DYNAGEN, INC.

                                 1991 STOCK PLAN



         1.  PURPOSE.  This 1991 Stock Plan (the  "Plan") is intended to provide
incentives: (a) to the officers and other employees of DynaGen, Inc., a Delaware
corporation  (the  "Company"),  its  parent  (if any) and any  present or future
subsidiaries of the Company (collectively,  "Related Corporations") by providing
them with  opportunities  to purchase  stock in the Company  pursuant to options
granted  hereunder  which qualify as  "incentive  stock  options"  under Section
422(b) of the Internal  Revenue Code of 1986, as amended (the "Code")  ("ISO" or
"ISOs");  (b) to directors,  officers,  employees and consultants of the Company
and Related  Corporations by providing them with opportunities to purchase stock
in the Company  pursuant to options  granted  hereunder  which do not qualify as
ISOs  ("Non-Qualified  Option" or  "Non-Qualified  Options");  (c) to directors,
officers,  employees and consultants of the Company and Related  Corporations by
providing  them  with  awards  of stock in the  Company  ("Awards");  and (d) to
directors,  officers,  employees  and  consultants  of the  Company  and Related
Corporations by providing them with  opportunities  to make direct  purchases of
stock in the  Company  ("Purchases").  Both ISOs and  Non-Qualified  Options are
referred to hereafter individually as an "Option" and collectively as "Options."
Options,  Awards and  authorizations to make Purchases are referred to hereafter
collectively  as  "Stock  Rights."  As  used  herein,  the  terms  "parent"  and
"subsidiary"   mean   "parent   corporation"   and   "subsidiary   corporation,"
respectively, as those terms are defined in Section 424 of the Code.

      2. ADMINISTRATION OF THE PLAN.

         A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be administered by
      the Board of  Directors  of the  Company  (the  "Board") or by a committee
      appointed by the Board (the  "Committee");  provided,  that, to the extent
      required by Rule 16b-3, or any successor  provision ("Rule 16b-3"), of the
      Securities  Exchange Act of 1934, with respect to specific grants of Stock
      Rights, the Plan shall be administered by a disinterested administrator or
      administrators  within  the  meaning  of  Rule  16b-3.  Hereinafter,   all
      references  in this  Plan to the  "Committee"  shall  mean the Board if no
      Committee  has been  appointed.  Subject to  ratification  of the grant or
      authorization  of  each  Stock  Right  by the  Board  (if so  required  by
      applicable state law), and subject to the terms of the Plan, the Committee
      shall have the authority to (i) determine the employees of the Company and
      Related  Corporations  (from among the class of employees  eligible  under
      paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine
      (from among the class of individuals and entities eligible under paragraph
      3 to receive  Non-Qualified  Options and Awards and to make  Purchases) to
      whom  Non-Qualified  Options,  Awards and authorizations to make Purchases
      may be  granted;  (ii)  determine  the time or times at which  Options  or
      Awards may be granted or Purchases made;  (iii) determine the option price
      of shares  subject to each Option,  which price shall not be less than the
      minimum price  specified in paragraph 6, and the purchase 





                                       2

      price of shares  subject to each  Purchase;  (iv)  determine  whether each
      Option granted shall be an ISO or a  Non-Qualified  Option;  (v) determine
      (subject to  paragraph  7) the time or times when each Option shall become
      exercisable  and the  duration  of the  exercise  period;  (vi)  determine
      whether  restrictions  such as  repurchase  options  are to be  imposed on
      shares  subject to Options,  Awards and  Purchases  and the nature of such
      restrictions,  if any,  and (vii)  interpret  the Plan and  prescribe  and
      rescind rules and regulations  relating to it. If the Committee determines
      to issue a Non-Qualified  Option,  it shall take whatever actions it deems
      necessary,  under Section 422 of the Code and the regulations  promulgated
      thereunder,  to ensure  that such  Option is not  treated  as an ISO.  The
      interpretation  and construction by the Committee of any provisions of the
      Plan or of any  Stock  Right  granted  under  it  shall  be  final  unless
      otherwise  determined  by the Board.  The  Committee may from time to time
      adopt such rules and  regulations for carrying out the Plan as it may deem
      best.  No  member of the Board or the  Committee  shall be liable  for any
      action or determination made in good faith with respect to the Plan or any
      Stock Right granted under it.

         B.  COMMITTEE  ACTIONS.  The Committee may select one of its members as
      its  chairman,  and shall hold  meetings at such time and places as it may
      determine.  Acts by a majority  of the  Committee,  or acts  reduced to or
      approved  in writing by a majority  of the  members of the  Committee  (if
      consistent  with  applicable  state  law),  shall be the valid acts of the
      Committee.  From  time to time  the  Board  may  increase  the size of the
      Committee and appoint additional members thereof,  remove members (with or
      without  cause) and  appoint new members in  substitution  therefor,  fill
      vacancies  however  caused,  or remove all  members of the  Committee  and
      thereafter directly administer the Plan.

         C. GRANT OF STOCK RIGHTS TO BOARD MEMBERS.  Stock Rights may be granted
      to  members  of the  Board  consistent  with the  provisions  of the first
      sentence of  paragraph  2(A)  above,  if  applicable.  All grants of Stock
      Rights to  members  of the Board  shall in all other  respects  be made in
      accordance  with the provisions of this Plan  applicable to other eligible
      persons. Members of the Board who are either (i) eligible for Stock Rights
      pursuant to the Plan or (ii) have been  granted  Stock  Rights may vote on
      any matters  affecting the  administration of the Plan or the grant of any
      Stock  Rights  pursuant to the Plan,  except that no such member shall act
      upon the granting to himself of Stock  Rights,  but any such member may be
      counted in  determining  the  existence  of a quorum at any meeting of the
      Board  during which action is taken with respect to the granting to him of
      Stock Rights.

         3. ELIGIBLE  EMPLOYEES AND OTHERS.  ISOs may be granted to any employee
of the Company or any Related  Corporation.  Those officers and directors of the
Company  who  are  not  employees  may  not be  granted  ISOs  under  the  Plan.
Non-Qualified  Options,  Awards  and  authorizations  to make  Purchases  may be
granted to any employee,  officer or director  (whether or not also an employee)
or consultant of the Company or any Related Corporation.  The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant an ISO, a Non-Qualified  Option, an Award or an authorization to make a
Purchase.  Granting of any Stock Right to any individual or entity shall neither
entitle that individual or entity to, nor disqualify him from,  participation in
any other grant of Stock Rights.






                                       3

         4. STOCK.  The stock subject to Options,  Awards and Purchases shall be
authorized  but unissued  shares of Common Stock of the Company,  par value $.01
per share (the  "Common  Stock"),  or shares of Common Stock  reacquired  by the
Company  in any  manner.  The  aggregate  number of  shares  which may be issued
pursuant  to the  Plan is  2,600,000,  subject  to  adjustment  as  provided  in
paragraph  13. Any such shares may be issued as ISOs,  Non-Qualified  Options or
Awards,  or to persons or entities  making  Purchases,  so long as the number of
shares so issued does not exceed such number, as adjusted. If any Option granted
under the Plan shall  expire or  terminate  for any reason  without  having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part,  the  unpurchased  shares subject to such Options shall again be available
for grants of Stock Rights under the Plan.

         No person may be granted  Options to acquire,  in the  aggregate,  more
than  750,000  of shares of Common  Stock  under the Plan  during any one fiscal
year.  If any Option  granted  under the Plan shall expire or terminate  for any
reason without having been exercised in full or shall cease for any reason to be
exercisable  in whole or in part or shall be  repurchased  by the  Company,  the
shares  subject to such Option  shall be included  in the  determination  of the
aggregate  number of shares of Common  Stock deemed to have been granted to such
person under the Plan.

         5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan
at any time after  October 14, 1991 and prior to October 14,  2001.  The date of
grant  of a Stock  Right  under  the  Plan  will be the  date  specified  by the
Committee at the time it grants the Stock Right;  provided,  however,  that such
date shall not be prior to the date on which the  Committee  acts to approve the
grant. The Committee shall have the right, with the consent of the optionee,  to
convert an ISO  granted  under the Plan to a  Non-Qualified  Option  pursuant to
paragraph 16.

         6.       MINIMUM OPTION PRICE; ISO LIMITATIONS.

         A.  PRICE  FOR  NON-QUALIFIED  OPTIONS.  The  exercise  price per share
      specified in the agreement relating to each  Non-Qualified  Option granted
      under  the  Plan  shall  in no  event  be  less  than  the  minimum  legal
      consideration required therefor under the laws of the State of Delaware or
      the laws of any  jurisdiction  in which the Company or its  successors  in
      interest may be organized.

         B.  PRICE FOR ISOS.  The  exercise  price  per share  specified  in the
      agreement  relating to each ISO  granted  under the Plan shall not be less
      than the fair market  value per share of Common  Stock on the date of such
      grant.  In the case of an ISO to be granted to an  employee  owning  stock
      possessing  more than ten percent (10%) of the total combined voting power
      of all  classes of stock of the Company or any  Related  Corporation,  the
      price per share specified in the agreement  relating to such ISO shall not
      be less than one hundred ten percent  (110%) of the fair market  value per
      share of Common Stock on the date of grant.

         C. $100,000 ANNUAL  LIMITATION ON ISOS.  Each eligible  employee may be
      granted ISOs only to the extent that, in the aggregate under this Plan and
      all  incentive   stock  option  plans  of  the  Company  and  any  Related
      Corporation,  the value of Common Stock 






                                       4

      (determined  at the time ISOs were granted)  which is subject to ISOs that
      become exercisable for the first time by such employee during any calendar
      year does not exceed  $100,000.  Any  options  granted to an  employee  in
      excess of such amount will be granted as Non-Qualified Options.

         D.  DETERMINATION  OF FAIR MARKET  VALUE.  If, at the time an Option is
      granted  under the Plan,  the Company's  Common Stock is publicly  traded,
      "fair market  value" shall be  determined  as of the last business day for
      which the prices or quotes  discussed in this sentence are available prior
      to the date such Option is granted and shall mean (i) the average (on that
      date) of the high and low  prices  of the  Common  Stock on the  principal
      national  securities  exchange on which the Common Stock is traded, if the
      Common Stock is then traded on a national securities exchange; or (ii) the
      last  reported sale price (on that date) of the Common Stock on the NASDAQ
      National Market List, if the Common Stock is not then traded on a national
      securities  exchange;  or (iii) the  closing  bid price (or average of bid
      prices) last quoted (on that date) by an established quotation service for
      over-the-counter  securities,  if the Common  Stock is not reported on the
      NASDAQ National Market List.  However, if the Common Stock is not publicly
      traded at the time an  Option is  granted  under  the Plan,  "fair  market
      value"  shall be  deemed  to be the  fair  value  of the  Common  Stock as
      determined by the Committee  after taking into  consideration  all factors
      which it deems appropriate, including, without limitation, recent sale and
      offer prices of the Common  Stock in private  transactions  negotiated  at
      arm's length.

         7.  OPTION  DURATION.  Subject to earlier  termination  as  provided in
paragraphs  9 and 10,  each Option  shall  expire on the date  specified  by the
Committee, but not more than (i) ten years and one day from the date of grant in
the case of Non-Qualified  Options, (ii) ten years from the date of grant in the
case of ISOs generally,  and (iii) five years from the date of grant in the case
of ISOs  granted to an employee  owning stock  possessing  more than ten percent
(10%) of the total combined  voting power of all classes of stock of the Company
or any  Related  Corporation.  Subject to earlier  termination  as  provided  in
paragraphs  9 and 10,  the term of each ISO  shall be the term set  forth in the
original  instrument  granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.

         8.  EXERCISE  OF OPTION.  Subject to the  provisions  of  paragraphs  9
through 12, each Option granted under the Plan shall be exercisable as follows:

         A. VESTING. The Option shall either be fully exercisable on the date of
      grant or shall become  exercisable  thereafter in such installments as the
      Committee may specify.

         B.  FULL  VESTING  OF   INSTALLMENTS.   Once  an  installment   becomes
      exercisable it shall remain exercisable until expiration or termination of
      the Option, unless otherwise specified by the Committee.

         C. PARTIAL EXERCISE. Each Option or installment may be exercised at any
      time or from time to time, in whole or in part, for up to the total number
      of shares with respect to which it is then exercisable.






                                       5


         D.  ACCELERATION  OF  VESTING.  The  Committee  shall have the right to
      accelerate the date of exercise of any installment of any Option; provided
      that  the  Committee  shall  not,  without  the  consent  of an  optionee,
      accelerate  the exercise date of any  installment of any Option granted to
      any employee as an ISO (and not previously  converted into a Non-Qualified
      Option  pursuant to paragraph 16) if such  acceleration  would violate the
      annual  vesting  limitation  contained in Section  422(d) of the Code,  as
      described in paragraph 6(C).

         E. EXTENSION OF EXERCISE PERIOD.  Notwithstanding  any provision herein
      to the contrary, the Committee may, in its discretion, extend the exercise
      period with respect to any Non-Qualified Option.

         9. TERMINATION OF EMPLOYMENT.  If an ISO optionee ceases to be employed
by the  Company and all  Related  Corporations  other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become  exercisable,  and his ISOs shall  terminate  after the passage of ninety
(90) days from the date of termination of his employment,  but in no event later
than on their specified  expiration  dates,  except to the extent that such ISOs
(or  unexercised  installments  thereof) have been converted into  Non-Qualified
Options  pursuant to paragraph 16.  Employment shall be considered as continuing
uninterrupted  during any bona fide leave of absence (such as those attributable
to illness,  military  obligations or  governmental  service)  provided that the
period of such leave does not  exceed 90 days or, if longer,  any period  during
which such optionee's  right to  reemployment  is guaranteed by statute.  A bona
fide leave of absence with the written  approval of the  Committee  shall not be
considered  an  interruption  of employment  under the Plan,  provided that such
written approval contractually  obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
ISOs  granted  under the Plan shall not be affected by any change of  employment
within or among the Company and Related  Corporations,  so long as the  optionee
continues to be an employee of the Company or any Related  Corporation.  Nothing
in the Plan shall be deemed to give any  grantee of any Stock Right the right to
be  retained  in  employment  or other  service by the  Company  or any  Related
Corporation for any period of time.

         10.  DEATH; DISABILITY.

         A. DEATH.  If an ISO optionee  ceases to be employed by the Company and
      all  Related  Corporations  by reason of his death,  any ISO of his may be
      exercised,  to the extent of the number of shares with respect to which he
      could have exercised it on the date of his death, by his estate,  personal
      representative  or beneficiary  who has acquired the ISO by will or by the
      laws of descent and distribution,  at any time prior to the earlier of the
      specified  expiration  date of the ISO or 180  days  from  the date of the
      optionee's death.

         B. DISABILITY.  If an ISO optionee ceases to be employed by the Company
      and all Related  Corporations by reason of his  disability,  he shall have
      the right to exercise  any ISO held by him on the date of  termination  of
      employment, to the extent of the number of shares with respect to which he
      could have  exercised it on that date, at any time prior to the earlier of
      the specified  expiration date of the ISO or 180 days from the date of the
      termination  of






                                        6


      the  optionee's  employment.  For  the  purposes  of the  Plan,  the  term
      "disability"  shall mean  "permanent  and total  disability" as defined in
      Section 22(e)(3) of the Code or successor statute.

         11. ASSIGNABILITY. No Option shall be assignable or transferable by the
optionee  except by will or by the laws of descent  and  distribution  or,  with
respect  to  Non-qualified  Options  only,  pursuant  to  a  qualified  domestic
relations  order as  defined in the Code or Title I of the  Employee  Retirement
Income  Security  Act,  or the rules  thereunder.  During  the  lifetime  of the
optionee each ISO shall be exercisable only by him.

         12.  TERMS AND  CONDITIONS  OF OPTIONS.  Options  shall be evidenced by
instruments  (which need not be  identical)  in such forms as the  Committee may
from time to time  approve.  Such  instruments  shall  conform  to the terms and
conditions  set forth in  paragraphs  6 through 11 hereof and may  contain  such
other  provisions as the Committee deems  advisable  which are not  inconsistent
with the Plan,  including  restrictions  applicable  to  shares of Common  Stock
issuable upon exercise of Options.  In granting any  Non-Qualified  Option,  the
Committee  may specify  that such  Non-Qualified  Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and  cancellation  provisions as the Committee may determine.  The Committee may
from time to time confer authority and  responsibility on one or more of its own
members  and/or one or more  officers of the Company to execute and deliver such
instruments.  The proper  officers of the Company are authorized and directed to
take any and all action  necessary or  advisable  from time to time to carry out
the terms of such instruments.

         13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's  rights with  respect to Options  granted to him  hereunder  shall be
adjusted as hereinafter provided,  unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:

         A. STOCK  DIVIDENDS  AND STOCK  SPLITS.  If the shares of Common  Stock
      shall be subdivided or combined into a greater or smaller number of shares
      or if the  Company  shall  issue any  shares  of  Common  Stock as a stock
      dividend on its outstanding  Common Stock,  the number of shares of Common
      Stock  deliverable  upon the  exercise of Options  shall be  appropriately
      increased or decreased proportionately,  and appropriate adjustments shall
      be made in the  purchase  price per  share to  reflect  such  subdivision,
      combination or stock dividend.

         B. CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated with
      or acquired by another  entity in a merger,  sale of all or  substantially
      all of the Company's assets or otherwise (an "Acquisition"), the Committee
      or the board of directors of any entity  assuming the  obligations  of the
      Company  hereunder  (the  "Successor  Board"),  shall,  as to  outstanding
      Options,  either (i) make  appropriate  provision for the  continuation of
      such Options by  substituting  on an  equitable  basis for the shares then
      subject to such  Options the  consideration  payable  with  respect to the
      outstanding shares of Common Stock in connection with the Acquisition;  or
      (ii) make  appropriate  provision for the  continuation of such Options by
      substituting  on an  equitable  basis for the shares then  subject to such





                                       7


      Options any equity securities of the successor corporation;  or (iii) upon
      written  notice  to the  optionees,  provide  that  all  Options  must  be
      exercised,  to the extent then  exercisable,  within a specified number of
      days of the date of such  notice,  at the end of which  period the Options
      shall  terminate;  or (iv)  terminate  all Options in exchange  for a cash
      payment equal to the excess of the fair market value of the shares subject
      to such Options (to the extent then  exercisable)  over the exercise price
      thereof;  or (v) accelerate the date of exercise of such Options or of any
      installment of such Options; or (vi) terminate all Options in exchange for
      the right to  participate  in any stock option or other  employee  benefit
      plan of any successor corporation.

         C.   RECAPITALIZATION   OR   REORGANIZATION.   In   the   event   of  a
      recapitalization   or   reorganization   of  the  Company  (other  than  a
      transaction   described  in   subparagraph  B  above)  pursuant  to  which
      securities  of the  Company or of  another  corporation  are  issued  with
      respect  to the  outstanding  shares of Common  Stock,  an  optionee  upon
      exercising  an Option shall be entitled to receive for the purchase  price
      paid upon such  exercise the  securities  he would have received if he had
      exercised his Option prior to such recapitalization or reorganization.

         D. MODIFICATION OF ISOS. Notwithstanding the foregoing, any adjustments
      made  pursuant to  subparagraphs  A, B or C with  respect to ISOs shall be
      made only after the  Committee,  after  consulting  with  counsel  for the
      Company,   determines   whether  such   adjustments   would  constitute  a
      "modification" of such ISOs (as that term is defined in Section 424 of the
      Code) or would cause any adverse tax  consequences for the holders of such
      ISOs. If the Committee  determines that such adjustments made with respect
      to ISOs would  constitute a modification of such ISOs, it may refrain from
      making such adjustments.

         E. DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
      or  liquidation  of the Company,  each Option will  terminate  immediately
      prior to the  consummation  of such proposed  action or at such other time
      and  subject  to such  other  conditions  as  shall be  determined  by the
      Committee.

         F. ISSUANCES OF SECURITIES.  Except as expressly  provided  herein,  no
      issuance  by the  Company of shares of stock of any class,  or  securities
      convertible  into  shares  of stock of any  class,  shall  affect,  and no
      adjustment by reason  thereof shall be made with respect to, the number or
      price of shares  subject  to  Options.  No  adjustments  shall be made for
      dividends  paid  in cash  or in  property  other  than  securities  of the
      Company.

         G. FRACTIONAL  SHARES.  No fractional  shares shall be issued under the
      Plan and the optionee  shall receive from the Company cash in lieu of such
      fractional shares.

         H.  ADJUSTMENTS.  Upon the happening of any of the events  described in
      subparagraphs  A, B or C above,  the class and aggregate  number of shares
      set forth in  paragraph 4 hereof that are  subject to Stock  Rights  which
      previously have been or  subsequently  may be granted under the Plan shall
      also be  appropriately  adjusted to reflect the events  described  in such
      subparagraphs.  The Committee or the Successor  Board shall 






                                       8


      determine the specific adjustments to be made under this paragraph 13 and,
      subject to paragraph 2, its determination shall be conclusive.

         If any person or entity  owning  restricted  Common  Stock  obtained by
exercise of a Stock Right made hereunder  receives  shares or securities or cash
in connection with a corporate  transaction described in subparagraphs A, B or C
above as a result  of  owning  such  restricted  Common  Stock,  such  shares or
securities or cash shall be subject to all of the  conditions  and  restrictions
applicable to the  restricted  Common Stock with respect to which such shares or
securities or cash were issued,  unless otherwise determined by the Committee or
the Successor Board.

         14. MEANS OF  EXERCISING  STOCK  RIGHTS.  A Stock Right (or any part or
installment  thereof) shall be exercised by giving written notice to the Company
at its  principal  office  address.  Such notice shall  identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being  exercised,  accompanied  by full payment of the purchase  price  therefor
either  (a)  in  United  States  dollars  in  cash  or by  check,  or (b) at the
discretion of the Committee, through delivery of shares of Common Stock having a
fair  market  value equal as of the date of the  exercise  to the cash  exercise
price of the Stock Right,  (c) at the discretion of the Committee and consistent
with applicable  law,  through the delivery of an assignment to the Company of a
sufficient  amount of the proceeds  from the sale of the Common  Stock  acquired
upon exercise of the Stock Right and an  authorization  to the broker or selling
agent  to  pay  that  amount  to  the  Company,  which  sale  shall  be  at  the
participant's direction at the time of exercise, or (d) at the discretion of the
Committee,  by any  combination  of (a),  (b) and (c)  above.  If the  Committee
exercises its  discretion to permit  payment of the exercise  price of an ISO by
means of the  methods  set forth in  clauses  (b),  (c) or (d) of the  preceding
sentence, such discretion shall be exercised in writing at the time of the grant
of the ISO in question. The holder of a Stock Right shall not have the rights of
a  shareholder  with respect to the shares  covered by his Stock Right until the
date of  issuance  of a stock  certificate  to him for such  shares.  Except  as
expressly   provided   above  in   paragraph  13  with  respect  to  changes  in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar  rights  for  which  the  record  date is  before  the date  such  stock
certificate is issued.

         15. TERM AND  AMENDMENT OF PLAN.  This Plan was adopted by the Board on
October 14, 1991,  subject (with respect to the validation of ISOs granted under
the Plan) to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders or, in lieu thereof, by written consent. If the approval
of  stockholders  is not obtained  prior to October 14, 1992, any grants of ISOs
under the Plan made prior to that date will be rescinded.  The Plan shall expire
at the end of the day on October 14, 2001 (except as to Options  outstanding  on
that date).  Subject to the provisions of paragraph 5 above, Stock Rights may be
granted  under the Plan prior to the date of  stockholder  approval of the Plan.
The Board may  terminate  or amend the Plan in any  respect at any time,  except
that, without the approval of the stockholders  obtained within 12 months before
or after the Board adopts a resolution authorizing any of the following actions:
(a) the  total  number of  shares  that may be issued  under the Plan may not be
materially  increased  (except by adjustment  pursuant to paragraph 13); (b) the
provisions  of paragraph 3 regarding  eligibility  for grants of ISOs may not be
modified;  (c) the  provisions of paragraph 6(B) regarding 







                                       9


the exercise  price at which  shares may be offered  pursuant to ISOs may not be
modified (except by adjustment pursuant to paragraph 13); and (d) the expiration
date of the Plan may not be  extended.  Except  as  otherwise  provided  in this
paragraph  15, in no event may  action  of the  Board or  stockholders  alter or
impair the rights of a  grantee,  without  his  consent,  under any Stock  Right
previously granted to him.

         16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOS.
The  Committee,  at the written  request of any optionee,  may in its discretion
take such actions as may be necessary  to convert such  optionee's  ISOs (or any
installments or portions of  installments  thereof) that have not been exercised
on the date of conversion  into  Non-Qualified  Options at any time prior to the
expiration  of such ISOs,  regardless  of whether the optionee is an employee of
the  Company  or a  Related  Corporation  at the time of such  conversion.  Such
actions may include,  but not be limited to,  extending  the exercise  period or
reducing the exercise price of the appropriate installments of such ISOs. At the
time of such  conversion,  the Committee  (with the consent of the optionee) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Committee in its  discretion may  determine,  provided that such  conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any  optionee  the  right  to have  such  optionee's  ISOs  converted  into
Non-Qualified  Options,  and no such conversion shall occur until and unless the
Committee  takes  appropriate  action.  The  Committee,  with the consent of the
optionee,  may also terminate any portion of any ISO that has not been exercised
at the time of such termination.

         17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares  pursuant to Options granted and Purchases  authorized  under the
Plan shall be used for general corporate purposes.

         18.  GOVERNMENTAL  REGULATION.  The  Company's  obligation  to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any  governmental  authority  required  in  connection  with the  authorization,
issuance or sale of such shares.

         19.  WITHHOLDING  OF ADDITIONAL  INCOME  TAXES.  Upon the exercise of a
Non-Qualified  Option, the grant of an Award, the making of a Purchase of Common
Stock  for less  than its fair  market  value,  the  making  of a  Disqualifying
Disposition  (as defined in paragraph  20) or the vesting of  restricted  Common
Stock  acquired on the  exercise of a Stock Right  hereunder,  the  Company,  in
accordance  with Section  3402(a) of the Code,  may require the optionee,  Award
recipient  or purchaser to pay  additional  withholding  taxes in respect of the
amount that is considered compensation includible in such person's gross income.
The  Committee in its  discretion  may  condition (i) the exercise of an Option,
(ii) the grant of an Award,  (iii) the making of a Purchase of Common  Stock for
less than its fair market value, or (iv) the vesting of restricted  Common Stock
acquired  by  exercising  a  Stock  Right,  on the  grantee's  payment  of  such
additional withholding taxes.

         20. NOTICE TO COMPANY OF DISQUALIFYING  DISPOSITION.  Each employee who
receives  an ISO must agree to notify the Company in writing  immediately  after
the employee  makes a  Disqualifying  Disposition  of any Common Stock  acquired
pursuant  to  the  exercise  of an  ISO.  A 








                                       10


Disqualifying Disposition is any disposition (including any sale) of such Common
Stock  before the later of (a) two years after the date the employee was granted
the ISO, or (b) one year after the date the  employee  acquired  Common Stock by
exercising  the ISO. If the employee  has died before such stock is sold,  these
holding period  requirements do not apply and no  Disqualifying  Disposition can
occur thereafter.

         21. GOVERNING LAW;  CONSTRUCTION.  The validity and construction of the
Plan and the instruments  evidencing  Stock Rights shall be governed by the laws
of the State of Delaware,  or the laws of any  jurisdiction in which the Company
or its  successors in interest may be organized.  In construing  this Plan,  the
singular  shall  include the plural and the  masculine  gender shall include the
feminine and neuter, unless the context otherwise requires.





                                       11


                                   AMENDMENTS


BOARD                  STOCKHOLDER
APPROVAL DATE          APPROVAL DATE             AMENDMENT
December 9, 1996       January 30, 1997          Section  4:  Change  number  of
                                                 shares  authorized to be issued
                                                 under the Plan  from  1,200,000
                                                 shares to 2,600,000  shares and
                                                 add the following paragraph:

                                                          No   person   may   be
                                                 granted Options to acquire,  in
                                                 the   aggregate,    more   than
                                                 750,000  of  shares  of  Common
                                                 Stock under the Plan during any
                                                 one fiscal year.  If any Option
                                                 granted  under  the Plan  shall
                                                 expire  or  terminate  for  any
                                                 reason   without   having  been
                                                 exercised   in  full  or  shall
                                                 cease  for  any  reason  to  be
                                                 exercisable in whole or in part
                                                 or shall be  repurchased by the
                                                 Company,  the shares subject to
                                                 such  Option  shall be included
                                                 in  the  determination  of  the
                                                 aggregate  number  of shares of
                                                 Common  Stock  deemed  to  have
                                                 been  granted  to  such  person
                                                 under the Plan.