FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549


              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For Quarter Ended March 31, 2000

                                       OR

              [ ] TRANSITION REPORT PURSUANT O SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                For the Transition Period from _______ to _______

                         Commission file number 33-20432

                       MAGNITUDE INFORMATION SYSTEMS, INC.
             (Exact Name of Registrant as Specified in its Charter)

                               Delaware 75-2228828
                  (State or other Jurisdiction of (IRS Employer
               Incorporation or Organization) Identification No.)

                 401 State Route 24, Chester, New Jersey 07930_
               (Address of Principal Executive Office) (Zip Code)

                                 (908) 879-2722
               (Registrant's telephone number including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.
                                 Yes x No _____

    The  number of shares of  Registrant's  Common  Stock,  $0.0001  par  value,
outstanding as of March 31, 2000, was 14,591,980 shares.

<PAGE>






              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES




                                      INDEX


                                                              Page
                                                             Number

PART  1  -  FINANCIAL INFORMATION

Item 1   Financial Statements (unaudited)

         Consolidated Balance Sheet
          - March 31, 2000                                             3

         Consolidated Statements of Operations
          - Three months ended March 31, 2000 and 1999                 4

         Consolidated Statements of Cash Flows
          - Three months ended March 31, 2000 and 1999                 5

         Notes to Consolidated Financial Statements                  6 - 11


Item 2  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                  12 - 13


PART II  -  OTHER INFORMATION                                         14


SIGNATURES                                                            16





                                       2

<PAGE>



PART I  - Item 1

              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                               March 31, 2000
<S>                                                                             <C>
     Current Assets
     Cash  .....................................................................$   1,427,184
     Accounts receivable, net of allowance for
     doubtful accounts of 76,111 ...............................................      152,008
     Inventories ...............................................................        8,885
     Deferred tax asset.........................................................      201,470
     Prepaid expenses ..........................................................      419,490
                                                                                   -------------
        Total Current Assets ...................................................    2,209,037
     Property, plant and equipment, net of accumulated
        depreciation of $153,910 ...............................................      107,679
     Software, net of accumulated amortization of
         $300,702 ..............................................................    1,206,648
     Other assets ..............................................................       28,459
                                                                                   -------------
TOTAL ASSETS ...................................................................    3,551,823
                                                                                     ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
     Accounts payable and accrued expenses .....................................      735,164
     Dividends payable .........................................................       15,601
     Prepayments received ......................................................        5,000
     Loans and notes payable ...................................................    1,745,992
     Current maturities long-term debt .........................................            0
     Current maturities lease obligations ......................................        6,938
                                                                                   -------------
        Total Current Liabilities ..............................................    2,508,695
     Long-term debt, less current portion ......................................      374,890
     Lease obligations, less current portion ...................................       13,005
                                                                                    -------------
TOTAL LIABILITIES ..............................................................    2,896,590

STOCKHOLDERS' EQUITY
     Preferred Stock, $0.001 par value,  3,000,000 shares authorized:
     2,500 shares have been designated Cumulative Preferred Stock,
     of which 1 share is issued and outstanding ................................            0
     300,000 shares have been designated Series A Convertible Preferred Stock,
     350,000 shares have been designated Series B Convertible Preferred Stock,
     120,000 shares have been designated Series C Convertible Preferred Stock,
     of which a combined total 294,440 shares are issued and outstanding                  294
     Common Stock, $0.0001 par value, 30,000,000 shares authorized,
     14,591,980 shares are issued and outstanding...............................        1,459
     Contributed capital .......................................................       81,000
     Additional paid-in capital ................................................   12,671,091
     Accumulated deficit .......................................................  (12,098,611)
                                                                                   ------------
TOTAL STOCKHOLDERS' EQUITY......................................................      655,233

TOTAL LIABILITIES AND EQUITY .................................................. $   3,551,823
                                                                                    ==========
</TABLE>



                 See notes to consolidated financial statements


                                       3

<PAGE>




              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                     Three Months Ended
                                                           March 31,
                                                     2000             1999
                                               -------------    -------------

Total Revenues .....................              100,022            44,507
     Cost of Goods Sold ............               40,934            42,876
                                               -------------     -------------

Gross Profit .......................               59,088             1,631

     Selling expenses ..............              226,820           165,471
     General & administrative expenses ....       522,286           421,975
                                                 -----------      -----------
Operating Income (Loss) ...................      (690,018)         (585,815)

     Miscellaneous income .................        17,222            63,675
     Interest expense (net) ...............      (109,579)          (51,837)
     Miscellaneous expenses ...............        (1,122)          (13,685)
                                                 -----------      -------------
Non-Operating Income (Expense) ............       (93,479)           (1,847)
                                               -------------    -------------


Net Loss ..................................   $  (783,497)      $  (587,662)
                                                 =========          ========


Loss per Common Share .....................   $     (0.06)      $    (0.08)
                                                  ========         =========
Weighted Average Number of
     Common Shares Outstanding ............     12,858,331        7,295,093






                 See notes to consolidated financial statements


                                       4
<PAGE>




              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


                                               Three Months Ended March 31,
                                                   2000               1999
Cash Flows from Operating Activities
     Net income (loss) ....................... $ (783,497)       $ (587,662)
     Adjustments to net income (loss)
        Depreciation and Amortization .........     48,07            45,794
        Loss on disposition of certain assets .     1,122                 0
        Stock and debt issued for expenses.....   163,306                 0
        Payment of dividends...................   (10,500)                0
     Decreases (increases) in Assets
        Accounts receivable ...................   (91,885)           83,029
        Miscellaneous receivables .............         0                 0
        Inventories ...........................         0                 0
        Prepaid expenses ......................   (30,609)         (161,075)
        Other assets ..........................   (26,000)             (450)
     Increases (decreases) in Liabilities
         Prepayments received..................     5,000                 0
        Accounts payable and accrued expenses .  (115,932)         (570,198)
                                                 -------------     ------------
Net Cash Provided (Used) by Operating Activities (825,721)       (1,190,562)

Cash Flows from Investing Activities
     Purchases of equipment and fixtures ......   (18,738)                0
     Disposition of property and equipment ....     3,358                 0
                                                 -------------     ------------
Net Cash Provided (Used) by Investing Activities   57,394                 0

Cash Flows from Financing Activities
     Proceeds from notes payable ................       0                 0
     Conversion of equity subscriptions .........       0                 0
     Repayment of loans and notes ...............(106,284)         (184,177)
     Repayment of long-term debt ................       0           (19,500)
     Issuance of common stock.................... 550,000         1,385,659
     Issuance of preferred stock ...............1,575,000                 0
                                                -------------     -------------
Net Cash Provided (Used)by Financing Activities 2,018,716         1,181,982
Net Increase (Decrease) in Cash ................1,177,615            (8,580)
Cash at Beginning of Period ....................  249,569             9,403
                                                 ------------     -------------
Cash at End of Period ........................ $1,427,184        $      823
                                              ===============     =============






                 See notes to consolidated financial statements



                                       5

<PAGE>




              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000

DESCRIPTION OF BUSINESS

         Magnitude  Information Systems, Inc. (the "Company" or "Magnitude") was
         incorporated as a Delaware corporation on April 19, 1988 under the name
         Fortunistics  Inc. On March 4, 1993,  the  Company  changed its name to
         Whitestone  Industries,  Inc. On July 14, 1997, the Company changed its
         name to Proformix Systems,  Inc., and on November 18, 1998, the Company
         changed its name to Magnitude Information Systems, Inc. .

         The Company's  primary  product is an integrated  suite of  proprietary
         software  modules  marketed  under the name  ErgoManager(TM)  which are
         designed to help  individual  computer users and  businesses  deal with
         potentially  preventable repetitive stress injury (RSI). These software
         modules can be applied  individually  or  together  in a  comprehensive
         ergonomic and early intervention  program that seeks to modify a user's
         behavior by monitoring  computer  usage  patterns over time and warning
         the user  when to break a  dangerous  trend in  repetitive  usage of an
         input device, such as a keyboard or mouse. The product was developed to
         train  people  working  on  computers,   monitor  computer-use  related
         activities and evaluate a user's risk exposure and  propensity  towards
         injury or loss of effectiveness  in connection with his/her  day-to-day
         work. Moreover,  the software enables a company to not only address the
         issue of health risks  involving  employees  and to minimize  resulting
         potential liabilities, but delivers a powerful tool to increase overall
         productivity.

BACKGROUND

         On June 24,  1997,  the  Company,  extended  a stock  exchange  offer
         to the  shareholders  of  Proformix,  Inc.,  a  Delaware corporation
         and  manufacturer  of  ergonomic  keyboarding  systems. Proformix Inc.
         in November  1998  changed its name to Magnitude,  Inc. and is now
         referred to as  Magnitude,  Inc.. At the time of this  submission,
         holders of 98.5% of Magnitude, Inc. common stock have tendered their
         shares. The business  combination which took the form of a reverse
         acquisition has been accounted for as a purchase.  As a result,  the
         Company and Magnitude,  Inc.  remain as two separate  legal  entities
         whereby Magnitude,  Inc.  operates as a subsidiary of Magnitude
         Information  Systems,  Inc..  The  operations  of the newly  combined
         entity are currently comprised solely of the operations of
         Magnitude, Inc.

         On February 2, 1998, the Company  entered into an Agreement and Plan of
         Merger with Rolina  Corporation,  a privately held New Jersey  software
         developing  firm,  and on  April  30,  1998,  into  an  Asset  Purchase
         Agreement with Vanity Software  Publishing Co., a Canadian developer of
         specialized  software,  whereby the Company,  in return for payments in
         form of cash and  equity,  acquired  the  rights  to  certain  software
         products and related assets,  with such software products  subsequently
         forming the basis for the further development,  during the year, of the
         Company's proprietary ErgoManager(TM) software system.

         On November  18,  1998,  the Company  and its wholly  owned  subsidiary
         Magnitude,  Inc.  entered into an Asset Purchase  Agreement and several
         related  agreements with 1320236 Ontario Inc. ("OS"), a publicly traded
         Canadian  designer,  manufacturer  and distributor of office  furniture
         based  in  Holland  Landing,  Ontario,  Canada,  pursuant  to  which OS
         acquired  Magnitude,  Inc.'s  hardware  product  line  comprised of the
         Company's  ergonomic  keyboard platform  products and accessories,  all
         related inventory and production  tooling and warehousing  assets,  and
         all intellectual  property rights including the Proformix name, against
         a cash  consideration  and an  ongoing  contingent  stream  of  royalty
         payments on OS' sales of the Proformix hardware products.

                                       6


<PAGE>



              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000


         Magnitude   Inc.'s  wholly  owned   subsidiary,   Corporate   Ergonomic
         Solutions,  Inc.  (Ergonomics)  was  incorporated  in the  State of New
         Jersey during October 1992.  Ergonomics,  which commenced operations in
         September 1997, was formed primarily to market hardware  products.  Its
         operations during 1998 and 1999 have not been significant.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation
         The consolidated  financial  statements  include the accounts of
         Magnitude  Information  Systems,  Inc. and its  subsidiaries,
         Magnitude,  Inc. and Corporate  Ergonomic  Solutions,  Inc. All
         significant  intercompany  balances and transactions have been
         eliminated.

     Inventories
         Inventory  consists of finished goods which are stated at the lower of
         cost (determined by the first-in, first out method) or market.

     Depreciation and Amortization
         Property,  plant and  equipment are recorded at cost.  Depreciation  on
         equipment,   furniture  and  fixtures  and  leasehold  improvements  is
         computed on the straight line method over the estimated useful lives of
         such assets between 5-10 years.  Maintenance and repairs are charged to
         operations as incurred.  Software  assets are amortized on the straight
         line method over 10 years.

     Securities Issued for Services
         The Company accounts for stock, stock options and stock warrants issued
         for services and  compensation  by employees  under the intrinsic value
         method. For non-employees, the fair market value of the Company's stock
         on the date of  stock  issuance  or  option  grant  is used.  Effective
         January 1, 1996, the Company adopted Statement of Financial  Accounting
         Standard (SFAS) No. 123, "Accounting for Stock-based Compensation". The
         statement   generally   suggests,   but  does  not  require,   employee
         stock-based  compensation  transactions  be accounted  for based on the
         fair  value of the  services  rendered  or the fair value of the equity
         instruments issued, whichever is more reliably measurable. As permitted
         by the  statement,  the  Company  has elected to continue to follow the
         requirements of Accounting Principles Board Opinion No. 25, "Accounting
         for Stock Issued to Employees' for employees  under the intrinsic value
         method. The adoption of SFAS No. 123 does not have a material impact on
         the financial statements.

     Income Taxes
         The  Company  provides  for income  taxes  based on enacted tax law and
         statutory  tax rates at which items of income and expenses are expected
         to be settled in the  Company's  income tax  return.  Certain  items of
         revenue and expense are  reported  for Federal  income tax  purposes in
         different  periods  than  for  financial  reporting  purposes,  thereby
         resulting in deferred income taxes.  Deferred taxes are also recognized
         for  operating  losses  that are  available  to offset  future  taxable
         income.  Valuation  allowances are established when necessary to reduce
         deferred tax assets to the amount expected to be realized.  The Company
         has  incurred  net  operating   losses  for   financial-reporting   and
         tax-reporting purposes.  Accordingly,  for Federal income tax purposes,
         the  benefit for income  taxes has been offset  entirely by a valuation
         allowance  against the related federal  deferred tax asset for the year
         ended  December 31,  1999.  For state  income tax  purposes,  a partial
         valuation  allowance has been offset against the related state deferred
         tax asset for the year ended December 31, 1999.

                                       7


<PAGE>


              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

     Net Loss Per Share
         Net loss per share,  in  accordance  with the  provisions  of Financial
         Accounting Standards Board No. 128, "Earnings Per Share" is computed by
         dividing  net loss by the weighted  average  number of shares of Common
         Stock outstanding during the period.  Common Stock equivalents have not
         been   included  in  this   computation   since  the  effect  would  be
         anti-dilutive.

     Revenue Recognition
         Revenue  from  the  licensing  of  proprietary   software  products  is
         recognized  at the  time  of  licensing  provided  that  the  resulting
         receivable is deemed probable of collection.

     Use of Estimates
         The  preparation of financial  statements in conformity  with generally
         accepted   principles   requires   management  to  make  estimates  and
         assumptions  that affect the reported amounts of assets and liabilities
         and disclosure of contingent  assets and liabilities at the date of the
         financial  statements and the reported amounts of revenues and expenses
         during the  reporting  period.  Actual  results could differ from those
         estimates.

DEFERRED TAX ASSET

         During 1999, the Company had filed an  application  with the New Jersey
         Economic  Development  Authority who administers the current New Jersey
         Tax   Certification   program  pursuant  to  the  New  Jersey  Emerging
         Technology and  Biotechnology  Financial  Assistance Act to qualify for
         and be the  beneficiary of this program which will permit a participant
         to liquidate  its State NOL tax benefits  against cash  considerations.
         The Company has been  accepted  under this  program and has been issued
         tax transfer  certificates  which will, upon  liquidation,  result in a
         cash benefit in the amount stated.


PREPAID EXPENSES

         Prepaid  expenses  include a position  of  $375,000  resulting  from an
         agreement  in February  1998 with BNN  Business  News  Network  Inc., a
         nationwide  media  advertising and radio network  company,  whereby the
         Company   purchased   advertising  time  to  be  utilized  on  stations
         associated  with Business  News Network  Inc.,  usable over a period of
         three years and aggregating  $900,000 in retail value, against issuance
         of 150,000 new and  restricted  common shares.  The services  purchased
         were capitalized at the then fair market value of the stock issued, for
         a total of $375,000. The resulting asset will be amortized as utilized,
         over the time  frame of the next  eighteen  months.  As per the date of
         this  report,  no portion of this asset has been  utilized.  Management
         believes that the Company will derive  economic  benefits  commensurate
         with the value of this  asset.  If  management  determines  that  these
         assumptions  are  incorrect or that it may not be able to  economically
         utilize the entire amount during the time  allotted,  it will effect an
         accelerated amortization or write-down of this asset position.


                                       8


<PAGE>



              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000


PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consist of the following at March 31, 2000:

              Equipment                      $       151,635
              Furniture and fixtures                  64,184
              Leasehold improvements                  45,770
                                             --------------
                                                     261,589
              Less accumulated depreciation          153,910
                                               --------------
                                        Total $      107,679
                                                ==============

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts  payable and accrued  expenses  consisted of the following at March 31,
2000:

              Accounts payable                $       141,263

              Accrued interest                        306,314

              Accrued commissions                      25,385

              Accrued salaries and
                  professional fees                   193,480

              Miscellaneous accruals                   68,722
                                                  =============

                                    Total      $       735,164
                                                  =============

<TABLE>
<CAPTION>
LOANS AND NOTES PAYABLE

     At March 31, 2000,  Magnitude,  Inc. and the Company had borrowings
     under short term loan agreements with the following terms and
     conditions:

<S>                                                                                                    <C>
     On December 4, 1996,  Magnitude,  Inc.  repurchased  the  equivalent  of                          $    75,000
     144,192  shares of its common stock and retired same against  issuance of
     a promissory  note  maturing  twelve  months thereafter  accruing interest
     at 5% per annum and due  December 4, 1998.  This note is overdue at
     September 30, 1999 and no demand for payment has been made through today's
     date.

     Private  Placement  Offering:  During  February  through June 1995,  an                             1,475,000
     underwriter  acting as placement  agent,  on behalf of Magnitude,  Inc.,
     in a private  placement  offering,  placed an aggregate 16 units, each
     consisting of a $100,000,  12% promissory  note and 10,000 shares of
     Magnitude,  Inc.'s common stock.  The promissory notes were originally due
     on the earlier of 12 months from their  issuance or the  completion of a
     public or private  financing of either debt or equity  securities of
     Magnitude,  Inc., and were  subsequently  extended for an additional 6
     months, and further by an additional.
</TABLE>



                                       9

<PAGE>


              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000

<TABLE>
<CAPTION>
         LOANS AND NOTES PAYABLE  continued

         nine months. In May 1997 a restructuring agreement caused $1,075,000 of
         these notes to be extended and  modified  to,  among  other,  mature by
         April  30,  2000.  Two such  notes,  however,  totaling  $200,000  were
         extended and modified  to,  among other,  mature on dates  ranging from
         October  1, 1998  through  April 30,  2000.  The total  amount of notes
         outstanding at March 31, 2000 was $1,475,000.

<S>                                                                                                         <C>
         Discounted  present value of a non-interest  bearing $70,000  settlement with a former investor            33,529
         of  Magnitude,  Inc.  to be paid in  monthly  payments  commencing  July 1, 1997.  The  imputed
         interest rate used to discount the note is 8% per annum.
                                                                                                                   162,463
         Promissory note issued to a member of the board of directors of the Company,  carrying interest
         at 12% p.a.  and  maturing  July 2000,  convertible  at the  holder'soption  into shares of the
         common  stock of the  Company at the rate of $0.50 per share.  The note
         was originally issued for $200,000 with $37,537 since repaid.
                                                                                                               --------------


                  Total                                                                                     $     1,745,992
                                                                                                               ==============

LONG-TERM DEBT

        Pursuant to the  February 2, 1998,  Agreement  and Plan of Merger with Rolina  Corporation  (see
        "Background")  the Company had issued  155,556  shares (the "Shares") of its common stock to the    $      374,890
        principal of Rolina  Corporation  who  currently  serves as the  Company's  President  and Chief
        Executive Officer,  and had issued a Put Option for such Shares at a price of $2.41 per share in
        accordance with the provisions contained therein,  with notice for exercise eligible to be given
        at any time after  February  1, 2000,  and before  5:00 p.m.  on the 90th day  thereafter.  This
        current  liability was converted  into a promissory  note maturing  March 31, 2002, and carrying
        interest at the rate of 7% per year payable  monthly.  The note includes an option to the holder
        for conversion of the  outstanding  principal  into shares of the Company's  common stock at the
        rate of $0.50 per share.



  INCOME TAXES

       At December 31, 1999,  the Company had net operating  loss carry forwards
       approximating  $11,300,000  which expire  between the years 2008 and 2013
       and are subject to certain annual limitations.

  The Company's total deferred tax asset and valuation allowance at December 31, 1999 are as follows:
            Total deferred tax asset                                                                          $       4,240,000
            Less valuation allowance                                                                                  4,240,000
            Net deferred tax asset                                                                            $               -
                                                                                                                 ================
</TABLE>

                                       10

<PAGE>



              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000



COMMITMENTS AND CONTINGENCIES

   Lease Agreements
     Magnitude,  Inc.  leases its  administrative  offices  pursuant  to a lease
     agreement dated December 9, 1998.  Such lease  commences  December 16, 1998
     and expires on December  31, 2001 and requires  monthly  payments of $3,700
     from December 16, 1998 to October 31, 1999 and $3,250 from November 1, 1999
     to December 31, 2001.

     On March 15, 2000,  the Company  entered into a lease  agreement for office
     space.  Such lease  commences  April 15, 2000 and expires on March 31, 2005
     and requires  monthly  payments of $6,500 from April 15, 2000 through March
     31, 2002; of $6,695 thereafter through March 31, 2003; of $6,896 thereafter
     through March 31, 2004; and of $7,103 thereafter through March 31, 2005.


RELATED PARTY TRANSACTIONS

      In January  2000,  the  Chairman of the Board of  Directors  resigned.  In
      connection with his resignation, $350,000 of the $900,000 principal amount
      cumulative  preferred shares held by him were exchanged for 700,000 shares
      of  common  stock of the  Company.  The  remaining  principal  balance  of
      $550,000 along with a promissory note totaling $351,060 were exchanged for
      a  $900,000  principal  amount of a new  series of  convertible  preferred
      shares  which have  rights of 7% per annum  dividend  payments  to be made
      monthly. In connection with a termination agreement dated January 28, 2000
      a restrictive covenant and confidentiality  agreement was executed whereby
      the Company  agreed to pay this  individual a monthly fee in the amount of
      $5,555  over  the  36  month  term  of  that  agreement  along  with  this
      individual's health and term life insurance for an 18 month period.

      On March 31,  2000,  the Company  and its  President  and Chief  Executive
      Officer agreed to convert a current liability payable to him in the amount
      of $374,890 into a  convertible  promissory  note maturing  March 31, 2002
      (see "Long-term Liabilities").


CHANGES IN KEY PERSONNEL

      In February  2000,  Steven D. Rudnik was  appointed  Chairman of the
      Board of  Directors  and Joseph J.  Tomasek was elected as a director.
      Mr. Tomasek also serves as the Company's  general counsel. In April 2000,
      Paul Chernis  resigned as a director from the Board.


SUBSEQUENT EVENTS

      On April 30, 2000,  the Company  retired an aggregate  $1,050,000  current
      notes payable by a combination of partial  repayment and conversion of the
      balance into common stock and convertible preferred stock (see "Management
      Discussion and Analysis").

                                       11


<PAGE>




      Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Results of Operations:

         For the quarter ended March 31, 2000, the Company had gross revenues of
$100,022  compared  to $44,507 for the same  period in 1999,  all such  revenues
generated by the  Company's  wholly owned  subsidiary  Magnitude,  Inc. from the
licensing of the Company's  proprietary  ErgoManager(TM)  software.  As in prior
periods,  these  revenues  were largely  composed of smaller  orders for initial
pilot projects.  Significantly,  however, they also include a first order from a
Government  agency to equip an entire  department  with the Company's  ergonomic
software.

         Gross profits amounted to $59,088 for a 59% gross margin. Gross profits
are  burdened  with a fixed  charge for  amortization  of software  investments.
Software  assets  underlying  the  Company's  products are being  amortized on a
straight  line  over 10 years,  resulting  in a level  charge  of  approximately
$12,000  per  month  to  cost-of-goods-sold.  Owing to the  fact  that  variable
cost-of-goods-sold  expenses are in the vicinity of only 5%, the gross margin is
expected to further increase as revenues grow. After deducting  selling expenses
and general and  administrative  expenses  of $749,106  the Company  realized an
operating  loss of $690,018  (compared to an operating  loss of $585,815 for the
first  quarter in 1999).  Non-operating  expenses,  after  taking  into  account
$17,222 income from royalties  totaled  $93,479 and include $65,113 net interest
expense and a $44,466  non-recurring  charge for  amortization of debt discount.
The net  result  for the  quarter  was a loss of  $783,497  or $0.06 per  share,
compared to a loss of $587,662 or $0.08 per share for the same period last year.

         The operating results for the first three months of the fiscal year are
indicative of the present status of Magnitude as a company in  transition,  with
new products being introduced into emerging markets.  The Company is undertaking
pioneering  efforts in educating future customers and the business  community at
large about the merits of a pro-active  stance in dealing with the growing level
of health risks and potential  liabilities  associated  with  repetitive  stress
injuries in the computer workplace  environment.  Management believes that these
efforts are  justified by the  potential  rewards  accruing  from this "First to
Market"  approach  which  should lead to a strong  competitive  advantage  and a
sizable market share during the years to come.

         The significant  improvement in the Company's balance sheet and working
capital  position  effected  during the first  quarter  will make it possible to
invest in a more comprehensive  marketing campaign with the goal of accelerating
the education of potential clients. This task will become easier for the Company
as the general  public becomes aware of the risks  associated  with poor posture
and work  habits in the  computerized  work  environment,  and as the  burden of
informing  the public is taken up by certain  State and Federal  agencies in the
course of public  discussion in connection with current  proposals by OSHA. This
process,  however,  takes time and while management is confident of the ultimate
success of its  strategy  it is not in a position to predict the timing with any
degree of certainty.  In addition,  marketing efforts must take into account the
relatively  long sales cycles  typical for products such as those offered by the
Company.  Software  that has the  potential of affecting a company's  operations
especially  where it impacts the  utilization of human resources is subject to a
possibly  larger degree of test,  scrutiny,  and committee  decision making than
most other software products.  Management  therefore expects longer sales cycles
which may  extend the  transition  period  until a  break-even  sales  volume is
achieved.

                                       12


<PAGE>




         As part of its  overall  marketing  strategy,  the  Company  negotiated
several joint venture-,  joint  marketing-,  and  distribution  agreements with,
among others,  AON Ergonomic  Services (a division of insurance  industry leader
AON  Corporation),  The  Speech  Centre  Training  Group  (U.K.)  ,  CapitalReps
(organization  specializing  in  sales  of  computer  products  to  the  federal
government).  In January 2000,  Anderson  Consulting LLP and the Company entered
into an agreement whereby Anderson will include the Company's  products in their
prestigious "Ideas Exchange" showcase. This agreement is of special significance
because it will  introduce  the Company to a potentially  large  audience of key
corporate clients. In order to take advantage of the wide reach of the Internet,
the  Company  just  completed a  distribution  agreement  with a key  e-commerce
marketer - Big Planet Inc., whereby Big Planet will offer the Company's products
directly  to  Internet  users  and  through  its  vast  network  of  independent
distributors.


Liquidity and Capital Resources

         During the quarter,  new equity investments  through private placements
with  accredited  investors  accompanied  by the conversion of larger amounts of
debt into equity significantly improved the balance sheet of the Company and put
the  Company  on a more solid  financial  footing  so that,  at March 31,  2000,
stockholders'  equity totaled positive  $655,223 compared to a deficit in excess
of $2.2  Million at the end of the previous  fiscal year.  During the same time,
the working capital deficit was reduced from $3,541,257 to $299,658,  a relative
improvement in excess of $3.2 Million.

         In February, the Company had obtained a firm commitment from a previous
investor to act as placement  agent for a capital  raising  effort to obtain new
equity  capital  of  $3  Million  through  private  placement  subscriptions  by
accredited investors.  By March 31, 2000, the Company had received a total of $2
Million under this program.  The remaining $1 Million is expected to be received
during the second quarter this year. In addition, the Company received a further
$200,000 from equity placements with other investors.

         Parallel to attracting  new capital in the form of equity  investments,
the  Company  between  January  1,  2000 and  March 31,  2000 has  converted  an
aggregate of $1,510,795  short-term debt into equity and  restructured  $374,890
short-term  liabilities into long-term  convertible  debt. Since then, a further
$711,500 of the remaining short-term debt was converted into equity which is not
yet reflected in the financial statements included herein.

         These  financing  transactions  more than offset the negative cash flow
from operations of  approximately  $825,000  during the quarter,  primarily as a
consequence of losses  incurred due to the absence of sufficient  revenues,  and
resulted  in a cash  position  in  excess  of $ 1.4  Million  at the  end of the
quarter. The Company has no bank debt.

         Management  believes  that  these  capital   transactions  provide  for
adequate  liquidity  and  financial  resources  sufficient  to fund  present and
anticipated future operations during the current fiscal year.



                                       13



<PAGE>




PART  II  -  OTHER INFORMATION

Item 1   LEGAL PROCEEDINGS

The Company is not a party in any legal proceedings.


Item 2   CHANGES IN SECURITIES

c)   Issuance of unregistered Securities

During the first quarter of 2000 and through May 8, 2000, the Company issued the
following unregistered securities:

         (i) 118,000  shares of Common Stock to the  principals of two privately
held companies,  Internet Ergonomic  Technologies,  Inc. and Cornell Ergonomics,
Inc.,  purchased by the Company in January 2000,  which  companies owned certain
software  assets which have been made part of and integrated  into the Company's
proprietary ErgoManager(TM) software system

          (ii) 81,383  shares of Common Stock to three outside consultants and
suppliers for services rendered;

         (iii)    14,445 shares of Common Stock to a director and shareholder
of the Company  pursuant to a 1997  transaction  approved by the Board of
Directors of the Company;

(iv)  16,854  shares of  Common  Stock to an  employee  in lieu of  salary, for
services rendered;

         (v)      100,000 shares to an officer of the Company pursuant to the
 terms of his employment agreement;

         (vi) 2,380,000  shares of Common Stock pursuant to the conversion of an
aggregate  $1,190,000 in convertible  promissory notes,  issued in reliance upon
exemptions provided under Section 4(2) of the Securities Act;

         (vii) 160,000 shares of Common Stock to seven private investors who had
previously  subscribed for certain convertible debt, such shares issued pursuant
to the terms of the  pertinent  subscription  agreement,  and in  reliance  upon
exemptions provided under Section 4(2) of the Securities Act;

         (viii)   400,000 shares of Common Stock to two individual investors
pursuant to private placement  subscriptions under Section 4(2) of the
Securities Act,which resulted in the receipt by the Company of $200,000 in cash;

          (ix)  500,000  shares  of  Common  Stock to three  individual  foreign
investors pursuant to private placement subscriptions under Section 4 (2) of the
Securities  Act,  which  resulted  in the  receipt by the Company of $250,000 in
cash;

         (x) 194,440 shares of Series B Senior  Convertible  Preferred  Stock to
five individual  foreign investors  pursuant to private placement  subscriptions
under Section 4 (2) of the Securities  Act, which resulted in the receipt by the
Company of $1,750,000 in cash, whereby such shares, among other things, have the
following rights and privileges:  (i) 7% annual preferential  dividend,  payable
semi-annually,  (ii)  conversion  at the  holders'  option into shares of Common
Stock at a conversion rate equivalent to $0.90 per share,  and (iii) callable by
the Company under certain terms and conditions;


                                       14

<PAGE>


         (xi) 100,000 shares of Series C Senior  Convertible  Preferred Stock to
the  former  chairman  of the  Company  pursuant  to the terms of a  Resignation
Agreement  entered  into between the Company and this  individual,  whereby such
shares,  among other things,  have the following  rights and privileges:  (i) 7%
annual preferential  dividend,  payable monthly, (ii) conversion at the holders'
option into 1,000,000 shares of Common,  and (iii) callable by the Company under
certain terms and conditions.


Item 3   DEFAULTS ON SENIOR SECURITIES    -  None
         -----------------------------


Item 4   SUBMISSION OF MATTERS TO A VOTE OF
         SECURITIES' HOLDERS

         In a meeting on March 10,  2000,  the Board of Directors of the Company
         approved  a  resolution  by which  the date of the  Annual  Meeting  of
         Stockholders  of the Company has bee set for May 18,  2000,  with March
         31, 2000,  the date of record of  stockholders  entitled to vote at the
         meeting.  A copy of the proxy statement  mailed to all  stockholders of
         record as of March 31, 2000 is attached hereto as Exhibit 22.

Item 5   OTHER INFORMATION      -  None


Item 6   EXHIBITS AND REPORTS ON FORM 8-K

(a)               Exhibit  (3)(i) - Articles  of  Incorporation  and  Amendments
                  thereto,  incorporated  herein by  reference  to  Exhibits  of
                  previous filings with the Commission.

                  Exhibit (3)(ii) - By-laws of the Company,  incorporated herein
                  by  reference  to  Exhibits  of  previous   filings  with  the
                  Commission.

                  Exhibit (4) - Instruments  defining the Rights of Holders - On
                  January  31,  2000,  the  Company  filed   amendments  to  its
                  Certificate  of  Incorporation,  designating  from its  "blank
                  check"  preferred stock pool 300,000 shares as Series A Senior
                  Convertible Preferred Stock, par value $0.001;  350,000 shares
                  as  Series B Senior  Convertible  Preferred  Stock,  par value
                  $0.001;  and  120,000  shares as  Series C Senior  Convertible
                  Preferred  Stock, par value $0.001. A copy of the designations
                  has been attached to the  Company's  report on Form 10-KSB for
                  the year ended  December 31, 1999,  as Exhibits 4.1, 4.2, 4.3,
                  which exhibits are included herein by reference.

                  Exhibit           (22) - Notice of Annual  Meeting dated April
                                    21,  2000,  and Proxy  Statement  - attached
                                    hereto.

                  Exhibit (27) - Financial Data Schedule -  attached hereto.

         (b)   Reports on Form 8-K:   -   None

                                       15



<PAGE>






                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.



                                   MAGNITUDE INFORMATION SYSTEMS, INC.




Date:   May 12, 2000             By: _/s/ Steven D. Rudnik_____
                                     -----------------------------
                                          Steven D. Rudnik
                                          President and Chief Executive Officer




                                       16


<PAGE>



              MAGNITUDE INFORMATION SYSTEMS, INC. AND SUBSIDIARIES

                                   EXHIBIT 22
                  Notice of Annual Meeting and Proxy Statement






To Our Shareholders


      This is an exciting and dynamic time for  Magnitude.  Our  marketplace  is
      poised  for  extraordinary  growth and we have  focused  our  efforts  and
      resources to position us to capture the lion's share of this new market.

      Our solutions  are in place,  our team is in place and we are committed to
you, our partners.

      This year we worked on  sharpening  and evolving  our  solutions to better
      target our short-term and long-term markets and goals. We have:

o         completed   the   expansion  of  our  core   software   product,   the
          ErgoManager(TM)  software  system - this solution is market tested and
          ready.
o         developed strategic  partnerships with several potential resellers and
          influencers  - creating  the  demand  and  channel  for  bringing  our
          solution to market.
o         introduced key prospective  clients to the  ErgoManager(TM)  product -
          with  many   thousands  of   ErgoManager(TM)   seats  up  and  running
          world-wide.
o         restructured   the   company's   balance  sheet  and  have  secured  a
          substantial amount of new equity capital to finance ongoing marketing,
          sales and  development  efforts -- to give  Magnitude  the lead in our
          market and keep us there.
o         developed  several  valuable and  proprietary  new  software  products
          related  to  Internet  and  e-Commerce  usage - two  important  growth
          markets.

We have set the stage to realize  our goal of building a strong  technology  and
"solution"  based business that creates  substantial  value for shareholders for
years to come.

We have carefully included our clients and partners in our development  efforts,
listening to their needs and  objectives.  During the past year, we have started
more than 100 pilot programs, many of which are at Fortune 1000 corporations and
major government agencies.

Over 4,000  licenses  are  presently  being used in these  pilot  programs  --
our  clients are  reporting  results  that exceed  their expectations.

Early in our  development  effort,  our clients  shared the  positive  impact on
productivity  they  attributed to smart  ergonomics as measured by our products.
And our  ErgoManager(TM)  is the first  suite of  software  solutions  that help
businesses  increase  productivity  by reducing  employee  fatigue and improving
their comfort while at the same time  mitigating  the health risks of repetitive
stress. This win-win combination of improved productivity and health benefits is
being realized by increasing  numbers of pilot program  customers.  And for this
reason, many of these companies have already started deploying our software on a
broader scale throughout their organizations.

                                       17

<PAGE>



In 2000, we are looking forward to very promising year. We have strengthened our
management team and added to our growing list of substantial  partners.  We have
expanded  our   relationship   with  Aon  and  entered  into  a  highly  coveted
co-partnering  agreement with Andersen  Consulting  after a lengthy and thorough
evaluation  of iur products and  company.  Early last year we  identified a vast
marketplace of potential buyers who can significantly benefit from our products,
in various  U.S.  Government  departments  and  agencies.  A recently  finalized
General  Services  Administration  (GSA)  contract  will lower the  barriers  in
selling to the Government. To help us achieve our goals in this area we retained
the services of a specialized marketing organization based in Washington D.C.

We have  brought our  financial  house in order.  During the latter part of 1999
and,  especially,  during  the first  Quarter  2000,  our  efforts to retain our
shareholders' and investors' confidence in the Company's future have resulted in
a  significant  improvement  of our balance  sheet.  Since  January 2000 we have
received  new  equity  capital  in excess of $2 Million  and  commitments  for a
further $1 Million,  and we are in the process of converting  debt  exceeding $2
Million in the aggregate, into equity.

During the past year we have  received  our first  patent which will protect the
valuable   intellectual   property   underlying  our  core   ergonomic   product
technologies.  We  have  other  applications  pending  with  the US  Patent  and
Trademark  office and will  continue to protect  our  proprietary  and  valuable
technology assets.

We  have  relentlessly,  systematically  and  methodically  moved  our  business
strategy forward as we bring our Ergonomic Software solutions to market. We have
laid the needed  infrastructure  to secure a "first to market"  position and the
lion share of the new markets to come.  Our  investment in R&D will  continually
keep us two steps ahead of the competitors that will surely follow our lead into
this market.

We firmly  believe that we have  created the  foundation  for a  successful  and
profitable  future  for  Magnitude.  We  could  not  have  done so  without  the
contribution and support of you, our  shareholders.  For that, I wish to express
our gratitude.



                                                     Steven D. Rudnik
                                                     Chairman, President and
                                                     Chief Executive Officer
                                                     April 21, 2000



                                       18

<PAGE>




                       MAGNITUDE INFORMATION SYSTEMS, INC.
                                  401 Route 24
                            Chester, New Jersey 07930
       - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 -     - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TIME . . . . . . . . . . . . . .   10:00 a.m. eastern time, May  18, 2000

PLACE. . . . . . . . . . . . . .    Newark Airport Marriott Hotel
                                    Newark International Airport
                                    Newark, New Jersey

ITEMS OF BUSINESS. . . . . . (1) To vote on the nominees for election to the
                                 Board of Directors, whose terms are described
                                 in the proxy statement.

                             (2) To approve an amendment to the certificate
                                 of incorporation to increase the number of
                                 authorized common shares from 30,000,000
                                 to 100,000,000.

                             (3) To approve and ratify the adoption of the
                                 Company's 2000 Stock Incentive Plan.

                             (4) To  ratify  the appointment of Rosenberg  Rich
                                 Baker  Berman & Company as independent
                                 auditors of the Company for the fiscal year
                                 ending December 31, 2000.

                              (5) To transact such other business as may
                                  properly come before the meeting or any
                                  adjournment or postponement thereof.

         The foregoing  items of business are more fully  described in the Proxy
Statement  accompanying this Notice. Only stockholders of record at the close of
business on March 31, 2000 are  entitled to notice of and to vote at the meeting
or any adjournment or postponement  thereof. A copy of the Company's 1999 Annual
Report on Form 10-KSB, which is not a part of the proxy soliciting material,  is
enclosed.  Whether  or not you expect to attend the  meeting,  please  complete,
date,  sign  and  promptly  return  the  accompanying   proxy  in  the  enclosed
postage-paid envelope so that your shares may be represented at the meeting.

                                          By Order of the Board of Directors

                                          -----------------------------
                                          Joerg H. Klaube, Secretary and
                                          Chief Financial Officer

                                       19



<PAGE>



                       MAGNITUDE INFORMATION SYSTEMS, INC.

                  Annual Meeting of Stockholders - May 18, 2000



           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

         The  undersigned  hereby  acknowledges  receipt of the notice of annual
meeting of stockholders of Magnitude  Information  Systems,  Inc., to be held at
the Newark Airport Mariott Hotel,  Newark  International  Airport,  Newark,  New
Jersey,  on May 18, 2000,  beginning at 10:00 a.m.,  Eastern Time, and the proxy
statement in  connection  therewith,  and appoints  Steven D. Rudnik,  Joseph J.
Tomasek  and Joerg H.  Klaube,  or any of them as  proxies,  with full  power of
substitution,  to vote as  directed  all  shares  of common  stock of  Magnitude
Information  Systems,  Inc.  standing  in the name of the  undersigned,  or with
respect to which the undersigned is entitled to vote and act, at the meeting and
at  any  adjournment   thereof.   If  this  card  contains  no  specific  voting
instructions, this proxy will be voted FOR the election of the director nominees
in item 1, and FOR the  Directors'  proposals  in items 2, 3, and 4. This  proxy
authorizes  each of the persons named above to vote at his or her  discretion on
any other  matter that may properly  come before the meeting or any  adjournment
thereof.


1.  ELECTION OF DIRECTORS--The Board of Directors recommends a vote "FOR"
     /  /  FOR all nominees listed below    /  /   WITHHOLD AUTHORITY
    (except as marked to the contrary below)      to vote for the nominees
                                                  listed below

    Nominees:  Steven D. Rudnik, John C. Duncan, Joseph J. Tomasek,
               Ivano Angelastri, Steven L. Gray
    (Instruction: To withhold authority to vote any individual nominee, write
     that nominee's name on the line provided below.)

    ---------------------------------------------------------------------------

2.  DIRECTORS'  PROPOSAL--To  Approve an  Amendment to the  Certificate  of
    Incorporation  to  Increase  Authorized  Common  Stock from  30,000,000
    Shares to 100,000,000 Shares.
      /     /  FOR              /    /   AGAINST           /    /   ABSTAIN

3.  DIRECTORS' PROPOSAL--To Approve and Ratify the Adoption of the Company's
    2000 Stock Incentive Plan.
      /     /   FOR             /    /   AGAINST           /     /   ABSTAIN

4.  DIRECTORS'  PROPOSAL--To Ratify the Appointment of Rosenberg Rich Baker
    Berman & Company as Independent  Auditors of the Company for the Fiscal
    Year Ending December 31, 2000.
      /     /   FOR             /    /   AGAINST           /     /   ABSTAIN

The undersigned  hereby revokes any proxy  heretofore  given to vote or act with
respect to the common stock of Magnitude  Information  Systems,  Inc. and hereby
ratifies and confirms all that the proxies,  their  substitutes,  or any of them
may lawfully do by virtue hereof. If more than one of the proxies named shall be
present in person or by substitute at the meeting or at any adjournment thereof,
the  majority  of the  proxies so  present  and  voting,  either in person or by
substitute, shall exercise all of the powers hereby given.

Please date, sign and mail this proxy in the enclosed envelope.
No postage is required.            Date __________________________, 2000

                                    ------------------------------------
                                        Signature of Stockholder

                                    ------------------------------------
                                         Signature of Stockholder

                                       20

<PAGE>


                           Please sign exactly as name or  names  appear  on
                           this proxy.  Where there is more than one owner,
                           each should sign.   When signing as attorney,
                           executor, administrator, trustee, custodian, guardian
                           or corporation officer, give full  title.  If more
                           than one  trustee, all  should sign.
                           Votes  MUST be indicated (x) in Black or Blue Ink.

                                       21


<PAGE>




                                 PROXY STATEMENT

                                TABLE OF CONTENTS
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
                                                                         Page

PROXY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
         Proxies and Voting Procedures  . . . . . . . . . . . . . . . . .  4
         Stockholders Entitled to Vote  . . . . . . . . . . . . . . . . .  4
         Required Vote . . . . . . .  . . . . . . . . . . . . . . . . . .  4
         Cost of Proxy Solicitations  . . . . . . . . . . . . . . . . . .  4
         Stockholder Communications . . . . . . . . . . . . . . . . . . .  5
Stockholder Account Maintenance . . . . . . . . . . . . . . . . . . . . .  5

GOVERNANCE OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . .  6
         Committees of the Board of Directors . . . . . . . . . . . . . .  6
Compensation of  Directors  . . . . . . . . . . . . . . . . . . . . . . .  6
Relationship with Independent Public Accountants  . . . . . . . . . . . .  6

PROPOSAL 1:  ELECTION OF BOARD OF DIRECTORS   . . . . . . . . . . . . . .  6
         Share Ownership of Management, Directors and Nominees  . . . . .  8

PROPOSAL 2:  APPROVAL OF AMENDMENT TO CERTIFICATE OF
                     INCORPORATION TO INCREASE AUTHORIZED
                     COMMON  STOCK . . . . . . . . . . . . . . . .. . . . 10

PROPOSAL 3:  APPROVAL OF THE ADOPTION OF THE COMPANY'S
                     2000 INCENTIVE STOCK PLAN . . . . . . . . . . . . .  11
         Purpose of the Proposal . . . . . . . . . . . . . . . . . . . .  11
         General . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . .  12
         Administration of the Plan  . . . . . . . . . . . . . . . . . .  12
         Eligibility to Receive Awards . . . . . . . . . . . . . . . . .  12
         Options . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
    Stock Grants and Stock Purchase Rights . . . . . . . . . . . . . . .  13
         Stock Appreciation Rights . . . . . . . . . . . . . . . . . . .  13
         Transferability of Awards . . . . . . . . . . . . . . . . . . .  14
         Certain U.S. Federal Income Tax Consequences  . . . . . . . . .  14
         Amendment and Termination of the Plan  . . . . . . . . .. . . .  15

PROPOSAL 4:  RATIFICATION OF THE APPOINTMENT OF
                     ROSENBERG RICH BAKER BERMAN & COMPANY
                     AS INDEPENDENT AUDITORS OF THE COMPANY
                     FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000  . . .  16

STOCKHOLDER PROPOSALS  . . . . . . . . . . . . . . . . . . . . . . . . .  16

OTHER MATTERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
EXHIBIT A:  MAGNITUDE INFORMATION SYSTEMS, INC.
                  2000 STOCK INCENTIVE PLAN  . . . . . . . . . . . . . .  18



                                       22


<PAGE>



                                 PROXY STATEMENT
     - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

         We  are  providing   these  proxy  materials  in  connection  with  the
      solicitation by the Board of Directors of Magnitude  Information  Systems,
      Inc.,  (the "Company") of proxies to be voted at the Company's 2000 Annual
      Meeting of Shareholders and at any meeting following adjournment thereof.

         You are cordially  invited to attend the annual meeting on
      May 18, 2000 beginning at 10:00 a.m.  E.D.T.  Stockholders  will be
      admitted  beginning at 9:30 a.m.  E.D.T.  The meeting will be held at
      the Newark Airport  Marriott  Hotel,  Newark  International
      Airport,  Newark, New Jersey.

         You  will  need a  proxy  card  to  enter  the  meeting.  If you  are a
      stockholder  of record the proxy card will have been sent to you.  If your
      shares  are held by your  broker in street  name,  you will need to obtain
      your proxy  card from your  broker.  If you plan to attend the  meeting in
      person, please retain the proxy card.

         We are mailing this proxy statement and accompanying forms of proxy and
      voting  instructions to holders of the Company's common stock on March 31,
      2000.

      PROXIES AND VOTING PROCEDURES

         YOUR VOTE IS  IMPORTANT.  Because many  Stockholders  cannot attend the
      meeting in person,  it is necessary  that a large number be represented by
      proxy.  Most Stockholders will cast their votes by completing a proxy card
      and mailing it in the postage-paid envelope provided.

         You can revoke your proxy at any time before it is  exercised by timely
      delivery of a properly executed,  later-dated proxy or by voting by ballot
      at the meeting.  By providing your voting instructions  promptly,  you may
      save the Company the expense of a second mailing.

         The method by which you vote will in no way limit your right to vote at
      the  meeting if you later  decide to attend in person.  If your shares are
      held in the name of a bank,  broker or other  holder of  record,  you must
      obtain a proxy,  executed in your favor,  from the holder of record, to be
      able to vote at the meeting.

         All shares  entitled  to vote and  represented  by  properly  completed
      proxies received prior to the meeting and not revoked will be voted at the
      meeting in accordance with your  instructions.  IF YOU DO NOT INDICATE HOW
      YOUR SHARES SHOULD BE VOTED ON A MATTER,  THE SHARES  REPRESENTED  BY YOUR
      PROPERLY  COMPLETED  PROXY  WILL  BE  VOTED  AS  THE  BOARD  OF  DIRECTORS
      RECOMMENDS.

         If any other matters are properly  presented at the annual  meeting for
      consideration, including, among other things, consideration of a motion to
      adjourn the meeting to another time or place, the persons named as proxies
      and  acting  thereunder  will  have  discretion  to vote on those  matters
      according  to  their  best  judgment  to the  same  extent  as the  person
      delivering  the proxy would be  entitled  to vote.  At the date this proxy
      statement  went to press,  we did not  anticipate  that any other  matters
      would be raised at the meeting.

      STOCKHOLDERS ENTITLED TO VOTE

         Stockholders  at the close of business on the record date are  entitled
      to notice of and to vote at the annual meeting.

         On March 31,  2000,  there  were  14,591,980  shares  of  common  stock
      outstanding.  Each share is entitled  to one vote on each matter  properly
      brought before the meeting.

                                       23

<PAGE>


         In accordance  with Delaware  law, a list of  Stockholders  entitled to
      vote at the  meeting  will be  available  at the  location  of the  Annual
      Meeting on May 18, 2000, and for 10 days prior to the meeting, between the
      hours of 9:00 a.m. E.D.T. and 4:00 p.m.
      at the Company's offices.

      REQUIRED VOTE

         The  presence,  in person or by proxy,  of the holders of a majority of
      the shares  entitled to vote  generally  for the  election of Directors is
      necessary to  constitute a quorum at the meeting.  Abstentions  and broker
      "non-votes"  are counted as present and  entitled to vote for  purposes of
      determining a quorum.  A broker  "non-vote"  occurs when a nominee holding
      shares  for a  beneficial  owner  does not vote on a  particular  proposal
      because the nominee does not have discretionary  voting power with respect
      to that item and has not received instructions from the beneficial owner.

         A plurality of the votes duly cast is required for the election of each
      Director.  Abstentions and broker "non-votes" are not counted for purposes
      of the election of a Director.

         The  affirmative  vote of the holders of a majority of the  outstanding
      common  shares  entitled to vote is  required  to approve  the  Directors'
      proposal to increase the number of authorized common shares, to ratify and
      approve the adoption of the  Company's  2000 Stock  Incentive  Plan and to
      ratify the  appointment  of  Rosenberg  Rich Baker Berman & Company as the
      Company's  independent  auditors  for the fiscal year ending  December 31,
      2000.

      COST OF PROXY SOLICITATION

         The Company  will pay the cost of  soliciting  proxies.  Proxies may be
      solicited on behalf of the Company by Directors,  officers or employees of
      the  Company  in person or by  telephone,  facsimile  or other  electronic
      means.  We estimate the cost of preparing and mailing this Proxy Statement
      to all  stockholders  of record and to brokerage firms who hold our shares
      in street name to be approximately $5,000.

         In  accordance  with the  regulations  of the  Securities  and Exchange
      Commission,  the Company  will also  reimburse  brokerage  firms and other
      custodians,  nominees  and  fiduciaries  for their  expenses  incurred  in
      sending proxies and proxy materials to beneficial owners of Company stock.

      STOCKHOLDER COMMUNICATIONS

         As a  stockholder,  your  comments  pertaining to any aspect of Company
      business are welcome. Space is provided for this purpose on the proxy card
      given to Stockholders  of record.  Although  stockholder  comments are not
      answered on an individual  basis,  they do assist us in understanding  the
      concerns of Stockholders.

      STOCKHOLDER ACCOUNT MAINTENANCE

        Our transfer  agent is  Securities  Transfer  Corporation,  16910 Dallas
      Parkway, Dallas, Texas 75248, telephone:  972-447-9890. All communications
      concerning accounts of Stockholders of record,  including address changes,
      name changes,  inquiries as to requirements to transfer  Company stock and
      similar issues can be handled by calling our transfer agent.

                                       25

<PAGE>



                            GOVERNANCE OF THE COMPANY

           ----------------------------------------------------------

      Pursuant  to the  Delaware  General  Corporation  Law  and  the  Company's
      by-laws, THE COMPANY' business, property and affairs are managed under the
      direction  of the  Board  of  Directors.  Members  of the  Board  are kept
      informed of the Company's  business through  discussions with the Chairman
      and officers, by reviewing materials provided to them and by participating
      in meetings of the Board.

         During  fiscal  1999,  the Board held 20  meetings. The average
attendance  in the  aggregate  of the total  number of Board meetings was 5.


COMMITTEES OF THE BOARD OF DIRECTORS

         During fiscal 1999, the Board of Directors had no committees.

Under the by-laws, nominations for Director may be made only by the Board.

COMPENSATION OF DIRECTORS

         Each non-employee Director received an option to purchase 40,000 shares
of the Company  common  stock..  The exercise  price per share under the options
granted  during  1998 and 1999 was  $1.00.  Options  generally  vested in annual
successive 25% tranches beginning on the first anniversary date of grant.

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

         Upon review of its work product and in  recognition of its high quality
of professional  services  rendered,  the Board has  reappointed  Rosenberg Rich
Baker  Berman & Company  the  independent  public  accounting  firm to audit our
financial statements for the fiscal year beginning January 1, 2000.

         Representatives  of  Rosenberg  Rich  Baker  Berman &  Company  will be
present at the meeting.  They will be given the  opportunity to make a statement
if they desire to do so, and they will be  available  to respond to  appropriate
questions.

                                   PROPOSAL 1

                         ELECTION OF BOARD OF DIRECTORS
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

         The Board of Directors is currently comprised of five (5) members whose
terms expire at the Annual Meeting.


         We have  nominated  Steven D. Rudnik,  John C. Duncan,
  Joseph J. Tomasek,  Ivano  Angelastri  and Steven L. Gray for one-year
  terms that will expire at our next annual  meeting in the year 2001.
  You can find the principal  occupations  and other  information
  about these nominees below.

                                       25

<PAGE>


         The  persons  named in the proxy card intend to vote such proxy for the
  election  of all the  nominees  unless you  indicate  that your vote should be
  withheld.  They  will not vote  for  additional  directors.  If  elected,  the
  nominees will continue in office until their successors have been duly elected
  and qualified, or until the earlier of their death, resignation or retirement.
  We expect all nominees to be able to serve if elected.

         The Board of Directors may, following the annual meeting,  increase the
  size of the Board and fill any resulting vacancy or vacancies. If the Board of
  Directors  increases  the size of the Board and elects a new  Director to fill
  the  resulting  vacancy,  the new Director must stand for election at the next
  year's annual meeting.

  NOMINEES

         Steven D. Rudnik , Age 40 - President,  CEO, and  Director.  Mr. Rudnik
joined the Company in February 1998 with the acquisition of Rolina  Corporation,
co-founded  by Mr.  Rudnik  in  1996,  and was  appointed  President  and  Chief
Executive  Officer,  and elected to the Board,  in January 1999.  Mr. Rudnik has
extensive   experience  in  software  product  development  and  an  operational
background in software companies  extending over the past 20 years. In 1983, Mr.
Rudnik  joined  Randall-Helms  International,  Inc.  Over the next 13 years,  he
conceived  and  developed  four  independent  families of stock market  modeling
software  products aimed at the worldwide  Institutional  Investor market.  Over
this time, these product  families  generated over $25 million in sales, to more
than 400 clients in 23 countries.  Mr. Rudnik was Executive VP  Development  and
Partner at the time Randall-Helms was sold in 1995.

          John C.  Duncan , Age 42 - Executive  Vice  President.  Until  January
1999,  Mr. Duncan was the Director of the  Department  of  Industrial  Relations
(DIR) of the State of California.  In that capacity he was the principal advisor
to  Governor  Pete  Wilson  on labor and  employment  issues  and  served in his
cabinet.  Mr. Duncan was instrumental in California  becoming the first state to
enact  ergonomic  regulations  to help protect  workers from  repetitive  stress
injuries.  As Director of the California DIR, Mr. Duncan supervised the Cal/OSHA
program and eleven other divisions of the State government,  including the Labor
Commissioner's  Office  and  the  Division  of  Workers  Compensation.   He  was
responsible for the supervision of 3,000 State employees and an annual budget of
$220 Million.

     Joseph J.  Tomasek , Age 53 - Director.  Mr.  Tomasek  was  appointed a
director  in  February  2000.  He has been  engaged in the private  practice of
corporate  and  securities  law in his own law firm for the  last  ten  years.
Mr.  Tomasek  was  appointed  to serve as general  counsel for the Company in
1999.  In addition to his work with the Company,  Mr.  Tomasek  represents
several  other clients in the United States and Europe in corporate finance
matters.

         Ivano Angelastri,  age 37 years, is a resident of Zurich,  Switzerland.
Mr.  Angelastri  has served as  Managing  Director  of T&T  Capital  Trading,  a
securities  brokerage firm located in Zug,  Switzerland,  since  January,  1999,
offering to select and institutional  clients  financial  advisory and portfolio
management  services.  Prior to his current  position,  Mr. Angelastri served as
Managing Director of Megan Services where he also performed  financial  advisory
and portfolio management services.

         Steven L. Gray, age 51 years, is a resident of Venice, Florida. For the
past 3-1/2 years, Mr. Gray has served as the President and is a shareholder of a
private Florida  corporation  engaged in the retail  distribution of nutritional
products. This corporation has a customer base in nine countries.  Prior to that
time, Mr. Gray ran his own real estate development company,  specializing in the
design and construction of multi-family housing.

 THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR STEVEN D. RUDNIK, JOHN C. DUNCAN,
 JOSEPH J. TOMASEK, IVANO ANGELASTRI AND STEVEN L. GRAY FOR ELECTION AS
 DIRECTORS.

                                       26

<PAGE>


 - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
              SHARE OWNERSHIP OF MANAGEMENT, DIRECTORS AND NOMINEES
 - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - -

      The following table sets forth information concerning the beneficial
ownership of the  Company's  common  stock as of March 31,  2000,  for: (a) each
Director and the nominee for Director; (b) each officer, including all executive
officers who are not also  Directors;  and (c) the  Directors  and officers as a
group.  Except as otherwise  noted,  the named  individual or family members had
sole voting and investment power with respect to such securities.

Title      Name and Address of       Amount and Nature of          Percent
of Class    Beneficial Owner          Beneficial Ownership (1)     of Class
--------  ----------------          ------------------------       --------
Common     Steven D. Rudnik              2, 302,778 (2)              13.98%
Stock         President, Chief Executive
              Officer and Director
           John C. Duncan                   210,000 (3)               1.42%
              Senior Vice President
              and Director
           Joerg H. Klaube                  100,100 (4)                 **
              Chief Financial Officer
           Peter J. Buscetto                 56,667 (5)                 **
              Director
           Paul Chernis                      30,000 (3)                 **
              Director
           Seymour Kroll                    618,792 (6)               4.17%
              Director
           Howard G. Siegel                 831,000 (7)               5.61%
              Vice President for
              Shareholder Relations
           Joseph J. Tomasek                 50,000 (3)                 **
              Director
                       Address of all persons above:  c/o the Company.

             All Directors and Officers   3,774,411                   21.78%
           as a Group (8 persons)

             Ivano Angelastri
                  Nominee for Director    1,050,000 (11)               6.89%
             Steven L. Gray
                  Nominee for Director      757,600 (12)               5.11%

             Michael G. Martin            1,750,000 (8)               10.91%
                 12 Tillman Ct.
                 Bridgewater, New Jersey
             Schuerch Asset Management    1,533,900 (9)               10.06%
                 Tellstrasse 21, St.Gallen,
                 Switzerland
             Viviana Partners, L.P.       1,260,000 (10)               8.40%
                 1 Sansome Str.,
                 San Francisco, CA

** less than 1%
----------------------------
     (1) For  purposes of this table,  a person or group of persons is deemed to
have "beneficial  ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days of March 28, 2000. For purposes of computing
the  percentage  of  outstanding  shares of Common  Stock held by each person or
group of persons named above,  any security  which such person or persons has or
have the right to acquire  within such date is deemed to be  outstanding  but is
not  deemed to be  outstanding  for the  purpose  of  computing  the  percentage
ownership of any other person. Except as indicated in the footnote to this table
and pursuant to applicable  community  property laws, the Company believes based
on  information  supplied by such persons,  that the persons named in this table
have sole voting and investment power with respect to all shares of Common Stock
which they beneficially own.
     (2) Includes  deferred  compensation of 150,000 shares,  options to acquire
         1,325,000 shares and conversion rights for appr. 750,000 shares.

                                       27

<PAGE>

     (3)  Represents  options to acquire the same number of shares;  Mr. Chernis
          resigned as a Director of the Company on April 17, 2000.
     (4) Includes options to acquire 100,000 shares.
     (5)  Includes  22,222  shares held by an  affiliate  and options to acquire
          20,000 shares.
     (6)  Includes options to acquire 129,866 shares and conversion rights for
          approx. 325,000 Shares.
     (7)  Includes warrants for 424,000 shares.
     (8)   Includes  options for 750,000 shares and preferred stock  convertible
           into 1,000,000 shares;  Mr. Martin resigned as a Director and Officer
           of the Company on January 28, 2000.
       (9)  Includes options and warrants for 1,023,900 shares.
      (10) Includes warrants for 600,000 shares.
      (11) Includes options and warrants for 650,000 shares.
      (12) Includes options and warrants for 240,000 shares.

                                   PROPOSAL 2

                   DIRECTORS' PROPOSAL TO APPROVE AN AMENDMENT
                       TO THE CERTIFICATE OF INCORPORATION
                       TO INCREASE AUTHORIZED COMMON STOCK
           ----------------------------------------------------------

          The  Board  of  Directors  believes  that it is in the  Company'  best
      interest to amend the Company's  certificate of  incorporation to increase
      the number of shares of common  stock the Company is  authorized  to issue
      from 30 million to 100 million.

          As of March 31, 2000, 14,591,980 of the Company's 30 million currently
      authorized  common  shares were issued and  outstanding.  Of the remaining
      authorized shares,  approximately 14,909,754 were reserved for issuance in
      connection with outstanding warrants, stock options,  convertible debt and
      convertible preferred stock.

         During  fiscal 2000,  the Company may decide to choose to offer certain
      accredited or institutional investors the opportunity to subscribe for and
      purchase additional common shares. In addition,  the Company may decide to
      acquire a company as part of its  strategy  to broaden  its  portfolio  of
      product offerings, to augment its technological capabilities and to expand
      its  geographic  markets  and  distribution  channels.  As  part  of  this
      strategy, we may acquire additional companies for these and other business
      reasons.  We may choose to pay for  acquisitions  with Company stock.  The
      Board  believes  that the  proposed  increase in the number of  authorized
      shares is desirable to maintain the Company's  flexibility in choosing how
      to pay for  acquisitions  and  other  corporate  actions  such  as  equity
      offerings to raise capital and adoption of additional  benefit plans.  The
      Board will determine the terms of any such issuance of additional shares.

         If this proposal is approved,  all or any of the authorized  shares may
      be issued  without  further  stockholder  action  (unless such approval is
      required by applicable  law or regulatory  authorities)  and without first
      offering those shares to the stockholders for  subscription.  The issuance
      of shares  otherwise  than on a pro-rata basis to all  stockholders  would
      reduce the proportionate interest in the Company of each stockholder.

         We have not proposed the  increase in the  authorized  number of shares
      with the  intention  of using  the  additional  shares  for  anti-takeover
      purposes,  although we could  theoretically  use the additional  shares to
      make more difficult or to discourage an attempt to acquire  control of the
      Company.

         If this  proposal is  approved,  the Company will  immediately  file an
      amendment to its Certificate of Incorporation  with the Secretary of State
      of the State of Delaware,  increasing our authorized  Common Shares to the
      new number as approved by stockholders.

                                       28

<PAGE>


          THE BOARD OF  DIRECTORS  RECOMMENDS  THAT  STOCKHOLDERS  VOTE FOR THIS
      PROPOSAL.  PROXIES  SOLICITED BY THE BOARD OF  DIRECTORS  WILL BE SO VOTED
      UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THEIR PROXIES.

                                   PROPOSAL 3

                 APPROVAL OF THE ADOPTION OF THE COMPANY'S 2000
                              INCENTIVE STOCK PLAN

         The Board of Directors proposes that the Company's stockholders approve
the Company's 2000 Incentive  Stock Plan (the "Plan").  The Plan was approved by
the Board of Directors on April 21, 2000.  The Plan  reserves  5,000,000  Common
Shares for issuance to employees,  consultants, advisors and directors. The Plan
is being submitted for  stockholder  approval in its entirety and is attached as
Exhibit A to this Proxy Statement.

         We have previously  issued options pursuant to the Company's 1997 Stock
Option Plan and on an individual  basis,  outside of any stock plan. As of March
31, 2000,  there are  currently  795,000 stock  options  issued  pursuant to the
provisions  of our 1997 Stock Option Plan and  4,134,866  stock  options  issued
outside  of any  stock  plan.  Even  with the  approval  of the  Company's  2000
Incentive  Stock Plan,  represented in this Proposal 3, the Company may continue
to grant stock options outside of any stock plan and is expected to do so.

 PURPOSE OF THE PROPOSAL

         In order to  continue  to  provide  key  individuals  with  awards  and
incentives  commensurate  with their  contributions  and competitive  with those
offered by other employers, the Board of Directors determined that it was in our
best interest to adopt the 2000 Stock  Incentive  Plan and reserve  5,000,000 of
our Common Shares for distribution under its terms.  Consequently,  on April 21,
2000,  our Board of  Directors  adopted  the Plan,  subject to  approval  by our
stockholders.  The Board of  Directors  believes  that  this Plan will  increase
stockholder  value by further aligning the interests of key individuals with the
interest of our  stockholders  by providing a great  opportunity to benefit from
stock  price   appreciation  that  generally   accompanies   improved  financial
performance.

 GENERAL

         The following  summary is qualified in its entirety by reference to the
Plan, a copy of which is attached to this proxy statement as Exhibit A. The Plan
provides for the granting of stock options,  stock appreciation rights and stock
awards  (collectively,  "Awards") to eligible Plan participants.  If the Plan is
approved at the Annual Meeting by the stockholders, the maximum number of shares
of the  Company's  common  stock  available  for  Awards  under the Plan will be
5,000,000.
PURPOSE OF THE PLAN

         The Plan is intended to:

          o attract and retain the best available personnel for positions of
             substantial responsibility;
          o provide additional incentives to employees, directors and
            consultants of the Company; and
          o promote the success of the Company's business.

 ADMINISTRATION OF THE PLAN

         The Plan may be  administered  by the Company's Board of Directors or a
committee of directors  appointed  by the Board of Directors  (the  "Committee")
with respect to whether the optionee is an employee, a director or a consultant.
To the extent that the Company wishes to qualify  options granted under the Plan
as  performance-based  compensation  under  Section  162(m)  under the  Internal
Revenue Code of 1986,  as amended (the "Code"),  members of the  Committee  must
also be "outside directors" under Section 162(m). For this discussion, the Board
of Directors or Committee  is  generally  referred to as the  Committee,  except
where only the Board of Directors may act.

                                       29


<PAGE>

          Subject  to  the  terms  of the  Plan,  the  Committee  has  the  sole
discretion to determine the employees,  directors and  consultants  who shall be
granted Awards,  the size and types of such Awards, and the terms and conditions
of such Awards.

ELIGIBILITY TO RECEIVE AWARDS

         Employees,  directors and consultants of the Company are eligible to be
selected to receive one or more Awards.  The actual number of employees who will
receive  Awards  under the Plan cannot be  determined  because  eligibility  for
participation in the Plan is in the discretion of the Committee.

OPTIONS

         The Committee may grant  non-qualified  stock options,  incentive stock
options  ("ISO")  (which  are  entitled  to  favorable  tax  treatment),   or  a
combination  thereof.  The  number  of shares  covered  by each  option  will be
determined  by the  Committee  but  during any fiscal  year of the  Company,  no
participant  may be granted  options for more than 500,000  shares.  However,  a
participant  may  be  granted  options  for  an  additional  250,000  shares  in
connection with the participant's commencement of service with the Company.

         The price of the shares of the  Company's  common stock subject to each
stock option is set by the Committee, subject to the following restrictions. The
exercise  price  of an  ISO  (or a  nonqualified  stock  option  intended  to be
performance based compensation under Section 162(m)) cannot be less than 100% of
the fair  market  value  (on the date of  grant) of the  shares  covered  by the
option. In addition,  the exercise price of an ISO must be at least 110% of fair
market value if (on the grant date) the participant  owns stock  possessing more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or any of its subsidiaries. Also, the aggregate fair market value of the
shares  (determined  on the grant  date)  covered  by ISOs  which  first  become
exercisable by any participant during any calendar year may not exceed $100,000.
Any excess over this amount will be deemed a nonqualified stock option.

          Options become  exercisable at the times and on the terms  established
by the  Committee.  If the Company is acquired in certain types of  transactions
and the  acquisition and options are not assumed or substituted by the acquirer,
options granted under the Plan will become fully exercisable.

STOCK GRANTS AND STOCK PURCHASE RIGHTS

         Stock grants and stock  purchase  rights may be issued by the Committee
to eligible  participants  under the Plan.  The  Committee  may make an outright
grant of restricted stock to a Plan participant.  In addition, the Committee may
award a participant a stock purchase right.  Stock purchase rights are shares of
the  Company's  common stock that vest in accordance  with terms and  conditions
established by the Committee.  The number of shares of restricted  stock granted
to a participant (if any) by either a stock grant or a stock purchase right will
be determined by the Committee.

         In determining  whether an Award of either a restricted  stock grant or
stock  purchase  rights  should  be  made,  and/or  the  vesting  schedule,   if
applicable,  for an Award,  the  Committee  may impose  whatever  conditions  to
vesting as it  determines  to be  appropriate.  For example,  the  Committee may
determine to grant stock purchase rights only if performance  goals  established
by the Committee are satisfied.  Again, if stock purchase rights are not assumed
or  substituted  by the  acquirer in certain  transactions,  their  vesting will
accelerate.

                                       30

<PAGE>


STOCK APPRECIATION RIGHTS

         The Committee is  authorized  to issue two types of stock  appreciation
rights under the Plan.

         Tandem  Appreciation  Right.  A  Tandem  Appreciation  Right  means  an
Appreciation  Right  granted in tandem with an Option Right or any similar right
granted  under any other  plan of the  Company,  payable  in cash or shares or a
combination  thereof upon the exercise of the  Appreciation  Right and generally
provides for such payment in an amount equal to the "spread"  between the market
price of the  Company's  Common  Shares  on the date the  Appreciation  Right is
exercised and the exercise price of the related Option Right.

         Free-standing Appreciation Right. A Free-standing Appreciation Right is
an Appreciation  Right granted under the Plan, not in tandem with a stock option
or Option  Right,  payable in cash or shares or a  combination  thereof upon the
exercise of the Appreciation Right and generally provides for such payment in an
amount equal to the "spread"  between the market price of the  Company's  Common
Share on the date of exercise and the base exercise price.

TRANSFERABILITY OF AWARDS

         Awards granted under the Plan  generally may not be sold,  transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the applicable laws of descent and distribution.

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

         The rules concerning the Federal income tax  consequences  with respect
to Awards  granted and to be granted  pursuant to the Plan are quite  technical.
Moreover,  the applicable  statutory  provisions  are subject to change,  as are
their   interpretations   and   applications   which  may  vary  in   individual
circumstances.  Therefore,  the  following is designed only to provide a general
understanding of the Federal income tax consequences. In addition, the following
discussion  does not set forth any gift,  estate,  social  security  or state or
local tax consequences that may be applicable and is limited to the U.S. federal
income tax  consequences  to  individuals  who are  citizens or residents of the
U.S.,  other  than those  individuals  who are taxed on a  residence  basis in a
foreign country.

         Incentive  Stock  Options.  In general,  an  employee  will not realize
taxable  income upon either the grant or the  exercise of an ISO and the Company
will not  realize an income tax  deduction  at either  such  time.  In  general,
however,  the  excess of the fair  market  value of the  shares of common  stock
acquired upon exercise of an ISO  (determined  at the time of exercise) over the
exercise  price  of the ISO  will  be  considered  income  for  purposes  of the
alternative  minimum  tax.  If the  recipient  does not sell  the  common  stock
received  pursuant to the exercise of the ISO within  either (i) two years after
the date of the grant of the ISO or (ii) one year after the date of exercise,  a
subsequent  sale of the common  stock will result in  long-term  capital gain or
loss to the recipient and will not result in a tax deduction to the Company.

         If the recipient disposes of the common stock acquired upon exercise of
the ISO within either of the above  mentioned  time periods,  the recipient will
generally  realize as ordinary  income an amount  equal to the lesser of (i) the
fair market value of the common stock on the date of exercise  over the exercise
price, or (ii) the amount realized upon  disposition over the exercise price. In
such event,  the Company  generally  will be entitled to an income tax deduction
equal to the amount  recognized as ordinary  income.  Any gain in excess of such
amount  realized by the recipient as ordinary income would be taxed at the rates
applicable to short-term  or long-term  capital gains  (depending on the holding
period).

         Nonqualified Stock Options. A recipient  generally will not realize any
taxable  income upon the grant of a  nonqualified  stock  option and the Company
will not  receive a  deduction  at the time of such  grant.  Upon  exercise of a
nonqualified stock option, the recipient  generally will receive ordinary income
in an amount equal to the excess of the fair market value of the common stock on
the date of exercise  over the exercise  price.  Upon a  subsequent  sale of the
common stock by the recipient,  16 the recipient  will  recognize  short-term or
long-term  capital  gain or loss  depending  upon his or holding  period for the
common  stock.  the Company will  generally be allowed a deduction  equal to the
amount recognized by the recipient as ordinary income.

                                       31

<PAGE>


         All Options.  With regard to both ISOs and nonqualified  stock options,
the following also apply:  (i) any entitlement to a tax deduction on the part of
the  Company  is  subject  to  the  applicable  tax  rules  (including,  without
limitation,  Section  162(m) of the Code  regarding a $1,000,000  limitation  on
deductible  compensation),  and (ii) in the  event  that the  exercisability  or
vesting of any award is  accelerated  because of a change of  control,  payments
relating to the awards (or a portion  thereof),  either  alone or together  with
certain other payments,  may constitute parachute payments under Section 280G of
the Code,  which  excess  amounts  may be subject to excise  taxes and a loss of
deductibility for the Company or the resulting entity.

         Stock  Grants.  The tax  principles  applicable  to a  direct  grant of
restricted  shares under the Plan are substantially the same as those summarized
above under the heading "Nonqualified Stock Options".

         Stock  Purchase  Rights.  Unless a recipient  makes an  election  under
Section 83(b) of the Code, the recipient will not recognize  taxable income when
the Company grants stock purchase rights (or if there is a purchase price,  when
the  recipient  buys  restricted  stock  pursuant  to a stock  purchase  right).
Instead,  the recipient  generally will recognize  ordinary income as the shares
vest.  If the  recipient  makes a Section 83(b)  election,  the  recipient  will
recognize  ordinary  income when the Company grants the recipient stock purchase
rights  (or buy  restricted  stock  if a  purchase  price is  required).  If the
recipient  later  loses its shares,  however,  the  recipient  cannot take a tax
deduction.  In either case, the recipient's ordinary income will be equal to the
fair market value of the shares when the recipient recognizes the income

         Stock  Appreciation   Rights.  A  recipient  who  is  granted  a  Stock
Appreciation Right, whether in tandem with a stock option or free-standing, will
recognize  ordinary  income in the year of  exercise  equal to the amount of the
appreciation  distribution.  The Company will be entitled to an income deduction
equal to such  distribution for the taxable year in which the ordinary income is
recognized by the recipient.

         In  general,  Section  162(m)  of  the  Code  denies  a  publicly  held
corporation  a deduction  for Federal  income tax purposes for  compensation  in
excess of $1,000,000 per year per person to its chief executive officer and four
other executive officers whose compensation is disclosed in its proxy statement,
subject to certain exceptions. Options will generally qualify under one of these
exceptions  if they are granted  under a plan that states the maximum  number of
shares with respect to which  options may be granted to any  recipient  during a
specified  period if the plan under which the options are granted is approved by
stockholders  and  is  administered  by  a  compensation   committee   comprised
exclusively  of  outside  directors.  The  Plan is  intended  to  satisfy  these
requirements with respect to options.

AMENDMENT AND TERMINATION OF THE PLAN

         The Board of Directors, in its sole discretion,  generally may amend or
terminate  the Plan,  or any part  thereof at any time and for any  reason.  The
amendment,  suspension or termination of the Plan shall not, without the consent
of the  participant,  alter or impair any rights or obligations  under any Award
granted to such  participant.  Any Plan  amendment  shall be approved by the the
Company  stockholders  as  required  by law.  The Plan  shall  remain in effect,
subject to the Board of Directors'  right to terminate the plan.  Absent further
Board of  Directors  action,  the Plan will  terminate  ten (10)  years from the
Plan's effective date.

THE BOARD OF DIRECTORS  RECOMMENDS THAT THE STOCKHOLDERS  VOTE "FOR" APPROVAL OF
THE PLAN.

                                       32

<PAGE>



                                   PROPOSAL 4
                       RATIFICATION OF THE APPOINTMENT OF
                      ROSENBERG RICH BAKER BERMAN & COMPANY
                     AS INDEPENDENT AUDITORS OF THE COMPANY
                  FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000

         The Board of Directors proposes that the Company's  stockholders ratify
its  appointment  of Rosenberg  Rich Baker  Berman & Company as the  independent
auditors of the Company for the fiscal year ending December 31, 2000.

         The Board of  Directors  has  reviewed  the work product as well as has
held  conferences  with  members  of  Rosenberg  Rich  Baker  Berman  &  Company
throughout  fiscal  year  1999.  In  recognition  of this  firm's  high  quality
professional services rendered,  the Board has re-appointed Rosenberg Rich Baker
Berman & Company to audit our financial statements for the fiscal year beginning
January 1, 2000.

         THE BOARD OF DIRECTORS  RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION  OF THE APPOINTMENT OF ROSENBERG RICH BAKER BERMAN & COMPANY AS THE
AUDITORS OF THE COMPANY FOR FISCAL YEAR ENDING DECEMBER 31, 2000.

                              STOCKHOLDER PROPOSALS

           ----------------------------------------------------------

          Any  stockholder  who  intends  to  present a  proposal  at the annual
      meeting  in the year 2001  must  deliver  the  proposal  to the  Corporate
      Secretary  at 401 Route 24,  Chester,  New  Jersey  07930,  not later than
      December 1, 2000,  if the proposal is submitted for inclusion in our proxy
      materials  for that  meeting  pursuant to Rule 14a-8 under the  Securities
      Exchange Act of 1934.

                                  OTHER MATTERS

         Whether or not you plan to attend  the  meeting,  please  vote by mark,
sign,  date and  promptly  return  the proxy  card  sent to you in the  envelope
provided. No postage is required for mailing in the United States.





                                     -------------------

                                       Steven D. Rudnik

                                       Chairman of the Board and

                                       Chief Executive Officer



April 21, 2000


                                       33

<PAGE>


                                    EXHIBIT A


                       MAGNITUDE INFORMATION SYSTEMS, INC.

                            2000 STOCK INCENTIVE PLAN



         1. Purpose. The purpose of this Plan is to attract and retain qualified
officers,  directors and other key employees of, and consultants  to,  Magnitude
Information  Systems,  Inc., a Delaware  corporation  (the  "Company"),  and its
Subsidiaries  and to provide  such  persons  with  appropriate  incentives.  The
Company  has  adopted  the Plan  effective  as of May 1,  2000,  subject  to the
approval of the  Company's  shareholders,  and unless  extended by  amendment in
accordance  with the terms of the Plan, no Option Rights,  Appreciation  Rights,
Restricted  Shares or Deferred Shares will be granted  hereunder after the tenth
anniversary of such effective date.

         2.       Definitions.  As used in this Plan,

         "Appreciation  Right" means a right granted pursuant to Section 5 of
this Plan,  including a Free-standing  Appreciation Right
and a Tandem Appreciation Right.

         "Base  Price"  means the price to be used as the basis for  determining
the Spread upon the exercise of a Free-standing Appreciation Right.

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Committee"  means the Compensation  Committee of the Board, as
described in Section 13(a) of this Plan, or, in the absence of
a Compensation Committee, the full Board.

         "Common  Shares" means (i) shares of the Common Stock,  $.01 par value,
of the Company and (ii) any security  into which Common  Shares may be converted
by reason of any  transaction  or event of the type  referred to in Section 9 of
this Plan.

         "Date of Grant" means the date  specified  by the  Committee on which a
grant of Option Rights or  Appreciation  Rights or a grant or sale of Restricted
Shares or Deferred  Shares  shall become  effective,  which shall not be earlier
than the date on which the Committee takes action with respect thereto.

         "Deferral  Period" means the period of time during which Deferred
Shares are subject to deferral  limitations  under Section 7
of this Plan.

         "Deferred  Shares"  means an award  pursuant to Section 7 of this
Plan of the right to receive  Common  Shares at the end of a
specified Deferral Period.

         "Free-standing  Appreciation Right" means an Appreciation Right granted
pursuant  to Section 5 of this Plan that is not granted in tandem with an Option
Right or similar right.

         "Incentive  Stock  Option"  means an Option  Right that is  intended to
qualify as an  "incentive  stock  option"  under  Section 422 of the Code or any
successor provision thereto.

         "Market  Value per  Share"  means the fair  market  value of the Common
Shares as determined by the Committee from time to time.

                                       34

<PAGE>


         "Nonqualified  Option"  means an Option  Right that is not  intended to
qualify as an Incentive Stock Option.

         "Optionee" means the person so designated in an agreement evidencing
 an outstanding Option Right.

         "Option Price" means the purchase price payable upon the exercise of an
Option Right.

         "Option  Right"  means the right to  purchase  Common  Shares  from the
Company upon the exercise of a Nonqualified  Option or an Incentive Stock Option
granted pursuant to Section 4 of this Plan.

         "Participant"  means a  person  who is  selected  by the  Committee  to
receive benefits under this Plan and (i) is at that time an officer, director or
other key employee of, or a consultant to, the Company or any Subsidiary or (ii)
has agreed to commence serving in any such capacity.

         "Reload Option  Rights" means  additional  Option Rights  automatically
granted to an Optionee  upon the exercise of Option  Rights  pursuant to Section
4(f) of this Plan.

         "Restricted  Shares"  means Common  Shares  granted or sold pursuant to
Section 6 of this Plan as to which  neither the  substantial  risk of forfeiture
nor the restriction on transfer referred to in Section 6 hereof has expired.

         "Rule 16b-3" means Rule 16b-3,  as promulgated and amended from time to
time by the Securities and Exchange Commission under the Securities Exchange Act
of 1934, or any successor rule to the same effect.

         "Spread" means, in the case of a Free-standing  Appreciation Right, the
amount by which  the  Market  Value per Share on the date when the  Appreciation
Right is exercised exceeds the Base Price specified therein or, in the case of a
Tandem Appreciation Right, the amount by which the Market Value per Share on the
date when the Appreciation Right is exercised exceeds the Option Price specified
in the related Option Right.

         "Subsidiary"   means  a   corporation,   partnership,   joint  venture,
unincorporated  association or other entity in which the Company has a direct or
indirect  ownership  or  other  equity  interest;  provided,  however,  that for
purposes of determining  whether any person may be a Participant for purposes of
any grant of Incentive  Stock  Options,  "Subsidiary"  means any  corporation in
which the Company owns or controls  directly or indirectly  more than 50% of the
total combined  voting power  represented by all classes of stock issued by such
corporation at the time of the grant.

         "Tandem   Appreciation  Right"  means  an  Appreciation  Right  granted
pursuant  to  Section 5 of this Plan that is  granted  in tandem  with an Option
Right or any similar right granted under any other plan of the Company.

         "10% Shareholder"  means an individual who, at the time an Option Right
is granted,  owns stock  possessing  more than 10% of the total combined  voting
power  of all  classes  of stock  issued  by the  Company  or by any  parent  or
subsidiary  corporation,  within the meaning of Section 422(b)(6) of the Code or
any successor provision thereto.

         3.       Shares Available under the Plan.

                  (a)  Subject to  adjustment  as  provided in Section 9 of this
Plan,  the number of Common Shares which may be (i) issued or  transferred  upon
the  exercise  of Option  Rights or  Appreciation  Rights,  or (ii)  awarded  as
Restricted  Shares and released from substantial  risk of forfeiture  thereof or
Deferred  Shares,  shall not in the aggregate  exceed  5,000,000  Common Shares,
which may be Common  Shares  of  original  issuance  or  Common  Shares  held in
treasury or a combination thereof. For the purposes of this Section 3(a):

                                       35

<PAGE>


                           (i) Upon  payment in cash of the benefit  provided by
         any award granted under this Plan,  any Common Shares that were covered
         by that  award  shall  again be  available  for  issuance  or  transfer
         hereunder; and

                           (ii) Upon the full or  partial  payment of any Option
         Price  by  the  transfer  to the  Company  of  Common  Shares  or  upon
         satisfaction of tax withholding obligations in connection with any such
         exercise or any other payment made or benefit  realized under this Plan
         by the  transfer or  relinquishment  of Common  Shares,  there shall be
         deemed to have been issued or transferred  under this Plan only the net
         number of Common Shares  actually  issued or transferred by the Company
         less the number of Common Shares so transferred or relinquished.

                  (b)  Notwithstanding  anything  in  Section  3(a)  hereof,  or
elsewhere in this Plan, to the contrary,  the aggregate  number of Common Shares
actually issued or transferred by the Company upon the exercise of the Incentive
Stock Options shall not exceed the total number of Common Shares first specified
in Section 3(a) hereof.

                           (c)  Notwithstanding any other provision of this Plan
         to the  contrary,  no  Participant  shall be granted  Option Rights and
         Appreciation  Rights,  in the  aggregate,  for more than 500,000 Common
         Shares during any one calendar year,  subject to adjustment as provided
         in Section 9 of this Plan.
                  (d)  Notwithstanding  any other  provision of this Plan to the
contrary, no Participant shall be granted Deferred Shares, in the aggregate, for
more than 2,000,000  Common Shares during any two  consecutive  calendar  years,
subject to adjustment as provided in Section 9 of this Plan.

         4. Option Rights.  The Committee may from time to time authorize grants
to  Participants  of  options  to  purchase  Common  Shares  upon such terms and
conditions  as the  Committee  may  determine in  accordance  with the following
provisions:

                  (a) Each grant shall  specify  the number of Common  Shares to
which it pertains.

                  (b) Each grant shall specify an Option Price per Common Share,
which  Option  Price,  in the  case of  Nonqualified  Stock  Options,  shall  be
determined  in the sole and  absolute  discretion  of the  Committee,  and which
Option Price, in the case of Incentive Stock Options,  shall be no less than the
Fair Market Value of the Common Shares at the Date of Grant . In the case of any
grant of Incentive  Stock  Options to a 10%  Shareholder,  such Option Price per
Common Share may not be less than 110% of the Market Value per Share on the Date
of Grant.

                  (c) Each grant shall specify the form of  consideration  to be
paid in  satisfaction  of the  Option  Price and the  manner of  payment of such
consideration,  which may  include  (i) cash in the form of currency or check or
other  cash  equivalent   acceptable  to  the  Company,   (ii)   nonforfeitable,
unrestricted Common Shares,  which are already owned by the Optionee,  (iii) any
other legal  consideration  that the Committee may deem  appropriate,  including
without  limitation  any form of  consideration  authorized  under  Section 4(d)
below, on such basis as the Committee may determine in accordance with this Plan
and (iv) any combination of the foregoing.

                  (d) Any  grant  of a  Nonqualified  Option  may  provide  that
payment of the Option  Price may also be made in whole or in part in the form of
Restricted  Shares  or  other  Common  Shares  that  are  subject  to a risk  of
forfeiture  or  restrictions  on transfer.  Unless  otherwise  determined by the
Committee  on or after the Date of Grant,  whenever  any Option Price is paid in
whole or in part by means of any of the forms of consideration specified in this
Section 4(d),  the Common  Shares  received by the Optionee upon the exercise of
the  Nonqualified  Option  shall be subject to the same risks of  forfeiture  or
restrictions on transfer as those that applied to the consideration  surrendered
by  the  Optionee;   provided,  however,  that  such  risks  of  forfeiture  and
restrictions  on transfer  shall apply only to the same number of Common  Shares
received by the  Optionee as applied to the  forfeitable  or  restricted  Common
Shares surrendered by the Optionee.

                                       36

<PAGE>


                  (e) Any grant  may,  if there is then a public  market for the
Common  Shares,  provide  for  deferred  payment  of the  Option  Price from the
proceeds of sale  through a broker of some or all of the Common  Shares to which
the exercise relates.

                  (f) Any  grant  may  provide  for the  automatic  grant to the
Optionee of Reload Option Rights upon the exercise of Option  Rights,  including
Reload  Option  Rights,  for Common  Shares or any other  noncash  consideration
authorized under Sections 4(c) and (d) above;  provided,  however, that the term
of any Reload  Option Right shall not extend beyond the term of the Option Right
originally exercised.
                  (g)  Successive  grants  may  be  made  to the  same  Optionee
regardless  of whether  any Option  Rights  previously  granted to the  Optionee
remain unexercised.

                  (h)  Each  grant  shall  specify  the  period  or  periods  of
continuous  employment,  or continuous engagement of the consulting services, of
the  Optionee by the Company or any  Subsidiary  that are  necessary  and/or the
individual or aggregate  performance  criteria that must be satisfied before the
Option Rights or installments  thereof shall become  exercisable,  and any grant
may  provide for the  earlier  exercise  of the Option  Rights in the event of a
change  in  control  of the  Company  or other  similar  transaction  or  event.
Notwithstanding  the  foregoing,  in the case of any  grant of  Incentive  Stock
Options, the aggregate Market Value per Share on the Date of Grant of the Common
Shares subject to such Incentive  Stock Options (and all other  incentive  stock
options granted by the Company or any parent or subsidiary corporation) that are
exercisable  for the first time by the Optionee  during any calendar  year shall
not exceed $100,000.

                  (i)      Option Rights granted  pursuant to this Section 4
 may be Nonqualified  Options or Incentive Stock Options or
combinations thereof.

                  (j) Any grant of an Option  Right may  provide for the payment
to the Optionee of dividend  equivalents  thereon in cash or Common  Shares on a
current,  deferred or  contingent  basis,  or the Committee may provide that any
dividend equivalents shall be credited against the Option Price.

                  (k) No Option Right granted  pursuant to this Section 4 may be
exercised  more  than 10  years  from  the  Date of  Grant.  In the  case of any
Incentive Stock Option granted to a 10% Shareholder, such Incentive Stock Option
may not be exercised more than five years from the Date of Grant.

                  (l) Each grant shall be evidenced by an agreement, which shall
be  executed  on behalf of the  Company by any  designated  officer  thereof and
delivered  to and  accepted by the  Optionee  and shall  contain  such terms and
provisions as the Committee may determine consistent with this Plan.

         5.  Appreciation  Rights.  The Committee may also  authorize  grants to
Participants of Appreciation  Rights. An Appreciation  Right shall be a right of
the Participant to receive from the Company an amount, which shall be determined
by the Committee and shall be expressed as a percentage  (not exceeding 100%) of
the Spread at the time of the exercise of an  Appreciation  Right.  Any grant of
Appreciation  Rights under this Plan shall be upon such terms and  conditions as
the Committee may determine in accordance with the following provisions:

                  (a) Any grant may  specify  that the amount  payable  upon the
exercise of an  Appreciation  Right may be paid by the  Company in cash,  Common
Shares or any combination thereof and may (i) either grant to the Participant or
reserve to the  Committee  the right to elect among those  alternatives  or (ii)
preclude the right of the Participant to receive and the Company to issue Common
Shares or other equity securities in lieu of cash.

                  (b) Any grant may  specify  that the amount  payable  upon the
exercise of an  Appreciation  Right shall not exceed a maximum  specified by the
Committee on the Date of Grant.

                  (c) Each  grant  shall  specify  (i) the  period or periods of
continuous  employment,  or continuous engagement of the consulting services, of
the  Optionee by the Company or any  Subsidiary  that are  necessary  and/or the
individual or aggregate  performance  criteria that must be satisfied before the
Appreciation  Rights or installments  thereof shall become  exercisable and (ii)
permissible  dates or periods on or during  which  Appreciation  Rights shall be
exercisable.

                                       37

<PAGE>


                  (d) Any grant may specify  that an  Appreciation  Right may be
exercised  only in the  event of a change in  control  of the  Company  or other
similar transaction or event.

                  (e) Any grant may provide  for the payment to the  Participant
of dividend equivalents thereon in cash or Common Shares on a current,  deferred
or contingent basis.

                  (f) Each grant shall be evidenced by an agreement, which shall
be  executed  on behalf of the  Company by any  designated  officer  thereof and
delivered  to and  accepted  by the  Optionee  and shall  describe  the  subject
Appreciation  Rights,  identify  any  related  Option  Rights,  state  that  the
Appreciation  Rights are subject to all of the terms and conditions of this Plan
and contain  such other terms and  provisions  as the  Committee  may  determine
consistent with this Plan.

                  (g)  Regarding  Tandem  Appreciation  Rights only:  Each grant
shall provide that a Tandem  Appreciation  Right may be exercised  only (i) at a
time when the related Option Right (or any similar right granted under any other
plan of the Company) is also  exercisable and the Spread is positive and (ii) by
surrender of the related Option Right (or such other right) for cancellation.

                  (h)      Regarding Free-standing Appreciation Rights only:

                           (i) Each  grant  shall  specify  in  respect  of each
         Free-standing  Appreciation  Right a Base Price per Common Share, which
         shall be equal to or  greater  than the  Market  Value per Share on the
         Date of Grant;

                           (ii)  Successive  grants  may be  made  to  the  same
         Participant regardless of whether any Free-standing Appreciation Rights
         previously granted to the Participant remain unexercised; and

                           (iii)    No  Free-standing  Appreciation  Right
 granted under this Plan may be exercised  more than 10 years from the Date of
 Grant.

         6. Restricted  Shares. The Committee may also authorize grants or sales
to  Participants  of  Restricted  Shares upon such terms and  conditions  as the
Committee may determine in accordance with the following provisions:

                  (a) Each grant or sale shall constitute an immediate  transfer
of the ownership of Common Shares to the  Participant  in  consideration  of the
performance  of services,  entitling such  Participant  to dividend,  voting and
other  ownership  rights,  subject to the  substantial  risk of  forfeiture  and
restrictions on transfer hereinafter referred to.

                  (b)  Each  grant  or  sale  may  be  made  without  additional
consideration  from the  Participant  or in  consideration  of a payment  by the
Participant that is less than the Market Value per Share on the Date of Grant.

                  (c)  Each  grant or sale  shall  provide  that the  Restricted
Shares covered  thereby shall be subject to a  "substantial  risk of forfeiture"
within the  meaning of Section 83 of the Code for a period to be  determined  by
the  Committee  on the Date of Grant,  and any grant or sale may provide for the
earlier  termination  of such  period in the event of a change in control of the
Company or other similar transaction or event.

                  (d) Each grant or sale shall provide  that,  during the period
for  which  such   substantial   risk  of   forfeiture   is  to  continue,   the
transferability  of the  Restricted  Shares shall be prohibited or restricted in
the manner and to the extent  prescribed  by the Committee on the Date of Grant.
Such  restrictions may include without  limitation rights of repurchase or first
refusal in the  Company or  provisions  subjecting  the  Restricted  Shares to a
continuing substantial risk of forfeiture in the hands of any transferee.

                                       38

<PAGE>


                  (e) Any grant or sale may require that any or all dividends or
other  distributions  paid on the  Restricted  Shares  during the period of such
restrictions  be  automatically  sequestered  and  reinvested on an immediate or
deferred  basis in additional  Common  Shares,  which may be subject to the same
restrictions as the underlying award or such other restrictions as the Committee
may determine.

                  (f) Each grant or sale  shall be  evidenced  by an  agreement,
which  shall be  executed  on behalf of the  Company by any  designated  officer
thereof and delivered to and accepted by the  Participant and shall contain such
terms and provisions as the Committee may determine  consistent  with this Plan.
Unless  otherwise  directed  by the  Committee,  all  certificates  representing
Restricted  Shares,  together with a stock power that shall be endorsed in blank
by the  Participant  with  respect to the  Restricted  Shares,  shall be held in
custody by the Company until all restrictions thereon lapse.

         7. Deferred Shares. The Committee may also authorize grants or sales of
Deferred Shares to Participants  upon such terms and conditions as the Committee
may determine in accordance with the following provisions:

                  (a) Each grant or sale shall  constitute  the agreement by the
Company to issue or transfer  Common Shares to the  Participant in the future in
consideration of the performance of services,  subject to the fulfillment during
the Deferral Period of such conditions as the Committee may specify.
                  (b)  Each  grant  or  sale  may  be  made  without  additional
consideration  from the  Participant  or in  consideration  of a payment  by the
Participant that is less than the Market Value per Share on the Date of Grant.

                  (c) Each grant or sale shall provide that the Deferred  Shares
covered thereby shall be subject to a Deferral  Period,  which shall be fixed by
the  Committee  on the Date of Grant,  and any grant or sale may provide for the
earlier  termination of the Deferral  Period in the event of a change in control
of the Company or other similar transaction or event.

                  (d) During the Deferral Period, the Participant shall not have
any right to transfer  any rights  under the subject  award,  shall not have any
rights of ownership in the Deferred  Shares and shall not have any right to vote
the  Deferred  Shares,  but the  Committee  may on or  after  the  Date of Grant
authorize the payment of dividend  equivalents on the Deferred Shares in cash or
additional Common Shares on a current, deferred or contingent basis.


                  (e) Each grant or sale  shall be  evidenced  by an  agreement,
which  shall be  executed  on behalf of the  Company by any  designated  officer
thereof and delivered to and accepted by the  Participant and shall contain such
terms and provisions as the Committee may determine consistent with this Plan.

         8.       Transferability.

                  (a) No Option Right or  Appreciation  Right granted under this
Plan may be  transferred  by a  Participant,  except  (i) by will or the laws of
descent  and  distribution,  or  (ii)  in the  case of an  award  other  than an
Incentive Stock Option,  to one or more members of the  Participant's  immediate
family or to a trust  established for the benefit of the Participant  and/or one
or more  members  of the  Participant's  immediate  family.  Option  Rights  and
Appreciation  Rights  granted  under  this  Plan may not be  exercised  during a
Participant's  lifetime  except  by (i)  the  Participant,  (ii)  a  permissible
transferee of the Participant  described in the preceding sentence,  or (iii) in
the event of the legal incapacity of the Participant or any such transferee,  by
the guardian or legal  representative  of the Participant or such transferee (as
applicable) acting in a fiduciary capacity on behalf thereof under state law and
court supervision.

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                  (b) Any grant made under this Plan may provide that all or any
part of the Common  Shares that are to be issued or  transferred  by the Company
upon  the  exercise  of  Option  Rights  or  Appreciation  Rights  or  upon  the
termination  of the Deferral  Period  applicable to Deferred  Shares,  or are no
longer  subject  to the  substantial  risk of  forfeiture  and  restrictions  on
transfer  referred  to in  Section 6 of this  Plan,  shall be subject to further
restrictions upon transfer.

         9.       Adjustments.

                  (a) The Committee may make or provide for such  adjustments in
the number of Common Shares covered by outstanding  Option Rights,  Appreciation
Rights and Deferred Shares granted hereunder, the Option Prices per Common Share
or Base  Prices  per  Common  Share  applicable  to any such  Option  Rights and
Appreciation Rights, and the kind of shares (including shares of another issuer)
covered  thereby,  as the Committee may in good faith  determine to be equitably
required in order to prevent dilution or expansion of the rights of Participants
that  otherwise  would  result  from  (i)  any  stock  dividend,   stock  split,
combination  of  shares,  recapitalization  or  similar  change  in the  capital
structure of the Company or (ii) any merger, consolidation,  spin-off, spin-out,
split-off,  split-up,  reorganization,  partial or complete liquidation or other
distribution  of  assets,  issuance  of  warrants  or other  rights to  purchase
securities or any other corporate  transaction or event having an effect similar
to any of the  foregoing.  In the event of any such  transaction  or event,  the
Committee may provide in substitution  for any or all  outstanding  awards under
this Plan such alternative consideration as it may in good faith determine to be
equitable under the  circumstances  and may require in connection  therewith the
surrender of all awards so replaced. Moreover, the Committee may on or after the
Date of Grant provide in the agreement evidencing any award under this Plan that
the holder of the award may elect to receive an  equivalent  award in respect of
securities  of the  surviving  entity  of any  merger,  consolidation  or  other
transaction or event having a similar effect,  or the Committee may provide that
the holder will  automatically be entitled to receive such an equivalent  award.
The  Committee  may also make or provide  for such  adjustments  in the  maximum
numbers of Common  Shares  specified in Section 3 of this Plan as the  Committee
may  in  good  faith  determine  to be  appropriate  in  order  to  reflect  any
transaction or event described in this Section 9.

                  (b) If another  corporation  is merged into the Company or the
Company  otherwise  acquires  another  corporation,  the  Committee may elect to
assume  under this Plan any or all  outstanding  stock  options or other  awards
granted by such  corporation  under any stock option or other plan adopted by it
prior  to  such  acquisition.  Such  assumptions  shall  be on  such  terms  and
conditions as the Committee may determine; provided, however, that the awards as
so assumed do not contain any terms,  conditions or rights that are inconsistent
with the terms of this Plan. Unless otherwise determined by the Committee,  such
awards shall not be taken into account for purposes of the limitations contained
in Section 3 of this Plan.

         10. Fractional  Shares.  The Company shall not be required to issue any
fractional  Common Shares  pursuant to this Plan.  The Committee may provide for
the elimination of fractions or for the settlement thereof in cash.

         11.  Withholding  Taxes.  To the extent that the Company is required to
withhold federal,  state,  local or foreign taxes in connection with any payment
made or benefit  realized by a Participant  or other person under this Plan, and
the amounts  available to the Company for the withholding are  insufficient,  it
shall be a condition  to the receipt of any such payment or the  realization  of
any such benefit  that the  Participant  or such other person make  arrangements
satisfactory  to the Company for payment of the balance of any taxes required to
be withheld.  At the  discretion of the  Committee,  any such  arrangements  may
without limitation include voluntary or mandatory relinquishment of a portion of
any such payment or benefit or the surrender of outstanding  Common Shares.  The
Company  and  any  Participant  or such  other  person  may  also  make  similar
arrangements  with  respect to the  payment  of any taxes with  respect to which
withholding is not required.

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         12.  Certain   Terminations  of  Employment  or  Consulting   Services,
Hardship, and Approved Leaves of Absence. Notwithstanding any other provision of
this  Plan to the  contrary,  in the  event  of  termination  of  employment  or
consulting  services by reason of death,  disability,  normal retirement,  early
retirement  with the  consent  of the  Company,  termination  of  employment  or
consulting  services to enter public or military service with the consent of the
Company or leave of absence approved by the Company, or in the event of hardship
or other special  circumstances,  of a Participant  who holds an Option Right or
Appreciation Right that is not immediately and fully exercisable, any Restricted
Shares as to which the  substantial  risk of  forfeiture or the  prohibition  or
restriction  on transfer  has not lapsed,  any  Deferred  Shares as to which the
Deferral  Period is not  complete,  or any Common Shares that are subject to any
transfer  restriction  pursuant to Section 8(b) of this Plan,  the Committee may
take any action that it deems to be equitable under the  circumstances or in the
best interests of the Company, including without limitation waiving or modifying
any limitation or requirement with respect to any award under this Plan.

             13.      Administration of the Plan.

                  (a)  This  Plan  shall  be  administered  by the  Compensation
Committee of the Board,  which shall be composed of not less than two members of
the Board, or, in the absence of a Compensation Committee, by the full Board. At
any time that awards  under the Plan are  subject to Rule 16b-3,  each member of
the Compensation Committee shall be a "non-employee director" within the meaning
of such Rule.  In  addition,  at any time that the Company is subject to Section
162(m)  of the  Code,  each  member of the  Compensation  Committee  shall be an
"outside  director"  within the  meaning  of such  Section.  A  majority  of the
Committee  shall  constitute  a  quorum,  and  the  acts of the  members  of the
Committee  who are present at any meeting  thereof at which a quorum is present,
or acts unanimously  approved by the members of the Committee in writing,  shall
be the acts of the Committee.

                  (b) The  interpretation  and  construction by the Committee of
any provision of this Plan or any agreement, notification or document evidencing
the grant of Option Rights,  Appreciation Rights,  Restricted Shares or Deferred
Shares, and any determination by the Committee pursuant to any provision of this
Plan or any such  agreement,  notification  or  document,  shall  be  final  and
conclusive. No member of the Committee shall be liable for any such action taken
or determination made in good faith.

         14.      Amendments and Other Matters.

                  (a)  This  Plan  may be  amended  from  time  to  time  by the
Committee;  provided, however, that except as expressly authorized by this Plan,
no such  amendment  shall  cause  this Plan to cease to satisfy  any  applicable
condition  of Rule  16b-3 or cause any award  under the Plan to cease to qualify
for any  applicable  exception  under  Section  162(m) of the Code,  without the
further approval of the stockholders of the Company.

                  (b) With the  concurrence  of the  affected  Participant,  the
Committee may cancel any agreement  evidencing  Option Rights or any other award
granted  under this Plan. In the event of any such  cancellation,  the Committee
may authorize the granting of new Option Rights or other awards hereunder, which
may or may not cover the same number of Common Shares as had been covered by the
cancelled Option Rights or other award, at such Option Price, in such manner and
subject  to such  other  terms,  conditions  and  discretion  as would have been
permitted  under this Plan had the  cancelled  Option  Rights or other award not
been granted.

                  (c) The  Committee  may  condition  the  grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the  Participant  of his  or  her  right  to  receive  a  cash  bonus  or  other
compensation   otherwise   payable  by  the  Company  or  a  Subsidiary  to  the
Participant.


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                  (d) This Plan shall not confer upon any  Participant any right
with respect to  continuance  of employment or other service with the Company or
any  Subsidiary  and shall  not  interfere  in any way with any  right  that the
Company or any Subsidiary  would  otherwise have to terminate any  Participant's
employment or other service at any time.

                  (e) To the  extent  that  any  provision  of this  Plan  would
prevent  any Option  Right that was  intended to qualify as an  Incentive  Stock
Option  from so  qualifying,  any such  provision  shall  be null and void  with
respect to any such Option Right;  provided,  however,  that any such  provision
shall remain in effect with respect to other Option  Rights,  and there shall be
no further effect on any provision of this Plan.

                  (f) Any award that may be made  pursuant  to an  amendment  to
this Plan that shall have been adopted without the approval of the  stockholders
of the Company shall be null and void if it is subsequently determined that such
approval was required under the terms of the Plan or applicable law.

                  (g) Unless otherwise determined by the Committee, this Plan is
intended  to comply  with Rule  16b-3 at all times  that  awards  hereunder  are
subject to such Rule.


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