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                                 Protarga, Inc.

                             1998 Stock Option Plan


     1. DEFINITIONS. As used in this 1998 Stock Option Plan of Protarga, Inc.,
the following terms shall have the following meanings:

          1.1. BOARD means the Company's Board of Directors.

          1.2. CODE means the federal Internal Revenue Code of 1986, as amended.

          1.3. COMMITTEE means a committee appointed by the Board or, if no such
     committee is appointed, the Board itself. Such committee or the Board, as
     the case may be, shall be responsible for the administration of the Plan,
     as provided in Section 5 of the Plan.

          1.4. COMPANY means Protarga, Inc., a Delaware corporation.

          1.5. EMPLOYMENT AGREEMENT means an agreement, if any, between the
     Company and an Optionee, setting forth, INTER ALIA, conditions and
     restrictions upon the transfer of shares of Stock.

          1.6. FAIR MARKET VALUE means (i) on any date prior to the Initial
     Public Offering Date, the value of a share of Stock on any such date as
     determined by the Committee, and (ii) on the Initial Public Offering Date
     or on any date thereafter, (A) the average of the closing bid and asked
     prices of a share of Common Stock on the over-the-counter market, as
     reported by the National Association of Securities Dealers, Inc. ("NASD")
     on such date, or (B) the closing price of a share of Common Stock on an
     exchange or the NASD's National Market System, as the case may be, on such
     date.

          1.7. GRANT DATE means the date as of which an Option is granted, as
     determined under Section 7.

          1.8. INCENTIVE OPTION means an Option which by its terms is to be
     treated as an "incentive stock option" within the meaning of Section 422 of
     the Code.



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          1.9. INITIAL PUBLIC OFFERING DATE means the date of the closing of the
     Company's initial public offering of Common Stock.

          1.10. NON-STATUTORY OPTION means any Option that is not an Incentive
     Option.

          1.11. OPTION means an option to purchase shares of Stock granted under
     the Plan.

          1.12. OPTION AGREEMENT means an agreement between the Company and an
     Optionee, setting forth the terms and conditions of an Option.

          1.13. OPTION PRICE means the price to be paid by an Optionee for a
     share of Stock upon exercise of an Option.

          1.14. OPTIONEE means a person eligible to receive an Option, as
     provided in Section 6, to whom an Option shall have been granted under the
     Plan.

          1.15. PLAN means this 1998 Stock Option Plan of the Company, as
     amended from time to time.

          1.16. STOCK means Common Stock, par value $.001 per share, of the
     Company.

          1.17. STOCK RESTRICTION AGREEMENT means a stock restriction agreement,
     if any, between the Company and an Optionee.

          1.18. TEN PERCENT OWNER means a person who owns, or is deemed within
     the meaning of Section 422(b)(6) of the Code to own, stock possessing more
     than 10% of the total combined voting power of all classes of stock of the
     Company (or its parent or subsidiary corporations). Whether a person is a
     Ten Percent Owner shall be determined with respect to each Option based on
     the facts existing immediately prior to the Grant Date of such Option.

          1.19. VESTING YEAR for any portion of any Incentive Option means the
     calendar year in which that portion of the Option first becomes
     exercisable.

          1.20. CHANGE IN CORPORATE CONTROL means (i) the time of approval by
     the stockholders of the Company of (A) any consolidation or merger of the
     Company in which the Company is not the continuing or surviving corporation
     or pursuant to which Stock would be converted into cash, securities or
     other property, other than a merger in

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     which the holders of Stock immediately prior to the merger will have the
     same proportionate ownership of common stock of the surviving corporation
     immediately after the merger as before the merger, (B) any sale, lease,
     exchange or other transfer (in one transaction or a series of related
     transactions) of all or substantially all the assets of the Company, or (C)
     adoption of any plan or proposal for the liquidation or dissolution of the
     Company, or (ii) the date on which any "person" (as defined in Section
     13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act"), other than the Company or a subsidiary or employee benefit plan or
     trust maintained by the Company or any of its subsidiaries shall become
     (together with its "affiliates" and "associates," as defined in Rule 12b-2
     under the Exchange Act) the "beneficial owner" (as defined in Rule l3d-3
     under the Exchange Act), directly or indirectly, of more than 25% of the
     Stock outstanding at the time, without the prior approval of the Board.

     2. PURPOSE. This Plan is intended to encourage ownership of Stock by
employees and directors of, and consultants to, the Company and its subsidiaries
and to provide additional incentives for them to promote the success of the
Company's business. The Plan is intended to be an incentive stock option plan
within the meaning of Section 422 of the Code, but not all Options granted
hereunder are required to be Incentive Options.

     3. TERM OF THE PLAN. Options may be granted hereunder at any time in the
period commencing on the approval of the Plan by the Board and ending April 20,
2008.

     4. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 17 of
the Plan, at no time shall the number of shares of Stock available hereunder
exceed 50,000 shares, which number of shares, automatically and without further
action, shall increase, effective as of January 1, 1999 and each January 1
thereafter during the term of the Plan, by an additional number of shares of
Stock sufficient to increase the number of shares then available for the future
grant of Options under the Plan to 50,000. However, in any event, throughout the
term of the Plan ending April 20, 2008, no more than an aggregate of 300,000
shares of Stock may be issued pursuant to the exercise of Incentive Stock
Options granted under the Plan. Shares to be issued upon the exercise of Options
granted under the Plan may be either authorized but unissued shares, or shares
held by the Company in its treasury. If any Option expires or terminates for any
reason without having been exercised in full, the shares not purchased
thereunder shall again be available for Options thereafter to be granted.

     5. ADMINISTRATION. The Plan shall be administered by the Committee. Subject
to the provisions of the Plan, the Committee shall have complete authority, in
its discretion, to make or


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to select the manner of making the following determinations with respect to each
Option to be granted by the Company: (a) the employee, director or consultant to
receive the Option; (b) whether the Option (if granted to an employee) will be
an Incentive Option or Non-statutory Option; (c) the time of granting the
Option; (d) the number of shares subject to the Option; (e) the Option Price;
(f) the Option period; (g) the Option exercise date or dates; (h) the effect of
termination of employment or other association with the Company on the
subsequent exercisability of the Option; and (i) whether an Optionee shall be
required to execute a Stock Restriction Agreement and the terms thereof. In
making such determinations, the Committee may take into account the nature of
the services rendered by the respective employees, directors and consultants,
their present and potential contributions to the success of the Company and its
subsidiaries, and such other factors as the Committee in its discretion shall
deem relevant. Subject to the provisions of the Plan, the Committee shall also
have complete authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and provisions of
the respective Option Agreements (which need not be identical), and to make all
other determinations necessary or advisable for the administration of the Plan.
The Committee's determinations on the matters referred to in this Section 5
shall be conclusive.

     6. ELIGIBILITY. An option shall be granted only to an employee or director
of, or consultant to, one or more of the Company or any subsidiary thereof.

     7. TIME OF GRANTING OPTIONS. The granting of an Option shall take place at
the time specified in the Option Agreement. Only if expressly so provided in the
Option Agreement, shall the Grant Date be the date on which an Option Agreement
shall have been duly executed and delivered by the Company and the Optionee.

     8. OPTION PRICE. The Option Price under each Incentive Option shall be not
less than 100% of the Fair Market Value of Stock on the Grant Date, or not less
than 110% of the Fair Market Value of Stock on the Grant Date if the Optionee is
a Ten Percent Owner. The Option Price under each Non-statutory Option shall not
be so limited solely by reason of this Section 8.

     9. OPTION PERIOD. No Incentive Option may be exercised later than the tenth
anniversary of the Grant Date, but in any case not later than the fifth
anniversary of the Grant Date, if the Optionee is a Ten Percent Owner. The
Option period under each Non-statutory Option shall not be so limited solely by
reason of this Section 9. An Option may become exercisable in such installments,
cumulative or non-cumulative, as the Committee may determine. In the case of an
Option not otherwise immediately exercisable in full, the Committee may
accelerate the exercisability of such Option in whole or in part at any time,
provided the acceleration of the

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exercisability of any Incentive Option would not cause the Option to fail to
comply with the provisions of Section 422 of the Code.

     10. LIMIT ON INCENTIVE OPTION CHARACTERIZATION. No Incentive Option shall
be considered an Incentive Option to the extent that pursuant to its terms it
would permit the Optionee to purchase for the first time in any Vesting Year
under that Incentive Option more than the number of shares of Stock calculated
by dividing the current limit by the Option Price. The current limit for any
Optionee for any Vesting Year shall be $100,000 minus the aggregate Fair Market
Value at the date of grant of the number of shares of Stock available for
purchase for the first time in the Vesting Year under each other Incentive
Option granted to the Optionee under the Plan and each other incentive stock
option granted to the Optionee under any other incentive stock option plan of
the Company (and any parent and subsidiary corporations).

     11. EXERCISE OF OPTION. An Option may be exercised by the Optionee giving
written notice, in the manner provided in Section 22, specifying the number of
shares with respect to which the Option is then being exercised. Such notice
shall be accompanied by payment in the form of cash, or certified or bank check
payable to the order of the Company, in an amount equal to the Option Price of
the shares to be purchased.

     In the event that notice of exercise is given prior to the Initial Public
Offering Date, such notice shall be accompanied by an executed counterpart of a
Stock Restriction Agreement if the exercising Optionee is not already a party to
a Stock Restriction Agreement. Payment may at the election of the Optionee be
made in whole or in part by the surrender of a whole number of shares of
previously issued Stock of the Company. Previously issued shares of Stock shall
be accepted in an amount equal to the then Fair Market Value of the surrendered
shares.

     In addition, the Optionee may surrender a portion of his Option with
respect to vested Shares as payment for other Shares which have also vested, and
in such case the portion of the Option surrendered shall be considered a payment
equal to the Fair Market Value of the vested Option Shares which could be
purchased with the surrendered portion of the Option less the aggregate exercise
price for such Option Shares.

     The Company may, in the sole discretion of the Committee, at the time of
grant of an Incentive Option or at the time of grant or thereafter of a
Non-statutory Option, determine to assist any Optionee in the exercise of one or
more Options granted to such Optionee under the Plan, including the satisfaction
of any tax obligations arising therefrom, by authorizing the extension of a loan
from the Company to such Optionee. The terms of any loan (including the interest
rate and terms of repayment) shall be upon such terms as the Committee specifies
in the applicable Option

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Agreement or otherwise deems appropriate at the time such Option Price becomes
due and payable. Loans may be authorized with or without security or collateral.
In all events, the maximum credit available to the Optionee may not exceed the
Option Price of the acquired shares of Stock (less the par value of such shares)
plus any tax liability incurred by the Optionee in connection with the
acquisition of such shares. The Committee may, in its discretion, determine that
one or more loans extended under the terms of this paragraph shall be subject to
forgiveness by the Company in whole or in part upon such terms and conditions as
the Committee may, in its discretion, deem appropriate.

     Receipt by the Company of notice, payment and, if applicable, executed
counterpart of a Stock Restriction Agreement shall constitute the exercise of
the Option. Within 30 days thereafter but subject to the remaining provisions of
the Plan, the Company shall deliver or cause to be delivered to the Optionee or
his agent a certificate or certificates for the number of shares then being
purchased. Such shares shall be fully paid and nonassessable.


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     12. RESTRICTIONS ON ISSUE OF SHARES.

     (a) Notwithstanding any other provision of the Plan, if, at any time, in
the reasonable opinion of the Company the issuance of shares of Stock covered by
the exercise of any Option may constitute a violation of law, then the Company
may delay such issuance and the delivery of a certificate for such shares until
(i) approval shall have been obtained from such governmental agencies, other
than the Securities and Exchange Commission, as may be required under any
applicable law, rule, or regulation, and (ii) in the case where such issuance
would constitute a violation of a law administered by or a regulation of the
Securities and Exchange Commission, one of the following conditions shall have
been satisfied:

          (1) the shares with respect to which such Option has been exercised
     are at the time of the issue of such shares effectively registered under
     the Securities Act of 1933, as amended (the "Securities Act"); or

          (2) a no-action letter in form and substance reasonably satisfactory
     to the Company and its counsel with respect to the issuance of such shares
     shall have been obtained by the Company from the Securities and Exchange
     Commission.

The Company shall make all reasonable efforts to bring about the occurrence of
said events.

     (b) Each certificate representing shares issued upon the exercise of an
Option will bear restrictive legends which may refer to this Plan and to
applicable restrictions under any Employment Agreement or Stock Restriction
Agreement.

     13. PURCHASE FOR INVESTMENT; SUBSEQUENT REGISTRATION.

     (a) Unless the shares to be issued upon exercise of an Option granted under
the Plan have been effectively registered under the Securities Act, the Company
shall be under no obligation to issue any shares covered by any Option unless
the person who exercises such Option, in whole or in part, shall give a written
representation to the Company which is satisfactory in form and substance to its
counsel and upon which the Company may reasonably rely, that he or she is
acquiring the shares issued pursuant to such exercise of the Option as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares.

     (b) Each share of Stock issued pursuant to the exercise of an Option
granted pursuant to this Plan may bear a reference to the investment
representation made in accordance

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with this Section 13 and to the fact that no registration statement has been
filed with the Securities and Exchange Commission in respect to said Stock.

     (c) If the Company shall deem it necessary or desirable to register under
the Securities Act or other applicable statutes any shares with respect to which
an Option shall have been granted, or to qualify any such shares for exemption
from the Securities Act or other applicable statutes, then the Company shall
take such action at its own expense. The Company may require from each Option
holder, or each holder of shares of Stock acquired pursuant to the Plan, such
information in writing for use in any registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Company and its officers and
directors from such holder against all losses, claims, damage and liabilities
arising from such use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.

     14. WITHHOLDING; NOTICE OF DISPOSITION OF STOCK PRIOR TO EXPIRATION OF
SPECIFIED HOLDING PERIOD.

     (a) Whenever shares are to be issued in satisfaction of an Option granted
hereunder, the Company shall have the right to require the Optionee to remit to
the Company an amount sufficient to satisfy federal, state, local or other
withholding tax requirements if and to the extent required by law (whether so
required to secure for the Company an otherwise available tax deduction or
otherwise) prior to the delivery of any certificate or certificates for such
shares.

     (b) The Company may require as a condition to the issuance of shares
covered by any Incentive Option that the party exercising such Option give a
written representation to the Company which is satisfactory in form and
substance to its counsel and upon which the Company may reasonably rely, that he
or she will report to the Company any disposition of such shares prior to the
expiration of the holding periods specified by Section 422(a)(1) of the Code. If
and to the extent that the realization of income in such a disposition imposes
upon the Company federal, state, local or other withholding tax requirements, or
any such withholding is required to secure for the Company an otherwise
available tax deduction, the Company shall have the right to require that the
recipient remit to the Company an amount sufficient to satisfy those
requirements; and the Company may require as a condition to the issuance of
shares covered by an Incentive Option that the party exercising such option give
a satisfactory written representation promising to make such a remittance.

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     15. TERMINATION OF ASSOCIATION WITH THE COMPANY. If the Optionee's
employment or other association with the Company is terminated, whether
voluntarily or otherwise, the Option, to the extent the Option is exercisable on
the date of termination, may be exercised by the Optionee, but only within 90
days after he or she ceases to be an employee of or consultant to the Company,
unless terminated earlier by its terms. Notwithstanding the foregoing, in the
event that the applicable Option Agreement with respect to an Option shall
contain specific provisions governing the effect that any such termination shall
have on the exercisability of such Option, such provisions in the Option
Agreement shall, to the extent that they are inconsistent with the provisions of
this Section 15, control and deem to supersede the provisions of this Section
15. For purposes of this Section 15, military or sick leave shall not be deemed
a termination of employment, PROVIDED that it does not exceed the longer of 90
days or the period during which the absent Optionee's reemployment rights, if
any, are guaranteed by statute or by contract.

     16. TRANSFERABILITY OF OPTIONS. Options shall not be transferable,
otherwise than by will or the laws of descent and distribution, and may be
exercised during the life of the Optionee only by the Optionee.

     17. ADJUSTMENT OF NUMBER AND KIND OF OPTION SHARES.


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     (a) In the event of any stock dividend payable in Stock or any split-up or
contraction in the number of shares of Stock after the date of an Option
Agreement and prior to the exercise in full of the Option, the number of shares
subject to such Option Agreement and the price to be paid for each share subject
to the Option shall be proportionately adjusted. In the event of any
reclassification, exchange, conversion or change of outstanding shares of Stock,
or in case of any consolidation or merger of the Company with or into another
company, or in case of any sale or conveyance to another company or entity of
the property of the Company as a whole or substantially as a whole, shares of
stock or other securities equivalent in kind and value to those shares an
Optionee would have received if he or she had held the full number of shares of
Stock subject to the Option immediately prior to such reclassification,
exchange, conversion, change, consolidation, merger, sale or conveyance and had
continued to hold those shares (together with all other shares, stock and
securities thereafter issued in respect thereof) to the time of the exercise of
the Option shall thereupon be subject to the Option. Upon dissolution or
liquidation of the Company, the Option shall terminate, but the Optionee (if at
the time in the employ of, serving as a director of, or retained as a consultant
to the Company or any of its subsidiaries) shall have the right, immediately
prior to such dissolution or liquidation, to exercise the Option to the extent
exercisable on the date of such dissolution or liquidation. No fraction of a
share shall be purchasable or deliverable upon exercise, but in the event any
adjustment hereunder of the number of shares covered by the Option shall cause
such number to include a fraction of a share, such number of shares shall be
adjusted to the nearest smaller whole number of shares. In the event of changes
in the outstanding Stock by reason of any stock dividend, split-up, contraction,
reclassification, or change of outstanding shares of Stock of the nature
contemplated by this Section 17, the number of shares of Stock available for the
purpose of the Plan as stated in Section 4 shall be correspondingly adjusted.

     (b) Upon the close of business on the Initial Public Offering Date, each
Option then outstanding shall cease to be exercisable for shares of Stock and
shall become exercisable for shares of Common Stock of the Company. The number
of shares of Common Stock that shall become subject to each such Option upon the
close of business on the Initial Public Offering Date shall be equal to the
number of shares of Stock subject to each such Option on the date immediately
preceding such Initial Public Offering Date. From and after the Initial Public
Offering Date, each such Option shall be exercisable only in accordance with the
terms set forth in, and to the extent provided in, this Plan or any applicable
Option Agreement (including, without limitation, any vesting schedule set forth
therein), all to the same extent as if each such Option were still exercisable
for shares of Stock. Without limiting the generality of the preceding sentence,
nothing in this Section 17(b) shall be construed as accelerating the
exercisability of any Option.


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     18. CHANGE IN CORPORATE CONTROL. Upon a Change in Corporate Control, each
outstanding Option shall immediately become fully exercisable.

     19. RESERVATION OF STOCK. The Company shall at all times during the term of
the Options reserve or otherwise keep available such number of shares of Stock
as will be sufficient to satisfy the requirements of the Plan and shall pay all
fees and expenses necessarily incurred by the Company in connection therewith.

     20. LIMITATION OF RIGHTS IN STOCK; NO SPECIAL EMPLOYMENT OR OTHER RIGHTS.
The Optionee shall not be deemed for any purpose to be a stockholder of the
Company with respect to any of the shares of Stock covered by an Option, except
to the extent that the Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to
the Optionee or his agent. Any Stock issued pursuant to the Option shall be
subject to all restrictions upon the transfer thereof which may be now or
hereafter imposed by the Certificate of Incorporation, the By-laws of the
Company, and the Employment Agreement. Nothing contained in the Plan or in any
Option shall confer upon any Optionee any right with respect to the continuation
of his or her employment with, or retention as a consultant by, the Company (or
any subsidiary), or interfere in any way with the right of the Company (or any
subsidiary), subject to the terms of any separate employment, consulting or
other agreement or provision of law or corporate articles or by-laws to the
contrary, at any time to terminate such employment, consulting or other
agreement or to increase or decrease the compensation of the Optionee from the
rate in existence at the time of the grant of an Option.

     21. TERMINATION AND AMENDMENT OF THE PLAN. The Board may at any time
terminate the Plan or make such modifications of the Plan as it shall deem
advisable. No termination or amendment of the Plan may, without the consent of
the Optionee to whom any Option shall theretofore have been granted, adversely
affect the rights of such Optionee under such Option.

     22. NOTICES AND OTHER COMMUNICATIONS. All notices and other communications
required or permitted under the Plan shall be effective if in writing and if
delivered or sent by certified or registered mail, return receipt requested (a)
if to the Optionee, at his or her residence address last filed with the Company,
and (b) if to the Company, at 1100 E. Hector Street, Suite 450, Conshohocken, PA
19428, with a copy to its Chief Financial Officer at such address, or to such
other persons or addresses as the Optionee or the Company may specify by a
written notice to the other from time to time.