Document:

TECH LABORATORIES, INC.
                    NOVEMBER 2000 INCENTIVE STOCK OPTION PLAN

1.   PURPOSE.

     The purpose of the November 2000  Incentive  Stock Option Plan (the "Plan")
is to provide an incentive to selected directors, officers and employees of Tech
Laboratories,   Inc.,  and  any   subsidiaries   of  Tech   Laboratories,   Inc.
(collectively, the "Company"), to acquire a proprietary interest in the Company,
to continue as directors,  officers and employees and to increase  their efforts
on behalf of the Company.

2.   THE PLAN.

     The Plan  provides  for the  grant of  Options  to  acquire  shares  of the
Company's common stock, par value $.01 (the "Stock").  Options granted under the
Plan are intended to qualify as incentive  stock options (the  "Incentive  Stock
Options" or "Options") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code").

3.   ADMINISTRATION.

     (a) The  Plan  shall  be  administered  by a  committee  (the  "Committee")
composed of one or more of the independent  members of the Board of Directors of
the Company (the  "Board") to operate and  administer  the Plan in its stead.  A
member of the Board  shall be  ineligible  to receive  an Option  under the Plan
unless he is an employee of the Company.

     (b) The Committee shall have plenary  authority in its discretion,  subject
only to the express provisions of the Plan and, in reference to the Options,  of
Code Section 422;

          (i) to select the eligible  persons who shall be granted  Options (the
     "Grantees"),  the number of Shares  subject to each Option and terms of the
     Option granted to each Grantee, provided that, in making its determination,
     the  Committee  shall  consider the position  and  responsibilities  of the
     employee,  the nature and value to the Company,  of his or her services and
     accomplishments,  the employee's present and potential  contribution to the
     success of the Company and any other  factors that the  Committee  may deem
     relevant.

          (ii) to determine the dates of the Option grants;

          (iii) to prescribe the form of the instruments evidencing Options;

          (iv) to  adopt,  amend  and  rescind  rules  and  regulations  for the
     administration of the Plan and for its own acts and proceedings;

          (v) to decide all questions and settle all  controversies and disputes
     of general applicability that may arise in connection with the Plan; and

          (vi) to amend certain terms of the Plan as provided in Section 9.

<PAGE>

All decisions,  determinations and interpretations with respect to the foregoing
matters  shall be made by the  Committee and shall be final and binding upon all
persons.

     (c) EXCULPATION.  No member of the Committee shall be personally liable for
monetary  damages  for any  action  taken or any  failure  to take any action in
connection with the  administration of the Plan or the granting of Options under
it unless such action or failure to take action constitutes self-dealing, wilful
misconduct  or  recklessness;  provided,  however,  that the  provisions of this
subsection  shall not apply to the  responsibility  or  liability  of a director
pursuant  to any  criminal  statute or to the  liability  of a director  for the
payment of taxes pursuant to local, state or federal law.

     (d) INDEMNIFICATION. Each member of the Committee shall be entitled without
further act on his part or her part to indemnity from the Company to the fullest
extent provided by applicable law and the Company's Certificate of Incorporation
or Bylaws in  connection  with or arising out of any action,  suit or proceeding
with respect to the  administration of the Plan or the granting of Options under
it in which he or she may be involved by reason of being or having been a member
of the Committee at the time of the action, suit or proceeding.

4.   EFFECTIVENESS AND TERMINATION OF THE PLAN.

     The Plan shall become  effective  as of November 14, 2000,  the date of its
adoption by the Board, provided that the Plan is approved by the stockholders of
the Company within one year of its adoption.  Any Option  outstanding  under the
Plan at the time of  termination  under  the Plan  shall  remain  in  effect  in
accordance  with its terms and  conditions and those of the Plan. The Plan shall
terminate on the earliest of:

          (a) November 14, 2010; or

          (b) the date when all shares of Stock  reserved for issuance under the
     Plan shall have been acquired through exercise of Options granted under the
     Plan; or

          (c) such earlier date as the Board or Committee may determine.

5.   THE STOCK.

     The aggregate  number of shares of Stock  issuable  under the Plan shall be
one hundred fifty thousand (150,000) shares or the number and kinds of shares of
capital  stock or other  securities  substituted  for the Stock as  provided  in
Section 8. The aggregate  number of shares of Stock  issuable under the Plan may
be set aside out of the authorized but unissued shares of Stock not reserved for
any other purpose or out of shares of Stock held in or acquired for the treasury
of the  Company.  All  shares  of Stock  subject  to an Option  that  terminates
unexercised for any reason may thereafter be subjected to a new Option under the
Plan.

6.   OPTION AGREEMENT.

     Each Grantee shall enter into a written  agreement with the Company setting
forth the terms and  conditions of the Option issued to the Grantee,  consistent
with the Plan.  The form of agreement to evidence  Options may be established at
any time or from time to time by the Committee. No Grantee

                                      -2-
<PAGE>

shall have rights in any Option unless and until a written  option  agreement is
entered into with the Company.

7.   TERMS AND CONDITIONS OF OPTIONS.

     Options may be granted by the  Committee  at any time and from time to time
prior to the termination of the Plan.  Except as hereinafter  provided,  Options
granted under the Plan shall be subject to the following terms and conditions:

     (a)  GRANTEES.  The  Grantees  shall  be  those  employees  of the  Company
(including officers and directors) and any subsidiaries of the Company, selected
by the Committee,  provided that no Incentive  Stock Options shall be granted to
(i) any person  owning Stock or other  capital  stock in the Company  possessing
more than 10% of the total combined voting power of all classes of capital stock
of the Company, unless such Grantee meets the requirements of 7(b) and 7(e); or,
(ii) any director who is not an employee.  The maximum  number of Options  which
may be granted to a Grantee  within a calendar year is fifty  thousand  (50,000)
shares of the Company's Stock.

     (b) PRICE.  The exercise  price of an Option shall be no less than the fair
market value of the Stock,  without regard to any  restriction,  at the time the
Option is granted.  If a Grantee owns more than 10% of the total combined voting
power of all  classes of stock of the  Company,  the share  price of any Options
granted to such individual  shall be 110% of the fair market value of the Stock.
The Committee shall  establish  procedures to determine the fair market value of
the Stock.

     (c) PAYMENT FOR STOCK.  The  exercise  price of an Option  shall be paid in
full at the time of the exercise in (i) cash, or (ii) by certified check payable
to the Company, or (iii) by other mode of payment as the Committee may approve.

     (d) LIMITATION.  Notwithstanding any provision of the Plan to the contrary,
an Option  shall not be treated as an  Incentive  Stock  Option to the extent to
which the aggregate  fair market value  (determined  as of the time an Incentive
Stock  Option is  granted)  of Stock  for  which  Incentive  Stock  Options  are
exercisable  for the first time buy a Grantee  during any calendar  year exceeds
$100,000.

     (e) DURATION AND EXERCISE OF OPTIONS. Options may be exercised for terms of
up to but not  exceeding  ten  years  from the  date of  grant.  Subject  to the
foregoing,  Options shall be  exercisable at the times and in the amounts (up to
the full amount  thereof)  determined  by the Board or  Committee at the time of
grant.  If an Option granted under the Plan is exercisable in  installments  the
Board or Committee shall determine what events,  if any, will make it subject to
acceleration.  If an Option is granted to an employee  who owns more than 10% of
the combined  voting  power of all classes of stock of the  Company,  the Option
must be exercised within 5 years.

     (f)  TERMINATION  OF  EMPLOYMENT.  Upon the  termination  of the  Grantee's
employment,  the right to exercise an Option shall be set forth in the agreement
entered into between the Company and the Grantee.

     (g)  TRANSFERABILITY  OF OPTION. No Option shall be transferable  except by
will or the laws of descent and  distribution.  An Option  shall be  exercisable
during the Grantee's lifetime only by the Grantee.

                                      -3-
<PAGE>

     (h)  MODIFICATION,  EXTENSION AND RENEWAL OF OPTIONS.  Subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
extend or renew  outstanding  Options  granted  under the  Plan,  or accept  the
surrender of outstanding  Options (to the extent not theretofore  exercised) and
authorize the granting of new Options in substitution  thereof.  Notwithstanding
the foregoing,  however, no modification of an Option shall, without the consent
of the  Grantee,  alter or impair  any  rights or  obligations  under any Option
theretofore  granted  under  the  Plan or  adversely  affect  the  status  of an
Incentive Stock Option.

     (i) OTHER TERMS AND  CONDITIONS.  Option  agreements  may contain any other
provision not inconsistent with the Plan that the Committee deems appropriate.

8.   ADJUSTMENT FOR CHANGES IN THE STOCK.

     (a) In the event the shares of Stock,  as presently  constituted,  shall be
changed  into or  exchanged  for a  different  number or kind of shares or other
securities  of  the  Company  (whether  by  reason  of  merger,   consolidation,
recapitalization,  reclassification, split, reverse split, combination of shares
or  otherwise),  then there shall be  substituted  for or added to each share of
Stock  theretofore  or  thereafter  subject  to an Option the number and kind of
shares of capital stock or other securities  into, which each outstanding  share
of Stock shall be changed,  or for which each such share shall be exchanged,  or
to which each such share  shall be  entitled,  as the case may be. The price and
other  terms of  outstanding  Options  shall  also be  appropriately  amended to
reflect the  foregoing  events.  In the event there shall be any other change in
the number or kind of outstanding  shares of the Stock,  or of any capital stock
or other securities into which the Stock shall have been changed or for which it
shall have been  exchanged,  if the  Committee  shall,  in its sole  discretion,
determine  that the  change  equitably  requires  an  adjustment  in any  Option
theretofore  granted or which may be granted  under the Plan,  then  adjustments
shall be made in accordance with its determination.

     (b) Fractional  shares resulting from any adjustment in Options pursuant to
this  Section 8 may be  settled  in cash or  otherwise  as the  Committee  shall
determine. Notice of any adjustment shall be given by the Company to each holder
of an Option that shall have been so adjusted,  and the  adjustment  (whether or
not notice is given)  shall be  effective  and binding  for all  purposes of the
plan.

     (c)  Notwithstanding  Section 8(a), the Committee  shall have the power, in
the event of the  disposition of all or  substantially  all of the assets of the
Company,  or the dissolution of the Company,  or the merger or  consolidation of
the Company,  or the making of a tender  offer to purchase all or a  substantial
portion of outstanding  Stock of the Company,  to amend all outstanding  Options
(upon  such  conditions  as it shall deem fit) to (i)  permit  the  exercise  of
Options  prior to the  effective  date of the  transaction  and to terminate all
unexercised  Options as of that date,  or (ii)  require  the  forfeiture  of all
Options, provided the Company pays to each Grantee the excess of the fair market
value of the Stock subject to the Option  (determined in accordance with Section
7(b)) over the exercise price of the Option,  or (iii) make any other provisions
that the Committee deems equitable.

9.   AMENDMENT OF THE PLAN.

     The  Committee  may amend the Plan,  may  correct  any defect or supply any
omission  or  reconcile  any  inconsistency  in the Plan or in any Option in the
manner and to the extent deemed  desirable to carry out the Plan without  action
on the part of the stockholders of the Company; provided,  however, that, except
as provided  in Section 8 and this  Section 9,  unless the  stockholders  of the
Company shall have first

                                      -4-
<PAGE>

approved  thereof  (i) the total  number of shares of Stock  subject to the Plan
shall not be increased,  (ii) no Option shall be exercisable more than ten years
after the date it is granted, (iii) the expiration date of the Plan shall not be
extended and (iv) no amendment  shall permit the exercise price of any Option to
be less than the fair market  value of the Stock at the time of grant,  increase
the  number  of  shares  of Stock  to be  received  on  exercise  of an  Option,
materially increase the benefits accruing to a Grantee under an Option or modify
the eligibility requirements for participation in the Plan.

10.  INTERPRETATION AND CONSTRUCTION. The interpretation and construction of any
provision of the Plan by the Committee  shall be final,  binding and  conclusive
for all purposes.

11.  APPLICATION OF FUNDS.

     The  proceeds  received by the Company  from the sale of Stock  pursuant to
this Plan will be used for general corporate purposes.

12.  NO OBLIGATION TO EXERCISE OPTION.

     The granting of an Option shall  impose no  obligation  upon the Grantee to
exercise an Option.

13.  PLAN NOT A CONTRACT OF EMPLOYMENT.

     The Plan is not a contract of  employment,  and the terms of  employment of
any Grantee shall not be affected in any way by the Plan or related  instruments
except as specifically provided therein. The establishment of the Plan shall not
be construed as  conferring  any legal rights upon any Grantee for a continuance
of employment; nor shall it interfere with the right of the Company to discharge
Grantee.

14.  EXPENSE OF THE PLAN.

     All of the expenses of administering the Plan shall be paid by the Company.

15.  COMPLIANCE WITH APPLICABLE LAW.

     Notwithstanding  anything herein to the contrary,  the Company shall not be
obligated  to cause to be issued or  delivered  any  certificates  for shares of
Stock  issuable  upon  exercise  of an Option  unless  and until the  Company is
advised by its counsel that the issuance and delivery of the  certificates is in
compliance with all applicable laws,  regulations of government  authorities and
the  requirements  of any exchange  upon which  shares of stock are traded.  The
Company  shall in no event be obligated to register any  securities  pursuant to
the Securities Act of 1933 (as now in effect or as hereafter amended) or to take
any other action in order to cause the issuance and delivery of  certificates to
comply with any of those laws,  regulations or  requirements.  The Committee may
require,  as a condition of the issuance  and  delivery of  certificates  and in
order to ensure compliance with those laws,  regulations and requirements,  that
the Grantee make such covenants,  agreements and representations as the Board or
Committee,  in its sole  discretion,  deems necessary or desirable.  Each Option
shall be subject to the further  requirement  that if at any time the  Committee
shall  determine  in its  discretion  that the listing or  qualification  of the
Shares  of  Stock  subject  to  the  Option,   under  any  securities   exchange
requirements  or under any  applicable  law,  or the  consent or approval of any
regulatory  body, is necessary in connection  with the granting of the Option or
the issuance of stock thereunder, the Option may not be exercised in whole or in
part unless

                                      -5-
<PAGE>

the  listing,  qualification,  consent or approval  shall have been  effected or
obtained free of any conditions not acceptable to the Committee.

16.  GOVERNING LAW.

     Except to the extent preempted by federal law, this Plan shall be construed
and enforced in accordance  with,  and governed by, the laws of the State of New
Jersey.

                                      -6-TECH LABORATORIES, INC.
              NOVEMBER 2000 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

1.   PURPOSE.

     The purpose of the Tech  Laboratories,  Inc. ("Tech Labs" or the "Company")
November  2000 Non-  employee  Director  Stock  Option  Plan (the  "Plan") is to
provide for the grant of stock options as an incentive to selected  non-employee
directors  of  Tech  Labs  and any  Subsidiary  of the  Company,  to  acquire  a
proprietary  interest in the Company, to continue as directors,  and to increase
their efforts on behalf of the Company.

2.   THE PLAN.

     The Plan  provides  for the  grant of  options  to  acquire  shares  of the
Company's common stock, par value $.01 (the "Stock").  Options granted under the
Plan are not intended to qualify as incentive  stock options  within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended.

3.   DEFINITIONS.

     As used in the Plan, the following  terms shall have the meanings set forth
below:

     (a) "Board " shall mean the Board of Directors of the Company.

     (b) "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time, and any regulations promulgated thereunder.

     (c)  "Company"  shall mean Tech Labs,  a New  Jersey  corporation,  and any
successor corporation.

     (d)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (e) "Fair Market Value" means,  as of any date, the value of Stock or other
property determined as follows:

          (i) If the Stock is  listed on any  established  stock  exchange  or a
     national market system,  including  without  limitation the Bulletin Board,
     the  Nasdaq  National  Market or The Nasdaq  SmallCap  Market of The Nasdaq
     Stock  Market,  its Fair Market Value shall be the closing  sales price for
     such stock (or the  closing  bid, if no sales were  reported)  as quoted on
     such  exchange or system for the last market  trading day prior to the time
     of determination;

          (ii) If the  Stock is  regularly  quoted  by a  recognized  securities
     dealer but selling prices are not reported,  its Fair Market Value shall be
     the mean  between  the high bid and low asked  prices  for the Stock on the
     last market trading day prior to the day of determination; or

     (f) "Grantee" shall mean a non-employee  director of the Company to whom an
Option has been granted under the terms of the Plan.

<PAGE>

     (g)  "Nonemployee  Director"  shall mean a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3.

     (h)  "Option"  shall mean the option to  purchase  the common  stock of the
Company pursuant to this Plan.

     (i) "Option  Agreement" shall mean a written  agreement between the Company
and a Grantee as described in Section 6.

     (j)  "Outside  Director"  shall mean a director  of the  Company  who is an
"outside director" within the meaning of Section 162(m) of the Code.

     (k)  "Plan"  shall  mean this Tech Labs 2000  Non-employee  Director  Stock
Option Plan, as amended from time to time.

     (l) "Rule 16b-3" shall mean Rule 16b-3  promulgated  by the  Securities and
Exchange  Commission under the Securities  Exchange Act of 1934, as amended,  or
any successor rule or regulation.

     (m)  "Stock"  shall mean  shares of Common  Stock,  $.01 par value,  of the
Company or such other  securities  or property as may become  subject to Options
pursuant to an adjustment made under Section 8.

     (n) "Subsidiary"  shall mean any corporation (other than the Company) in an
unbroken  chain  of  corporations  beginning  with  the  Company  if each of the
corporations  other than the last  corporation  in the unbroken  chain owns more
than 50% of the total  combined  voting  power of all classes of stock in one of
the other corporations in such chain.

4.   ADMINISTRATION.

     (a) The Plan shall be administered the Board.

     (b) The Board shall have plenary authority in its discretion,  subject only
to the express provisions of the Plan:

          (i) to select the  Grantees,  the number of shares of Stock subject to
     each  Option and terms of the Option  granted  to each  Grantee  (including
     without limitation the period during which such Option can be exercised and
     any restrictions on exercise),  provided that, in making its determination,
     the Committee shall consider the value and accomplishment of the individual
     to the Company, the individual's present and potential  contribution to the
     success of the Company,  and any other  factors that the Committee may deem
     relevant.

          (ii) to determine the dates of the Option grants;

          (iii) to prescribe the form of the Option Agreements;

          (iv) to  adopt,  amend  and  rescind  rules  and  regulations  for the
     administration of the Plan and for its own acts and proceedings;

                                      -2-
<PAGE>

          (v) to decide all questions and settle all  controversies and disputes
     of general applicability that may arise in connection with the Plan; and

          (vi) to modify or amend any outstanding  Option as provided in Section
     8(h).

     All  decisions,  determinations  and  interpretations  with  respect to the
foregoing matters shall be made by the Board and shall be final and binding upon
all persons.

     (c)  EXCULPATION.  No member of the Board  shall be  personally  liable for
monetary  damages  for any  action  taken or any  failure  to take any action in
connection with the  administration of the Plan or the granting of Options under
it unless  such  action or  failure  to take  action  constitutes  self-dealing,
willful misconduct or recklessness;  provided,  however,  that the provisions of
this subsection shall not apply to the responsibility or liability of a director
pursuant  to any  criminal  statute or to the  liability  of a director  for the
payment of taxes pursuant to local, state or federal law.

     (d)  INDEMNIFICATION.  Each member of the Board  shall be entitled  without
further act on his part or her part to indemnity from the Company to the fullest
extent provided by applicable law and the Company's Certificate of Incorporation
or Bylaws in  connection  with or arising out of any action,  suit or proceeding
with respect to the  administration of the Plan or the granting of Options under
it in which he or she may be involved by reason of being or having been a member
of the Board at the time of the action, suit or proceeding.

5.   EFFECTIVENESS AND TERMINATION OF THE PLAN.

     The Plan shall become  effective  as of November 14, 2000,  the date of its
adoption by the Board, provided that the Plan is approved by the stockholders of
the Company within one year of its adoption.  Any Option outstanding at the time
of termination  of the Plan shall remain in effect in accordance  with its terms
and conditions  and those of the Plan. The Plan shall  terminate on the earliest
of:

     (a) November 14, 2010; or

     (b) the date when all shares of Stock reserved for issuance under Section 6
of the Plan shall have been acquired  through  exercise of Options granted under
the Plan; or

     (c) such earlier date as the Board may determine.

6.   THE STOCK.

     The aggregate  number of shares of Stock  issuable  under the Plan shall be
one  hundred  thousand  (100,000)  shares or the  number  and kinds of shares of
capital  stock or other  securities  substituted  for the Stock as  provided  in
Section 9. The aggregate  number of shares of Stock  issuable under the Plan may
be set aside out of the authorized but unissued shares of Stock not reserved for
any  other  purpose,  or out of  shares  of Stock  held in or  acquired  for the
treasury  of the  Company.  All  shares  of  Stock  subject  to an  Option  that
terminates  unexercised  for any reason may  thereafter  be  subjected  to a new
Option under the Plan.

                                      -3-
<PAGE>

7.   OPTION AGREEMENT.

     Each Grantee shall enter into an Option  Agreement with the Company setting
forth the terms and  conditions of the Option issued to the Grantee,  consistent
with the Plan.  The form of Option  Agreement may be  established at any time or
from time to time by the  Committee.  No Grantee shall have rights in any Option
unless and until an Option Agreement is entered into with the Company.

8.   TERMS AND CONDITIONS OF OPTIONS.

     Options may be granted by the  Committee  at any time and from time to time
prior to the termination of the Plan.  Except as hereinafter  provided,  Options
granted under the Plan shall be subject to the following terms and conditions:

     (a) GRANTEES.  The Grantees  shall be those  non-employee  directors of the
Company or its  Subsidiaries  selected by the  Committee.  The maximum number of
shares of Stock  which may be issued  pursuant  to Options  granted to a Grantee
within a calendar year is 50,000.

     (b) PRICE.  The  exercise  price of an Option shall be set by the Board but
shall be no less than the Fair Market  Value of the Stock at the time the Option
is granted.

     (c) PAYMENT FOR STOCK.  The  exercise  price of an Option  shall be paid in
full at the time of the exercise in (i) cash, or (ii) by certified check payable
to the Company, or (iii) by other mode of payment as the Committee may approve.

     (d) DURATION AND EXERCISE OF OPTIONS. Options may be exercised for terms of
up to but not  exceeding  ten  years  from the  date of  grant.  Subject  to the
foregoing,  Options shall be  exercisable at the times and in the amounts (up to
the full amount thereof) determined by the Committee at the time of grant. If an
Option granted under the Plan is exercisable in installments the Committee shall
determine what events, if any, will make it subject to acceleration.

     (e) STATUS OF NON-EMPLOYEE DIRECTOR.  Upon the happening of any event which
causes  Grantee to lose status as a non-employee  director,  Options held by the
Grantee may only be exercised  to the extent and during the period,  if any, set
forth in the Option Agreement.

     (f)  TRANSFERABILITY  OF OPTION. No Option shall be transferable  except by
will or the laws of descent and  distribution.  An Option  shall be  exercisable
during the Grantee's lifetime only by the Grantee.

     (g)  MODIFICATION,  EXTENSION AND RENEWAL OF OPTIONS.  Subject to the terms
and  conditions  and within the  limitations  of the Plan, the Board may modify,
extend or renew  outstanding  Options  granted  under the  Plan,  or accept  the
surrender of outstanding  options (to the extent not theretofore  exercised) and
authorize the granting of new Options in substitution  thereof.  Notwithstanding
the foregoing,  however, no modification of an Option shall, without the consent
of the  Grantee,  alter or impair  any  rights or  obligations  under any Option
theretofore granted under the Plan.

     (h) OTHER TERMS AND  CONDITIONS.  Option  Agreements  may contain any other
provision not inconsistent with the Plan that the Board deems appropriate.

                                      -4-
<PAGE>

9.   ADJUSTMENT FOR CHANGES IN THE STOCK.

     (a) In the event the shares of Stock,  as presently  constituted,  shall be
changed  into or  exchanged  for a  different  number or kind of shares or other
securities  of  the  Company  (whether  by  reason  of  merger,   consolidation,
recapitalization,  reclassification, split, reverse split, combination of shares
or  otherwise),  then there shall be  substituted  for or added to each share of
Stock  theretofore  or  thereafter  subject  to an Option the number and kind of
shares of capital stock or other securities  into, which each outstanding  share
of Stock shall be changed,  or for which each such share shall be exchanged,  or
to which each such share  shall be  entitled,  as the case may be. The price and
other  terms of  outstanding  Options  shall  also be  appropriately  amended to
reflect the  foregoing  events.  In the event there shall be any other change in
the number or kind of outstanding  shares of the Stock,  or of any capital stock
or other securities into which the Stock shall have been changed or for which it
shall have been exchanged, if the Board shall, in its sole discretion, determine
that the change  equitably  requires  an  adjustment  in any Option  theretofore
granted or which may be granted under the Plan, then  adjustments  shall be made
in accordance with its determination.

     (b) Fractional  shares resulting from any adjustment in Options pursuant to
this Section 9 may be settled in cash or otherwise as the Board shall determine.
Notice of any  adjustment  shall be given by the  Company  to each  holder of an
Option  that shall have been so  adjusted,  and the  adjustment  (whether or not
notice is given) shall be effective and binding for all purposes of the plan.

     (c)  Notwithstanding  Section 9(a), the Board shall have the power,  in the
event  of the  disposition  of all or  substantially  all of the  assets  of the
Company,  or the dissolution of the Company,  or the merger or  consolidation of
the Company,  or the making of a tender  offer to purchase all or a  substantial
portion of outstanding  Stock of the Company,  to amend all outstanding  Options
(upon  such  conditions  as it shall deem fit) to (i)  permit  the  exercise  of
Options  prior to the  effective  date of the  transaction  and to terminate all
unexercised  Options as of that date,  or (ii)  require  the  forfeiture  of all
Options, provided the Company pays to each Grantee the excess of the Fair Market
Value of the Stock subject to the Option over the exercise  price of the Option,
or (iii) make any other provisions that the Board deems equitable.

10.  AMENDMENT OF THE PLAN.

     The Board may amend the Plan, may correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any Option in the manner and to
the extent deemed  desirable to carry out the Plan without action on the part of
the stockholders of the Company; provided,  however, that, except as provided in
Section 9 and this Section 10, unless the stockholders of the Company shall have
first  approved  thereof (i) the total number of shares of Stock  subject to the
Plan shall not be increased,  (ii) no Option shall be exercisable  more than ten
years after the date it is granted,  (iii) the expiration date of the Plan shall
not be extended  and (iv) no amendment  shall  permit the exercise  price of any
Option to be less than the Fair Market  Value of the Stock at the time of grant,
increase  the number of shares of Stock to be received on exercise of an Option,
materially increase the benefits accruing to a Grantee under an Option or modify
the eligibility requirements for participation in the Plan.

11.  INTERPRETATION AND CONSTRUCTION.

     The  interpretation  and  construction  of any provision of the Plan by the
Board shall be final, binding and conclusive for all purposes.

                                      -5-
<PAGE>

12.  APPLICATION OF FUNDS.

     The  proceeds  received by the Company  from the sale of Stock  pursuant to
this Plan will be used for general corporate purposes.

13.  NO OBLIGATION TO EXERCISE OPTION.

     The granting of an Option shall  impose no  obligation  upon the Grantee to
exercise an Option.

14.  NO RIGHT TO CONTINUE AS DIRECTOR.

     Neither the Plan nor any Option  Agreement shall constitute an agreement or
understanding, expressed or implied, that the Company will retain a Grantee as a
Director for any period of time.

15.  EXPENSE OF THE PLAN.

     All of the expenses of administering the Plan shall be paid by the Company.

16.  COMPLIANCE WITH APPLICABLE LAW.

     Notwithstanding  anything herein to the contrary,  the Company shall not be
obligated  to cause to be issued or  delivered  any  certificates  for shares of
Stock  issuable  upon  exercise  of an Option  unless  and until the  Company is
advised by its counsel that the issuance and delivery of the  certificates is in
compliance with all applicable laws,  regulations of government  authorities and
the  requirements  of any exchange  upon which  shares of Stock are traded.  The
Company  shall in no event be obligated to register any  securities  pursuant to
the Securities Act of 1933 (as now in effect or as hereafter amended) or to take
any other action in order to cause the issuance and delivery of  certificates to
comply with any of those laws,  regulations or  requirements.  The Committee may
require,  as a condition of the issuance  and  delivery of  certificates  and in
order to ensure compliance with those laws,  regulations and requirements,  that
the  Grantee  make  such  covenants,   agreements  and  representations  as  the
Committee,  in its sole  discretion,  deems necessary or desirable.  Each Option
shall be subject to the further  requirement  that if at any time the  Committee
shall  determine  in its  discretion  that the listing or  qualification  of the
shares  of  Stock  subject  to  the  Option,   under  any  securities   exchange
requirements  or under any  applicable  law,  or the  consent or approval of any
regulatory  body, is necessary in connection  with the granting of the Option or
the issuance of Stock thereunder, the Option may not be exercised in whole or in
part unless the  listing,  qualification,  consent or  approval  shall have been
effected or obtained free of any conditions not acceptable to the Committee.

17.  GOVERNING LAW.

     Except to the extent preempted by federal law, this Plan shall be construed
and enforced in accordance  with,  and governed by, the laws of the State of New
Jersey.

                                      -6-

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