Document:

EXHIBIT 4.1

                               GENTA INCORPORATED

                            1998 STOCK INCENTIVE PLAN

               (Amended and Restated Effective September 19, 2002)
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                                Table of Contents
                                                                            Page
                                                                            ----
                                    ARTICLE I
                                     GENERAL

1.1      Purpose...........................................................   1
1.2      Administration....................................................   1
1.3      Persons Eligible for Awards.......................................   2
1.4      Types of Awards Under Plan........................................   2
1.5      Shares Available for Awards.......................................   2
1.6      Definitions of Certain Terms......................................   3

                                   ARTICLE II
                              AWARDS UNDER THE PLAN

2.1      Agreements Evidencing Awards......................................   5
2.2      No Rights as a Shareholder........................................   5
2.3      Grant of Stock Options, Stock Appreciation
            Rights and Reload Options......................................   5
2.4      Exercise of Options and Stock Appreciation Rights.................   7
2.5      Termination of Employment; Death..................................   8
2.6      Grant of Restricted Stock.........................................   8
2.7      Grant of Restricted Stock Units...................................   9
2.8      Other Stock-Based Awards..........................................  10
2.9      Grant of Dividend Equivalent Rights...............................  10
2.10     Right of Recapture................................................  10

                                   ARTICLE III
                                  MISCELLANEOUS

3.1      Amendment of the Plan; Modification of Awards.....................  11
3.2      Tax Withholding...................................................  11
3.3      Restrictions......................................................  11
3.4      Nonassignability..................................................  12
3.5      Requirement of Notification of Election Under
           Section 83(b) of the Code.......................................  12
3.6      Requirement of Notification Upon Disqualifying Disposition
           Under Section 421(b) of the Code................................  12
3.7      Change in Control, Dissolution, Liquidation, Merger...............  12
3.8      Right of Discharge Reserved.......................................  14
3.9      Nature of Payments................................................  14
3.10     Non-Uniform Determinations........................................  14
3.11     Other Payments or Awards..........................................  15
3.12     Section Headings..................................................  15
3.13     Effective Date and Term of Plan...................................  15
3.14     Governing Law.....................................................  15
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                                    ARTICLE I
                                     GENERAL

1.1 Purpose

            The purpose of the Genta Incorporated 1998 Stock Incentive Plan, as
amended and restated effective September 19, , 2002, (the "Plan") is to provide
for officers, other employees and directors of, and consultants to, Genta
Incorporated (the "Company") and its subsidiaries an incentive (a) to enter into
and remain in the service of the Company, (b) to enhance the long-term
performance of the Company, and (c) to acquire a proprietary interest in the
success of the Company.

1.2 Administration

            1.2.1 Subject to Section 1.2.6, the Plan shall be administered by
the Compensation Committee (the "Committee") of the board of directors of the
Company (the "Board"), which shall consist of not less than two directors. The
members of the Committee shall be appointed by, and serve at the pleasure of,
the Board. To the extent required for transactions under the Plan to qualify for
the exemptions available under Rule 16b-3 ("Rule 16b-3") promulgated under the
Securities Exchange Act of 1934 (the "1934 Act"), all actions relating to awards
to persons subject to Section 16 of the 1934 Act shall be taken by the Board
unless each person who serves on the Committee is a "non-employee director"
within the meaning of Rule 16b-3 or such actions are taken by a sub-committee of
the Committee (or the Board) comprised solely of "non-employee directors". To
the extent required for compensation realized from awards under the Plan to be
deductible by the Company pursuant to section 162(m) of the Internal Revenue
Code of 1986 (the "Code"), the members of the Committee shall be "outside
directors" within the meaning of section 162(m).

            1.2.2 The Committee shall have the authority (a) to exercise all of
the powers granted to it under the Plan; (b) to construe, interpret and
implement the Plan and any plan agreements executed pursuant to Section 2.1; (c)
to prescribe, or amend and rescind rules and regulations relating to the Plan,
including rules governing its own operations; (d) to make all determinations
necessary or advisable in administering the Plan; (e) to correct any defect,
supply any omission and reconcile any inconsistency in the Plan; (f) to amend
the Plan to reflect changes in applicable law; (g) to determine whether, to what
extent and under what circumstances awards may be settled or exercised in cash,
Shares of Common Stock, other securities, other awards or other property, or
canceled, forfeited or suspended and the method or methods by which awards may
be settled, canceled, forfeited or suspended; (h) to determine whether, to what
extent and under what circumstances cash, shares of Common Stock, other
securities, other awards or other property and other amounts payable with
respect to an award shall be deferred either automatically or at the election of
the holder thereof or of the Committee; and (i) to determine whether, to what
extent and under what circumstances the management of the day-to-day operations
of the Plan and the functions of the Company with respect thereto, including,
without limitation, processing of the exercise of options and holding and sales
of option shares by grantees, shall be delegated to a registered broker-dealer
or other qualified third party.

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            1.2.3 Actions of the Committee shall be taken by the vote of a
majority of its members. Any action may be taken by a written instrument signed
by a majority of the Committee members, and action so taken shall be fully as
effective as if it had been taken by a vote at a meeting.

            1.2.4 The determination of the Committee on all matters relating to
the Plan or any plan agreement shall be final, binding and conclusive.

            1.2.5 No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any award
thereunder.

            1.2.6 Notwithstanding anything to the contrary contained herein: (a)
until the Board shall appoint the members of the Committee, the Plan shall be
administered by the Board; and (b) the Board may, in its sole discretion, at any
time and from time to time, grant awards or resolve to administer the Plan. In
either of the foregoing events, the Board shall have all of the authority and
responsibility granted to the Committee herein.

1.3 Persons Eligible for Awards

            Awards under the Plan may be made to such directors (including
directors who are not employees), officers and other employees of the Company
and its subsidiaries (including prospective employees conditioned on their
becoming employees), and to such consultants, advisers and other independent
contractors of the Company and its subsidiaries (collectively, "key persons"),
as the Committee shall select in its discretion.

1.4 Types of Awards Under Plan

            Awards may be made under the Plan in the form of (a) incentive stock
options (within the meaning of section 422 of the Code); (b) non-qualified stock
options; (c) stock appreciation rights; (d) dividend equivalent rights; (e)
restricted stock; (f) restricted stock units; and (g) other stock-based awards,
all as more fully set forth in Article II. The term "award" means any of the
foregoing. No incentive stock option (other than an incentive stock option that
may be assumed or issued by the Company in connection with a transaction to
which section 424(a) of the Code applies) may be granted to a person who is not
an employee of the Company on the date of grant.

1.5 Shares Available for Awards

            1.5.1 Total shares available. The total number of shares of common
stock of the Company, par value $0.001 per share ("Common Stock"), which may be
transferred pursuant to awards granted under the Plan shall not exceed
15,600,000. Notwithstanding the foregoing, the total number of incentive stock
options (as defined in Section 1.6.2) which may be granted may not exceed
12,500,000 shares. Such shares may be authorized but unissued Common Stock or
authorized and issued Common Stock held in the Company's treasury or acquired by
the Company for the purposes of the Plan. The Committee may direct that a) a
stop order may be placed in effect with respect to shares issued pursuant to the
Plan and b) any stock certificate evidencing shares issued pursuant to the Plan
shall bear a legend setting forth such restrictions on transferability as may
apply to such shares pursuant to the Plan. If, after the effective date of the
Plan, any award is forfeited or any award otherwise terminates or is cancelled
without the

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delivery of shares of Common Stock, then the shares covered by such award or to
which such award relates shall again become available for transfer pursuant to
awards granted or to be granted under this Plan. Any shares of Common Stock
delivered by the Company, any shares of Common Stock with respect to which
awards are made by the Company and any shares of Common Stock with respect to
which the Company becomes obligated to make awards, through the assumption of,
or in substitution for, outstanding awards previously granted by an acquired
entity, shall not be counted against the shares available for awards under this
Plan.

            1.5.2 Individual Limit. The total number of shares of Common Stock
with respect to which stock options and stock appreciation rights may be granted
to any one employee of the Company or a subsidiary during any two-year period
shall not exceed 8,000,000 shares.

            1.5.3 Adjustments. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding award, the number of shares available for awards, the number of
shares that may be subject to awards to any one employee, and the price per
share of Common Stock covered by each such outstanding award 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 Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein or in the applicable
plan agreement, 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 of Common Stock subject to an award. After any adjustment made
pursuant to this Section 1.5.3, the number of shares subject to each outstanding
award shall be rounded to the nearest whole number.

            1.5.4 Except as provided in this Section 1.5 and in Section 2.3.8,
there shall be no limit on the number or the value of the shares of Common Stock
that may be subject to awards to any individual under the Plan.

1.6 Definitions of Certain Terms

            1.6.1 The "Fair Market Value" of a share of Common Stock on any day
shall be determined as follows.

                  (a) If the principal market for the Common Stock (the
"Market") is a national securities exchange or the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") National Market or
Small Cap Market, the last sale price or, if no reported sales take place on the
applicable date, the average of the high bid and low asked price of Common Stock
as reported for such Market on such date or, if no such quotation is made on
such date, on the next preceding day on which there were quotations, provided
that such quotations shall have been made within the ten (10) business days
preceding the applicable date;

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                  (b) If the Common Stock is actively traded but paragraph (a)
does not apply, the average of the high bid and low asked price for Common Stock
on the applicable date, or, if no such quotations shall have been made on such
date, on the next preceding day on which there were quotations, provided that
such quotations shall have been made within the ten (10) business days preceding
the applicable date; or,

                  (c) In the event that neither paragraph (a) nor (b) shall
apply, the Fair Market Value of a share of Common Stock on any day shall be
determined in good faith by the Committee.

            1.6.2 The term "incentive stock option" means an option that is
intended to qualify for special federal income tax treatment pursuant to
sections 421 and 422 of the Code, as now constituted or subsequently amended, or
pursuant to a successor provision of the Code, and which is so designated in the
applicable plan agreement. Any option that is not specifically designated as an
incentive stock option shall under no circumstances be considered an incentive
stock option. Any option that is not an incentive stock option is referred to
herein as a "nonqualified stock option."

            1.6.3 The term "employment" means, in the case of a grantee of an
award under the Plan who is not an employee of the Company, the grantee's
association with the Company or a subsidiary as a director, consultant, adviser,
other independent contractor or otherwise.

            1.6.4 A grantee shall be deemed to have a "termination of
employment" upon ceasing to be employed by the Company and all of its
subsidiaries or by a corporation assuming awards in a transaction to which
section 424(a) of the Code applies. The Committee may in its discretion
determine (a) whether any leave of absence constitutes a termination of
employment for purposes of the Plan; (b) the impact, if any, of any such leave
of absence on awards theretofore made under the Plan; and (c) when a change in a
non-employee's association with the Company constitutes a termination of
employment for purposes of the Plan. The Committee shall have the right to
determine whether a grantee's termination of employment is a dismissal for cause
and the date of termination in such case, which date the Committee may
retroactively deem to be the date of the action that is cause for dismissal.
Such determinations of the Committee shall be final, binding and conclusive.

            1.6.5 The term "cause," when used in connection with termination of
a grantee's employment, shall have the meaning set forth in any then-effective
employment agreement between the grantee and the Company or a subsidiary
thereof. In the absence of such an employment agreement provision, "cause"
means: (a) conviction of any crime (whether or not involving the Company or its
subsidiaries) constituting a felony in the jurisdiction involved; (b) engaging
in any act which, in each case, subjects, or if generally known would subject,
the Company or its subsidiaries to public ridicule or embarrassment; (c)
material violation of the Company's or a subsidiary's policies, including,
without limitation, those relating to sexual harassment or the disclosure or
misuse of confidential information; or (d) serious neglect or misconduct in the
performance of the grantee's duties for the Company or a subsidiary or willful
or repeated failure or refusal to perform such duties; in each case as
determined by the Committee, which determination shall be final, binding and
conclusive.

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                                   ARTICLE II
                              AWARDS UNDER THE PLAN

2.1 Agreements Evidencing Awards

            Each award granted under the Plan (except an award of unrestricted
stock) shall be evidenced by a written agreement ("plan agreement") which shall
contain such provisions as the Committee in its discretion deems necessary or
desirable. Such provisions may include, without limitation, a requirement that
the grantee acknowledge that such shares are acquired for investment purposes
only. The Committee may grant awards in tandem with or in substitution for any
other award or awards granted under this Plan or any award granted under any
other plan of the Company or any subsidiary. Payments or transfers to be made by
the Company or any subsidiary upon the grant, exercise or payment of an award
may be made in such form as the Committee shall determine, including cash,
shares of Common Stock, other securities, other awards or other property and may
be made in a single payment or transfer, in installments or on a deferred basis,
in each case in accordance with rules established by the Committee. By accepting
an award pursuant to the Plan, a grantee thereby agrees that the award shall be
subject to all of the terms and provisions of the Plan, the applicable plan
agreement, and the determinations of the Committee.

2.2 No Rights as a Shareholder

            No grantee of an option or stock appreciation right (or other person
having the right to exercise such award) shall have any of the rights of a
shareholder of the Company with respect to shares subject to such award until a)
the issuance of a stock certificate to such person for such shares or b) the
book-entry ownership is reflected for the nominee of such person who holds such
shares in "street name." Except as otherwise provided in Section 1.5.3, no
adjustment shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities or other property)
for which the record date is prior to the date such shares are issued.

2.3 Grant of Stock Options, Stock Appreciation Rights and Reload Options

            2.3.1 The Committee may grant incentive stock options and
nonqualified stock options (collectively, "options") to purchase shares of
Common Stock from the Company, to such key persons, in such amounts and subject
to such terms and conditions, as the Committee shall determine in its
discretion, subject to the provisions of the Plan.

            2.3.2 The Committee may grant stock appreciation rights to such key
persons, in such amounts and subject to such terms and conditions, as the
Committee shall determine in its discretion, subject to the provisions of the
Plan. Stock appreciation rights may be granted in connection with all or any
part of, or independently of, any option granted under the Plan. A stock
appreciation right granted in connection with a nonqualified stock option may be
granted at or after the time of grant of such option. A stock appreciation right
granted in connection with an incentive stock option may be granted only at the
time of grant of such option.

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            2.3.3 The grantee of a stock appreciation right shall have the
right, subject to the terms of the Plan and the applicable plan agreement, to
receive from the Company an amount equal to (a) the excess of the Fair Market
Value of a share of Common Stock on the date of exercise of the stock
appreciation right over (b) the exercise price of such right as set forth in the
plan agreement (or over the option exercise price if the stock appreciation
right is granted in connection with an option), multiplied by (c) the number of
shares with respect to which the stock appreciation right is exercised. Payment
upon exercise of a stock appreciation right shall be in cash or in shares of
Common Stock (valued at their Fair Market Value on the date of exercise of the
stock appreciation right) or both, all as the Committee shall determine in its
discretion. Upon the exercise of a stock appreciation right granted in
connection with an option, the number of shares subject to the option shall be
correspondingly reduced by the number of shares with respect to which the stock
appreciation right is exercised. Upon the exercise of an option in connection
with which a stock appreciation right has been granted, the number of shares
subject to the stock appreciation right shall be correspondingly reduced by the
number of shares with respect to which the option is exercised.

            2.3.4 Each plan agreement with respect to an option shall set forth
the amount (the "option exercise price") payable by the grantee to the Company
upon exercise of the option evidenced thereby. The option exercise price per
share shall be determined by the Committee in its discretion; provided, however,
that the option exercise price of an incentive stock option shall be at least
100% of the Fair Market Value of a share of Common Stock on the date the option
is granted (except as permitted in connection with the assumption or issuance of
options in a transaction to which section 424(a) of the Code applies), and
provided further that in no event shall the option exercise price be less than
the par value of a share of Common Stock.

            2.3.5 Each plan agreement with respect to an option or stock
appreciation right shall set forth the periods during which the award evidenced
thereby shall be exercisable, whether in whole or in part. Such periods shall be
determined by the Committee in its discretion; provided, however, that no
incentive stock option (or a stock appreciation right granted in connection with
an incentive stock option) shall be exercisable more than 10 years after the
date of grant.

            2.3.6 The Committee may in its discretion include in any plan
agreement with respect to an option (the "original option") a provision that an
additional option (the "additional option") shall be granted to any grantee who,
pursuant to Section 2.4.3(b), delivers shares of Common Stock in partial or full
payment of the exercise price of the original option. The additional option
shall be for a number of shares of Common Stock equal to the number thus
delivered, shall have an exercise price equal to the Fair Market Value of a
share of Common Stock on the date of exercise of the original option, and shall
have an expiration date no later than the expiration date of the original
option. In the event that a plan agreement provides for the grant of an
additional option, such agreement shall also provide that the exercise price of
the original option be no less than the Fair Market Value of a share of Common
Stock on its date of grant, and that any shares that are delivered pursuant to
Section 2.4.3(b) in payment of such exercise price shall have been held for at
least six months.

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            2.3.7 To the extent that the aggregate Fair Market Value (determined
as of the time the option is granted) of the stock with respect to which
incentive stock options granted under this Plan and all other plans of the
Company and any subsidiary are first exercisable by any employee during any
calendar year shall exceed the maximum limit (currently, $100,000), if any,
imposed from time to time under section 422 of the Code, such options shall be
treated as nonqualified stock options.

            2.3.8 Notwithstanding the provisions of Sections 2.3.4 and 2.3.5, to
the extent required under section 422 of the Code, an incentive stock option may
not be granted under the Plan to an individual who, at the time the option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of his employer corporation or of its parent or
subsidiary corporations (as such ownership may be determined for purposes of
section 422(b)(6) of the Code) unless (a) at the time such incentive stock
option is granted the option exercise price is at least 110% of the Fair Market
Value of the shares subject thereto and (b) the incentive stock option by its
terms is not exercisable after the expiration of five (5) years from the date it
is granted.

2.4 Exercise of Options and Stock Appreciation Rights

            Subject to the provisions of this Article II, each option or stock
appreciation right granted under the Plan shall be exercisable as follows:

            2.4.1 Unless the applicable plan agreement otherwise provides, an
option or stock appreciation right shall become exercisable in four
substantially equal installments, on each of the first, second, third and fourth
anniversaries of the date of grant, and each installment, once it becomes
exercisable, shall remain exercisable until expiration, cancellation or
termination of the award.

            2.4.2 Unless the applicable plan agreement otherwise provides, an
option or stock appreciation right may be exercised from time to time as to all
or part of the shares as to which such award is then exercisable (but, in any
event, only for whole shares). A stock appreciation right granted in connection
with an option may be exercised at any time when, and to the same extent that,
the related option may be exercised. An option or stock appreciation right shall
be exercised by the filing of a written notice with the Company, on such form
and in such manner as the Committee shall prescribe.

            2.4.3 Any written notice of exercise of an option shall be
accompanied by payment for the shares being purchased or such other document
that the Committee may prescribe. Such payment shall be made: (a) by certified
or official bank check (or the equivalent thereof acceptable to the Company) for
the full option exercise price; or (b) unless the applicable plan agreement
provides otherwise, by delivery of shares of Common Stock (which, if acquired
pursuant to exercise of a stock option, were acquired at least six months prior
to the option exercise date) and having a Fair Market Value (determined as of
the exercise date) equal to all or part of the option exercise price and a
certified or official bank check (or the equivalent thereof acceptable to the
Company) for any remaining portion of the full option exercise price; or (c) at
the discretion of the Committee and to the extent permitted by law, by such
other method as the Committee may from time to time prescribe.

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            2.4.4 Promptly after receiving payment of the full option exercise
price, or after receiving notice of the exercise of a stock appreciation right
for which payment will be made partly or entirely in shares, the Company shall,
subject to the provisions of Section 3.3 (relating to certain restrictions),
provide for the issuance of the shares of Common Stock for which the award has
been exercised. If the method of payment employed upon option exercise so
requires, and if applicable law permits, an optionee may direct the Company to
deliver the certificate(s) to the optionee's stockbroker.

2.5 Termination of Employment; Death

            2.5.1 Except to the extent otherwise provided in Section 2.5.2 or
2.5.3 or in the applicable plan agreement, all options and stock appreciation
rights not theretofore exercised shall terminate upon termination of the
grantee's employment for any reason (including death).

            2.5.2 Except to the extent otherwise provided in the applicable plan
agreement, if a grantee's employment terminates for any reason other than death
or dismissal for cause, the grantee may exercise any outstanding option or stock
appreciation right on the following terms and conditions: (a) exercise may be
made only to the extent that the grantee was entitled to exercise the award on
the date of employment termination; and (b) exercise must occur within ninety
(90) days after employment terminates, except that this ninety day period shall
be increased to one year if the termination is by reason of disability, but in
no event after the expiration date of the award as set forth in the plan
agreement. In the case of an incentive stock option, the term "disability" for
purposes of the preceding sentence shall have the meaning given to it by section
422(c)(6) of the Code.

            2.5.3 Except to the extent otherwise provided in the applicable plan
agreement, if a grantee dies while employed by the Company or any subsidiary, or
after employment termination but during the period in which the grantee's awards
are exercisable pursuant to Section 2.5.2, any outstanding option or stock
appreciation right shall be exercisable on the following terms and conditions:
(a) exercise may be made only to the extent that the grantee was entitled to
exercise the award on the date of death; and (b) exercise must occur by the
earlier of the first anniversary of the grantee's death or the expiration date
of the award. Any such exercise of an award following a grantee's death shall be
made only by the grantee's executor or administrator, unless the grantee's will
specifically disposes of such award, in which case such exercise shall be made
only by the recipient of such specific disposition. If a grantee's personal
representative or the recipient of a specific disposition under the grantee's
will shall be entitled to exercise any award pursuant to the preceding sentence,
such representative or recipient shall be bound by all the terms and conditions
of the Plan and the applicable plan agreement which would have applied to the
grantee.

2.6 Grant of Restricted Stock

            2.6.1 The Committee may grant restricted shares of Common Stock to
such key persons, in such amounts, and subject to such terms and conditions as
the Committee shall determine in its discretion, subject to the provisions of
the Plan. Restricted stock awards may be made independently of or in connection
with any other award under the Plan. A grantee of a restricted stock award shall
have no rights with respect to such award unless such grantee accepts the award
within such period as the Committee shall specify by executing a plan agreement
in such form as the Committee shall determine and, if the Committee shall so
require, makes payment to the Company by certified or official bank check (or
the equivalent thereof acceptable to the Company) in such amount as the
Committee may determine.

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            2.6.2 Promptly after a grantee accepts a restricted stock award, the
Company shall issue in the grantee's name a certificate or certificates for the
shares of Common Stock covered by the award. Upon the issuance of such
certificate(s), the grantee shall have the rights of a shareholder with respect
to the restricted stock, subject to the non-transferability restrictions and
Company repurchase rights described in Sections 2.6.4 and 2.6.5 and to such
other restrictions and conditions as the Committee in its discretion may include
in the applicable plan agreement.

            2.6.3 Unless the Committee shall otherwise determine, any
certificate issued evidencing shares of restricted stock shall remain in the
possession of the Company until such shares are free of any restrictions
specified in the applicable plan agreement.

            2.6.4 Shares of restricted stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in this Plan or the applicable plan agreement. The
Committee at the time of grant shall specify the date or dates (which may depend
upon or be related to the attainment of performance goals and other conditions)
on which the non-transferability of the restricted stock shall lapse. Unless the
applicable plan agreement provides otherwise, additional shares of Common Stock
or other property distributed to the grantee in respect of shares of restricted
stock, as dividends or otherwise, shall be subject to the same restrictions
applicable to such restricted stock.

            2.6.5 During the 120 days following termination of the grantee's
employment for any reason, the Company shall have the right to require the
return of any shares to which restrictions on transferability apply, in exchange
for which the Company shall repay to the grantee (or the grantee's estate) the
lesser of (a) the Fair Market Value of the shares, or (b) any amount paid by the
grantee for such shares.

2.7 Grant of Restricted Stock Units

            2.7.1 The Committee may grant awards of restricted stock units to
such key persons, in such amounts, and subject to such terms and conditions as
the Committee shall determine in its discretion, subject to the provisions of
the Plan. Restricted stock units may be awarded independently of or in
connection with any other award under the Plan.

            2.7.2 At the time of grant, the Committee shall specify the date or
dates on which the restricted stock units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. In the event of the termination of the grantee's employment by the
Company and its subsidiaries for any reason, restricted stock units that have
not become nonforfeitable shall be forfeited and cancelled.

            2.7.3 At the time of grant, the Committee shall specify the maturity
date applicable to each grant of restricted stock units, which may be determined
at the election of the grantee. Such date may be later than the vesting date or
dates of the award. On the maturity date, the Company shall transfer to the
grantee one unrestricted, fully transferable share of Common Stock for each
restricted stock unit scheduled to be paid out on such date and not previously
forfeited. The Committee shall specify the purchase price, if any, to be paid by
the grantee to the Company for such shares of Common Stock.

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2.8 Other Stock-Based Awards

            The Committee may grant other types of stock-based awards (including
the grant of unrestricted shares) to such key persons, in such amounts and
subject to such terms and conditions, as the Committee shall in its discretion
determine, subject to the provisions of the Plan. Such awards may entail the
transfer of actual shares of Common Stock to Plan participants, or payment in
cash or otherwise of amounts based on the value of shares of Common Stock.

2.9 Grant of Dividend Equivalent Rights

            The Committee may in its discretion include in the plan agreement
with respect to any award a dividend equivalent right entitling the grantee to
receive amounts equal to the ordinary dividends that would be paid, during the
time such award is outstanding and unexercised, on the shares of Common Stock
covered by such award if such shares were then outstanding. In the event such a
provision is included in a plan agreement, the Committee shall determine whether
such payments shall be made in cash, in shares of Common Stock or in another
form, whether they shall be conditioned upon the exercise of the award to which
they relate, the time or times at which they shall be made, and such other terms
and conditions as the Committee shall deem appropriate.

2.10 Right of Recapture

            2.10.1 If at any time within one year after the date on which a
participant exercises an option or stock appreciation right, or on which
restricted stock vests, or which is the maturity date of restricted stock units,
or on which income is realized by a participant in connection with any other
stock-based award (each of which events is a "realization event"), the
participant (a) is terminated for cause or (b) engages in any activity
determined in the discretion of the Committee to be in competition with any
activity of the Company, or otherwise inimical, contrary or harmful to the
interests of the Company (including, but not limited to, accepting employment
with or serving as a consultant, adviser or in any other capacity to an entity
that is in competition with or acting against the interests of the Company),
then any gain realized by the participant from the realization event shall be
paid by the participant to the Company upon notice from the Company. Such gain
shall be determined as of the date of the realization event, without regard to
any subsequent change in the Fair Market Value of a share of Common Stock. The
Company shall have the right to offset such gain against any amounts otherwise
owed to the participant by the Company (whether as wages, vacation pay, or
pursuant to any benefit plan or other compensatory arrangement).

                                       10
<PAGE>

                                  ARTICLE III
                                 MISCELLANEOUS

3.1 Amendment of the Plan; Modification of Awards

            3.1.1 The Board may from time to time suspend, discontinue, revise
or amend the Plan in any respect whatsoever, except that no such amendment shall
materially impair any rights or materially increase any obligations under any
award theretofore made under the Plan without the consent of the grantee (or,
after the grantee's death, the person having the right to exercise the award).
For purposes of this Section 3.1, any action of the Board or the Committee that
alters or affects the tax treatment of any award shall not be considered to
materially impair any rights of any grantee.

            3.1.2 Shareholder approval of any amendment shall be obtained to the
extent necessary to comply with section 422 of the Code (relating to incentive
stock options) or other applicable law or regulation.

            3.1.3 The Committee may amend any outstanding plan agreement,
including, without limitation, by amendment which would accelerate the time or
times at which the award becomes unrestricted or may be exercised, or waive or
amend any goals, restrictions or conditions set forth in the agreement. However,
any such amendment (other than an amendment pursuant to Section 3.7.2, relating
to change in control) that materially impairs the rights or materially increases
the obligations of a grantee under an outstanding award shall be made only with
the consent of the grantee (or, upon the grantee's death, the person having the
right to exercise the award).

3.2 Tax Withholding

            3.2.1 As a condition to the receipt of any shares of Common Stock
pursuant to any award or the lifting of restrictions on any award, or in
connection with any other event that gives rise to a federal or other
governmental tax withholding obligation on the part of the Company relating to
an award (including, without limitation, FICA tax), the Company shall be
entitled to require that the grantee remit to the Company an amount sufficient
in the opinion of the Company to satisfy such withholding obligation.

            3.2.2 If the event giving rise to the withholding obligation is a
transfer of shares of Common Stock, then, unless otherwise specified in the
applicable plan agreement, the grantee may satisfy the withholding obligation
imposed under Section 3.2.1 by electing to have the Company withhold shares up
to an amount that does not exceed the grantee's minimum applicable withholding
tax rate for federal (including, without limitation, FICA tax) or other
governmental tax liabilities.

3.3 Restrictions

            3.3.1 If the Committee shall at any time determine that any consent
(as hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any award under the Plan, the issuance or
purchase of shares or other rights thereunder, or the taking of any other action
thereunder (each such action a "plan action"), then such plan action shall not
be taken, in whole or in part, unless and until such consent shall have been
effected or obtained to the full satisfaction of the Committee.

                                       11
<PAGE>

            3.3.2 The term "consent" as used herein with respect to any plan
action means (a) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (b) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (c) any and all consents,
clearances and approvals in respect of a plan action by any governmental or
other regulatory bodies.

3.4 Nonassignability

            Except to the extent otherwise provided in the applicable plan
agreement, no award or right granted to any person under the Plan shall be
assignable or transferable other than by will or by the laws of descent and
distribution, and all such awards and rights shall be exercisable during the
life of the grantee only by the grantee or the grantee's legal representative.

3.5 Requirement of Notification of Election Under Section 83(b) of the Code

            If any grantee shall, in connection with the acquisition of shares
of Common Stock under the Plan, make the election permitted under section 83(b)
of the Code (that is, an election to include in gross income in the year of
transfer the amounts specified in section 83(b)), such grantee shall notify the
Company of such election within ten (10) days of filing notice of the election
with the Internal Revenue Service, in addition to any filing and notification
required pursuant to regulations issued under the authority of Code section
83(b).

3.6 Requirement of Notification Upon Disqualifying Disposition Under Section
    421(b) of the Code

            If any grantee shall make any disposition of shares of Common Stock
issued pursuant to the exercise of an incentive stock option under the
circumstances described in section 421(b) of the Code (relating to certain
disqualifying dispositions), such grantee shall notify the Company of such
disposition within 10 days thereof.

3.7 Change in Control, Dissolution, Liquidation, Merger

            3.7.1 For purposes of this Section 3.7, a "change in control" shall
have occurred if:

                  (a) any "person", as such term is used in Sections 13(d) and
14(d) of the 1934 Act other than (i) the Current Shareholders of the Company as
of the effective date of the Plan (the "Current Shareholders", such term to
include their heirs or estates, or trusts or other entities the primary
beneficiaries of which are the Current Shareholders or persons designated by
them), (ii) the Company or any subsidiary of the Company, (iii) any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any subsidiary of the Company, or (iv) any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or
indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Company's then outstanding securities without the
prior written consent of the Committee or the Board; or

                                       12
<PAGE>

                  (b) during any period of twenty-four (24) consecutive months,
individuals who at the effective date of the Plan constitute the Board and any
new director whose election by the Board or nomination for election by the
Company shareholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;

                  (c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company (other than a wholly-owned
subsidiary of the Company), other than (i) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) 50% or more of the
combined voting power of voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (ii) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no "person" (as defined in Section 3.7.1(a)
above with the exceptions noted in section 3.7.1(a)) acquires more than 50% of
the combined voting power of the Company's then outstanding securities; or

                  (d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets (or any transaction
having a similar effect).

            3.7.2 Upon the happening of a change in control:

                  (a) notwithstanding any other provision of this Plan, any
option or stock appreciation right then outstanding shall become fully vested
and immediately exercisable upon the subsequent termination of employment of the
grantee by the Company or its successors without cause within one year of such
change in control unless the applicable plan agreement expressly provides
otherwise; and

                  (b) to the fullest extent permitted by law, the Committee may,
in its sole discretion, amend any plan agreement in such manner as it deems
appropriate, including, without limitation, by amendments that advance the dates
upon which any or all outstanding awards of any type shall terminate.

            3.7.3 In the event of the proposed dissolution or liquidation of the
Company, all outstanding awards will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee. The Committee may, in the exercise of its sole discretion in such
instances, accelerate the date on which any award becomes exercisable or fully
vested and/or declare that any award shall terminate as of a specified date.

                                       13
<PAGE>

            3.7.4 In the event of a merger or consolidation ("merger") of the
Company with or into any other corporation or entity ("successor corporation"),
outstanding awards shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Committee determines, in the exercise of its
sole discretion, to accelerate the date on which an award becomes exercisable or
fully vested. In the absence of an assumption or substitution of awards, awards
shall, to the extent not exercised, terminate as of the date of the closing of
the merger. For the purposes of this Section 3.7.4, an award shall be considered
assumed if, for every share of Common Stock subject thereto immediately prior to
the merger, the grantee has the right, following the merger, to acquire the
consideration received in the merger transaction by holders of shares of Common
Stock (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 Committee
may, with the consent of the successor corporation and the participant, provide
for the consideration to be acquired pursuant to the award, for each share of
Common Stock subject thereto, 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. For purposes
hereof, the term "merger" shall include any transaction in which another
corporation acquires all of the issued and outstanding Common Stock of the
Company.

3.8 Right of Discharge Reserved

            Nothing in the Plan or in any plan agreement shall confer upon any
grantee the right to continue in the employ of the Company or any subsidiary or
affect any right which the Company or any subsidiary may have to terminate such
employment.

3.9 Nature of Payments

            3.9.1 Any and all grants of awards and issuances of shares of Common
Stock under the Plan shall be in consideration of services performed for the
Company by the grantee.

            3.9.2 All such grants and issuances shall constitute a special
incentive payment to the grantee and shall not be taken into account in
computing the amount of salary or compensation of the grantee for the purpose of
determining any benefits under any pension, retirement, profit-sharing, bonus,
life insurance or other benefit plan of the Company or of any subsidiary or
under any agreement with the grantee, unless such plan or agreement specifically
provides otherwise.

3.10 Non-Uniform Determinations

            The Committee's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Plan agreements, as
to (a) the persons to receive awards under the Plan, (b) the terms and
provisions of awards under the Plan and (c) the treatment of leaves of absence
pursuant to Section 1.6.4.

                                       14
<PAGE>

3.11 Other Payments or Awards

            Nothing contained in the Plan shall be deemed in any way to limit or
restrict the Company from making any award or payment to any person under any
other plan, arrangement or understanding, whether now existing or hereafter in
effect.

3.12 Section Headings

            The section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of the
sections.

3.13 Effective Date and Term of Plan

            3.13.1 The Plan was originally adopted by the Board on May 28, 1998
(the "effective date") and was previously amended and restated on March 21,
2002. This amendment and restatement of the Plan is effective September 19,
2002.

            3.13.2 Unless sooner  terminated by the Board,  the  provisions of
the Plan respecting the grant of incentive stock options shall terminate on the
day before the tenth anniversary of the effective date of the Plan, and no
incentive stock option awards shall thereafter be made under the Plan. All
awards made under the Plan prior to its termination shall remain in effect until
such awards have been satisfied or terminated in accordance with the terms and
provisions of the Plan and the applicable plan agreements.

3.14 Governing Law

            All rights and obligations under the Plan shall be construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of laws.

                                       15EXHIBIT 4.2

                               GENTA INCORPORATED

                 NON-EMPLOYEE DIRECTORS' 1998 STOCK OPTION PLAN

               (Amended and Restated Effective September 19, 2002)

1. Purpose

            The purpose of the Genta Incorporated Non-Employee Directors' 1998
Stock Option Plan (the "Plan") as amended and restated effective September 19,
2002 is to provide an incentive to those directors of Genta Incorporated (the
"Company") who are not employees of the Company to serve on the board of
directors of the Company (the "Board") and to maintain and enhance the Company's
long-term performance.

2. Administration

            The terms of the stock options to be awarded under the Plan are set
forth herein and may not be varied other than by amendment of the Plan in
accordance with Section 10. To the extent that any administrative action is
required in connection with the Plan, such action shall be taken by the Board,
whose determination in such case shall be final, binding and conclusive.

3. Shares Available for Awards

            The total number of shares of common stock of the Company, par value
$.001 per share ("Common Stock"), which may be transferred upon the exercise of
options granted under the Plan shall not exceed 3,300,000 shares plus the number
of shares underlying the options referred to in Section 5(c) (as adjusted as
provided therein). Such shares may be authorized and unissued shares, treasury
shares or shares acquired by the Company for the purposes of the Plan. Any
shares of Common Stock that are subject to a stock option under the Plan and
that have not been transferred at the time such option is cancelled or
terminated shall again be available for options under the Plan.

4. Persons Eligible for Stock Options

            Stock options shall be granted under the Plan only to persons who
are members of the Board and are not employees of the Company or any subsidiary
thereof ("Eligible Directors").

5. Grant of Stock Options

            (a) Every option granted under the Plan shall be subject to the
terms and conditions set forth in the Plan, and shall be evidenced by an option
agreement, which shall not be inconsistent with the provisions of the Plan.

            (b) Repealed by March 22, 2001 amendment.

            (c) Each Eligible Director serving as a director on May 28, 1998
shall be granted stock options to purchase the number of shares of Common Stock
set forth below under the heading "Number of Initial Shares" at an exercise
price of $.94375 per share (subject to

                                                                               1
<PAGE>

proportional adjustment for any stock split or reverse stock split of the Common
Stock). The exercise price and number of shares subject to such stock options
shall be subject to adjustment if the number of shares of Fairly-Diluted Common
Stock (as defined below) as of February 26, 1999 (the "Adjustment Date") is
other than 44,725,266 shares (subject to proportional adjustment for any stock
split or reverse stock split of the Common Stock) as a result of any and all
Covered Events (as defined below) occurring prior to such time, in which case
(x) the number of shares of Common Stock covered by the stock option shall
increase by a number of shares equal to the percentage set forth below under the
caption "Applicable Percentage" of the number of shares of Fairly-Diluted Common
Stock as of the Adjustment Date in excess of 44,725,266 that are attributable to
Covered Events and (y) the per share exercise price shall be adjusted to equal
the conversion price of the Company's Series D Convertible Preferred Stock
immediately after the Reset (as defined in the fifth paragraph of Subsection
4(a) of the Certificate of Designations for the Series D Convertible Preferred
Stock, as amended from time to time) as modified by any contractual modification
to such Reset agreed to by at least a majority of the holders of Series D
Preferred Stock. "Fairly-Diluted Common Stock" shall mean, as of a specified
date, the number of shares of Common Stock that would be outstanding on such
date assuming (i) the conversion into Common Stock on such date of all preferred
stock of the Company outstanding on May 28, 1998 or issuable upon exercise of
warrants outstanding on May 28, 1998; and (ii) the exercise of all warrants of
the Company outstanding on May 28, 1998 or contractually required to be issued
pursuant to an agreement in effect on May 28, 1998, in each case having an
exercise price per share of Common Stock of less than $2.00 on May 28, 1998
(subject to proportional adjustment for any stock split or reverse stock split
of the Common Stock) including, but not limited to, any Penalty Warrants (as
defined in the Company's Annual Report on Form 10-K, as amended, for the year
ended December 31, 1997) that may be issued. "Covered Events" mean any issuance
of Penalty Warrants or alteration of the conversion price of the Series D
Preferred Stock pursuant to the Reset referred to above or any contractual
modification thereof.

                                                                   Applicable
Director                   Number of Initial Shares              Percentage (%)
--------                   ------------------------              --------------

Drapkin                            675,000                           1.5
Cooper                             337,500                            .75
Sandage                            337,500                            .75
Kessel                              75,000                            .167
Salomon                             75,000                            .167
Stein                               75,000                            .167
Wakoff                              75,000                            .167
Weiss                               75,000                            .167

            (d) Each person elected to the Board after March 22, 2001, and who
upon such election qualifies as an Eligible Director, shall, upon such person's
election, be granted options to purchase 24,000 shares of Common Stock. The
exercise price per share of Common Stock under each option granted under this
subsection 5(d) shall be equal to Fair Market Value (as defined in subsection
6(a) of this Plan). Such options shall become exercisable in equal installments
over a three-year period beginning on the first anniversary of the grant,
provided that the optionee continues to be an Eligible Director at that time.

            (e) Each member of the Board will be granted an annual option to
purchase 20,000 shares of Common Stock at the first meeting of the Board they
attend in person. The

                                                                               2
<PAGE>

exercise price per share of Common Stock under each option granted under this
subsection 5(e) shall be equal to Fair Market Value (as defined in subsection
6(a) of this Plan). Such options shall become exercisable immediately upon
grant.

            (f) Each member of the Executive Committee of the Board of Directors
will be granted options to purchase 1,000 shares of Common Stock for each
Executive Committee meeting they attend in person. The exercise price per share
of Common Stock under each option granted under this subsection 5(f) shall be
equal to Fair Market Value (as defined in subsection 6(a) of this Plan). Such
options shall become exercisable immediately upon grant.

6. Terms of Stock Options

            (a) The exercise price per share of Common Stock under each option
granted under Sections 5(d), (e) and (f) shall be equal to the "Fair Market
Value" per share of Common Stock on the date of option grant. For purposes of
the Plan, the "Fair Market Value" of a share of Common Stock on any day shall be
as follows: (i) if the principal market for the Common Stock (the "Market") is a
national securities exchange or the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") National Market or SmallCap Market, the
last sale price or, if no reported sales take place on the applicable date, the
average of the high bid and low asked price of Common Stock as reported for such
Market on such date or, if no such quotation is made on such date, on the next
preceding day on which there were quotations, provided that such quotations
shall have been made within the ten (10) business days preceding the applicable
date; (ii) if the Common Stock is actively traded but clause (i) does not apply,
the average of the high bid and low asked price for Common Stock on the
applicable date, or, if no such quotations shall have been made on such date, on
the next preceding day on which there were quotations, provided that such
quotations shall have been made within the ten (10) business days preceding the
applicable date; or (iii) in the event that neither clause (i) or (ii) shall
apply, the Fair Market Value of a share of Common Stock on any day shall be
determined in good faith by the Board. The exercise price of each option granted
under Section 5(c) shall be $0.94375 per share, subject to adjustment as
provided in Section 5(c).

            (b) Each option granted under the Plan shall have a term of ten
years, and shall not be exercisable after the tenth anniversary of the date of
grant.

            (c) Each option granted under Section 5(c) shall become exercisable
in 16 substantially equal installments on the last day of each calendar quarter
after October 1, 1997 provided that adjustments to the number of options
contemplated by Section 5(c) shall be pro-rated as to vesting over the remaining
quarterly periods after the adjustment. Each option granted under Section 5(d)
shall become exercisable in equal installments over a three-year period
beginning on the first anniversary of the grant. Each option granted under
Sections 5(e) and (f) shall become exercisable immediately upon grant. An option
may be exercised from time to time for all or part of the shares as to which it
is then exercisable (but, in any event, only for whole shares).

            (d) Notwithstanding the foregoing, the Board of Directors, in its
discretion, may accelerate the date upon which any option granted under the Plan
shall become exercisable to such earlier date as it deems appropriate by written
amendment to the agreements evidencing the grant of such option.

                                                                               3
<PAGE>

7. Exercise of Options

            (a) An option shall be exercised by the filing of a written notice
with the Company, on such form and in such manner, as the Company shall
prescribe, accompanied by payment for the shares being purchased or such other
documentation as the Board may prescribe. Such payment shall be made: (i) by
certified or official bank check (or the equivalent thereof acceptable to the
Company) for the full option exercise price; (ii) by delivery of shares of
Common Stock (which, if acquired pursuant to the exercise of a stock option,
were acquired at least six months prior to the option exercise date) and having
a Fair Market Value (determined as of the exercise date) equal to all or part of
the option exercise price and a certified or official bank check (or the
equivalent thereof acceptable to the Company) for any remaining portion of the
full option exercise price; or (iii) at the discretion of the Board and to the
extent permitted by law, by such other method as the Board may authorize,
including, without limitation, at the discretion of the Board, by the
withholding of shares (valued at their Fair Market Value on the date of
exercise) underlying the Option.

            (b) Promptly after receiving payment of the full option exercise
price, the Company shall provide for the issuance to the Eligible Director, or
to such other person as may then have the right to exercise the option, the
shares of Common Stock for which the option has been exercised.

            (c) The holder of a stock option (or other person having the right
to exercise the option) shall have none of the rights of a shareholder of the
Company with respect to the shares subject to the option until i.) the issuance
of a stock certificate to such person for such shares or ii.) the book-entry
ownership is reflected for the nominee of such person who holds such shares in
"street name." Except as otherwise provided in Section 9, no adjustment shall be
made for dividends, distributions or other rights (whether ordinary or
extraordinary, and whether in cash, securities or other property) for which the
record date is prior to the date such shares are issued.

8. Termination of Directorship; Change of Control

            (a) If an optionee's membership on the Board terminates for any
reason other than death, the optionee may exercise any outstanding option to the
extent that the optionee was entitled to exercise it on the date of termination.
Exercise must occur within six months after termination, except that the
six-month period shall be increased to one year if the termination is by reason
of disability, but in no event after the expiration date of the option.

            (b) If an optionee dies while serving on the Board, or during the
period in which an option is exercisable pursuant to paragraph (a) of this
Section 8, any outstanding option shall be exercisable to the extent that the
optionee was entitled to exercise it on the date of death. Exercise must occur
by the earlier of the first anniversary of death or the expiration date of the
option. Such exercise shall be made only by the optionee's executor or
administrator, unless the optionee's will specifically disposes of the option,
in which case exercise shall be made only by the recipient of such specific
disposition. If an optionee's personal representative or the recipient of a
specific disposition under the optionee's will shall be entitled to exercise any
award pursuant to the preceding sentence, such representative or recipient shall
be bound by all the terms and conditions of the Plan and the applicable
agreement which would have applied to the optionee including, without
limitation, the provisions of Section 11 hereof.

                                                                               4
<PAGE>

            (c) Upon expiration of the applicable six-month or one-year period
described in paragraph (a) or (b) of this Section 8, any unexercised option
shall be null and void.

            (d) Upon the happening of a change in control (as hereinafter
defined) notwithstanding any other provision of this Plan, any option granted
under this Plan then outstanding shall become fully vested and immediately
exercisable (i) upon the termination of the Eligible Director's status as an
Eligible Director as a result of the removal of such person from the Board
(other than for cause) by shareholder action within one year of such change in
control or (ii) in the case of any liquidation, sale, disposition or other
transaction described in clause (D) of the next sentence, immediately upon the
consummation of such liquidation, sale, disposition or other transaction. A
"change in control" shall have occurred if: (A) any "person", as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "1934 Act") (other than (i) the shareholders of the Company as of
the effective date of the Plan (the "Current Shareholders", such term to include
their heirs or estates, or trusts or other entities the primary beneficiaries of
which are the Current Shareholders or persons designated by them, (ii) the
Company or any subsidiary of the Company, (iii) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, or (iv) any company owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities
of the Company representing more than 50% of the combined voting power of the
Company's then outstanding securities without the prior written consent of the
Board; or (B) during any period of twenty-four (24) consecutive months,
individuals who at the effective date of the Plan constitute the Board and any
new director whose election by the Board or nomination for election by the
Company shareholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof; or (C) the
shareholders of the Company approve a merger or consolidation of the Company
with any other company (other than a wholly-owned subsidiary of the Company),
other than (i) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) 50% or more of the combined voting power of
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (ii) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no "person" (as defined in clause (A) above with the exceptions noted
in said clause (A)) acquires more than 50% of the combined voting power of the
Company's then outstanding securities; or (D) the shareholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect).

            (e) In the event of a merger or consolidation ("merger") of the
Company with or into any other corporation or entity ("successor corporation"),
outstanding awards granted under this Plan shall be assumed or an equivalent
option or right shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation. For the purposes of this paragraph
(e), an award shall be considered assumed if, for every share of Common

                                                                               5
<PAGE>

Stock subject thereto immediately prior to the merger, the grantee has the
right, following the merger, to acquire the consideration received in the merger
transaction by holders of shares of Common Stock (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
acquired pursuant to the award, for each share of Common Stock subject thereto,
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. For purposes hereof, the term "merger" shall include any
transaction in which another corporation acquires all of the issued and
outstanding Common Stock of the Company.

9. Change in Capitalization

            In the event of any change in the Common Stock by reason of a stock
split, reverse stock split, stock dividend, recapitalization, reclassification,
merger, consolidation, split-up, combination, exchange of shares or the like,
the Board shall appropriately adjust the number and kind of shares authorized
for issuance under the Plan, the number of shares subject to each option then
outstanding or subsequently granted under the Plan and the exercise price of
each such option. The Board's determination as to what, if any, adjustments
shall be made shall be final, binding and conclusive on the Company and on all
Eligible Directors who receive option grants under the Plan.

10. Amendment of the Plan

            (a) The Board may from time to time suspend, discontinue, revise or
amend the Plan in any respect whatsoever; provided, however, that no such
amendment shall impair any material rights or increase any material obligations
under any option theretofore granted under the Plan without the consent of the
optionee (or, after the optionee's death, the person having the right to
exercise the option). For purposes of this Section 10, any action of the Board
that alters or affects the tax treatment of any option shall not be considered
to materially impair any rights of any optionee.

            (b) Shareholder approval shall be required with respect to any
amendment if the failure to obtain such approval would adversely affect the
compliance of the Plan with the requirements of any applicable law, rule or
regulation.

11. Restrictions

            (a) If the Board shall at any time determine that any Consent (as
hereinafter defined) is necessary or desirable as a condition of, or in
connection with, the granting of any option under the Plan, the issuance or
purchase of shares or other rights thereunder, or the taking of any other action
thereunder (each such action being hereinafter referred to as a "Plan Action"),
then such Plan Action shall not be taken, in whole or in part, unless and until
such Consent shall have been effected or obtained to the full satisfaction of
the Board.

            (b) The term "Consent" as used herein with respect to any Plan
Action means (i) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (ii) any and all written agreements and
representations by the optionee with respect to the disposition of shares, or
with respect to any other matter, which the Board shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (iii) any and all consents,
clearances and approvals in respect of a Plan Action by any governmental or
other regulatory bodies.

                                                                               6
<PAGE>

            (c) The Board may direct that i.) a stop order may be placed in
effect with respect to shares issued pursuant to the Plan and ii.) any stock
certificate evidencing shares issued pursuant to the Plan shall bear a legend
setting forth such restrictions on transferability as may apply to such shares
pursuant to the Plan.

12. Nonassignability

            No award or right granted to any person under the Plan shall be
assignable or transferable other than by will or by the laws of descent and
distribution, and all such awards and rights shall be exercisable during the
life of the grantee only by the grantee or the grantee's legal representative.

13. No Right to Re-election

            Nothing in the Plan shall be deemed to create any obligation on the
part of the Board to nominate any of its members for re-election by the
Company's shareholders, nor confer upon any Eligible Director the right to
remain a member of the Board for any period of time or at any particular rate of
compensation.

14. No Limitation on Corporate Actions

            This Plan shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

15. Section Headings

            The section headings contained herein are for the purpose of
convenience only and are not intended to define or limit the contents of the
sections.

                                                                               7
<PAGE>

16. Effective Date and Term of Plan

            The Plan was originally adopted by the Board on May 28, 1998, This
amendment and restatement of the Plan is effective September 19, 2002. Unless
sooner terminated by the Board, the Plan shall terminate on the date when no
more shares are available for transfer under the Plan. Options outstanding upon
Plan termination shall continue in effect in accordance with their terms.

17. Governing Law

            All rights and obligations under the Plan shall be construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of laws.

                                                                               8

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