Document:

VDC Communications, Inc.

                      1998 STOCK INCENTIVE PLAN, AS AMENDED

                       (as amended through August 9, 2000)

         Section 1. General  Purpose of the Plan;  Definitions.  The name of the
plan is the VDC Communications,  Inc. 1998 Stock Incentive Plan, As Amended (the
"Plan").  The  purpose of the Plan is to  encourage  and  enable  the  officers,
employees, directors and consultants of VDC Communications, Inc. (the "Company")
and its  Subsidiaries  upon whose  judgment,  initiative and efforts the Company
largely  depends  for the  successful  conduct  of its  business  to  acquire  a
proprietary  interest in the Company.  It is  anticipated  that  providing  such
persons  with a  direct  stake in the  Company's  welfare  will  assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and  strengthening  their desire to remain
with the Company.

         The following terms shall be defined as set forth below:

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

         "Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options,  Restricted Stock Awards,  Stock Awards,  Performance  Share Awards and
Stock Appreciation Rights.

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal  Revenue  Code of 1986,  as amended,  and any
successor Code, and related rules, regulations and interpretations.

         "Effective  Date"  means the date on which the Plan is  approved by the
stockholders as set forth in Section 19.

         "Fair  Market  Value" of the Stock on any given  date  means (i) if the
principal  market for the Stock is the American Stock Exchange,  Inc.  ("AMEX"),
any other United  States  securities  exchange or the National  Market System of
National  Association  of the  Securities  Dealers  Automated  Quotation  System
("NASDAQ"),  the  Fair  Market  Value on any date  shall  be the  closing  price
reported for the Stock on such  exchange or system for such date or, if no sales
were reported for such date,  for the last day  preceding  such date for which a
sale  was  reported,  or (ii) if the  principal  market  for the  Stock is not a
national securities exchange or the NASDAQ National Market System, and the Stock
is  admitted to  quotation  on NASDAQ,  the Fair Market  Value on any given date
shall be the  average of the highest  bid and lowest  asked  prices of the Stock
reported  for such date or, if no bid and asked  prices were  reported  for such
date,  for the last day preceding such date for which such prices were reported;
and (iii) if the Fair Market Value cannot be determined on the basis  previously
set  forth  in this  definition  on the date  that  Fair  Market  Value is to be

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determined, the Board shall in good faith determine the Fair Market Value of the
Stock on such date.

         "Incentive  Stock  Option"  means  any  Stock  Option   designated  and
qualified as an "incentive stock option" as defined in Section 422 of the Code.

         "Independent  Director"  means  a  member  of the  Board  who is not an
employee or officer of the Company or any Subsidiary.

         "Non-Qualified  Stock  Option"  means any Stock  Option  that is not an
Incentive Stock Option.

         "Option" or "Stock Option" means any Option to purchase shares of Stock
granted pursuant to Section 6.

         "Performance  Share Award" means any Award granted  pursuant to Section
12.

         "Restricted  Stock Award" means any Award  granted  pursuant to Section
10.

         "Stock"  means the Common  Stock,  par value  $.0001 per share,  of the
Company, subject to adjustments pursuant to Section 14.

         "Stock Appreciation Right" or "SAR" means any Award granted pursuant to
Section 7.

         "Stock Award" means any award granted pursuant to Section 11.

         "Subsidiary"  means any  corporation  or other  entity  (other than the
Company) in any unbroken chain of corporations or other entities, beginning with
the  Company,  if each of the  corporations  or  entities  (other  than the last
corporation  or entity in the  unbroken  chain)  owns  stock or other  interests
possessing  50% or more of the economic  interest or the total  combined  voting
power  of all  classes  of  stock  or  other  interests  in  one  of  the  other
corporations or entities in the chain.

         Section 2.  Administration.  The Plan shall be administered by the full
Board of  Directors  of the  Company or a committee  of such Board of  Directors
comprised  of two or more  "Non-Employee  Directors"  within the meaning of Rule
16b-3(a)(3)  (or its  successor  rule)  promulgated  under  the Act  (the  "Plan
Administrator").  Subject to the provisions of the Plan, the Plan  Administrator
is authorized to:

                  (a)      construe the Plan and any Award under the Plan;

                  (b)      select   the   directors,  officers,  employees   and
                           consultants of the Company and  its  Subsidiaries  to
                           whom Awards may be granted;

                  (c)      determine the number of shares of Stock to be covered
                           by any Award;

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                  (d)      determine and  modify from time to time the terms and
                           conditions,  including restrictions, of any Award and
                           to approve the  form of written instrument evidencing
                           Awards;

                  (e)      accelerate at any time the exercisability or  vesting
                           of all or any portion of any Award and/or to  include
                           provisions in awards providing for such acceleration;

                  (f)      impose  limitations  on Awards, including limitations
                           on transfer and repurchase provisions;

                  (g)      extend the exercise period within which Stock Options
                           may be exercised; and

                  (h)      determine at any time  whether,  to what extent,  and
                           under  what  circumstances  Stock and  other  amounts
                           payable  with  respect to an Award  shall be deferred
                           either  automatically  or  at  the  election  of  the
                           participant  and  whether  and  to  what  extent  the
                           Company  shall  pay or  credit  amounts  constituting
                           interest   (at   rates   determined   by   the   Plan
                           Administrator)  or dividends  or deemed  dividends on
                           such deferrals.

The  determination  of the  Plan  Administrator  on any  such  matters  shall be
conclusive.

         Section  3.   Delegation  of  Authority  to  Grant  Awards.   The  Plan
Administrator,  in its  discretion,  may delegate to the Chairman of the Company
all or part of the Plan  Administrator's  authority  and duties with  respect to
granting Awards to individuals  who are not subject to the reporting  provisions
of Section 16 of the Act or  "covered  employees"  within the meaning of Section
162(m) of the Code. The Plan Administrator may revoke or amend the terms of such
a delegation at any time, but such revocation shall not invalidate prior actions
of the Chairman that were consistent with the terms of the Plan.

         Section 4. Eligibility.  Directors, officers, employees and consultants
of  the  Company  or  its   Subsidiaries   who,  in  the  opinion  of  the  Plan
Administrator,  are mainly  responsible for the continued growth and development
and future financial success of the business shall be eligible to participate in
the Plan.  In  addition,  Independent  Directors  are  eligible  to  receive  an
automatic grant of Stock Options pursuant to Section 9 hereof.

         Section 5. Shares  Subject to the Plan. The initial number of shares of
Stock which may be issued pursuant to the Plan shall be 5,000,000.  For purposes
of the foregoing limitation, the shares of Stock underlying any Awards which are
forfeited,  canceled,  reacquired by the Company, satisfied without the issuance
of Stock or otherwise terminated (other than by exercise) shall be added back to
the  number  of  shares  of  Stock   available  for  issuance  under  the  Plan.
Notwithstanding the foregoing, on and after the date that the Plan is subject to
Section 162(m) of the Code, Stock Options with respect to no more than 1,000,000
shares of Stock may be granted to any one individual  participant during any one
calendar year period.  To the extent that an SAR is granted in conjunction  with
an Option, the shares covered by such SAR and Option shall be counted only once.

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Common Stock to be issued under the Plan may be either  authorized  and unissued
shares or shares held in treasury by the Company.

         Section 6. Stock Options.  Options granted  pursuant to the Plan may be
either Options which are Incentive Stock Options or Non-Qualified Stock Options.
Incentive  Stock  Options  and  Non-Qualified  Stock  Options  shall be  granted
separately  hereunder.  The Plan  Administrator,  shall determine whether and to
what extent  Options  shall be granted  under the Plan and whether  such Options
granted  shall be  Incentive  Stock  Options  or  Non-Qualified  Stock  Options;
provided,  however,  that:  (a)  Incentive  Stock Options may be granted only to
employees of the Company or any  Subsidiary  that is a "subsidiary  corporation"
within the meaning of Section  424(f) of the Code;  and (b) No  Incentive  Stock
Option may be granted  following the tenth  anniversary of the effective date of
the Plan. The provisions of the Plan and any stock Option agreement  pursuant to
which  Incentive  Stock  Options  shall be issued shall be construed in a manner
consistent  with Section 422 of the Code (or any successor  provision) and rules
and regulations promulgated thereunder.

         Section 7. Stock Appreciation  Rights. The Plan Administrator may, from
time to time,  subject to the  provisions  of the Plan,  grant SARs to  eligible
participants.  Such SARs may be granted (i) alone, (ii)  simultaneously with the
grant of an Option  (either an  Incentive  Stock Option or  Non-Qualified  Stock
Option) and in  conjunction  therewith  or in the  alternative  thereto or (iii)
subsequent  to the grant of a  Non-Qualified  Stock  Option  and in  conjunction
therewith or in the alternative thereto.

                  (a)      An SAR shall entitle the holder upon exercise thereof
                           to receive from the Company,  upon a written  request
                           filed with  the  Secretary  of  the  Company  at  its
                           principal offices  (the  "Request"),  (i) a number of
                           shares  of  Stock (with or without restrictions as to
                           substantial  risk  of forfeiture and transferability,
                           as  determined  by  the  Plan   Administrator  in its
                           sole  discretion),  (ii) an  amount of cash, or (iii)
                           any  combination  of  shares  of  Stock  and cash, as
                           specified in the Request (but subject to the approval
                           of the Plan  Administrator  in its  sole  discretion,
                           at any time up to and including  the time of payment,
                           as  to  the  making of any cash  payment),  having an
                           aggregate  Fair Market Value equal to the product  of
                           (i) the excess of the Fair Market Value,  on the  day
                           of  such  Request,  of  one share of Stock  over  the
                           exercise  price  per  share  specified  in  such  SAR
                           or its related Option, multiplied by (ii) the  number
                           of shares of  Stock  for  which  such  SAR  shall  be
                           exercised.

                  (b)      The exercise  price of an SAR granted  alone shall be
                           determined by the Plan Administrator,  but may not be
                           less  than the Fair  Market  Value of the  underlying
                           Stock  on  the  date  of   grant.   An  SAR   granted
                           simultaneously  with or subsequent to the grant of an
                           Option  and  in  conjunction   therewith  or  in  the
                           alternative  thereto  shall  have the  same  exercise
                           price as the related  Option,  shall be  transferable
                           only  upon  the  same  terms  and  conditions  as the
                           related Option,  and shall be exercisable only to the
                           same extent as the related Option; provided, however,
                           that an SAR, by its terms,  shall be exercisable only

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                           when the Fair  Market  Value of the Stock  subject to
                           the SAR and related Option exceeds the exercise price
                           thereof.

                  (c)      Upon exercise of an SAR granted  simultaneously  with
                           or  subsequent  to an Option  and in the  alternative
                           thereto,  the number of shares of Stock for which the
                           related Option shall be exercisable  shall be reduced
                           by the  number  of  shares of Stock for which the SAR
                           shall  have been  exercised.  The number of shares of
                           Stock for which an SAR shall be exercisable  shall be
                           reduced upon any exercise of a related  Option by the
                           number of shares of Stock for which such Option shall
                           have been exercised.

                  (d)      Any SAR shall be  exercisable  upon  such  additional
                           terms and conditions as may be prescribed by the Plan
                           Administrator.

         Section 8. Terms of Options and SARs.  Each Option or SAR granted under
the Plan shall be evidenced  by an agreement  between the Company and the person
to whom such  Option or SAR is granted  and shall be  subject  to the  following
terms and conditions:

                  (a)      Subject to adjustment as  provided in  Section  14 of
                           this  Plan,  the price at which  each  share  covered
                           by an Option may be purchased  shall be determined in
                           each  case   by  the  Plan  Administrator;  provided,
                           however,  that  such  price  shall  not,  in the case
                           of an Incentive  Stock Option,  be less than the Fair
                           Market Value of the underlying  Stock at the time the
                           Option is granted.  If an optionee owns (or is deemed
                           to own under applicable provisions of  the  Code  and
                           rules and regulations  promulgated  thereunder)  more
                           than ten percent  (10%) of the combined  voting power
                           of all  classes  of the stock of the  Company  and an
                           Option  granted  to  such  optionee  is  intended  to
                           qualify as an  Incentive  Stock  Option,  the  Option
                           price shall be no less than 110% of the  Fair  Market
                           Value of the Common Stock  covered by the  Option  on
                           the date the Option is granted.

                  (b)      The  aggregate  Fair Market  Value of shares of Stock
                           with  respect to which  Incentive  Stock  Options are
                           first  exercisable  by the  optionee in any  calendar
                           year  (under  all  plans of the  Company)  shall  not
                           exceed the  limitations,  if any,  imposed by Section
                           422(d) of the Code (or any successor  provision).  If
                           any Option  designated as an Incentive  Stock Option,
                           either alone or in conjunction  with any other Option
                           or Options,  exceeds the  foregoing  limitation,  the
                           portion of such  Option in excess of such  limitation
                           shall  automatically  be reclassified (in whole share
                           increments and without  fractional share portions) as
                           a  Non-Qualified  Stock  Option,  with later  granted
                           Options being so reclassified first.

                  (c)      Options  and SARs  shall not be  transferable  by the
                           participant  otherwise than by will or by the laws of
                           descent  and  distribution  or pursuant to a domestic
                           relations order.  After the death of the participant,
                           the Option or SAR may be  transferred  to the Company
                           upon such terms and  conditions,  if any, as the Plan

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                           Administrator  and  the  personal  representative  or
                           other  person  entitled to exercise the Option or SAR
                           may agree within the period  specified in  subsection
                           8(d)(iii) hereof.

                  (d)      An  Option  or SAR may be  exercised  in whole at any
                           time,  or in part  from  time to  time,  within  such
                           period or  periods  (not to exceed ten years from the
                           granting  of the  Option in the case of an  Incentive
                           Stock  Option)  as may  be  determined  by  the  Plan
                           Administrator  and set forth in the  agreement  (such
                           period or periods  being  hereinafter  referred to as
                           the  "Option  Period"),  provided  that,  unless  the
                           agreement provides otherwise:

                           (i)      If a participant who is an employee  of  the
                                    Company or a  Subsidiary  shall  cease to be
                                    employed by the Company or  the  Subsidiary,
                                    as the  case may be,  all  Options and  SARs
                                    to which the  employee is then  entitled  to
                                    exercise may be exercised only within  three
                                    months after the  termination  of employment
                                    and within the Option  Period  or,  if  such
                                    termination   was  due  to   disability   or
                                    retirement (as hereinafter defined),  within
                                    two years after  termination  of  employment
                                    and    within     the     Option     Period.
                                    Notwithstanding   the   foregoing,   if   an
                                    employee  of the  Company  ceases to  be  an
                                    employee  of  the  Company  but  immediately
                                    continues as an  employee  of  a  Subsidiary
                                    (i.e.  there is not more than a two week gap
                                    between  such employments) or an employee of
                                    a Subsidiary ceases to  be  an  employee  of
                                    that Subsidiary but immediately continues as
                                    an employee  of  the  Company   or   another
                                    Subsidiary  (i.e.  there  is not  more  than
                                    a two week gap  between  such  employments),
                                    then said participant's Options shall remain
                                    unaffected by said transition in employment.
                                    Notwithstanding  the  foregoing:  (a) in the
                                    event that  any  termination  of  employment
                                    shall be for Cause  (as  defined  herein) or
                                    the   participant   becomes  an  officer  or
                                    director  of, a  consultant  to or  employed
                                    by a Competing Business (as defined herein),
                                    during the Option Period,  then any  and all
                                    Options and SARs held  by  such  participant
                                    shall  forthwith  terminate  and  all vested
                                    Options shall be forfeited; and (b) the Plan
                                    Administrator may, in its  sole  discretion,
                                    extend  the  Option  Period  of  any  Option
                                    or SAR for up to three years from  the  date
                                    of  termination   of  employment  regardless
                                    of   the   original   Option   Period.   For
                                    purposes of the Plan,  retirement shall mean
                                    the  termination  of  employment  with   the
                                    Company (or a  Subsidiary,  as the  case may
                                    be), other than for Cause, at any time after
                                    the age 65.

                                    For purposes of this Plan,  the term "Cause"
                                    shall mean (a) with respect to an individual
                                    who is party to a written agreement with the
                                    Company  (or a  Subsidiary,  as the case may
                                    be) which  contains a definition  of "cause"
                                    or "for  cause" or words of  similar  import
                                    for purposes of  termination  of  employment
                                    thereunder  by the Company (or a Subsidiary,

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                                    as the case may be),  "cause" or "for cause"
                                    as  defined  in such  agreement;  (b) in all
                                    other cases (I) the willful commission by an
                                    employee  of a  criminal  or other  act that
                                    causes  substantial  economic  damage to the
                                    Company  (or a  Subsidiary,  as the case may
                                    be) or  substantial  injury to the  business
                                    reputation  of the Company (or a Subsidiary,
                                    as the case may be); (II) the  commission of
                                    an act of fraud in the  performance  of such
                                    person's  duties  to or  on  behalf  of  the
                                    Company  (or a  Subsidiary,  as the case may
                                    be); or (III) the continuing willful failure
                                    of a person to  perform  the  duties of such
                                    person to the Company (or a  Subsidiary,  as
                                    the case may be)  (other  than a failure  to
                                    perform duties  resulting from such person's
                                    incapacity  due to  illness)  after  written
                                    notice thereof  (specifying  the particulars
                                    thereof   in   reasonable   detail)   and  a
                                    reasonable  opportunity to cure such failure
                                    are  given  to the  person  by the  Board of
                                    Directors  of the Company (or a  Subsidiary,
                                    as  the   case   may   be)   or   the   Plan
                                    Administrator.  For purposes of the Plan, no
                                    act,  or failure to act,  on the part of any
                                    person shall be considered  "willful" unless
                                    done or  omitted  to be  done by the  person
                                    other  than  in  good   faith  and   without
                                    reasonable  belief that the person's  action
                                    or omission was in the best  interest of the
                                    Company  (or a  Subsidiary,  as the case may
                                    be).

                                    For   purposes   of  this  Plan,   the  term
                                    "Competing Business" shall mean: any person,
                                    corporation  or other entity  engaged in the
                                    business of (a) providing telecommunications
                                    services  or (b)  selling or  attempting  to
                                    sell any  product  or  service  which is the
                                    same as or similar to  products  or services
                                    sold by the Company (or a Subsidiary, as the
                                    case may be)  within  the last year prior to
                                    termination  of  such  person's  employment,
                                    consultant relationship or directorship,  as
                                    the case may be, hereunder.

                           (ii)     If a participant who is a  director  of  the
                                    Company  shall cease to serve  as a director
                                    of the Company, any  Options  or  SARs  then
                                    exercisable  by   such   director   may   be
                                    exercised  only within  three  months  after
                                    the cessation  of  service  and  within  the
                                    Option Period unless such  cessation was due
                                    to disability, in which case  such  optionee
                                    may exercise  such  Option or SAR within two
                                    years after cessation of service and  within
                                    the  Option  Period.   Notwithstanding   the
                                    foregoing: (a) if any cessation  of  service
                                    as a director  was the result of removal for
                                    Cause or the participant  becomes an officer
                                    or director of, a  consultant to or employed
                                    by a  Competing  Business  during the Option
                                    Period,  any Options and SARs held  by  such
                                    participant shall  forthwith  terminate; and
                                    (b) the Plan  Administrator may  in its sole
                                    discretion extend the Option  Period  of any

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                                    Option  or SAR  for up to  three  years from
                                    the date of cessation of service  regardless
                                    of the original Option Period;

                           (iii)    If the  participant  shall  die  during  the
                                    Option  Period,  any  Options  or SARs  then
                                    exercisable may be exercised only within two
                                    years  after  the  participant's  death  and
                                    within  the  Option  Period  and only by the
                                    participant's  personal   representative  or
                                    persons    entitled    thereto   under   the
                                    participant's  will or the  laws of  descent
                                    and distribution;

                           (iv)     The Option or SAR may not be  exercised  for
                                    more  shares   (subject  to   adjustment  as
                                    provided    in   Section   14)   after   the
                                    termination of the participant's employment,
                                    cessation   of   service   as  a   director,
                                    cessation of service as a consultant, or the
                                    participant's  death,  as the  case  may be,
                                    than  the   participant   was   entitled  to
                                    purchase  thereunder  at  the  time  of  the
                                    termination of the participant's employment,
                                    service, or the participant's death; and

                           (v)      If a  participant  owns (or is deemed to own
                                    under applicable  provisions of the Code and
                                    regulations   promulgated  thereunder)  more
                                    than 10% of the combined voting power of all
                                    classes  of  stock  of the  Company  (or any
                                    parent  or  subsidiary  corporation  of  the
                                    Company)  and  an  Option  granted  to  such
                                    participant  is  intended  to  qualify as an
                                    Incentive  Stock  Option,  the Option by its
                                    terms  may  not  be  exercisable  after  the
                                    expiration  of five years from the date such
                                    Option is granted.

                           (vi)     If a participant who is a consultant to  the
                                    Company or a Subsidiary shall cease to serve
                                    as  a  consultant   to   the  Company  or  a
                                    Subsidiary,  as the case may be, any Options
                                    or SARs then exercisable by  such consultant
                                    may be exercised  only within  three  months
                                    of the  cessation  of service and within the
                                    Option    Period.     Notwithstanding    the
                                    foregoing, the Plan Administrator may in its
                                    sole  discretion  extend the  Option  Period
                                    of any Option or SAR for up to  three  years
                                    from the  date  of  cessation   of   service
                                    regardless of the original  Option   Period.
                                    Notwithstanding    the   foregoing,   if   a
                                    consultant  of the Company  ceases to  be  a
                                    consultant  of  the Company but  immediately
                                    continues  as  a  consultant of a Subsidiary
                                    (i.e. there is not more  than a two week gap
                                    between such  engagements)  or a  consultant
                                    of a Subsidiary ceases to be a consultant of
                                    that Subsidiary but immediately continues as
                                    a  consultant   of  the  Company  or another
                                    Subsidiary  (i.e.  there is  not  more  than
                                    a  two week gap between  such  engagements),
                                    then said  participant's  Options shall
                                    remain unaffected by said transition in
                                    engagement.

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<PAGE>

                  (e)      The Option exercise price  of  each  share  purchased
                           pursuant  to an Option  shall  be paid in full at the
                           time of each  exercise  (the "Payment Date")  of  the
                           Option   (i) in  cash;  (ii)  by  delivering  to  the
                           Company a notice  of  exercise  with  an  irrevocable
                           direction  to a  broker-dealer  registered  under the
                           Act to sell a  sufficient  portion of the shares  and
                           deliver the sale proceeds directly to the Company  to
                           pay the exercise price;  (iii)  in the  discretion of
                           the Plan Administrator,  through the delivery  to the
                           Company of previously-owned shares  of  Common  Stock
                           having an  aggregate  Fair Market  Value equal to the
                           Option exercise price of the shares being  purchased
                           pursuant to the exercise of the Option;  provided,
                           however,  that shares of  Common Stock  delivered  in
                           payment  of the  Option  price  must  have  been held
                           by the  participant  for  at least  six (6) months in
                           order to be  utilized to pay the Option  price;  (iv)
                           in the  discretion of the Plan Administrator, through
                           an  election to have shares of Common Stock otherwise
                           issuable to the optionee withheld to pay the exercise
                           price of such Option;  or (v)  in  the  discretion of
                           the  Plan  Administrator, through any combination  of
                           the payment procedures set forth in subsections  (i)-
                           (iv) of this Section 8(e).

                  (f)      The  Plan  Administrator,   in  its  discretion,  may
                           authorize  "stock  retention  Options" which provide,
                           upon the  exercise  of an Option  previously  granted
                           under this Plan (a "prior Option"),  using previously
                           owned  shares,  for the  automatic  issuance of a new
                           Option  under this Plan with an exercise  price equal
                           to the current  Fair  Market  Value and for up to the
                           number   of   shares   equal   to   the   number   of
                           previously-owned  shares  delivered in payment of the
                           exercise  price  of  the  prior  Option.  Such  stock
                           retention Option shall have the same Option Period as
                           the prior Option.

                  (g)      Nothing  contained  in the  Plan  nor  in  any  Award
                           agreement shall confer upon any participant any right
                           with respect to the  continuance of employment by the
                           Company  nor  interfere  in any way with the right of
                           the Company to terminate his employment or change his
                           compensation at any time.

                  (h)      The Plan  Administrator  may include such other terms
                           and conditions not inconsistent with the foregoing as
                           the  Plan   Administrator   shall  approve.   Without
                           limiting the  generality of the  foregoing  sentence,
                           the  Plan   Administrator   shall  be  authorized  to
                           determine  that Options or SARs shall be  exercisable
                           in one or more  installments  during  the term of the
                           Option,  subject  to the  attainment  of  performance
                           goals and objectives and the right to exercise may be
                           cumulative as determined by the Plan Administrator.

         Section 9.  Independent  Director  Options.  Anything  to the  contrary
notwithstanding,  each Independent Director who is first elected or appointed to
serve as a  director  commencing  June 1, 1998  shall  automatically  be granted
Non-Qualified  Stock  Options to  purchase  25,000  shares of Stock.  The Option
exercise price for Options granted to Independent  Directors under the Plan will

                                       9
<PAGE>

be  equal  the Fair  Market  Value of the  Stock on the date of  grant.  Options
granted to Independent  Directors under the foregoing provisions will be granted
on the date that such  Independent  Director is first  elected or  appointed  to
serve  as a  director  and,  so long as the  Independent  Director  continuously
remains a  director,  will vest in equal  annual  installments  over three years
commencing  on the  anniversary  of the date of grant and will  expire ten years
after  grant;  provided,  however,  that if the  optionee  ceases  to serve as a
director, the Options will terminate ninety days after such cessation.

         Section 10.  Restricted Stock Awards.

                  (a)      The Plan  Administrator  may grant  Restricted  Stock
                           Awards to any officer,  employee or consultant of the
                           Company  and its  Subsidiaries.  A  Restricted  Stock
                           Award  entitles the  recipient  to acquire  shares of
                           Stock subject to such  restrictions and conditions as
                           the Plan  Administrator  may determine at the time of
                           grant ("Restricted  Stock").  Conditions may be based
                           on   continuing   employment   (or   other   business
                           relationship)  and/or  achievement of pre-established
                           performance goals and objectives.

                  (b)      Upon execution of a written  instrument setting forth
                           the Restricted  Stock Award and paying any applicable
                           purchase  price, a participant  shall have the rights
                           of a shareholder with respect to the Stock subject to
                           the  Restricted  Stock  Award,  including,   but  not
                           limited  to the right to vote and  receive  dividends
                           with respect thereto; provided,  however, that shares
                           of Stock subject to Restricted Stock Awards that have
                           not vested  shall be subject to the  restrictions  on
                           transferability  described  in Section  10(d)  below.
                           Unless  the  Plan   Administrator   shall   otherwise
                           determine,  certificates  evidencing  the  Restricted
                           Stock shall remain in the  possession  of the Company
                           until such Restricted  Stock is vested as provided in
                           Section 10(c) below.

                  (c)      The Plan  Administrator  at the  time of grant  shall
                           specify the date or dates  and/or the  attainment  of
                           pre-established  performance  goals,  objectives  and
                           other  conditions  on which  Restricted  Stock  shall
                           become vested,  subject to such further rights of the
                           Company  or its  assigns as may be  specified  in the
                           instrument  evidencing the Restricted Stock Award. If
                           the grantee or the Company, as the case may be, fails
                           to  achieve  the  designated  goals or the  grantee's
                           relationship  with the Company is terminated prior to
                           the  expiration  of the vesting  period,  the grantee
                           shall  forfeit  all  shares of Stock  subject  to the
                           Restricted Stock Award which have not then vested.

                  (d)      Unvested  Restricted Stock may not be sold,  assigned
                           transferred,   pledged  or  otherwise  encumbered  or
                           disposed of except as specifically provided herein or
                           in the written  instrument  evidencing the Restricted
                           Stock Award.

         Section  11.  Stock  Awards.  The Plan  Administrator  may, in its sole
discretion,  grant  (or  sell  at  a  purchase  price  determined  by  the  Plan
Administrator)  a Stock  Award to any  officer,  employee or  consultant  of the

                                       10
<PAGE>

Company or its  Subsidiaries,  pursuant  to which such  individual  may  receive
shares of Stock free of any vesting  restrictions  (a "Stock  Award")  under the
Plan. Stock Awards may be granted or sold as described in the preceding sentence
in respect of past services or other valid consideration, or in lieu of any cash
compensation due to such individual.

         Section 12.  Performance  Share Awards. A Performance Share Award is an
Award  entitling the recipient to acquire shares of Stock upon the attainment of
specified  performance  goals. The Plan Administrator may make Performance Share
Awards  independent  of or in  connection  with the  granting of any other Award
under the Plan.  Performance  Share Awards may be granted  under the Plan to any
officer,  employee or consultant of the Company or its  Subsidiaries,  including
those who qualify for awards under other performance  plans of the Company.  The
Plan  Administrator in its sole discretion  shall determine  whether and to whom
Performance  Share Awards shall be made, the performance  goals applicable under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions  applicable to the awarded  Performance Shares;
provided, however, that the Plan Administrator may rely on the performance goals
and other  standards  applicable  to other  performance  plans of the Company in
setting the standards for Performance Share Awards under the Plan.

         Section 13.  Tax Withholding.

                  (a)      Whenever shares are to be issued or  cash  is  to  be
                           paid under the Plan, the Company shall have the right
                           to require the participant to remit to the Company an
                           amount sufficient to satisfy federal, state and local
                           tax  withholding  requirements  prior to the delivery
                           of  any  certificate  for  shares  or  any  proceeds;
                           provided, however, that in the case of a  participant
                           who  receives an Award of shares under the Plan which
                           is not fully vested, the participant shall remit such
                           amount on the first business day  following  the  Tax
                           Date.  The "Tax Date" for purposes of this Section 13
                           shall be the date on which the amount of  tax  to  be
                           withheld is determined.  If  a  participant  makes  a
                           disposition  of shares acquired upon the exercise  of
                           an Incentive  Stock Option within  either  two  years
                           after the Option was granted or one  year  after  its
                           exercise by the participant,  the  participant  shall
                           promptly  notify the Company and  the  Company  shall
                           have the  right to  require the participant to pay to
                           the Company an amount sufficient  to satisfy federal,
                           state and local tax withholding requirements.

                  (b)      A participant  who is obligated to pay the Company an
                           amount  required to be withheld under  applicable tax
                           withholding  requirements  may pay such amount (i) in
                           cash;   (ii)   in  the   discretion   of   the   Plan
                           Administrator, through the delivery to the Company of
                           previously-owned  shares  of Common  Stock  having an
                           aggregate  Fair Market Value on the Tax Date equal to
                           the tax obligation provided that the previously owned
                           shares  delivered in  satisfaction of the withholding
                           obligations  must have  been held by the  participant
                           for  at  least  six  (6)  months;  or  (iii)  in  the
                           discretion  of  the  Plan  Administrator,  through  a

                                       11
<PAGE>

                           combination   of  the   procedures   set   forth   in
                           subsections (i) and (ii) of this Section 13(b).

                  (c)      A participant who is obligated to pay to the  Company
                           an amount required to be  withheld  under  applicable
                           tax  withholding  requirements  in  connection   with
                           either the exercise of a Non-Qualified  Stock Option,
                           or the receipt of  a  Restricted  Stock  Award, Stock
                           Award or Performance  Share Award under the Plan may,
                           in  the  discretion  of the Plan Administrator, elect
                           to satisfy this withholding obligation, in  whole  or
                           in part, by  requesting  that  the  Company  withhold
                           shares of stock otherwise issuable to the participant
                           having a Fair  Market  Value on the Tax Date equal to
                           the  amount of  the  tax  required  to  be  withheld;
                           provided, however, that shares may be withheld by the
                           Company  only if  such  withheld  shares have vested.
                           Any fractional amount shall be paid to the Company by
                           the participant in cash or shall be withheld from the
                           participant's next regular paycheck.

                  (d)      An election by a participant  to have shares of stock
                           withheld  to  satisfy  federal,  state  and local tax
                           withholding  requirements  pursuant to Section  13(c)
                           must be in writing and delivered to the Company prior
                           to the Tax Date.

         Section 14.  Adjustment of Number and Price of Shares.

                  Any other provision of the Plan notwithstanding:

                  (a)      If,  through   or   as   a   result  of  any  merger,
                           consolidation,  sale  of all or substantially  all of
                           the    assets   of   the   Company,   reorganization,
                           recapitalization,  reclassification,  stock dividend,
                           stock   split,   reverse stock split or other similar
                           transaction,  the   outstanding  shares of Stock  are
                           increased  or  decreased  or  are  exchanged  for   a
                           different   number  or   kind   of  shares  or  other
                           securities of the Company,  or  additional  shares or
                           new or different  shares or other  securities of  the
                           Company  or  other  non-cash assets  are  distributed
                           with  respect  to  such  shares  of  Stock  or  other
                           securities,  the  Plan  Administrator  shall  make an
                           appropriate or proportionate  adjustment  in  (i) the
                           number  of  Stock  Options that can be granted to any
                           one  individual participant, (ii) the number and kind
                           of shares  or  other   securities subject to any then
                           outstanding  Awards  under  the Plan,  and  (iii) the
                           price for each share subject to any then  outstanding
                           Stock Options under the Plan,  without  changing  the
                           aggregate   exercise  price (i.e., the exercise price
                           multiplied  by the number of shares) as to which such
                           Stock Options remain exercisable.  The  adjustment by
                           the  Plan  Administrator shall be final, binding  and
                           conclusive.  If this Section  14(a) applies  and  the
                           event  is  also  an  Acquisition  Event  (as  defined
                           below), then Section  14(d)  shall be  applicable  to
                           such event,  and  this  Section 14(a)  shall  not  be
                           applicable.

                                       12
<PAGE>

                  (b)      In the event that, by reason of a  corporate  merger,
                           consolidation,  acquisition  of  property  or  stock,
                           separation,  reorganization or liquidation, the Board
                           of  Directors   shall   authorize  the   issuance  or
                           assumption of  a stock Option or stock Options  in  a
                           transaction  to  which  Section  424(a)  of  the Code
                           applies,  then,  notwithstanding  any other provision
                           of the Plan, the  Plan  Administrator  may  grant  an
                           Option or Options upon such terms and  conditions  as
                           it may deem appropriate for the purpose of assumption
                           of the old Option,  or  substitution of a new  Option
                           for  the   old   Option,  in  conformity   with   the
                           provisions of  Code Section 424(a) and the rules  and
                           regulations thereunder,  as they may be amended  from
                           time to time. If this Section 14(b) applies  and  the
                           event  is  also  an  Acquisition  Event  (as  defined
                           below),  then  Section  14(d) shall be applicable  to
                           such  event, and  this  Section 14(b)  shall  not  be
                           applicable.

                  (c)      No  adjustment or  substitution  provided for in this
                           Section 14 shall  require  the Company to issue or to
                           sell  a  fractional  share  under  any  stock  Option
                           agreement  or share  award  agreement  and the  total
                           adjustment or substitution with respect to each stock
                           Option  and share  award  agreement  shall be limited
                           accordingly.

                  (d)      Acquisition; Change in Control Events; Liquidation or
                           Dissolution.

                           (i)      Definitions

                                    (A)     An "Acquisition Event" shall mean:

                                            (1)    after  August  9,  2000,  any
                                                   merger  or  consolidation  of
                                                   the  Company   with  or  into
                                                   another entity as a result of
                                                   which the Stock is  converted
                                                   into  or  exchanged  for  the
                                                   right   to   receive    cash,
                                                   securities or other property;
                                                   or

                                            (2)    after  August  9,  2000,  any
                                                   exchange  of  shares  of  the
                                                   Company for cash,  securities
                                                   or other property pursuant to
                                                   a  statutory  share  exchange
                                                   transaction.

                                    (B)     A  "Change  in  Control Event" shall
                                            mean:

                                            (1)    after  August  9,  2000,  any
                                                   merger,   consolidation,   or
                                                   transaction   (or  series  of
                                                   related   transactions  which
                                                   commence after August 9, 2000
                                                   and occur within any 12 month
                                                   period)  which results in the
                                                   voting   securities   of  the
                                                   Company           outstanding
                                                   immediately   prior   thereto
                                                   representing      immediately
                                                   thereafter     (either     by
                                                   remaining  outstanding  or by
                                                   being  converted  into voting
                                                   securities  of the  surviving

                                       13
<PAGE>
                                                   or  acquiring   entity)  less
                                                   than  62.5%  of the  combined
                                                   voting  power  of the  voting
                                                   securities  of the Company or
                                                   such  surviving  or acquiring
                                                   entity            outstanding
                                                   immediately     after    such
                                                   merger,   consolidation,   or
                                                   transaction; or

                                            (2)    any  individual,  entity,  or
                                                   "person,"  as  such  term  is
                                                   used in  Sections  13(d)  and
                                                   14(d) of the Act (other  than
                                                   (A)  the  Company,   (B)  any
                                                   trustee  or  other  fiduciary
                                                   holding  securities  under an
                                                   employee  benefit plan of the
                                                   Company,  or (C)  any  person
                                                   who, immediately prior August
                                                   9, 2000, was the  "beneficial
                                                   owner"  (as  defined  in Rule
                                                   13d-3 (or its successor rule)
                                                   under the Act),  directly  or
                                                   indirectly,  of more than 10%
                                                   of the combined  voting power
                                                   of   the    Company's    then
                                                   outstanding            voting
                                                   securities),  is or  becomes,
                                                   after  August  9,  2000,  the
                                                   "beneficial     owner"    (as
                                                   defined in Rule 13d-3 (or its
                                                   successor   rule)  under  the
                                                   Act), directly or indirectly,
                                                   of  securities of the Company
                                                   representing  30% or  more of
                                                   the combined  voting power of
                                                   the      Company's       then
                                                   outstanding            voting
                                                   securities; or

                                             (3)   during any period of not more
                                                   than two  consecutive  years,
                                                   not   including   any  period
                                                   prior  to  August  9,   2000,
                                                   individuals    who   at   the
                                                   beginning   of  such   period
                                                   constitute the Board, and any
                                                   new  director  (other  than a
                                                   director     whose    initial
                                                   assumption  of  office  is in
                                                   connection  with an actual or
                                                   threatened  election contest,
                                                   including, but not limited to
                                                   a    consent    solicitation,
                                                   relating  to the  election of
                                                   directors   of  the  Company)
                                                   whose  election  by the Board
                                                   or nomination for election by
                                                   the  Company's   stockholders
                                                   was  approved by a vote of at
                                                   least two-thirds (2/3) 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

                                            (4)    after  August  9,  2000,  any
                                                   sale,   lease,   exchange  or
                                                   other    transfer   (in   one
                                                   transaction  or a  series  of
                                                   related transactions) of all,
                                                   or substantially  all, of the
                                                   assets of the Company,  other
                                                   than   to   a    wholly-owned
                                                   subsidiary of the Company; or

                                       14
<PAGE>

                                            (5)    the  complete liquidation  of
                                                   the Company.

                           (ii)     Effect on Options

                                    (A)     Acquisition   Event.    Upon     the
                                            occurrence of an  Acquisition  Event
                                            (regardless of  whether  such  event
                                            also constitutes a Change in Control
                                            Event),  or  the  execution  by  the
                                            Company  of  any   agreement    with
                                            respect  to  an  Acquisition   Event
                                            (regardless  of  whether such  event
                                            will result in a  Change  in Control
                                            Event), the Board shall provide that
                                            all  outstanding  Options  shall  be
                                            assumed, or equivalent options shall
                                            be substituted,  by the acquiring or
                                            succeeding   corporation    (or   an
                                            affiliate thereof); provided that if
                                            such    Acquisition    Event    also
                                            constitutes  a   Change  in  Control
                                            Event, such assumed  or  substituted
                                            options    shall    be   immediately
                                            exercisable   in   full   upon   the
                                            occurrence   of   such   Acquisition
                                            Event.   For  purposes  hereof,   an
                                            Option  shall  be  considered  to be
                                            assumed if,  following  consummation
                                            of the Acquisition Event, the Option
                                            confers  the  right to purchase, for
                                            each share of Stock subject  to  the
                                            Option   immediately   prior to  the
                                            consummation  of   the   Acquisition
                                            Event,  the  consideration  (whether
                                            cash,  securities or other property)
                                            received  as   a   result   of   the
                                            Acquisition   Event  by  holders  of
                                            Stock for each  share of  Stock held
                                            immediately    prior     to      the
                                            consummation  of   the   Acquisition
                                            Event (and if holders were offered a
                                            choice of consideration, the type of
                                            consideration  chosen by the holders
                                            of a  majority  of  the  outstanding
                                            shares of Stock); provided, however,
                                            that  if  the consideration received
                                            as a result of the Acquisition Event
                                            is not solely  common stock  of  the
                                            acquiring  or succeeding corporation
                                            (or  an   affiliate   thereof),  the
                                            Company may, with the consent of the
                                            acquiring or succeeding corporation,
                                            provide  for the consideration to be
                                            received  upon   the   exercise   of
                                            Options to consist  solely of common
                                            stock of the acquiring or succeeding
                                            corporation   (or    an    affiliate
                                            thereof)  equivalent  in fair market
                                            value to the per share consideration
                                            received  by  holders of outstanding
                                            shares  of  Stock as a result of the
                                            Acquisition  Event.  Notwithstanding
                                            the  foregoing,  if the acquiring or
                                            succeeding   corporation    (or   an
                                            affiliate thereof) does not agree to
                                            assume,  or   substitute  for,  such
                                            Options, then the Plan Administrator
                                            shall, upon written  notice  to  the
                                            participants,  provide that all then
                                            unexercised   Options   will  become
                                            exercisable  in   full   as   of   a
                                            specified   time    prior   to   the
                                            Acquisition  Event (the  Board shall

                                       15
<PAGE>

                                            use its best  efforts to ensure that
                                            Option  holders  have  at  least  90
                                            calendar  days, and in no event less
                                            than 30 calendar  days, to  exercise
                                            their Options)  and  will  terminate
                                            immediately    prior     to      the
                                            consummation  of   such  Acquisition
                                            Event,   except    to   the   extent
                                            exercised by the participants before
                                            the consummation of such Acquisition
                                            Event;  provided,  however,  in  the
                                            event  of an Acquisition Event under
                                            the  terms of which holders of Stock
                                            will  receive   upon    consummation
                                            thereof  a  cash  payment  for  each
                                            share  of Stock surrendered pursuant
                                            to  such   Acquisition   Event  (the
                                            "Acquisition Price"), then the Board
                                            may   instead   provide   that   all
                                            outstanding  Options shall terminate
                                            upon     consummation     of    such
                                            Acquisition  Event   and  that  each
                                            participant  shall   receive,     in
                                            exchange  therefor,  a cash  payment
                                            equal to the  amount  (if any) by
                                            which  (A)   the  Acquisition  Price
                                            multiplied  by  the number of shares
                                            of Stock subject to such outstanding
                                            Options  (whether   or    not   then
                                            exercisable),   exceeds  (B)     the
                                            aggregate  exercise  price of   such
                                            Options.

                                    (B)     Change in Control  Event that is not
                                            an  Acquisition   Event.   Upon  the
                                            occurrence  of a Change  in  Control
                                            Event that does not also  constitute
                                            an  Acquisition  Event,  all Options
                                            then-outstanding shall automatically
                                            become  immediately  exercisable  in
                                            full.

                           (iii)    Effect on Other Awards

                                    (A)     Acquisition  Event  that  is  not  a
                                            Change in  Control  Event.  The Plan
                                            Administrator   shall   specify  the
                                            effect of an Acquisition  Event that
                                            is not a Change in Control  Event on
                                            any other  Award  granted  under the
                                            Plan  at the  time of the  grant  of
                                            such Award.

                                    (B)     Change in  Control  Event.  Upon the
                                            occurrence  of a Change  in  Control
                                            Event  (regardless  of whether  such
                                            event    also     constitutes     an
                                            Acquisition  Event),  except  to the
                                            extent specifically  provided to the
                                            contrary    in    the     instrument
                                            evidencing  any  other  Award or any
                                            other     agreement     between    a
                                            participant  and  the  Company,  all
                                            other     Awards     shall    become
                                            exercisable, realizable or vested in
                                            full,   or  shall  be  free  of  all
                                            conditions   or   restrictions,   as
                                            applicable to each such Award.

                                       16
<PAGE>

                           (iv)     Liquidation or Dissolution.  In the event of
                                    a proposed liquidation or dissolution of the
                                    Company, the Plan Administrator  shall  upon
                                    written  notice to the  participants provide
                                    that all then unexercised Options  will  (i)
                                    become  exercisable   in   full  as   of   a
                                    specified time prior to the effective   date
                                    of  such  liquidation  or  dissolution  (the
                                    Board shall use its best  efforts  to ensure
                                    that   Option   holders  have  at  least  90
                                    calendar days,  and in no event less than 30
                                    calendar days,  to exercise  their  Options)
                                    and  (ii)   terminate  effective  upon  such
                                    liquidation or dissolution,  except  to  the
                                    extent exercised before such effective date.
                                    The  Plan   Administrator   may  specify the
                                    effect  of  a liquidation or  dissolution on
                                    any Restricted  Stock Award or  other  Award
                                    granted  under  the  Plan at the time of the
                                    grant of such Award.

         Section 15.  Amendment and  Discontinuance.  The Board of Directors may
alter,  amend,  suspend or  discontinue  the Plan,  provided that no such action
shall deprive any person without such person's consent of any rights theretofore
granted pursuant hereto.

         Section 16. Compliance with Governmental  Regulations.  Notwithstanding
any provision of the Plan or the terms of any agreement entered into pursuant to
the Plan, the Company shall not be required to issue any shares  hereunder prior
to  registration  of the shares  subject to the Plan under the Securities Act of
1933 or the Act, if such registration  shall be necessary,  or before compliance
by the Company or any participant  with any other  provisions of either of those
acts or of  regulations  or rulings of the  Securities  and Exchange  Commission
thereunder,  or  before  compliance  with  other  federal  and  state  laws  and
regulations and rulings thereunder,  including the rules of AMEX, any applicable
exchange or of the NASDAQ Stock  Market.  The Company shall use its best efforts
to effect  such  registrations  and to comply  with such laws,  regulations  and
rulings  forthwith  upon advice by its  counsel  that any such  registration  or
compliance is necessary.

         Section 17. Compliance with Section 16. With respect to persons subject
to Section 16 of the Act,  transactions  under this Plan are  intended to comply
with all applicable conditions of Rule 16b-3 (or its successor rule and shall be
construed to the fullest extent possible in a manner consistent with this intent
). To the extent  that any Award  fails to so  comply,  it shall be deemed to be
modified to the extent  permitted by law and to the extent  deemed  advisable by
the Plan Administrator in order to comply with Rule 16b-3.

         Section 18. Participation by Foreign Nationals.  The Plan Administrator
may, in order to fulfill the purposes of the Plan and without amending the Plan,
modify grants to foreign  nationals or United States citizens employed abroad in
order to recognize differences in local law, tax policy or custom.

         Section  19.  Effective  Date of Plan.  The Plan  became  effective  on
September  4, 1998,  the date of approval  and adoption of the Plan by requisite
vote of the holders of the outstanding shares of Stock.

                                       172000-OP35

                                                              Frederick A. Moran
                                                              Optionee

                            VDC COMMUNICATIONS, INC.
                            ------------------------

                        INCENTIVE STOCK OPTION AGREEMENT

                       UNDER THE VDC COMMUNICATIONS, INC.

               1998 STOCK INCENTIVE PLAN, AS AMENDED (the "Plan")

                  This  Agreement  is  made  as  of  August 9, 2000, (the "Grant
Date") by and between VDC  Communications,  Inc.,  a Delaware  corporation  (the
"Corporation") and Frederick A. Moran (the "Optionee").

                  WHEREAS,  Optionee is an employee of the Corporation or one of
its  subsidiaries  and the  Corporation  considers it desirable  and in its best
interest that Optionee be given an inducement to acquire a proprietary  interest
in the  Corporation and an incentive to advance the interests of the Corporation
by granting  the  Optionee an option to purchase  shares of common  stock of the
Corporation (the "Common Stock");

                  NOW,  THEREFORE,  the parties hereto,  intending to be legally
bound,  hereby agree that as of the Grant Date,  the  Corporation  hereby grants
Optionee an option to purchase from it, upon the terms and  conditions set forth
in the Plan (a copy of which is attached hereto) and this Agreement, that number
of shares of the authorized and unissued  Common Stock of the  Corporation as is
set forth on Schedule A hereto.

                  1.       Terms of Stock Option.  The option to purchase Common
                           ---------------------
Stock  granted  herein is subject to the terms,  conditions,  and  covenants set
forth in the Plan as well as the following:

                           (a)      This option  shall  constitute  an Incentive
                                    Stock  Option  which is  intended to qualify
                                    under  Section 422 of the  Internal  Revenue
                                    Code of 1986, as amended;

                           (b)      The per share  exercise price for the shares
                                    subject to this option  shall be 110% of the
                                    Fair  Market  Value (as defined in the Plan)
                                    of the Common Stock on the Grant Date, which
                                    exercise  price is set forth on  Schedule  A
                                    hereto;

                                       1
<PAGE>

                           (c)      This option  shall vest in  accordance  with
                                    the vesting schedule set forth on Schedule A
                                    hereto; and

                           (d)      No portion of this  option may be  exercised
                                    more  than  five (5)  years  from the  Grant
                                    Date.

                  2.       Payment  of  Exercise  Price.   The  option   may  be
                           ----------------------------
exercised,  in part or in whole,  only by  written  request  to the  Corporation
accompanied by payment of the exercise price in full either: (i) in cash for the
shares  with  respect  to  which  it is  exercised;  (ii) by  delivering  to the
Corporation   a  notice  of  exercise  with  an   irrevocable   direction  to  a
broker-dealer  registered under the Securities Exchange Act of 1934, as amended,
to sell a  sufficient  portion  of the  shares  and  deliver  the sale  proceeds
directly to the Corporation to pay the exercise  price;  (iii) in the discretion
of  the  Plan  Administrator,   through  the  delivery  to  the  Corporation  of
previously-owned  shares of Common Stock  having an aggregate  Fair Market Value
equal to the option exercise price of the shares being purchased pursuant to the
exercise of the Option; provided, however, that shares of Common Stock delivered
in payment of the option  price must have been held by the Optionee for at least
six (6)  months in order to be  utilized  to pay the option  price;  (iv) in the
discretion  of the Plan  Administrator,  through an  election  to have shares of
Common Stock  otherwise  issuable to the  Optionee  withheld to pay the exercise
price  of such  Option;  or (v) in the  discretion  of the  Plan  Administrator,
through any combination of the payment procedures set forth in Subsections (i) -
(iv) of this paragraph.

                  3.       Miscellaneous.
                           -------------

                           (a)      This  Agreement and the options  represented
                                    hereby may not be assigned or transferred in
                                    any manner  except by will or by the laws of
                                    descent  and  distribution  or pursuant to a
                                    domestic relations order.

                           (b)      This   Agreement   will  be   governed   and
                                    interpreted  in accordance  with the laws of
                                    the  State  of   Connecticut,   and  may  be
                                    executed in more than one counterpart,  each
                                    of  which  shall   constitute   an  original
                                    document.

                           (c)      No  alterations,   amendments,   changes  or
                                    additions to this  Agreement will be binding
                                    upon  either  the  Corporation  or  Optionee
                                    unless reduced to writing and signed by both
                                    parties.

                           (d)      All  controversies  or claims arising out of
                                    this   Agreement   shall  be  determined  by
                                    binding   arbitration,   conducted   at  the
                                    Corporation's    offices    in    Greenwich,
                                    Connecticut,   or  at  such  other  location

                                       2
<PAGE>

                                    designated  by the  Corporation,  before the
                                    American Arbitration Association.

                           (e)      No    rule   of    construction    requiring
                                    interpretation  against the  drafting  party
                                    shall  apply to the  interpretation  of this
                                    Agreement.

                           (f)      If any  provision of this  Agreement is held
                                    to  be  invalid,  the  remaining  provisions
                                    shall remain in full force and effect.

                  In witness  whereof,  the parties have executed this Agreement
as of the Grant Date.

                                                VDC COMMUNICATIONS, INC.

                                                By:      /s/ Frederick A. Moran
                                                   -----------------------------
                                                         Frederick A. Moran
                                                         Chief Executive Officer

                                                OPTIONEE

                                                /s/ Frederick A. Moran
                                                --------------------------------
                                                Frederick A. Moran

                                       3
<PAGE>

                                                              Frederick A. Moran
                                                              Optionee

                                   Schedule A

1.  Grant Date:  August 9, 2000

2.  Number of Shares of Common Stock covered by the Option:  150,000

3.  Exercise  Price  (110%  of Fair Market Value  of Common Stock  on  the Grant
    Date):   $.825

4.  The Option shall vest in accordance with the following schedule:

         (i)      30,000 shares shall vest on the first anniversary of the Grant
                  Date, provided Optionee remains  continuously  employed by the
                  Corporation  or any of its  Subsidiaries  (as  defined  in the
                  Plan) from August 9, 2000 through August 8, 2001;

         (ii)     30,000  shares  shall  vest on the second  anniversary  of the
                  Grant Date, provided Optionee remains continuously employed by
                  the Corporation or any of its  Subsidiaries (as defined in the
                  Plan) from August 9, 2000 through August 8, 2002;

         (iii)    30,000 shares shall vest on the third anniversary of the Grant
                  Date, provided Optionee remains  continuously  employed by the
                  Corporation  or any of its  Subsidiaries  (as  defined  in the
                  Plan) from August 9, 2000 through August 8, 2003;

         (iv)     30,000  shares  shall  vest on the fourth  anniversary  of the
                  Grant Date, provided Optionee remains continuously employed by
                  the Corporation or any of its  Subsidiaries (as defined in the
                  Plan) from August 9, 2000 through August 8, 2004; and

         (v)      30,000 shares shall vest on the fifth anniversary of the Grant
                  Date, provided Optionee remains  continuously  employed by the
                  Corporation  or any of its  Subsidiaries  (as  defined  in the
                  Plan) from August 9, 2000 through August 8, 2005.

                                       4

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