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UNION ACCEPTANCE CORPORATION

                          EMPLOYEE STOCK PURCHASE PLAN

         The Union  Acceptance  Corporation  Employee  Stock  Purchase Plan (the
"Plan") has been adopted by Union Acceptance  Corporation (the "Corporation") to
facilitate the acquisition of shares of the Corporation's  Class A Common Stock,
without par value (the  "Shares"),  by the employees of the  Corporation and its
subsidiaries (the Corporation and its subsidiaries are collectively  referred to
as the "Employers" and individually as an "Employer"). The terms of the Plan are
set forth below:

                                    ARTICLE I
                                  Participation

         Section 1.1 Eligibility to Participate.  All full-time employees of the
Employers who have attained the age of 18 and who have  completed six (6) months
of continuous  service with an Employer are eligible to participate in the Plan.
For this purpose,  continuous  service means  service  uninterrupted  except for
military duty,  authorized leaves of absence, or temporary absence on account of
illness. However, participation in the Plan is entirely voluntary.

         Section 1.2 Election to Participate.  Each eligible  employee may elect
to  participate  in this Plan in writing at any time,  and the election  will be
effective as soon as practicable after it is received by his Employer.  Election
forms for this purpose will be  available at the human  resources  office of the
Corporation. In making the election, the eligible employee (the "Investor") will
authorize  his Employer to make regular  periodic  payroll  deductions  from the
compensation he otherwise  receives from that Employer.  The payroll  deductions
shall not be less than Ten  Dollars  ($10.00)  per pay  period nor more than ten
percent  (10%)  of the  employee's  compensation  in  the  pay  period.  Payroll
deduction is the only method for participating in the Plan.

         Section  1.3 Change in  Election.  Upon  proper  written  notice to his
Employer,  an Investor may change or terminate  his  election.  To be effective,
notice must be written  and must be received by the  Employer no later than 5:00
P.M.  on  Thursday  of the week  prior to the  first day of the pay  period  the
employee desires the change or termination of the deduction to become effective.
However,  when an Investor changes the amount of his payroll  deduction,  he may
not  change  the  amount of such  deductions  for a period  of three (3)  months
thereafter, except in case of hardship or emergency.

         Section 1.4  Administration.  The Board of Directors of the Corporation
or its  Compensation  Committee  shall have power to interpret  this plan and to
make rules and decisions respecting the administration of the plan. The Board of
Directors or the Compensation Committee shall select an agent and its successors
from time to time (the  "Agent")  to perform the  responsibilities  of the Agent
under this plan. The  Corporation or an affiliate of the Corporation may perform
the record-keeping

                                       -1-

<PAGE>

functions  prescribed  to the  Agent  under  the plan,  but all  purchases  made
pursuant  to  the  plan  must  be  conducted  by an  agent  independent  of  the
Corporation  as determined by the Board of Directors of the  Corporation  or the
Compensation  Committee  from  time to time.  Neither  the  Corporation  nor any
affiliate of the  Corporation  shall exercise any direct or indirect  control or
influence  over the prices or amounts of shares to be purchased,  the timing of,
or the manner in which,  the shares are to be  purchased,  or the selection of a
broker or dealer through which purchases may be executed. From time to time, the
Board of Directors  or its  Compensation  Committee  may  designate  one or more
individuals  to  maintain   records  as  to  the  eligibility  of  employees  to
participate  in the Plan and to preserve  and act upon forms  affecting  payroll
deductions  filed by  employees  under the Plan.  No such person  shall have any
discretion concerning decisions regarding the Plan.

                                   ARTICLE II
                                Employer Subsidy

         Section 2.1 Employer  Subsidy.  Each Employer shall make a contribution
to the account of each Investor it employs in an amount equal to such percentage
of the Investor's  payroll deduction as the Corporation  determines from time to
time (the "Employer  Subsidy").  Until otherwise  determined by the Corporation,
the initial  Employer  Subsidy shall be 10%. Such percentage may be changed from
time to time as determined by the Corporation in its sole discretion, subject to
the notice  provisions in Section 2.2 below. Each Employer shall transfer to the
Agent the Employer  Subsidy  allocable to each Investor's  Account no later than
the end of the month  following  the fiscal  quarter  (ending on the last day of
September,  December, March and June) in which the Investor's payroll deductions
were made.

         Section 2.2 Notice of Change in Employer  Subsidy.  The Employers shall
notify  all  employees  eligible  to  participate  in this Plan in writing on or
before the last working day of the second pay period prior to the pay period for
which  any  change  in the  percentage  of the  Employer  Subsidy  is to  become
effective. Upon proper written notice to his Employer, an Investor may change or
terminate his payroll deduction, subject to the provisions of Section 1.3 above.

                                   ARTICLE III
                                   Accounting

         Section 3.1  Establishment  of Accounts.  The Employers shall make such
payroll  deductions as are authorized by each Investor and transfer to the Agent
the total of such  deductions and the Employer  Subsidy,  along with an itemized
statement  showing the deductions and the Employer Subsidy;  provided,  however,
that such  transfer  shall not be made until the end of the month  following the
fiscal  quarter in which such  deductions  were made. The Agent shall provide an
Investor  the option that all  deductions  and  Employer  Subsidy be held by the
Agent in either an  individual  account,  a joint  account  with the  Investor's
spouse, or a custodian account for a minor

                                       -2-

<PAGE>

(collectively  referred to hereinafter as the "Investor's  Account").  The Agent
shall maintain a record for such Investor that reflects:

          (a) the amount of payroll  deductions  and the amount of the  Employer
     Subsidy received from the Employers applicable to the Investor;

          (b) the  number of  Shares,  whole  and  fractional,  credited  to the
     Investor's  Account,  as a result of purchases made with payroll deductions
     and cash  dividends,  or as a result of stock  splits,  stock  dividends or
     other credits;

          (c) the amount of cash dividends received or other amounts received on
     Shares credited to the Investor's Account;

          (d) the amount used to purchase,  or the cash  proceeds  realized from
     the sale of,  fractional  Shares,  credited  to the  Investor's  Account by
     reason of purchases through the use of commingled  funds,  stock dividends,
     or otherwise; and

          (e) the balance of cash, if any, held in his Investor's Account.

         Section 3.2 Periodic Account  Statement.  On at least a quarterly basis
and upon the distribution of Shares to an Investor,  the Agent shall furnish the
Investor   statements   reflecting  the  payroll  deductions  received  on  such
Investor's behalf, the aggregate amount of the Employer Subsidy received on such
Investor's behalf, the number of Shares purchased on such Investor's behalf, the
cost of the Shares, and all other charges or credits to the Investor's Account.

                                   ARTICLE IV
                         Investment and Voting of Shares

         Section 4.1 Share Purchases.  Except as may be necessary to comply with
applicable  federal  securities  laws, the Agent shall purchase  Shares promptly
upon the receipt of funds,  and, in any event,  within thirty (30) business days
of the receipt of any funds of an Investor,  at prevailing  market prices on the
open  market.  The Agent may,  but shall not be  obligated  to,  select a broker
through which purchases may be executed.  In making purchases for the Investor's
Accounts,  the Agent may  commingle  each  Investor's  funds with those of other
Investors  participating  in the Plan.  The Agent  shall  purchase as many whole
Shares of stock as the total  amount of funds in the Agent's  possession  at the
time of purchase  shall permit.  The Employers  shall not exercise any direct or
indirect  control or influence over the times when, or the prices at which,  the
Agent may purchase the Shares, the number of Shares to be purchased,  the manner
in which the Shares are to be purchased, or the broker (if any) through whom the
purchases may be executed. Any fractional Shares shall be allocated and computed
to the ten-thousandth of a Share.

                                       -3-

<PAGE>

         Section 4.2 Investment of Dividends.  Cash dividends,  interest and any
cash or other  contributions  received on the Shares  purchased  and held by the
Agent shall be reinvested in Shares.  The number of Shares  purchased  with cash
dividends,  or the number of Shares  acquired  in the event of a stock  dividend
paid by the Corporation or a stock split of the Corporation shall be credited to
the  appropriate  Investors'  Accounts  in  proportion  to the  number of Shares
credited  to each such  Investor's  Account  on the  record  date for (or in the
absence of a record date, the payment date for) the dividend or stock split with
respect to the Shares.

         Section 4.3 Sale of Shares.  Except as  otherwise  provided  below,  an
Investor  may  instruct  the Agent to sell any or all of the full Shares and any
fractional interest in a Share held in his Investor's Account; provided, that if
the Investor is an officer or director  subject to Section 16 of the  Securities
Exchange Act of 1934, as amended (the "1934 Act"),  such  instruction must be in
writing  stating that such investor has not made a purchase of Shares or engaged
in any  transaction  which could be deemed a purchase  pursuant to Section 16 of
the 1934 Act within the prior six (6) months and other evidence as the Agent may
request to assure  that such sale occurs in  conformity  with Rule 144 under the
Securities Act of 1933, as amended, or successor provision.  As soon as possible
after receipt of  instructions  to sell Shares from an Investor's  Account,  the
Agent will transfer the Investor's specified number of Shares into an account in
the individual Investor's name. Further disposition of the Shares transferred to
the account in the individual  Investor's  name will be between the Investor and
the Agent and will be outside of the Plan.

         Section 4.4 Registration and Voting of Shares.  The Agent is authorized
to, and shall, register such Shares in its own name or the name of its nominees;
provided,  however,  that each Investor  shall be entitled to vote the number of
whole Shares  credited to his Investor's  Account.  The Agent shall provide each
Investor with written notice of any meeting of Shareholders of the  Corporation,
and shall  provide  each  Investor  with all proxy  materials  furnished  by the
Corporation in connection with any such meeting. The Agent shall vote the Shares
in accordance  with the  instructions  obtained from the  Investors.  Shares for
which no voting  instructions  have been received shall be voted by the Agent in
accordance  with  the  recommendation,  if any,  of the  Corporation's  Board of
Directors   on  the  matter  in   question   and,  in  the  absence  of  such  a
recommendation, shall not be voted by the Agent.

         Section 4.5 Tender Offer.  Each Investor shall have the right to direct
the Agent as to whether the Shares allocated to his Investor's Account are to be
tendered  pursuant to any tender  offer made for the Shares of the  Corporation.
The  Agent  shall as soon as  practical  (and in no event  later  than  five (5)
calendar  days)  after its  receipt of the tender  offer  documents  cause to be
prepared and delivered to each Investor who has an Investor's  Account as of the
date of the tender  offer a copy of all  relevant  information  as to the tender
offer and a written  election  form which will direct the Agent as to whether it
should tender the Shares held in such Investor's  Account.  The Shares for which
no direction is received from the Investor  shall be tendered or not tendered in
accordance  with  the  recommendation,  if any,  of the  Corporation's  Board of
Directors   on  the  matter  in   question   and,  in  the  absence  of  such  a
recommendation, shall not be tendered by the Agent.

                                       -4-

<PAGE>

                                    ARTICLE V
                                  Distributions

         Section 5.1 Partial  Distributions.  Whole Shares may be withdrawn upon
the  written  request  of an  Investor  to the  Agent at any time to the  extent
accumulated  at the time of the request  for an  Investor's  Account,  and stock
certificates  for such  number of  Shares  shall be issued  and  distributed  as
required  by the form of  Investor's  Account  promptly  after  receipt  of such
request;  provided,  however,  that,  except  in the  case  of an  Investor  who
withdraws  from the Plan,  an Investor may not  withdraw  fewer than twenty (20)
Shares.  The value of any fractional Shares or uninvested cash shall be refunded
only upon withdrawal from the Plan as provided in Section 5.2.

         Section 5.2  Withdrawal from Plan.

                  a. Voluntary Withdrawal. Any Investor may voluntarily withdraw
         from the Plan at any time by  notifying  the  Agent of such  intent  in
         writing.  Any such withdrawal shall become  effective  immediately upon
         receipt  of such  notice  by the  Agent;  provided,  however,  that any
         withdrawal shall not affect any purchase of Shares by the Agent, or any
         orders  given by the Agent to any  broker,  prior to the receipt of any
         such notice of withdrawal.  The Investor shall concurrently  deliver to
         his  Employer  a  notice  of  termination  of  the  payroll   deduction
         authorization,  which termination  shall become effective  according to
         the provisions of Section 1.3.

                  As soon as reasonably  practicable  after receipt of notice of
         withdrawal,  the Agent shall cause stock  certificates to be issued and
         distributed  as  required  by the type of  Investor's  Account  for the
         number of Shares accumulated for the Investor's benefit,  and shall pay
         over any  uninvested  cash credited to the  Investor's  Account in like
         manner.  Fractional  Shares credited to an Investor's  Account shall be
         handled as  provided  in Section  5.2(c)  below.  If  requested  by the
         Investor,  in lieu of issuing stock certificates,  the Agent shall sell
         the Investor's  Shares and fractional Shares in accordance with Section
         4.3 above.

                  Upon  withdrawal  of an employee  from the Plan,  the employee
         shall  not be  allowed  to  participate  in the Plan  again  until  the
         expiration of a six (6) month period  commencing on the effective  date
         of the withdrawal.

                    b. Death or  Termination.  Withdrawal from the Plan shall be
               immediately  effective  upon  the  death  of an  Investor  or the
               termination  of  employment  of an  Investor  by  the  Employers;
               provided,  however,  that any such withdrawal from the Plan shall
               not affect  any  purchase  of Shares by the Agent,  or any orders
               given by the Agent to any broker,  prior to receipt of any notice
               of such death or termination of employment. Death or termination

                                       -5-

<PAGE>

               of employment shall  immediately  terminate the payroll deduction
               authorization of the Investor to his Employer.

                  Issuance  and  distribution  of  stock  certificates  and  the
         payment of any uninvested  cash shall be made after notice of the death
         or  termination  of  employment  in the manner  provided for  voluntary
         withdrawal from the Plan.

                    c.   Fractional   Shares.   If  at  the  time  of   complete
               distribution to an Investor there is a fractional  Share credited
               to his  Investor's  Account,  the Agent is authorized to use such
               cash from the Investor's  Account as may be necessary to purchase
               additional  fractional  Shares to equal a whole  Share if such is
               possible. If there is insufficient cash in the Investor's Account
               to permit such purchase of a whole Share, the Agent is authorized
               to sell any such fractional Share to another  Investor's  Account
               based on the current  market price for Shares on the date of sale
               or to the  special  revolving  plan  account  established  by the
               Corporation  with the  Agent for such  purpose,  and  credit  the
               Investor's Account with the cash proceeds thereof.

                                   ARTICLE VI
                                  Miscellaneous

         Section  6.1  Liability.  The  relationship  between  the Agent and the
Investor  is the  normal  relationship  between  an agent  and its  client.  The
Employers shall have no responsibility or liability for any act or thing done or
left undone including,  but not limited to, any action taken with respect to the
price,  time of,  quantity,  brokers chosen by the Agent, or other conditions or
circumstances relating to the purchase or sale of Shares under the terms of this
Plan.

         Section 6.2 No Interest.  All sums deducted from the Investor's payroll
and  held by  either  the  Employers  or the  Agent  for and on  behalf  of such
Investor, shall be held interest free.

         Section   6.3   Expenses.   Administrative   expenses   and   brokerage
commissions,  if any,  incurred on purchases of Shares in  connection  with this
Plan shall be paid by the Employer.  Brokerage  commissions and other charges in
connection with sales, if applicable, will be payable by the Investor who orders
the transactions for his Investor's Account.

         Section 6.4  Amendments.  Amendments  to this Plan may be  adopted,  in
writing,  by the  Corporation  with the  approval  of its  Board  of  Directors;
provided  that no amendment  affecting the rights and duties of the Agent (other
than the Corporation) shall be effective without its prior written consent.

         Section  6.5  Successors.  In the event of either  the  resignation  or
disqualification  of the  Agent,  its  successor  shall be named by the Board of
Directors of the Corporation or the Compensation Committee.

                                       -6-

<PAGE>

         Section 6.6 Termination.  Upon thirty (30) days prior written notice to
the Agent, the Corporation may terminate this Plan; provided,  however, that the
prior  notice  requirement  may be waived by the Agent.  Upon  thirty  (30) days
written notice to the Corporation, the Agent may resign as Agent, in which event
the  Corporation  shall either  promptly  appoint a successor  agent or elect to
terminate  the Plan by written  notice to the Agent (which need not be delivered
in  advance).  The rights and benefits of the  Investors  accrued at the time of
such termination shall not be affected. A final accounting,  and delivery of all
Shares and funds, shall be made by the Agent to its successor, if any, or to the
Investors if no successor is appointed and the Plan is  terminated,  at the date
of termination of this Plan as to the Agent.

         Section  6.7  Binding  Effect.  This  Plan  shall be  binding  upon the
Employers,  the Agent and Investors and upon their  successors,  administrators,
executors and assigns.

         Section 6.8 Non-Transferable.  The rights granted under this Plan to an
eligible  employee are not transferable by him other than by will or the laws of
descent and distribution or pursuant to a qualified  domestic relations order as
defined by the  Internal  Revenue  Code of 1986,  as amended,  or Title I of the
Employee  Retirement  Income Security Act, as amended,  or the rules thereunder,
and are  exercisable  during his lifetime  only by him or by his guardian or his
legal representative.EXHIBIT 10.3

                             1999 STOCK OPTION PLAN

                                       OF

                         NATIONAL HOME HEALTH CARE CORP.

         1.  PURPOSES  OF THE PLAN.  This  stock  option  plan (the  "Plan")  is
designed to provide an  incentive  to key  employees  (including  directors  and
officers  who are key  employees)  and to  directors  who are not  employees  of
National Home Health Care Corp., a Delaware corporation (the "Company"), and its
present  and  future  subsidiary  corporations,   as  defined  in  Paragraph  19
("Subsidiaries"),  and to  offer  an  additional  inducement  in  obtaining  the
services of such  individuals.  The Plan  provides  for the grant of  "incentive
stock  options"  ("ISOs")  within the  meaning of  Section  422 of the  Internal
Revenue Code of 1986, as amended (the "Code"),  and  nonqualified  stock options
("NQSOs"),  but the Company  makes no warranty  as to the  qualification  of any
option as an "incentive stock option" under the Code.

         2. STOCK  SUBJECT TO THE PLAN.  Subject to the  provisions of Paragraph
12, the aggregate  number of shares of Common Stock,  $.001 par value per share,
of the Company  ("Common Stock") for which options may be granted under the Plan
shall not exceed 500,000.  Such shares of Common Stock may, in the discretion of
the Board of Directors of the Company (the "Board of Directors"), consist either
in whole or in part of authorized but unissued  shares of Common Stock or shares
of Common Stock held in the treasury of the  Company.  The Company  shall at all
times  during the term of the Plan  reserve  and keep  available  such number of
shares of Common Stock as will be sufficient to satisfy the  requirements of the
Plan.  Subject to the  provisions  of  Paragraph  13, any shares of Common Stock
subject to an option which for any reason expires,  is canceled or is terminated
unexercised or which ceases for any reason to be exercisable  shall again become
available for the granting of options under the Plan.

         3.  ADMINISTRATION  OF THE PLAN. The Plan shall be  administered by the
Board of Directors  which,  to the extent it shall  determine,  may delegate its
powers with  respect to the  administration  of the Plan to a  committee  of the
Board of Directors (the  "Committee")  consisting of not less than two directors
(or  such  greater  number  as  required  by  law),  each  of  whom  shall  be a
"non-employee  director" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). References in the Plan to determinations or actions by the
Committee shall be deemed to include  determinations and actions by the Board of
Directors.   Unless  otherwise  provided  in  the  By-laws  of  the  Company  or
resolutions  of the  Board  of  Directors,  a  majority  of the  members  of the
Committee shall  constitute a quorum,  and the acts of a majority of the members
present at any  meeting at which a quorum is present,  and any acts  approved in
writing by all members without a meeting, shall be the acts of the Committee.

<PAGE>

                  Subject to the express  provisions of the Plan,  the Committee
shall have the  authority,  in its sole  discretion,  with  respect to  Employee
Options (as defined in Paragraph  19): to determine  the key employees who shall
receive options;  the times when they shall receive  options;  whether an option
shall be an ISO or a NQSO; the number of shares of Common Stock to be subject to
each  option;  the  term of each  option;  the date  each  option  shall  become
exercisable;  whether an option  shall be  exercisable  in whole,  in part or in
installments,  and, if in installments,  the number of shares of Common Stock to
be subject to each  installment;  whether the installments  shall be cumulative;
the  date  each  installment  shall  become  exercisable  and  the  term of each
installment;  whether to  accelerate  the date of exercise  of any  installment;
whether  shares of Common Stock may be issued on exercise of an option as partly
paid, and, if so, the dates when future installments of the exercise price shall
become due and the  amounts of such  installments;  the  exercise  price of each
option; the form of payment of the exercise price; the amount, if any, necessary
to satisfy the Company's  obligation to withhold taxes;  whether to restrict the
sale or other  disposition  of the  shares of  Common  Stock  acquired  upon the
exercise of an option and to waive any such restriction;  whether to subject the
exercise of all or any portion of an option to the fulfillment of  contingencies
as specified in the Contract (as described in Paragraph 11)  including,  without
limitation,  contingencies  relating to entering  into a covenant not to compete
with the Company and its Parent and  Subsidiaries,  to financial  objectives for
the Company, a Subsidiary, a division, a product line or other category,  and/or
the period of  continued  employment  of the  optionee  with the  Company or its
Subsidiaries,  and to determine  whether such  contingencies  have been met; and
with  respect to Employee  Options and Outside  Director  Options (as defined in
Paragraph  19): to construe  the  respective  Contracts  and the Plan;  with the
consent of the optionee, to cancel or modify an option,  provided such option as
modified  would be  permitted  to be granted on such date under the terms of the
Plan; to  prescribe,  amend and rescind  rules and  regulations  relating to the
Plan;  and  to  make  all  other  determinations   necessary  or  advisable  for
administering  the Plan.  The  determinations  of the  Committee  on the matters
referred to in this Paragraph 3 shall be conclusive.

                  The Committee may employ such legal counsel,  consultants  and
agents as it may deem desirable for the  administration of the Plan and may rely
upon any opinion or  computation  received from any such counsel,  consultant or
agent.  Expenses  incurred by the  Committee in the  engagement of such counsel,
consultant or agent shall be paid by the Company.  No member or former member of
the Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted hereunder.

         4. ELIGIBILITY; GRANTS. The Committee may, consistent with the purposes
of the  Plan,  grant  Employee  Options  from  time to  time,  to key  employees
(including  officers and directors who are key  employees) of the Company or any
of its Subsidiaries. Options granted shall cover such number of shares of Common
Stock as the Committee may determine; provided, however, that the maximum number
of shares  subject to options  that may be granted to any employee in any fiscal
year of the  Company  under  the Plan  (the  "162(m)  Maximum")  may not  exceed
100,000; and further,  provided,  that the aggregate market value (determined at
the time the  option is  granted)  of the  shares of Common  Stock for which any
eligible  person  may be

<PAGE>

granted ISOs under the Plan or any other plan of the Company,  or of a Parent or
a Subsidiary of the Company,  which are  exercisable  for the first time by such
optionee  during any calendar year shall not exceed  $100,000.  The $100,000 ISO
limitation  shall be applied by taking  ISOs into  account in the order in which
they were granted. Any option (or the portion thereof) granted in excess of such
amount shall be treated as a NQSO.

                  On the date the Plan is  adopted  by the  Board of  Directors,
every Director of the Company who is not on such date an employee of the Company
or any of its Subsidiaries  (an "Outside  Director") shall be granted an Outside
Director  Option to purchase 5,000 shares of Common Stock.  In addition,  at the
end of the first  fiscal year of the Company in which its Net Income (as defined
below) exceeds each of $4,000,000,  $5,000,000,  $6,000,000,  $7,000,000,  etc.,
each  person who is an Outside  Director  of the Company on the last day of such
fiscal year shall be granted an Outside Director Option to purchase 2,500 shares
of Common  Stock.  For  purposes  of this  paragraph,  Net Income  means the net
after-tax income of the Company and its consolidated Subsidiaries, as determined
from the Company's  audited financial  statements.  The Outside Director Options
described in this paragraph with respect to a given fiscal year shall be granted
as soon as the  Company's  audited  financial  statements  for such  fiscal year
become  available.  In the event the remaining  shares available for grant under
the Plan are not sufficient to grant the Outside  Director  Options to each such
Outside  Director  in any year,  the  number of shares  subject  to the  Outside
Director  Options  for such year shall be reduced  proportionately.  Neither the
Board of Directors nor the Committee  shall have any discretion  with respect to
the selection of Directors to receive  Outside  Director  Options or the amount,
the price or the timing with respect thereto.

         5.  EXERCISE  PRICE.  The exercise  price of the shares of Common Stock
under each  Employee  Option shall be  determined  by the  Committee;  provided,
however,  that the exercise price shall not be less than 100% of the fair market
value of the  Common  Stock  subject  to such  option on the date of grant;  and
further provided,  that if, at the time an ISO is granted, the optionee owns (or
is deemed to own under Section  424(d) of the Code) stock  possessing  more than
10% of the total  combined  voting power of all classes of stock of the Company,
of any of its Subsidiaries or of a Parent,  the exercise price of such ISO shall
not be less than 110% of the fair market  value of the Common  Stock  subject to
such ISO on the date of grant.  The exercise price of the shares of Common Stock
under each  Outside  Director  Option shall be equal to the fair market value of
the Common Stock subject to such option on the date of grant.

                  The fair market  value of the Common Stock on any day shall be
(a) if the  principal  market  for the  Common  Stock is a  national  securities
exchange,  the average between the high and low sales prices of the Common Stock
on such day as reported by such exchange or on a  consolidated  tape  reflecting
transactions on such exchange,  (b) if the principal market for the Common Stock
is not a national  securities  exchange  and the  Common  Stock is quoted on the
National   Association  of  Securities   Dealers  Automated   Quotations  System
("NASDAQ"),  and (i) if actual sales price information is available with respect
to the Common  Stock,  the average  between the high and low sales prices of the
Common  Stock  on  such  day on  NASDAQ,  or (ii)  if

<PAGE>

such  information is not available,  the average between the highest bid and the
lowest asked  prices for the Common  Stock on such day on NASDAQ,  or (c) if the
principal market for the Common Stock is not a national  securities exchange and
the Common  Stock is not quoted on NASDAQ,  the average  between the highest bid
and lowest  asked  prices for the Common  Stock on such day as  reported  on the
NASDAQ OTC Bulletin Board Service or by National Quotation Bureau,  Incorporated
or a  comparable  service;  provided  that if clauses  (a),  (b) and (c) of this
Paragraph are all inapplicable,  or if no trades have been made or no quotes are
available  for such day,  the fair  market  value of the Common  Stock  shall be
determined by the Committee by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options.  The determination
of the Committee shall be conclusive in determining the fair market value of the
stock.

         6. TERM. The term of each Employee Option granted  pursuant to the Plan
shall be such term as is established by the Committee,  in its sole  discretion,
at or before the time such option is granted;  provided,  however, that the term
of each ISO granted  pursuant to the Plan shall be for a period not exceeding 10
years from the date of grant thereof; and further provided, that if, at the time
an ISO is granted,  the optionee owns (or is deemed to own under Section  424(d)
of the Code) stock  possessing  more than 10% of the total combined voting power
of all  classes  of stock of the  Company,  of any of its  Subsidiaries  or of a
Parent,  the term of the ISO shall be for a period not exceeding five years from
the date of grant.  Employee Options shall be subject to earlier  termination as
hereinafter  provided.  Each Outside  Director Option shall be exercisable for a
term of five years commencing on the date of grant.

         7.  EXERCISE.  An option (or any part or installment  thereof),  to the
extent then  exercisable,  shall be  exercised by giving  written  notice to the
Company at its  principal  office (at present 700 White Plains Road,  Scarsdale,
New York 10583,  Attn.:  Chairman of the  Board),  stating  which ISO or NQSO is
being  exercised,  specifying  the number of shares of Common  Stock as to which
such  option  is being  exercised  and  accompanied  by  payment  in full of the
aggregate exercise price therefor (or the amount due on exercise if the Employee
Option Contract permits installment  payments) (a) in cash or by certified check
or (b) in the case of an Employee  Option,  if the Contract at the time of grant
so permits,  with the  authorization  the Committee,  with  previously  acquired
shares of Common  Stock having an aggregate  fair market  value,  on the date of
exercise,  equal to the aggregate exercise price of all options being exercised,
or (c) with any combination of cash, certified check or shares of Common Stock.

                  A person entitled to receive Common Stock upon the exercise of
an option shall not have the rights of a stockholder with respect to such shares
of Common  Stock until the date of issuance  of a stock  certificate  to him for
such shares; provided, however, that until such stock certificate is issued, any
option holder using previously  acquired shares of Common Stock in payment of an
option  exercise price shall  continue to have the rights of a stockholder  with
respect to such previously acquired shares.
<PAGE>

                  In no case  may a  fraction  of a share  of  Common  Stock  be
purchased or issued under the Plan.

         8.  TERMINATION OF EMPLOYMENT.  Any holder of an Employee  Option whose
employment with the Company (and its Parent and Subsidiaries) has terminated for
any reason other than his death or  Disability  (as defined in Paragraph 19) may
exercise such option, to the extent exercisable on the date of such termination,
at any  time  within  three  months  after  the  date  of  termination,  but not
thereafter  and in no event  after  the  expiration  of the term of the  option;
provided,  however,  that if his employment  shall be terminated  either (a) for
cause or (b) without the consent of the  Company,  said option  shall  terminate
immediately.  Employee  Options  granted under the Plan shall not be affected by
any change in the status of the holder so long as he continues to be a full-time
employee of the Company,  its Parent or any of the  Subsidiaries  (regardless of
having been transferred from one corporation to another).

                  For the purposes of the Plan, an employment relationship shall
be deemed to exist  between an individual  and a corporation  if, at the time of
the  determination,  the  individual  was an  employee of such  corporation  for
purposes of Section 422(a) of the Code. As a result,  an individual on military,
sick leave or other bona fide leave of absence  shall  continue to be considered
an  employee  for  purposes  of the Plan  during such leave if the period of the
leave does not exceed 90 days or, if longer,  so long as the individual's  right
to  re-employment  with the Company  (or a related  corporation)  is  guaranteed
either by statute or by contract. If the period of leave exceeds 90 days and the
individual's right to re-employment is not guaranteed by statute or by contract,
the employment  relationship  shall be deemed to have terminated on the 91st day
of such leave.

                  An Outside Director Option may be exercised at any time during
its five year term; provided, however, that if the holder of an Outside Director
Option  ceases to be a Director of the Company  (other than as a result of death
or Disability),  unless the holder becomes a director emeritus or an employee of
the Company or any of its Subsidiaries,  the holder may exercise such option, to
the extent  exercisable on the date of such cessation,  at any time within three
months after the date of such  cessation,  but not  thereafter,  and in no event
after the expiration of the term of the option.

                  Nothing  in the Plan or in any option  granted  under the Plan
shall  confer on any  individual  any  right to  continue  in the  employ of the
Company, its Parent or any of its Subsidiaries, or as a Director of the Company,
or interfere in any way with the right of the Company,  its Parent or any of its
Subsidiaries  to terminate the employee's  employment at any time for any reason
whatsoever  without  liability  to  the  Company,  its  Parent  or  any  of  its
Subsidiaries.

         9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies (a) while he
is employed by the Company,  its Parent or any of its  Subsidiaries,  (b) within
three months after the  termination of his employment  (unless such  termination
was for cause or  without  the  consent
<PAGE>

of the  Company)  or (c)  within  one  year  following  the  termination  of his
employment by reason of Disability,  an Employee Option may be exercised, to the
extent  exercisable on the date of his death, by his executor,  administrator or
other person at the time entitled by law to his rights under such option, at any
time within one year after death,  but not  thereafter and in no event after the
expiration of the term of the option.

                  Any optionee  whose  employment  has  terminated  by reason of
Disability may exercise his Employee Option, to the extent  exercisable upon the
effective date of such termination, at any time within one year after such date,
but not  thereafter  and in no event  after  the  expiration  of the term of the
option.

                  The term of an Outside  Director  Option shall not be affected
by the death or Disability of the  optionee.  If an optionee  holding an Outside
Director Option dies during the term of such option, the option may be exercised
at any time during its term by his  executor,  administrator  or other person at
the time entitled by law to his rights under such option.

         10.  COMPLIANCE  WITH SECURITIES LAW. It is a condition to the exercise
of any option that either (a) a Registration  Statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of Common
Stock to be issued upon such exercise shall be effective and current at the time
of exercise, or (b) there is an exemption from registration under the Securities
Act for the issuance of shares of Common Stock upon such exercise. In connection
therewith,  the Committee may require the optionee to execute and deliver to the
Company his representation and warranty,  in form and substance  satisfactory to
the Committee, that the shares of Common Stock to be issued upon the exercise of
the  option  are  being  acquired  by the  optionee  for  his own  account,  for
investment  only and not with a view to the resale or distribution  thereof.  In
addition,  the  Committee  may require the optionee to represent  and warrant in
writing that any subsequent  resale or distribution of shares of Common Stock by
such optionee will be made only pursuant to (i) a Registration  Statement  under
the  Securities Act which is effective and current with respect to the Shares of
Common  Stock being sold,  or (ii) a specific  exemption  from the  registration
requirements of the Securities Act, but in claiming such exemption, the optionee
shall prior to any offer of sale or sale of such shares of Common Stock  provide
the Company  with a favorable  written  opinion of counsel  satisfactory  to the
Company,  in  form  and  substance  satisfactory  to  the  Company,  as  to  the
applicability  of such  exemption  to the  proposed  sale or  distribution.  The
foregoing restriction, however, shall not apply with respect to (x) issuances by
the Company so long as the shares of Common  Stock being  issued are  registered
under the  Securities  Act and a prospectus in respect  thereof is current,  (y)
re-offerings  of shares of Common  Stock by persons who are not  affiliates  (as
defined in Rule 405 or any successor  rule or regulation  promulgated  under the
Securities  Act) of the Company if the shares of Common Stock were so registered
or (z)  re-offerings of shares by Common Stock by affiliates (as defined in Rule
405 or any successor rule or regulation promulgated under the Securities Act) of
the Company if the shares being re-offered are registered for re-offer under the
Securities Act and a prospectus in respect thereof is current.

<PAGE>

                  Nothing  herein shall be construed as requiring the Company to
register shares subject to any option under the Securities Act. In addition,  if
at any time the Committee  shall determine in its discretion that the listing or
qualification  of the  shares  of Common  Stock  subject  to such  option on any
securities  exchange or under any applicable  law, or the consent or approval of
any  governmental  regulatory body, is necessary or desirable as a condition of,
or in  connection  with,  the  granting of an option,  or the issue of shares of
Common  Stock  thereunder,  such option may not be exercised in whole or in part
unless such listing, qualification, consent or approval shall have been effected
or obtained free of any conditions not acceptable to the Committee.

         11.  STOCK  OPTION  CONTRACTS.  Each option  shall be  evidenced  by an
appropriate  Contract  which  shall  be duly  executed  by the  Company  and the
optionee,  and shall contain such terms and conditions not inconsistent herewith
as may be determined by the Committee.

         12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provisions  of the Plan,  in the event of any change in the  outstanding  Common
Stock by reason of a stock dividend,  recapitalization,  merger or consolidation
in which the Company is the  surviving  corporation,  split-up,  combination  or
exchange of shares or the like, the aggregate  number and kind of shares subject
to the Plan, the aggregate number and kind of shares subject to each outstanding
option and the exercise  price  thereof shall be  appropriately  adjusted by the
Board of Directors, whose determination shall be conclusive.

                  In the  event of (a) the  liquidation  or  dissolution  of the
Company, (b) a merger or consolidation in which the Company is not the surviving
corporation  or (c) any other capital  reorganization  in which more than 50% of
the shares of Common Stock of the Company  entitled to vote are  exchanged,  any
outstanding options shall terminate,  unless other provision is made therefor in
the transaction.

         13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the
Board of Directors on October 7, 1999.  No option may be granted  under the Plan
after October 6, 2009. The Board of Directors,  without further  approval of the
Company's stockholders,  may at any time suspend or terminate the Plan, in whole
or in  part,  or  amend  it from  time to time in such  respects  as it may deem
advisable,  including,  without limitation, in order that ISOs granted hereunder
meet the  requirements  for "incentive  stock options" under the Code, to comply
with the provisions of Rule 16b-3 promulgated under the Exchange Act and Section
162(m)  of the Code,  and to  conform  to any  change  in  applicable  law or to
regulations or rulings of administrative  agencies;  provided,  however, that no
amendment  shall  be  effective   without  the  requisite  prior  or  subsequent
stockholder  approval  which would (a) except as  contemplated  in Paragraph 12,
increase the maximum  number of shares of Common Stock for which  options may be
granted  under the Plan or the  162(m)  Maximum,  (b)  materially  increase  the
benefits  to  participants   under  the  Plan  or  (c)  change  the  eligibility
requirements   for   individuals   entitled   to  receive   options   hereunder.
Notwithstanding  the  foregoing,  the  provisions
<PAGE>

regarding the selection of Directors for participation  in, and the amount,  the
price or the timing of, Outside  Director Options shall not be amended more than
once  every six  months,  other than to comport  with  changes in the Code,  the
Employee Retirement Income Security Act or the rules thereunder. No termination,
suspension or amendment of the Plan shall,  without the consent of the holder of
an existing  option  affected  thereby,  adversely  affect his rights under such
option.  The power of the  Committee  to  construe  and  administer  any options
granted  under  the Plan  prior to the  termination  or  suspension  of the Plan
nevertheless shall continue after such termination or during such suspension.

         14.  NON-TRANSFERABILITY  OF OPTIONS.  No option granted under the Plan
shall  be  transferable  otherwise  than  by will or the  laws  of  descent  and
distribution,  and options may be  exercised,  during the lifetime of the holder
thereof, only by him or his legal representatives. Except to the extent provided
above,  options  may not be  assigned,  transferred,  pledged,  hypothecated  or
disposed of in any way (whether by operation of law or otherwise)  and shall not
be subject to execution, attachment or similar process.

         15. WITHHOLDING  TAXES. The Company may withhold cash and/or,  with the
authorization of the Committee, shares of Common Stock to be issued with respect
thereto  having an  aggregate  fair market  value  equal to the amount  which it
determines is necessary to satisfy its obligation to withhold federal, state and
local income taxes or other taxes incurred by reason of the grant or exercise of
an option,  its  disposition,  or the  disposition of the  underlying  shares of
Common  Stock.  Alternatively,  the Company may require the holder to pay to the
Company such amount,  in cash,  promptly  upon demand.  The Company shall not be
required to issue any shares of Common  Stock  pursuant to any such option until
all required  payments have been made. Fair market value of the shares of Common
Stock shall be determined in accordance with Paragraph 5.

         16. LEGENDS;  PAYMENT OF EXPENSES.  The Company may endorse such legend
or legends upon the certificates for shares of Common Stock issued upon exercise
of an option under the Plan and may issue such "stop  transfer"  instructions to
its  transfer  agent  in  respect  of  such  shares  as it  determines,  in  its
discretion,  to be necessary or appropriate to (a) prevent a violation of, or to
perfect an exemption from, the registration  requirements of the Securities Act,
(b)  implement the  provisions of the Plan or any agreement  between the Company
and the  optionee  with respect to such shares of Common Stock or (c) permit the
Company  to  determine  the  occurrence  of a  "disqualifying  disposition,"  as
described  in  Section  421(b)  of the  Code,  of the  shares  of  Common  Stock
transferred upon the exercise of an ISO granted under the Plan.

                  The Company  shall pay all issuance  taxes with respect to the
issuance of shares of Common Stock upon the exercise of an option  granted under
the Plan, as well as all fees and expenses incurred by the Company in connection
with such issuance.
<PAGE>

         17.  USE OF  PROCEEDS.  The cash  proceeds  from the sale of  shares of
Common Stock  pursuant to the exercise of options  under the Plan shall be added
to the general funds of the Company and used for its general corporate  purposes
as the Board of Directors may determine.

         18.  SUBSTITUTIONS  AND  ASSUMPTIONS OF OPTIONS OF CERTAIN  CONSTITUENT
CORPORATIONS.  Anything in this Plan to the contrary notwithstanding,  the Board
of Directors may, without further approval by the  stockholders,  substitute new
options for prior options of a Constituent  Corporation (as defined in Paragraph
19) or assume the prior options of such Constituent Corporation.

         19.      DEFINITIONS.

                  a.  Subsidiary.  The  term  "Subsidiary"  shall  have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.

                  b. Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.

                  c. Constituent Corporation. The term "Constituent Corporation"
shall mean any  corporation  which  engages with the Company,  its Parent or any
Subsidiary  in a  transaction  to which  Section  424(a) of the Code applies (or
would apply if the option assumed or substituted  were an ISO), or any Parent or
any Subsidiary of such corporation.

                  d. Disability.  The term  "Disability"  shall mean a permanent
and total disability within the meaning of Section 22(e)(3) of the Code.

                  e. Employee Option.  The term "Employee  Option" shall mean an
option  granted  pursuant  to the Plan to a key  employee  of the  Company  or a
Subsidiary of the Company.

                  f. Outside Director Option. The term "Outside Director Option"
shall mean a NQSO granted pursuant to the Plan to a director of the Company who,
at the  time of the  grant,  is not an  employee  of the  Company  or any of its
Subsidiaries.

         20.  GOVERNING LAW. The Plan, such options as may be granted  hereunder
and all related matters shall be governed by, and construed in accordance  with,
the laws of the State of Delaware without regard to conflict of laws provisions.

         21. PARTIAL  INVALIDITY.  The invalidity or illegality of any provision
herein shall not affect the validity of any other provision.

         22.  STOCKHOLDER  APPROVAL.  The Plan shall be subject to approval by a
majority of the votes  present in person or by proxy and entitled to vote hereon
at the next duly held meeting of the Company's stockholders at which a quorum is
present.  No options granted
<PAGE>

hereunder may be exercised prior to such approval;  provided,  however, that the
date of grant of any  option  shall  be  determined  as if the Plan had not been
subject to such  approval.  Notwithstanding  the  foregoing,  if the Plan is not
approved by a vote of the  stockholders  of the Company on or before  October 7,
2000, then the Plan and any options granted hereunder shall terminate.

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