1998 MANAGEMENT AND DIRECTOR
                                 STOCK OPTION PLAN

                          GENERAL NUTRITION COMPANIES, INC.

     1. Purpose of the Plan.

     This stock option plan (the  "Plan") is intended to encourage  ownership of
the stock of General Nutrition  Companies,  Inc. (the "Company") by officers and
key employees of the Company and its subsidiaries, and directors of the Company,
to induce  qualified  personnel to enter and remain in the employ of the Company
or its subsidiaries and otherwise to provide additional  incentive for optionees
to promote the success of its business.

     2. Stock Subject to the Plan.

     (a) The total number of shares of the  authorized  but unissued or Treasury
shares of the common stock,  $.01 par value, of the Company ("Common Stock") for
which  options may be granted  under the Plan shall not exceed Two Million  Five
Hundred  Thousand  (2,500,000)  shares,  subject to  adjustment  as  provided in
Section 12 hereof.

     (b) Of the total  number of shares for which  options may be granted  under
the Plan,  1,000,000  shares are  initially  available  for grant  hereunder and
1,500,000  will become  available  for grant  hereunder  if the market price per
share of the Company's  Common Stock reaches the following levels on or prior to
January 23, 2004:

         Market Price               Additional Share Becoming
              Per Share                           Available for Grant      

            $41.55                                   500,000
            $49.86                                   500,000
            $59.83                                   500,000
                                      TOTAL:       1,500,000

     (c) If an option granted or assumed hereunder shall expire or terminate for
any reason without having been exercised in full, the unpurchased shares subject
thereto shall again be available for subsequent option grants under the Plan.

     (d) Stock issuable upon exercise of an option granted under the Plan may be
subject  to  such   restrictions  on  transfer,   repurchase   rights  or  other
restrictions as shall be determined by the Board of Directors.

     3. Administration of the Plan.

     The Plan shall be  administered by the Board of Directors or by a committee
(the  "Committee")  consisting of two or more members of the Company's  Board of
Directors,  to whom the Board  may  (except  as  provided  in  Section 5 hereof)
delegate its authority hereunder.  The decision of the Board or of the Committee
as to all  questions  of  interpretation  and  application  of the Plan shall be
final,  binding and conclusive on all persons.  The Board or the Committee shall
have the authority to adopt, amend and rescind such rules and regulations as, in
its opinion,  may be advisable in the  administration  of the Plan. The Board or
the  Committee  may correct any defect or supply any omission or  reconcile  any
inconsistency  in the Plan or in any option agreement  granted  hereunder in the
manner and to the extent it shall deem  expedient  to carry the Plan into effect
and shall be the sole and final judge of such expediency.  No Board or Committee
member shall be liable for any action or determination made in good faith.

     If any such Committee is appointed, the Board may from time to time appoint
a member or members of the Committee in  substitution  for or in addition to the
member or members then in office and may fill vacancies on the Committee however
caused. The Committee shall choose one of its members as Chairman and shall hold
meetings at such times and places as it shall deem advisable.  A majority of the
members of the Committee  shall  constitute a quorum and any action may be taken
by a majority of those present and voting at any meeting. Any action may also be
taken  without the  necessity of a meeting by a written  instrument  signed by a
majority of the Committee.

     4. Type of Options.

     Options  granted  pursuant to the Plan shall be authorized by action of the
Board or the Committee and may be designated in the sole discretion of the Board
or the Committee as either  incentive stock options meeting the  requirements of
Section 422 of the Code or non-qualified  options which are not intended to meet
the  requirements  of Section 422 of the Code.  Options  designated as incentive
stock options that fail to continue to meet the  requirements  of Section 422 of
the Code shall be redesignated as non-qualified  options  automatically  without
further  action by the Board or the  Committee  on the date of such  failure  to
continue to meet the requirements of Section 422 of the Code.

     5. Eligibility.

     Options  designated  as  incentive  stock  options  may be granted  only to
officers  and key  employees  of the  Company or of any  subsidiary  corporation
(herein called "subsidiary" or "subsidiaries"), as defined in Section 424 of the
Code and the Treasury  Regulations  promulgated  thereunder (the "Regulations").
Options  designated as non-qualified  options may be granted to directors of the
Company  and  officers  and  key  employees  of  the  Company  or of  any of its
subsidiaries.

     Option grants to directors  who are not otherwise  employees of the Company
or a subsidiary shall be made by the Board of Directors.

     In determining the eligibility of an individual to be granted an option, as
well as in  determining  the number of shares to be optioned to any  individual,
the Committee shall take into account the position and  responsibilities  of the
individual  being  considered,  the  nature  and  value  to the  Company  or its
subsidiaries of his or her service and  accomplishments,  his or her present and
potential  contribution to the success of the Company or its  subsidiaries,  and
such other factors as the Committee may deem relevant.

     No option  designated as an incentive  stock option shall be granted to any
optionee of the Company or any  subsidiary  if such optionee  owns,  immediately
prior to the grant of an option,  stock representing more than 10% of the voting
power or more than 10% of the value of all  classes of stock of the Company or a
parent or a  subsidiary,  unless  the  purchase  price for the stock  under such
option  shall be at least 110% of its fair market  value at the time such option
is granted and the option, by its terms, shall not be exercisable more than five
years from the date it is granted. In determining the stock ownership under this
paragraph, the provisions of Section 424(d) of the Code shall be controlling. In
determining  the fair  market  value under this  paragraph,  the  provisions  of
Section 7 hereof shall apply.  The maximum number of shares of Common Stock with
respect to which an option or options may be granted to any  optionee in any one
taxable year of the Company  shall not exceed  150,000  shares of Common  Stock,
taking into account shares which were the subject of options granted during such
taxable year and subsequently terminated or repriced.

     6. Option Grants; Option Agreement.

     Of the  1,000,000  shares  initially  available  for the  grant of  options
hereunder, 500,000 shall be available for grant at exercise prices determined by
the Board or the Committee,  which prices shall not be less than the fair market
value of the  Company's  Common Stock at the time of grant.  Such options  shall
vest on a daily basis over the four years commencing on the date of grant.

     The remaining 500,000 shares initially  available for grant hereunder shall
be granted at exercise  prices  determined by the Board or the Committee,  which
prices  shall not be less than the fair  market  value of the  Company's  Common
Stock at the time of grant.  Such options shall vest at the rate of 25% per year
over the four year period  commencing  on the date of grant,  provided  that the
market price per share of the Company's  Common Stock achieves  specified levels
of appreciation  during such four year period.  Such  appreciation must equal or
exceed  20% in each  year  commencing  with the  date of  grant of each  option.
Notwithstanding  any such  appreciation,  except as set  forth in the  following
sentence,  no more than 25% of the  shares  available  for  issuance  under such
option shall vest in any one year. If in a given year the market price per share
of the Company's  Common Stock fails to achieve the specified  level, the shares
which  fail to vest in that year may vest in a  subsequent  year  within the six
year period commencing on the date of grant.

     Options with respect to the  additional  1,500,000  shares which may become
available for grant  hereunder  pursuant to Section 2(b) hereof shall be granted
at exercise  prices  equal to the price per share which was required in order to
make such shares  available for grant under such Section  2(b).  Options for the
purchase  of 50% of the  shares  which  become  available  for  amount for grant
pursuant to Section  2(b) hereof  shall vest on a daily basis over the four year
period  commencing  on the  date  of  grant.  Options  for the  purchase  of the
remaining  50% of such  shares  shall  vest at the rate of 25% per year over the
four year period  commencing  on the date of grant if the market price per share
of the  Company's  Common Stock  appreciates  at the rate of 20% or more in each
year of such four year  period.  In the event that the  required  level of stock
appreciation  is not met in a given year,  the shares which fail to vest in that
year may vest in a subsequent year if the level of stock  appreciation which was
not met is achieved in a subsequent  year within the six year period  commencing
on the date of grant.

     Notwithstanding the foregoing, if an option whose vesting is dependent upon
the  achievement of specified  levels of stock price  appreciation  has not been
fully  vested  by the  close of the six year  period  commencing  on the date of
grant,  such option shall be exercisable for a 30-day period commencing with the
close of such six year period and thereafter  shall  terminate to the extent not
exercised.

     Each option  shall be evidenced by an option  agreement  (the  "Agreement")
duly  executed on behalf of the Company and by the  optionee to whom such option
is granted,  which  Agreement  shall comply with and be subject to the terms and
conditions of the Plan.  The Agreement may contain such other terms,  provisions
and conditions which are not inconsistent  with the Plan as may be determined by
the Committee, provided that options designated as incentive stock options shall
meet all of the conditions for incentive stock options as defined in Section 422
of the Code.  No option  shall be granted  within the meaning of the Plan and no
purported  grant of any option shall be effective until the Agreement shall have
been duly  executed  on behalf of the Company  and the  optionee.  More than one
option may be granted to an individual.

     7. Option Price.

     The  option  price or prices of shares of the  Company's  Common  Stock for
options designated as non-qualified  stock options shall be as determined by the
Board or the Committee,  but, except as provided in Section 6 above, in no event
less than the fair market  value of such Common  Stock at the time the option is
granted.  The option price or prices of shares of the Company's Common Stock for
incentive  stock  options shall be the fair market value of such Common Stock at
the time the option is granted as  determined  by the Board or the  Committee in
accordance with the Regulations promulgated under Section 422 of the Code.

     If such shares are then listed on any  national  securities  exchange,  the
fair market  value shall be the mean between the high and low sales  prices,  if
any, on the largest such exchange on the business day immediately  preceding the
date of the grant of the option  or, if none,  shall be  determined  by taking a
weighted average of the means between the highest and lowest sales prices on the
nearest date before and the nearest  date after the date of grant in  accordance
with Treasury  Regulations Section 25.2512-2.  If the shares are not then listed
on any such  exchange,  the fair market  value of such shares  shall be the mean
between the high and low sales  prices,  if any,  as  reported  in the  National
Association of Securities  Dealers  Automated  Quotation  System National Market
System ("NASDAQ/NMS") for the business day immediately preceding the date of the
grant of the  option,  or, if none,  shall be  determined  by taking a  weighted
average of the means  between the highest and lowest  sales on the nearest  date
before and the nearest date after the date of grant in accordance  with Treasury
Regulations  Section 25.2512-2.  If the shares are not then either listed on any
such exchange or quoted in  NASDAQ/NMS,  the fair market value shall be the mean
between the average of the "Bid" and the average of the "Ask" prices, if any, as
reported  in  the  National  Daily  Quotation   Service  for  the  business  day
immediately preceding the date of the grant of the option, or, if none, shall be
determined  by taking a weighted  average of the means  between  the highest and
lowest  sales  prices on the nearest  date before and the nearest date after the
date of grant in accordance with Treasury Regulations Section 25.2512-2.  If the
fair market value cannot be determined under the preceding three  sentences,  it
shall be determined in good faith by the Board or the Committee.

     8. Manner of Payment; Manner of Exercise.

     (a)  Options  granted  under the Plan may  provide  for the  payment of the
exercise  price by delivery  of (i) cash or a check  payable to the order of the
Company in an amount equal to the exercise price of such options, (ii) shares of
Common  Stock of the Company  owned by the  optionee  having a fair market value
equal in amount to the exercise price. Delivery of shares of Common Stock of the
Company  owned by such optionee may be made only if such payment does not result
in a charge to earnings for financial  accounting  purposes as determined by the
Board or the  Committee.  The fair market  value of any shares of the  Company's
Common  Stock  which  may be  delivered  upon  exercise  of an  option  shall be
determined by the Board or the Committee in accordance with Section 7 hereof.

     (b) To the extent  that the right to  purchase  shares  under an option has
accrued  and is in effect,  options may be  exercised  in full at one time or in
part  from time to time,  by  giving  written  notice,  signed by the  person or
persons exercising the option, to the Company, stating the number of shares with
respect to which the option is being  exercised,  accompanied by payment in full
for such shares as  provided  in  subparagraph  (a) above.  Upon such  exercise,
delivery of a certificate for paid-up non-assessable shares shall be made at the
principal  office of the Company to the person or persons  exercising the option
at such time, during ordinary  business hours,  after five (5) but not more than
thirty (30) days from the date of receipt of the notice by the Company, as shall
be designated in such notice, or at such time, place and manner as may be agreed
upon by the Company and the person or persons exercising the option.

     9. Exercise of Options.

     Each  option  granted  under the Plan shall,  subject to Section  10(b) and
Section 12 hereof,  be  exercisable at such time or times and during such period
as shall be set  forth  in the  Agreement;  provided,  however,  that no  option
granted  under the Plan  shall  have a term in excess of ten (10) years from the
date of grant.

     To the extent  that an option to  purchase  shares is not  exercised  by an
optionee when it becomes initially exercisable, it shall not expire but shall be
carried  forward and shall be  exercisable,  on a  cumulative  basis,  until the
expiration of the exercise period. No partial exercise may be made for less than
ten (10) full shares of Common Stock.

     10. Term of Options; Exercisability.

     (a) Term.

     (1) Each option  shall expire not more than ten (10) years from the date of
the  granting  thereof,  but shall be subject to earlier  termination  as herein
provided.

     (2) Except as otherwise  provided in this Section 10, an option  granted to
any employee  optionee who ceases to be an employee of the Company or one of its
subsidiaries shall terminate (i) on the later of the last day of the third month
after the date such  optionee  ceases to be an employee of the Company or one of
its  subsidiaries  or the third  business  day after the Plan is approved by the
Stockholders  under  Section  19 hereof or (ii) on the date on which the  option
expires by its terms, whichever occurs first.

     (3) If such  termination  of employment is as a result of  termination  for
cause  such  option  will  terminate  on the date the  optionee  ceases to be an
employee of the Company or one of its subsidiaries.

     (4) If such  termination  of  employment is because the optionee has become
permanently  disabled (within the meaning of Section 22(e)(3) of the Code), such
option shall  terminate on the last day of the twelfth  month from the date such
optionee ceases to be an employee, or on the date on which the option expires by
its terms, whichever occurs first.

     (5) An option granted to a director shall  terminate on the last day of the
third month after such director ceases to serve as a director.

     (6) In the  event  of  the  death  of any  optionee  (whether  employee  or
director),  any option granted to such optionee shall  terminate on the last day
of the twelfth month from the date of death,  or on the date on which the option
expires by its terms, whichever occurs first.

     (b) Exercisability.

     An option granted to a director or an employee  optionee who ceases to be a
director  or an  employee  of the  Company or one of its  subsidiaries  shall be
exercisable  only to the extent  that the right to  purchase  shares  under such
option has  accrued  and is in effect on the date such  optionee  ceases to be a
director  or an employee  of the  Company or one of its  subsidiaries,  provided
however that an option  granted to a director who does not stand for  reelection
to the Board of Directors upon the expiration of such  director's term of office
shall be exercisable as to the full amount of the shares covered by such option,
notwithstanding the provisions of such option concerning vesting.

     11. Options Not Transferrable.

     The right of any  optionee  to  exercise  any option  granted to him or her
shall not be assignable or transferrable by such optionee otherwise than by will
or the  laws  of  descent  and  distribution,  and  any  such  option  shall  be
exercisable  during the lifetime of such optionee only by him or her. Any option
granted  under  the Plan  shall be null and  void and  without  effect  upon the
bankruptcy of the optionee to whom the option is granted,  or upon any attempted
assignment or transfer, except as herein provided,  including without limitation
any  purported  assignment,  whether  voluntary or by operation of law,  pledge,
hypothecation  or other  disposition,  attachment,  trustee  process  or similar
process,  whether  legal or  equitable,  upon such option.  Notwithstanding  the
foregoing,  any option  granted  under the Plan (other than an  incentive  stock
option)  may  provide  (if the  Board or the  Committee  in its sole  discretion
decides to include such a  provision),  that the  optionee  shall be entitled to
make a transfer  of all or any part of such  option to members of his  immediate
family or a trust  for the  benefit  of such  persons,  following  notice to the
Secretary of the Company and approval by the Board or the  Committee in its sole
discretion,  provided that (in the case of options granted to persons subject to
Section 16 of the  Securities  Exchange  Act of 1934 at the time of grant),  any
such provision  shall by its terms be inoperative  and no such transfer shall be
permitted except when transfers to members of the optionee's immediate family or
a trust for the benefit of such persons are permissible  under the conditions to
the availability of the exemption afforded by Regulation 16b-3 promulgated under
the Securities Exchange Act of 1934.

     12. Recapitalizations, Reorganizations and the Like.

     (a) In the event that the  outstanding  shares of the  Common  Stock of the
Company are changed into or exchanged  for a different  number or kind of shares
or other  securities of the Company or of another  corporation  by reason of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up,  combination  of  shares,  or  dividends  payable  in  capital  stock,
appropriate  adjustment  shall be made in the  number  and kind of  shares as to
which options may be granted under the Plan and as to which outstanding  options
or portions thereof then unexercised  shall be exercisable,  to the end that the
proportionate  interest  of the  optionee  shall be  maintained  as  before  the
occurrence of such event;  such adjustment in outstanding  options shall be made
without change in the total price applicable to the unexercised  portion of such
options and with a corresponding adjustment in the option price per share.

     (b) In addition,  unless otherwise determined by the Board or the Committee
in its sole  discretion,  in the case of any (i) sale or  conveyance  to another
entity of all or substantially  all of the property and assets of the Company or
(ii)  a  Change  in  Control  (as  hereinafter  defined)  of  the  Company,  the
purchaser(s)  of  the  Company's  assets  or  stock  may,  in  his,  her  or its
discretion,  deliver  to the  optionee  the same kind of  consideration  that is
delivered  to  the  stockholders  of the  Company  as a  result  of  such  sale,
conveyance  or Change in Control,  or the Board or the  Committee may cancel all
outstanding  options  in  exchange  for  consideration  in cash or in kind which
consideration in both cases shall be equal in value to the value of those shares
of stock or other  securities  the optionee  would have  received had the option
been exercised (to the extent then exercisable) and no disposition of the shares
acquired upon such  exercise been made prior to such sale,  conveyance or Change
in Control,  less the option price therefor.  Upon receipt of such consideration
by the  optionee,  his or her option shall  immediately  terminate  and be of no
further  force  and  effect.  The  value of the  stock or other  securities  the
optionee  would  have  received  if the  option  had  been  exercised  shall  be
determined  in good faith by the Board or the  Committee of the Company,  and in
the case of shares of the Common Stock of the Company,  in  accordance  with the
provisions of Section 7 hereof.  The Board or the Committee  shall also have the
power and right to accelerate the exercisability of any options, notwithstanding
any limitations in this Plan or in the Agreement upon such a sale, conveyance or
Change in  Control.  Upon such  acceleration,  any  options or  portion  thereof
originally  designated  as incentive  stock  options  that no longer  qualify as
incentive  stock  options  under  Section  422 of the Code as a  result  of such
acceleration  shall be redesigned as non-qualified  stock options.  A "Change in
Control"  shall be deemed to have  occurred  if any  person,  or any two or more
persons acting as a group,  and all affiliates of such person or persons,  shall
acquire shares of the Company's then outstanding Common Stock of the Company, in
one or more  transactions,  or series of transactions,  such that following such
transaction or  transactions,  such person or group and affiliates  beneficially
own twenty (20%) percent or more of the Company's Common Stock outstanding. Upon
the occurrence of a Change in Control, all options under the plan outstanding on
the  date on  which  the  Change  in  Control  occurs  will  immediately  become
exercisable in full.

     (c) Upon  dissolution or liquidation  of the Company,  all options  granted
under  this Plan  shall  terminate,  but each  optionee  (if at such time in the
employ of or a director  of the Company of any of its  subsidiaries)  shall have
the right, immediately prior to such dissolution or liquidation, to exercise his
or her option to the extent then exercisable.

     (d) If by reason  of a  corporate  merger,  consolidation,  acquisition  of
property or stock, separation,  reorganization, or liquidation, the Board or the
Committee  shall authorize the issuance or assumption of a stock option or stock
options in a  transaction  to which Section  424(a) of the Code  applies,  then,
notwithstanding  any other  provision of the Plan,  the  Committee  may grant an
option or options upon such terms and conditions as it may deem  appropriate for
the purpose of assumption of the old option, or substitution of a new option for
the old option,  in conformity with the provisions of such Section 424(a) of the
Code and the  Regulations  thereunder,  and any such option shall not reduce the
number of shares otherwise available for issuance under the Plan.

     (e) No fraction of a share shall be  purchasable  or  deliverable  upon the
exercise of any option, but in the event any adjustment  hereunder of the number
of shares covered by the option shall cause such number to include a fraction of
a share,  such fraction shall be adjusted to the nearest smaller whole number of
shares.

     13. No Special Employment Rights.

     Nothing contained in the Plan or in any option granted under the Plan shall
confer upon any option holder any right with respect to the  continuation of his
or her  employment  by the Company (or any  subsidiary)  or interfere in any way
with the right of the Company (or any  subsidiary),  subject to the terms of any
separate  employment  agreement to the contrary,  at any time to terminate  such
employment or to increase or decrease the compensation of the option holder from
the  rate in  existence  at the  time of the  grant  of an  option.  Whether  an
authorized leave of absence, or absence in military or government service, shall
constitute  termination  of  employment  shall be determined by the Board or the
Committee at the time.

     14. Withholding.

     The  Company's  obligation  to  deliver  shares  upon the  exercise  of any
non-qualified  option  granted  under the Plan  shall be  subject  to the option
holder's satisfaction of all applicable Federal, state and local income, excise,
employment and other tax withholding requirements.  The Company and employee may
agree to withhold shares of Common Stock purchased upon exercise of an option to
satisfy the above-mentioned withholding requirements.

     15. Restrictions on Issue of Shares.

     (a)  Notwithstanding the provisions of Section 8, the Company may delay the
issuance of shares  covered by the  exercise of any option and the delivery of a
certificate  for such  shares  until one of the  following  conditions  shall be
satisfied:

     (i) The shares with respect to which such option has been  exercised are at
the time of the issue of such shares  effectively  registered or qualified under
applicable  Federal  and  state  securities  acts now in  force or as  hereafter
amended; or

     (ii)  Counsel for the Company  shall have given an opinion,  which  opinion
shall not be unreasonably  conditioned or withheld,  that such shares are exempt
from  registration  and  qualification   under  applicable   Federal  and  state
securities acts now in force or as hereafter amended.

     (b) It is intended that all  exercises of options  shall be effective,  and
the Company shall use its best efforts to bring about  compliance with the above
conditions  within a reasonable time,  except that the Company shall be under no
obligation  to  qualify  shares  or  to  cause  a  registration  statement  or a
post-effective  amendment to any  registration  statement to be prepared for the
purpose  of  covering  the issue of shares in respect of which any option may be
exercised, except as otherwise agreed to by the Company in writing.

     16. Purchase for Investment; Rights of Holder on Subsequent Registration.

     Unless the shares to be issued upon exercise of an option granted under the
Plan have been  effectively  registered under the Securities Act of 1933, as now
in force or hereafter amended, the Company shall be under no obligation to issue
any shares covered by any option unless the person who exercises such option, in
whole or in part,  shall give a written  representation  and  undertaking to the
Company which is  satisfactory  in form and scope to counsel for the Company and
upon which,  in the opinion of such counsel,  the Company may  reasonably  rely,
that he or she is acquiring the shares  issued  pursuant to such exercise of the
option for his or her own  account as an  investment  and not with a view to, or
for sale in connection with, the distribution of any such shares, and that he or
she will make no transfer of the same  except in  compliance  with any rules and
regulations  in force at the time of such transfer  under the  Securities Act of
1933, or any other  applicable  law, and that if shares are issued  without such
registration,  a legend to this effect may be endorsed  upon the  securities  so
issued. In the event that the Company shall, nevertheless,  deem it necessary or
desirable  to  register  under the  Securities  Act of 1933 or other  applicable
statutes any shares with  respect to which an option shall have been  exercised,
or to qualify any such shares for exemption  from the  Securities Act of 1933 or
other applicable statutes, then the Company may take such action and may require
from each  optionee  such  information  in writing  for use in any  registration
statement,   supplementary  registration  statement,   prospectus,   preliminary
prospectus or offering circular as is reasonably  necessary for such purpose and
may require  reasonable  indemnity to the Company and its officers and directors
and controlling persons from such holder against all losses, claims, damages and
liabilities  arising from such use of the information so furnished and caused by
any untrue  statement of any material  fact therein or caused by the omission to
state a material  fact  required to be stated  therein or  necessary to make the
statements therein not misleading in the light of the circumstances  under which
they were made.

     17. Loans.

     The  Company  may not make loans to  optionees  to permit  them to exercise
options.

     18. Modification of Outstanding Options.

     The Board or the Committee  may authorize the amendment of any  outstanding
option with the consent of the optionee  when and subject to such  conditions as
are deemed to be in the best interest of the Company and in accordance  with the
purposes of this Plan.

     19. Approval of Stockholders.

     The Plan shall be subject to approval by the vote of  stockholders  holding
at least a majority of the voting stock of the Company present,  or represented,
and entitled to vote at a duly held stockholders' meeting, or by written consent
of a majority of all the  stockholders,  within  twelve  (12)  months  after the
adoption of the Plan by the Board of  Directors  and shall take effect as of the
date of adoption by the Board upon such approval. The Board or the Committee may
grant options under the Plan prior to such  approval,  but any such option shall
become  effective  as of the  date  of  grant  only  upon  such  approval,  and,
accordingly, no such option may be exercisable prior to such approval.

     20. Termination and Amendment of Plan.

     Unless sooner  terminated as herein provided,  the Plan shall terminate ten
(10) years  from the date upon  which the Plan was duly  adopted by the Board of
Directors of the Company.  The Board of Directors may at any time  terminate the
Plan or make such  modification  or  amendment  thereof  as it deems  advisable;
provided, however, that except as provided in Section 20, the Board of Directors
may not, without the approval of the stockholders of the Company obtained in the
manner  stated in Section 19,  increase  the maximum  number of shares for which
options  may be  granted  or change  the  designation  of the  class of  persons
eligible to receive options under the Plan or change the provisions of Section 6
regarding criteria for vesting of options.  The Board or the Committee may grant
options to persons  subject to Section 16(b) of the  Securities and Exchange Act
of 1934  after an  amendment  to the Plan by the  Board of  Directors  requiring
stockholder  approval  under  Section  20,  but any  such  option  shall  become
effective as of the date of grant only upon such  approval and  accordingly,  no
such  option  may be  exercisable  prior to such  approval.  Termination  or any
modification  or  amendment  of the Plan shall not,  without  the  consent of an
optionee, affect his or her rights under an option theretofore granted to him or
her.

     21. Reservation of Stock.

     The Company shall at all times during the term of the Plan reserve and keep
available  such number of shares of stock as will be  sufficient  to satisfy the
requirements  of the  Plan and  shall  pay all  fees  and  expenses  necessarily
incurred by the Company in connection therewith.

     22. Limitation of Rights in the Option Shares.

     An optionee  shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the options  except to the extent that the option
shall have been exercised with respect  thereto and, in addition,  a certificate
shall have been issued theretofore and delivered to the optionee.

     23. Notices.

     Any  communication  or notice  required or  permitted to be given under the
Plan  shall be in  writing,  and  mailed  by  registered  or  certified  mail or
delivered  by hand,  if to the  Company,  to its  principal  place of  business,
attention: President, and, if to an optionee, to the address as appearing on the
records of the Company.