event of (A) the death of the
Optionee while an Employee or a Consultant of the Company or (B) any termination
of employment or service due to disability (as defined above), any Stock Option
which is otherwise exercisable by the Optionee on the date on which the Optionee
ceases to be an Employee or Consultant as aforesaid, shall terminate unless
exercised by the Optionee or the Optionee's personal representative within one
year of the date on which the Optionee ceases to be an Employee or Consultant
(or within such other period of time as may be specified in the Grant Letter),
but in any event no later than the date of the expiration of the option exercise
period.

                                    (iv) Notwithstanding the foregoing
provisions, failure to exercise an Incentive Stock Option within the periods of
time prescribed under sections 421 and 422(a) of the Code shall cause the
Incentive Stock Option to cease to be treated as an "incentive stock option" for
purposes of sections 421 and 422 of the Code.

                           (2)      NON-EMPLOYEE  DIRECTORS.  Upon cessation of
service as a Non-Employee Director for reasons other than death, only those
options exercisable at the date of cessation of service shall be exercisable by
the Non-Employee Director. Such options shall be exercisable until the first to
occur of: (i) the expiration of the remaining term of the option or (ii) 90 days
after cessation of service of the Non-Employee Director. In the event of the
death of a Non-Employee Director while a member of the Board, or within the
period after termination of service during which the options are exercisable by
the Non-Employee Director in accordance with this Plan, the options granted to
him shall be exercisable until the first to occur of: (A) the expiration of the
remaining term of the option or (B) one year after the date of the Non-Employee
Director's death, but only to the extent that the Non-Employee Director would
have been entitled to exercise the options had he lived during such period.

                  (g) SATISFACTION OF OPTION PRICE. The Optionee shall pay the
option price specified in the Grant Letter in (i) U.S. Dollars by cash, wire
transfer of immediately available funds or certified check payable to the order
of the Company, or (ii) with the approval of the Committee, by delivering shares
of Company Stock owned by the Optionee including Company Stock acquired in
connection with the exercise of a particular Stock Option and having a fair
market value on the date of exercise equal to the option price. The Company may
require the Optionee, in connection with the exercise of a Stock Option, to
provide such information (including, without limitation, the Optionee's address
and taxpayer identification number) as may be necessary to complete any tax
information returns and other tax returns and reports that may be required to
reflect such exercise. The Optionee shall pay the option price and the amount of
withholding tax due, if any, at the time of exercise. Except as otherwise
determined by the Committee, shares of Company Stock shall not be issued or
transferred upon exercise of a Stock Option until the option price is fully paid
and any required withholding is made.

                  (h) RULE 16b-3 RESTRICTIONS. Unless an Optionee could
otherwise transfer Company Stock issued pursuant to a Stock Option granted
hereunder without incurring liability

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under Section 16(b) of the Exchange Act, at least six months must elapse from
the date of acquisition of a Stock Option to the date of disposition of the
Company Stock issued upon exercise of such option.

                  (i) LIMITS ON INCENTIVE STOCK OPTIONS. Each Incentive Stock
Option shall provide that to the extent that the aggregate fair market value of
the Company Stock on the date of the grant with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year under the Plan or any other stock option plan of the Company or any parent
or subsidiary corporation thereof exceeds $100,000, then, if and to the extent
required by Section 422(d) of the Code or any successor or related provision,
such option as to the excess shall be treated as a Non qualified Stock Option.
An Incentive Stock Option shall not be granted to any Employee who, at the time
of grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or parent of the Company,
unless the option price per share is not less than 110% of the fair market value
of Company Stock on the date of grant and the option exercise period is not more
than five years from the date of grant.

                  (j) OPTIONAL PURCHASE BY THE COMPANY. In the sole discretion
of the Committee, in lieu of the exercise of a Stock Option, the Optionee may be
permitted to transfer the Stock Option to the Company in exchange for a cash
payment equal to the excess of (i) the then fair market value of the shares of
Company Stock subject to the Optionee's outstanding Stock Options over (ii) the
purchase price as specified therein. Notwithstanding the foregoing, if any right
granted pursuant to this Subsection would make any corporate transaction
ineligible for pooling of interests accounting treatment under APB No. 16 that
but for this provision would otherwise be eligible for such accounting
treatment, or is determined by the Committee to be otherwise disadvantageous to
the Company, the Optionee shall not receive a cash payment in lieu of the
exercise of his or her Stock Options.

7.       TRANSFERABILITY OF OPTIONS

                  Only the Optionee or his or her authorized legal
representative may exercise rights under a Stock Option. Such persons may not
transfer those rights except by will or by the laws of descent and distribution
or, if permitted under Rule 16b-3 of the Exchange Act and if permitted in any
specific case by the Committee in its sole discretion, pursuant to a qualified
domestic relations order as defined under the Code or Title I of ERISA or the
regulations thereunder. When an Optionee dies, the personal representative or
other person entitled to succeed to the rights of the Optionee ("Successor
Optionee") may exercise such rights. A Successor Optionee must furnish proof
satisfactory to the Company of his or her right to receive the Stock Option
under the Optionee's will or under the applicable laws of descent and
distribution.

                  Notwithstanding the foregoing, the Committee may permit an
Optionee to transfer rights under a Non qualified Stock Option to the Optionee's
spouse or a lineal descendant or to one or more trusts for the benefit of such
family members or to partnerships in which such family members are the only
partners (a "Family Transfer") provided that the Optionee receives no
consideration for a Family Transfer and that the Optionee and the transferee in
the Family Transfer agree to such conditions as the Committee my impose,
including, without limitation, (i) provisions to assure the payment of any taxes
required to be deducted, withheld and/or paid over in connection with the
exercise of a Stock Option, and (ii) acknowledgment that the Stock
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Options and the exercise thereof will continue to be subject to the same terms
and conditions of the Grant Letter and this Plan, and any attempt to transfer a
Stock Option other than in accordance with the foregoing shall be void and of no
force or effect.

8.       CHANGE IN CONTROL OF THE COMPANY

                  As used herein, a "Change in Control" shall be deemed to have
occurred if:

                  (a) As a result of any transaction, any one stockholder other
than an existing stockholder as of the effective date specified in Section 17(a)
of the Plan (or a beneficiary or the estate thereof), becomes a beneficial
owner, as defined below, directly or indirectly, of securities of the Company
representing more than 50% of the common stock of the Company or the combined
voting power of the Company's then outstanding securities;

                  (b) A liquidation or dissolution of or the sale of all
or substantially all of the Company's assets occurs; or

                  (c) On or after the effective date specified in Section 17(b):

                           (1)  As a result of a tender offer, stock purchase,
other stock acquisition, merger, consolidation, recapitalization, reverse split,
or sale or transfer of assets, any person or group (as such terms are used in
and under Section 13(d) of the Exchange Act) other than an existing stockholder
as of the effective date specified in Section 17(a) of the Plan (or a
beneficiary of the estate thereof), becomes the beneficial owner (as defined in
Rule 13-d under the Exchange Act), directly or indirectly, of securities of the
Company representing more than 40% of the common stock of the Company, or the
combined voting power of the Company's then outstanding securities; or

                           (2) During any period of two consecutive years,
individuals who at the beginning of such period constitute the board of
directors cease for any reason to constitute at least a majority thereof unless
the election, or the nomination for election by the Company's shareholders, of
each new director was approved by a vote of at least 2/3 of the directors then
still in office who were directors at the beginning of the period.

9.       CONSEQUENCES OF A CHANGE IN CONTROL

                  (a) NOTICE.  Unless the Committee otherwise determines:

                           (1) If a Change of Control will occur pursuant to a
transaction approved by the stockholders of the Company or by the Board (if
stockholder action is not required), then, not later than ten (10) days after
the approval by the stockholders of the Company (or the approval by the Board,
if stockholder action is not required) of such Change of Control, the Company
shall give each Optionee with any outstanding Stock Options written notice of
such proposed Change in Control.

                           (2) If a Change of Control occurs without approval by
the stockholders or the Board, then, not later than ten (10) days after such
Change in Control, the Company shall give each Optionee with any outstanding
Stock Options written notice of the Change of Control.

                  (b) EXERCISE RIGHT. In connection with the Change in Control
and effective only upon such Change in Control, unless the Committee determines
otherwise, each Optionee shall thereupon have the right, within twenty (20) days
after such written notice is sent by the Company, (the "Election Period"), to
exercise in full any or all of such Optionee's outstanding


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Stock Options (whether the right to exercise such Stock Option has then accrued
or the right to exercise such Stock Options will occur or has occurred upon the
Change in Control).

                  (c) TERMINATION OF STOCK OPTION. If an Optionee does not
exercise the Optionee's outstanding Stock Options in a timely manner in
accordance with Subsection (b) in connection with a Change in Control where the
Company is not the surviving corporation(or survives only as a subsidiary of
another corporation), the Optionee's Stock Options shall terminate as of the
Change of Control. Notwithstanding the foregoing, a Stock Option will not
terminate if assumed by the surviving or acquiring corporation, or its parent,
upon a merger or consolidation and, with respect to an Incentive Stock Option,
the assumption of the Stock Option occurs under circumstances which are not
deemed a modification of the option with the meaning of Sections 424(a) and
424(h)(3)(A) of the Code.

                  (d) ACCOUNTING AND TAX LIMITATIONS. Notwithstanding the
foregoing, if the termination of the Stock Options described in Subsection (c)
would make the applicable Change in Control ineligible for pooling of interest
accounting treatment under APB No. 16, and, but for such provision, the Change
of Control would otherwise qualify for such treatment, each affection Optionee
shall receive a replacement or substitute stock option issued by the surviving
or acquiring corporation.

10.      AMENDMENT AND TERMINATION OF THE PLAN

                  (a) AMENDMENT. The Board, by written resolution, may amend or
terminate the Plan at any time; provided, however, that any amendment that
increases the aggregate number (or individual limit for any single Optionee) of
shares of Company Stock that may be issued or transferred under the Plan (other
than by operation of Section 3(b)), or modifies the requirements as to
eligibility for participation in the Plan, shall be subject to approval by the
stockholders of the Company, and provided, further, that after the effective
date specified in Section 17(b) the Board shall not amend the Plan without
stockholder approval if such approval is required by Rule 16b-3 of the Exchange
Act or section 162(m) of the Code.

                  (b) TERMINATION OF PLAN. The Plan shall terminate on the day
before the tenth anniversary of its effective date unless terminated earlier by
the Board or unless extended by the Board with the approval of the stockholders.

                  (c) TERMINATION AND AMENDMENT OF OUTSTANDING STOCK OPTIONS. A
termination or amendment of the Plan that occurs after a Stock Option is granted
shall not materially impair the rights of an Optionee unless the Optionee
consents or unless the Committee acts under Section 18(b) hereof. The
termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Stock Option. Whether or not the Plan
has terminated, an outstanding Stock Option may be terminated or amended under
Section 18(b) hereof or may be amended by agreement of the Company and the
Optionee consistent with the Plan.

                  (d) GOVERNING DOCUMENT. The Plan shall be the controlling
document. No other statements, representations, explanatory materials, or
examples, oral or written, may amend the Plan in any manner. The Plan shall be
binding upon and enforceable against the Company, its successors and assigns and
the Optionees and their assigns.

11.      FUNDING OF THE PLAN

                  This Plan shall be unfunded. The Company shall not be required
to establish any


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special or separate fund or to make any other segregation of assets to assure
the payment of any Stock Options under this Plan. In no event shall interest be
paid or accrued on any Stock Option, including unpaid installments of Stock
Options.

12.      RIGHTS OF INDIVIDUALS

                  Nothing in this Plan shall entitle any Employee, Non-Employee
Director, Consultant or other person to any claim or right to be granted a Stock
Option under this Plan. Neither this Plan nor any action taken hereunder shall
be construed as giving any Employee, Non-Employee Director, or Consultant any
rights to be retained by or in the employ of the Company or any other employment
rights.

13.      NO FRACTIONAL SHARES

                  No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Stock Option. The Committee shall
determine whether cash, other awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

14.      WITHHOLDING OF TAXES

                  The Optionee or other person receiving shares of Company Stock
upon the exercise of a Stock Option shall be required to pay to the Company the
amount of any federal, state or local taxes which the Company is required to
withhold with respect to the exercise of such Stock Options and the Company
shall have the right to deduct from other wages paid to the Optionee by the
Company (including through the withholding of Company Stock purchased upon the
exercise of a Stock Option, if then authorized by the Committee and applicable
law) the amount of any tax required to be deducted, withheld or paid over with
respect to such Stock Options which is not otherwise paid. The Company's
obligation to make any delivery or transfer of any shares shall be conditioned
on the Optionee's compliance, to the Company's satisfaction, with any
withholding requirements.

15.      REQUIREMENTS FOR ISSUANCE OF SHARES

                  No Company Stock shall be issued or transferred upon the
exercise of any Stock Option hereunder unless and until all requirements
applicable to the issuance or transfer of such Company Stock have been complied
with to the satisfaction of the Committee. The Committee shall have the right to
condition any Stock Option made to any Optionee hereunder on such Optionee's
undertaking in writing to comply with such restrictions on his subsequent
disposition of such shares of Company Stock as the Committee shall deem
necessary or advisable as a result of any provisions of such grant or any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued under the Plan will be
subject to such stop-transfer orders and other restrictions as may be applicable
under such laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.

16.      HEADINGS

                  Section headings are for reference only. In the event of a
conflict between a title and the content of a Section, the content of the
Section shall control.

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17.      EFFECTIVE DATE

                  (a) EFFECTIVE DATE OF THE PLAN. Subject to the approval of the
Company's stockholders, this Plan shall be effective as of December 5, 1996.

                  (b) EFFECTIVENESS OF SECTION 16 AND SECTION 162(M) PROVISIONS.
The provisions of the Plan that refer to, or are applicable to persons subject
to, section 16 of the Exchange Act or section 162(m) of the Code shall be
effective, if at all, upon registration of the Company Stock under section 12(g)
of the Exchange Act, and shall remain effective thereafter for so long as such
stock is so registered.

18.      MISCELLANEOUS

                  (a) SUBSTITUTE GRANTS. The Committee may make a grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company or any of its subsidiaries in substitution for
a stock option or restricted stock grant granted by such corporation
("Substituted Stock Incentives"). The terms and conditions of the substitute
grant may vary from the terms and conditions required by the Plan and from those
of the Substituted Stock Incentives. The Committee shall prescribe the
provisions of the substitute grants.

                  (b) COMPLIANCE WITH LAW. The Plan, the exercise of Stock
Options and the obligations of the Company to issue or transfer shares of
Company Stock under Stock Options shall be subject to all applicable laws and to
approvals by an governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent
of the Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange Act.
The Committee may revoke any Stock Option if it is contrary to law or modify a
Stock Option to bring it into compliance with any valid and mandatory government
regulation. The Committee may also adopt rules regarding the withholding of
taxes on payments to Optionees. The Committee may, in its sole discretion, agree
to limit its authority under this Section.

                  (c) OWNERSHIP OF STOCK. An Optionee or Successor Optionee
shall have no rights as a stockholder with respect to any shares of Company
Stock covered by a Stock Option until the shares are issued or transferred to
the Optionee or Successor Optionee on the stock transfer records of the Company.

                  (d) GOVERNING LAW. The validity, construction, interpretation
and effect of the Plan and Grant Letters issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania.

                  (e) GENDER AND NUMBER. In this Plan (unless the context
requires otherwise), the masculine, feminine, and neuter genders and the
singular and the plural include one another.

                  (f) NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given upon delivery,
if delivered in person, or on the third business day after mailing, if mailed by
registered or certified mail, return receipt requested, addressed in the case of
the Company, to the President, at the last principal address of record for the
Company; to the Optionee, at the Optionee's last address as reflected on the
books and records of the Company; or in each case, to such other address as may
be designated to the Company or the Optionee from time to time as provided
above.