INTELLIGROUP, INC.

                           1996 STOCK PLAN, AS AMENDED



     1.   Purposes of the Plan.  The  purposes of this Stock Plan are to attract
and  retain  the  best   available   personnel  for  positions  of   substantial
responsibility,  to provide  additional  incentive  to  Employees,  non-Employee
members of the Board and Consultants of the Company and its  Subsidiaries and to
promote the success of the Company's  business.  Options  granted under the Plan
may be incentive  stock  options (as defined  under  Section 422 of the Code) or
non-statutory  stock options,  as determined by the Administrator at the time of
grant of an option and subject to the  applicable  provisions  of Section 422 of
the Code, as amended, and the regulations promulgated thereunder. Stock purchase
rights may also be granted under the Plan.

     2.   Certain Definitions.   As used herein, the following definitions shall
apply:

          (a)  "Administrator"   means  the  Board  or  any  of  its  Committees
appointed pursuant to Section 4 of the Plan.

          (b)  "Board" means the Board of Directors of the Company.

          (c)  "Code" means the Internal Revenue Code of 1986, as amended.

          (d)  "Committee"  means  the  Committee  appointed  by  the  Board  of
Directors in accordance with paragraph (a) of Section 4 of the Plan.

          (e)  "Common Stock" means the Common Stock of the Company.

          (f)  "Company" means Intelligroup, Inc., a New Jersey corporation.

          (g)  "Consultant"  means any  person,  including an  advisor,  who is
engaged by the Company or any Parent or  subsidiary  to render  services  and is
compensated  for  such  services,  and  any  director  of  the  Company  whether
compensated for such services or not.

          (h)  "Continuous  Status  as  an  Employee"  means the  absence of any
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave;  (ii) military  leave;  (iii) any other leave of
absence  approved by the Board,  provided that such leave is for a period of not
more than ninety (90) days,  unless  reemployment  upon the  expiration  of such
leave is  guaranteed  by  contract  or  statute,  or unless  provided  otherwise
pursuant to Company policy adopted from time to time; or (iv) transfers  between
locations  of the  Company or  between  the  Company,  its  Subsidiaries  or its
successor.
<PAGE>

          (i)  "Employee"  means any person, including  officers and  directors,
employed by the Company or any Parent or Subsidiary of the Company.  The payment
of a  director's  fee by the  Company  shall  not be  sufficient  to  constitute
"employment" by the Company.

          (j)  "Exchange Act"  means the  Securities  Exchange  Act of  1934, as
amended.

          (k)  "Fair Market Value"  means, as of any date,  the value of Common
Stock determined as follows:

               (i)   If  the Common Stock is  listed  on any  established  stock
     exchange or a national  market  system  including  without  limitation  the
     National Market System of the National  Association of Securities  Dealers,
     Inc. Automated Quotation  ("Nasdaq") System, its Fair Market Value shall be
     the closing  sales  price for such stock (or the  closing  bid, if no sales
     were  reported)  as quoted on such system or  exchange  for the last market
     trading  day prior to the time of  determination  as  reported  in the Wall
     Street Journal or such other source as the Administrator deems reliable or;

               (ii)  If the Common  Stock is quoted  on  Nasdaq  (but not on the
     National  Market  System  thereof)  or  regularly  quoted  by a  recognized
     securities  dealer but  selling  prices are not  reported,  its Fair Market
     Value  shall be the mean  between  the high and low  asked  prices  for the
     Common Stock or;

               (iii) In the  absence  of an  established  market  for the Common
     Stock,  the Fair Market Value  thereof shall be determined in good faith by
     the Administrator.

          (l)  "Incentive Stock  Option"  means an  Option  intended  to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

          (m)  "Nonstatutory  Stock  Option"  means  an  Option not  intended to
qualify as an Incentive Stock Option.

          (n)  "Option" means a stock option granted pursuant to the Plan.

          (o)  "Optioned Stock" means the Common Stock subject to an Option.

          (p)  "Optionee"  means  an  Employee  or  Consultant  who  receives an
Option.

          (q)  "Parent" means a  "parent corporation",  whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (r)  "Plan" means this 1996 Stock Plan.

          (s)  "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of stock purchase rights under Section 11 below.

                                      -2-
<PAGE>

          (t)  "Share"  means  a  share  of  the  Common  Stock,  as adjusted in
accordance with Section 13 of the Plan.

          (u)  "Subsidiary"  means a  "subsidiary  corporation",  whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 13 of
the Plan, the maximum  aggregate number of shares which may be optioned and sold
under the Plan is 4,700,000 shares of Common Stock if an initial public offering
of Common Stock shall have been consummated,  and 700,000 shares of Common Stock
if an initial public  offering of Common Stock shall not have been  consummated.
The shares may be authorized, but unissued, or reacquired Common Stock.

          If an option  should  expire or become  unexercisable  for any  reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated,  become available for
future grant under the Plan.

     4.   Administration of the Plan.

          (a)  Procedure.

               (i)  Administration With Respect to Directors and Officers.  With
     respect to grants of Options or stock purchase  rights to Employees who are
     also officers or directors of the Company,  the Plan shall be  administered
     by (A) the Board if the Board may  administer  the Plan in compliance  with
     Rule 16b-3  promulgated  under the  Exchange Act or any  successor  thereto
     ("Rule  16b-3") with respect to a plan intended to qualify  thereunder as a
     discretionary  plan,  or  (B)  a  Committee  designated  by  the  Board  to
     administer the Plan,  which Committee shall be constituted in such a manner
     as to permit  the Plan to comply  with Rule  16b-3  with  respect to a plan
     intended to qualify  thereunder as a  discretionary  plan.  Once appointed,
     such Committee  shall  continue to serve in its  designated  capacity until
     otherwise  directed by the Board.  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,  and remove all members of the
     Committee and  thereafter  directly  administer the Plan, all to the extent
     permitted  by  Rule  16b-3  with  respect  to a plan  intended  to  qualify
     thereunder as a discretionary plan.

               (ii)  Multiple Administrative Bodies. If permitted by Rule 16b-3,
     the Plan may be administered by different bodies with respect to directors,
     non-director officers and Employees who are neither directors nor officers.

               (iii) Administration  With  Respect  to  Consultants  and   Other
     Employees.  With respect to grants of Options or stock  purchase  rights to
     Employees  who are  neither  directors  nor  officers  of the Company or to
     Consultants,  the Plan shall be administered by

                                      -3-
<PAGE>

     (A) the Board, if the Board may administer the Plan in compliance with Rule
     16b-3, or (B) a Committee designated by the Board, which Committee shall be
     constituted in such a manner as to satisfy the legal requirements  relating
     to the  administration  of  incentive  stock option  plans,  if any, of New
     Jersey  corporate law and applicable  securities  laws and of the Code (the
     "Applicable Laws"). Once appointed,  such Committee shall continue to serve
     in its designated capacity until otherwise directed by the Board. 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,  and remove all members of the  Committee and  thereafter  directly
     administer the Plan, all to the extent permitted by the Applicable Laws.

          (b)  Powers of the  Administrator.   Subject to the  provisions of the
Plan and in the case of a Committee,  the specific duties delegated by the Board
to  such  Committee,   the  Administrator  shall  have  the  authority,  in  its
discretion:

               (i)    to determine the Fair Market Value of the Common Stock, in
     accordance with Section 2(k) of the Plan;

               (ii)   to select the officers, Consultants and  Employees to whom
     Options  and  stock  purchase  rights  may  from  time to  time be  granted
     hereunder;

               (iii)  to determine whether and to what extent  Options and stock
     purchase rights or any combination thereof, are granted hereunder;

               (iv)   to determine  the number of  shares of  Common Stock to be
     covered by each such award granted hereunder;

               (v)    to approve forms of agreement for use under the Plan;

               (vi)   to determine the terms and  conditions,  not  inconsistent
     with the terms of the Plan, of any award granted hereunder (including,  but
     not limited to, the share price and any restriction or limitation or waiver
     of forfeiture  restrictions  regarding any Option or other award and/or the
     shares of Common Stock relating thereto, based in each case on such factors
     as the Administrator shall determine, in its sole discretion);

               (vii)  to  determine  whether  and  under  what  circumstances an
     Option  may be  settled in cash  under  subsection  9(f)  instead of Common
     Stock;

               (viii) to  determine  whether,  to  what  extent and  under  what
     circumstances  Common  Stock and other  amounts  payable with respect to an
     award  under this Plan shall be  deferred  either  automatically  or at the
     election of the  participant  (including  providing for and determining the
     amount,  if any, of any deemed  earnings on any deferred  amount during any
     deferral period);

                                      -4-
<PAGE>

               (ix)   to  reduce the  exercise  price of any  Option to the then
     current  Fair  Market  Value if the Fair Market  Value of the Common  Stock
     covered by such Option  shall have  declined  since the date the Option was
     granted; and

               (x)    to  determine  the  terms and  restrictions  applicable to
     stock purchase rights and the Restricted Stock purchased by exercising such
     stock purchase rights.

          (c)  Effect of  Committee's  Decision.  All  decisions, determinations
and interpretations of the  Administrator  shall  be  final  and binding  on all
Optionees and any other holders of any Options.

     5.   Eligibility.

          (a)  Nonstatutory  Stock Options may be granted to Employees  and
Consultants.  Incentive  Stock  Options  may be granted  only to  Employees.  An
Employee or  Consultant  who has been  granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.

          (b)  Each Option shall be  designated in the written option  agreement
as either an Incentive  Stock Option or a  Nonstatutory  Stock Option.  However,
notwithstanding such designations,  to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options  designated as Incentive Stock
Options are  exercisable  for the first time by any optionee during any calendar
year  (under  all plans of the  Company  or any  Parent or  Subsidiary)  exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.

          (c)  For purposes of  Section 5(b),  Incentive  Stock Options shall be
taken into account in the order in which they were granted,  and the Fair Market
Value of the Shares shall be  determined  as of the time the Option with respect
to such Shares is granted.

          (d)  The Plan  shall  not  confer  upon any  Optionee  any  right with
respect to  continuation  of  employment  or  consulting  relationship  with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate  his  employment or consulting  relationship  at any time,  with or
without cause.

     6.   Term of Plan.  The Plan shall  become  effective  upon the  earlier to
occur  of its  adoption  by the  Board  of  Directors  or  its  approval  by the
shareholders  of the Company as  described  in Section 19 of the Plan.  It shall
continue in effect for a term of ten (10) years unless sooner  terminated  under
Section 15 of the Plan.


                                      -5-
<PAGE>
     7.   Term of Option.  The term of each  Option shall be the  term stated in
the Option Agreement;  provided, however, that in the case of an Incentive Stock
Option,  the term  shall be no more than ten (10)  years  from the date of grant
thereof  or  such  shorter  term as may be  provided  in the  Option  Agreement.
However,  in the case of an Option  granted to an Optionee  who, at the time the
Option is granted,  owns stock  representing  more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.

     8.   Option Exercise Price and Consideration.

          (a)  The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board,  but
shall be subject to the following:

               (i)    In the case of an Incentive Stock Option

                      (A)    granted to  an  Employee  who,  at the  time of the
     grant of such Incentive Stock Option, owns stock representing more than ten
     percent (10%) of the voting power of all classes of stock of the Company or
     any Parent or  Subsidiary,  the per Share  exercise  price shall be no less
     than 110% of the Fair Market Value per Share on the date of grant.

                      (B)    granted to  any  Employee,  the per Share  exercise
     price shall be no less than 100% of the Fair Market Value per  Share on the
     date of grant.

               (ii)   In the case of a Nonstatutory Stock Option

                      (A)    granted to a person  who, at the time of the  grant
     of such Option,  owns stock representing more than ten percent (10%) of the
     voting  power of all  classes  of stock of the  Company  or any  Parent  or
     Subsidiary,  the per Share exercise price shall be no less than 110% of the
     Fair Market Value per Share on the date of the grant.

                      (B)    granted to any person, the per Share exercise price
     shall be no less than 85% of the Fair Market Value per Share on the date of
     grant.

          (b)  The  consideration to  be  paid for the  Shares to be issued upon
exercise of an Option,  including the method of payment,  shall be determined by
the  Administrator  (and,  in the case of an Incentive  Stock  Option,  shall be
determined  at the time of grant)  and may  consist  entirely  of (1) cash,  (2)
check,  (3)  promissory  note,  (4) other Shares which (x) in the case of Shares
acquired  upon  exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired,  directly or
indirectly,  from the  Company,  and (y) have a Fair Market Value on the date of
surrender  equal to the aggregate  exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that

                                      -6-
<PAGE>

number of Shares having a Fair Market Value on the date of exercise equal to the
exercise  price  for the  total  number  of  Shares  as to which  the  option is
exercised,  (6) delivery of a properly  executed  exercise  notice together with
irrevocable  instructions  to a broker to  promptly  deliver to the  Company the
amount of sale or loan  proceeds  required  to pay the  exercise  price,  (7) by
delivering  an   irrevocable   subscription   agreement  for  the  Shares  which
irrevocably  obligates the option holder to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription agreement, (8)
any  combination  of  the  foregoing  methods  of  payment,  or (9)  such  other
consideration  and method of payment  for the  issuance  of Shares to the extent
permitted under Applicable  Laws. In making its  determination as to the type of
consideration to accept, the Administrator  shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.

     9.   Exercise of Option.

          (a)  Procedure  for  Exercise;  Rights as a  Shareholder.  Any  Option
granted  hereunder  shall be exercisable at such times and under such conditions
as determined by the Administrator,  including performance criteria with respect
to the Company and/or the Optionee,  and as shall be permissible under the terms
of the Plan.

               An Option may not be exercised for a fraction of a Share.

               An Option shall be deemed to be exercised  when written notice of
such exercise has been given to the Company in accordance  with the terms of the
Option by the person  entitled to exercise  the Option and full  payment for the
Shares with  respect to which the Option is exercised  has been  received by the
Company.  Full payment may, as authorized by the  Administrator,  consist of any
consideration  and method of payment  allowable  under Section 8(b) of the Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued)  such stock  certificate  promptly  upon  exercise of the Option.  No
adjustment  will be made for a dividend or other right for which the record date
is prior to the date the stock  certificate  is issued,  except as  provided  in
Section 11 of the Plan.

               Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale  under  the  Option,  by the  number of Shares as to which the
Option is exercised.

          (b)  Termination  of  Employment.  In the  event of  termination of an
Optionee's consulting  relationship or Continuous Status as an Employee with the
Company (as the case may be),  such  Optionee  may, but only within  ninety (90)
days (or such other  period of time as is  determined  by the  Board,  with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not  exceeding  ninety (90) days) after the date of such
termination  (but in no event later than the expiration date of the term of such
Option as set forth

                                      -7-
<PAGE>

in the Option  Agreement),  exercise his Option to the extent that  Optionee was
entitled  to  exercise  it at the date of such  termination.  To the extent that
Optionee  was  not  entitled  to  exercise  the  Option  at  the  date  of  such
termination,  or if  Optionee  does not  exercise  such  Option to the extent so
entitled within the time specified herein, the Option shall terminate.

          (c)  Disability  of  Optionee.    Notwithstanding  the  provisions  of
Section 9(b) above,  in the event of  termination  of an  Optionee's  consulting
relationship  or  Continuous  Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee may,
but only within twelve (12) months from the date of such  termination (but in no
event later than the expiration  date of the term of such Option as set forth in
the Option  Agreement),  exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination,  or if Optionee does
not  exercise  such Option to the extent so entitled  within the time  specified
herein, the Option shall terminate.

          (d)  Death of Optionee.  In the event of the death of an Optionee, the
Option may be  exercised,  at any time within  twelve (12) months  following the
date of death  (but in no event  later than the  expiration  date of the term of
such Option as set forth in the Option  Agreement),  by the Optionee's estate or
by a person  who  acquired  the  right to  exercise  the  Option by  bequest  or
inheritance,  but only to the extent the  Optionee  was entitled to exercise the
Option at the date of death.  To the extent that  Optionee  was not  entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such  Option to the extent so entitled  within the time  specified  herein,  the
Option shall terminate.

          (e)  Rule 16b-3.  Options  granted to persons subject to Section 16(b)
of the  Exchange  Act must  comply  with  Rule  16b-3  and  shall  contain  such
additional  conditions or restrictions as may be required  thereunder to qualify
for the maximum  exemption  from  Section 16 of the Exchange Act with respect to
Plan transactions.

          (f)  Buyout Provisions.   The  Administrator may at any  time offer to
buy out for a payment in cash or Shares, an Option previously granted,  based on
such terms and conditions as the  Administrator  shall establish and communicate
to the Optionee at the time that such offer is made.

     10.  Non-Transferability  of Options.  The Option may not be sold, pledged,
assigned, hypothecated,  transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised,  during the
lifetime of the Optionee, only by the Optionee. The terms of the Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.

                                      -8-
<PAGE>

     11.  Stock Purchase Rights.

          (a)  Rights to Purchase.   Stock purchase rights may be issued  either
alone,  in addition  to, or in tandem with other awards  granted  under the Plan
and/or cash awards made outside of the Plan. After the Administrator  determines
that it will offer stock  purchase  rights  under the Plan,  it shall advise the
offeree  in writing of the terms,  conditions  and  restrictions  related to the
offer,  including  the number of Shares  that such  person  shall be entitled to
purchase,  the price to be paid  (which  price shall not be less than 50% of the
Fair  Market  Value of the  Shares  as of the date of the  offer),  and the time
within which such person must accept such offer,  which shall in no event exceed
thirty  (30)  days  from  the  date  upon  which  the  Administrator   made  the
determination  to grant the stock purchase right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator.

          (b)  Repurchase Option. Unless the Administrator determines otherwise,
the  Restricted  Stock purchase  agreement  shall grant the Company a repurchase
option  exercisable  upon  the  voluntary  or  involuntary  termination  of  the
purchaser's  employment  with the  Company  for any reason  (including  death or
Disability).   The  purchase  price  for  Shares  repurchased  pursuant  to  the
Restricted  Stock  purchase  agreement  shall be the original  price paid by the
purchaser and may be paid by cancellation  of any  indebtedness of the purchaser
to the Company.  The repurchase option shall lapse at such rate as the Committee
may determine.

          (c)  Other  Provisions.  The Restricted Stock purchase agreement shall
contain such other terms,  provisions and conditions not  inconsistent  with the
Plan as may be  determined  by the  Administrator  in its  sole  discretion.  In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.

          (d)  Rights  as a  Shareholder.   Once  the  stock  purchase  right is
exercised,  the  purchaser  shall  have  the  rights  equivalent  to  those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized  transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock purchase right is exercised, except as provided in Section 13
of the Plan.

     12.  Stock  Withholding to  Satisfy  Withholding Tax  Obligations.   At the
discretion of the Administrator,  Optionees may satisfy withholding  obligations
as  provided  in this  paragraph.  When an  Optionee  incurs  tax  liability  in
connection  with an Option or stock  purchase  right,  which  tax  liability  is
subject to tax  withholding  under  applicable  tax laws,  and the  Optionee  is
obligated to pay the Company an amount required to be withheld under  applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing to
have the Company withhold

                                      -9-
<PAGE>

from the Shares to be issued upon exercise of the Option, or the Shares to
be issued in connection  with the stock purchase  right,  if any, that number of
Shares  having a Fair Market Value equal to the amount  required to be withheld.
The Fair Market Value of the Shares to be withheld  shall be  determined  on the
date that the amount of tax to be withheld is to be determined (the "Tax Date").

          All elections by an Optionee to have Shares  withheld for this purpose
shall be made in writing in a form acceptable to the  Administrator and shall be
subject to the following restrictions:

          (a)  the election must be made on or prior to the applicable Tax Date;

          (b)  once made, the election shall be irrevocable as to the particular
Shares of the Option or Right as to which the election is made;

          (c)  all elections shall be subject to the consent or  disapproval  of
the Administrator;

          (d)  if the  Optionee is  subject to  Rule 16b-3,  the  election  must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional  conditions or restrictions as may be required  thereunder to qualify
for the maximum  exemption  from  Section 16 of the Exchange Act with respect to
Plan transactions.

          In the  event  the  election  to have  Shares  withheld  is made by an
Optionee  and the Tax Date is deferred  under  Section 83 of the Code because no
election is filed under  Section 83(b) of the Code,  the Optionee  shall receive
the full  number of Shares  with  respect to which the Option or stock  purchase
right is  exercised  but such  Optionee  shall be  unconditionally  obligated to
tender back to the Company the proper number of Shares on the Tax Date.

     13.  Adjustments Upon Changes in Capitalization or  Merger.  Subject to any
required  action by the  shareholders  of the  Company,  the number of shares of
Common Stock  covered by each  outstanding  Option,  and the number of shares of
Common Stock which have been  authorized  for issuance  under the Plan but as to
which no Options have yet been  granted or which have been  returned to the Plan
upon  cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding  Option,  shall be proportionately
adjusted for any  increase or decrease in the number of issued  shares of Common
Stock  resulting  from a stock  split,  reverse  stock  split,  stock  dividend,
combination or  reclassification  of the Common Stock,  or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of  consideration  by the Company;  provided,  however,  that  conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of  consideration."  Such adjustment shall be made by the Board,
whose  determination  in that respect  shall be final,  binding and  conclusive.
Except as  expressly  provided  herein,  no issuance by the Company of shares of
stock of any class, or securities convertible into

                                      -10-
<PAGE>

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 of Common  Stock
subject to an Option.

          In the  event  of  the  proposed  dissolution  or  liquidation  of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such proposed action.  To the extent it has not been previously  exercised,  the
Option will terminate  immediately  prior to the  consummation  of such proposed
action.  In the event of a merger or  consolidation  of the Company with or into
another  corporation  or the sale of all or  substantially  all of the Company's
assets (hereinafter,  a "merger"),  the Option shall be assumed or an equivalent
option  shall be  substituted  by such  successor  corporation  or a  parent  or
subsidiary  of such  successor  corporation.  In the event  that such  successor
corporation  does not agree to assume the Option or to  substitute an equivalent
option, the Board shall, in lieu of such assumption or substitution, provide for
the  Optionee to have the right to exercise the Option as to all of the Optioned
Stock,  including  Shares  as  to  which  the  Option  would  not  otherwise  be
exercisable.  If the  Board  makes  an  Option  fully  exercisable  in  lieu  of
assumption or substitution in the event of a merger,  the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen (15)
days  from the date of such  notice,  and the  Option  will  terminate  upon the
expiration of such period. For the purposes of this paragraph,  the Option shall
be considered  assumed if, following the merger, the Option or right confers the
right to  purchase,  for each Share of stock  subject to the Option  immediately
prior to the merger, the consideration (whether stock, cash, or other securities
or  property)  received in the merger by holders of Common  Stock for each Share
held on the  effective  date of the  transaction  (and if holders were offered a
choice of  consideration,  the type of consideration  chosen by the holders of a
majority  of  the  outstanding  Shares);   provided,   however,   that  if  such
consideration  received  in the  merger  was  not  solely  common  stock  of the
successor  corporation  or its  Parent,  the Board may,  with the consent of the
successor  corporation and the participant,  provide for the consideration to be
received upon the exercise of the Option, for each Share of stock subject to the
Option,  to be solely  common stock of the successor  corporation  or its Parent
equal in Fair Market Value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.

     14.  Time of Granting  Options.  The date of grant of an Option  shall, for
all purposes,  be the date on which the  Administrator  makes the  determination
granting such Option,  or such other date as is determined by the Board.  Notice
of the  determination  shall be given to each  Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.

     15.  Amendment and Termination of the Plan.

          (a)  Amendment and  Termination.  The  Board  may at  any  time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or  discontinuation  shall be made which would impair the rights of any Optionee
under any grant theretofore made,  without his or her consent.  In addition,  to
the extent  necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other  applicable law or regulation,
including the requirements of the NASD or an established  stock  exchange),  the

                                      -11-
<PAGE>

Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.

          (b)  Effect  of  Amendment  or  Termination.   Any  such  amendment or
termination  of the Plan  shall not  affect  Options  already  granted  and such
Options  shall  remain  in full  force  and  effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

     16.  Conditions  Upon  Issuance of  Shares.   Shares  shall  not  be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance  and  delivery of such Shares  pursuant  thereto  shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933,  as amended,  the  Exchange  Act,  the rules and  regulations  promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed,  and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

          As a condition to the  exercise of an Option,  the Company may require
the person  exercising  such Option to represent  and warrant at the time of any
such  exercise  that the  Shares are being  purchased  only for  investment  and
without  any  present  intention  to sell or  distribute  such Shares if, in the
opinion of counsel for the Company,  such a representation is required by any of
the aforementioned relevant provisions of law.

     17.  Reservation of Shares.  The  Company,  during the  term of this  Plan,
will at all times reserve and keep  available  such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

          The inability of the  Company to obtain authority from any  regulatory
body having jurisdiction,  which authority is deemed by the Company's counsel to
be necessary  to the lawful  issuance  and sale of any Shares  hereunder,  shall
relieve the Company of any  liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

     18.  Agreements.  Options and stock purchase  rights shall be  evidenced by
written agreements in such form as the Board shall approve from time to time.

     19.  Shareholder  Approval.   Continuance of the Plan  shall be  subject to
approval by the  shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.

                                      -12-
<PAGE>

     20.  Information to Optionees.  The Company shall provide to each Optionee,
during the period for which such  Optionee has one or more Options  outstanding,
copies of all annual  reports and other  information  which are  provided to all
shareholders  of the Company.  The Company shall not be required to provide such
information  if the  issuance  of  Options  under  the  Plan is  limited  to key
employees  whose duties in  connection  with the Company  assure their access to
equivalent information.



                                      -13-