Document:

FULLCOMM TECHNOLOGIES, INC.
                         (formerly Contessa Corporation)

                                 2000 STOCK PLAN

     1.   PURPOSES OF THE PLAN.   The purposes of this Stock Plan are to attract
          --------------------
and  retain  the  best   available   personnel  for  positions  of   substantial
responsibility,  to provide  additional  incentive  to  Employees,  Non-Employee
members  of  the  Board  and  Consultants   (sometimes  referred  to  herein  as
"Participants")  of the Company and its  Subsidiaries and to promote the success
of the Company's business.

     2.   CERTAIN  DEFINITIONS.  As used herein, the following definitions shall
          --------------------
apply:

          (a)  "Award" or  "Awards,"  except  where  referring  to a  particular
category  of grant  under the  Plan,  shall  include  Incentive  Stock  Options,
Nonstatutory Stock Options, Restricted Stock Awards and Stock Awards.

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

          (c)  "Code"  means the  Internal  Revenue  Code of 1986,  as  amended,
including any successor law thereto.

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

          (e)  "Common Stock"  means the Common  Stock,  $.01 par value,  of the
Company.

          (f)  "Company"   means   Fullcomm   Technologies,  Inc.,  a   Delaware
corporation.

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

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

          (i)  "Employee"  means any person,  including  officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company.

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

<PAGE>

          (k)  "Fair Market Value" means: (i) if the Common Stock is admitted to
quotation on the National  Association of Securities Dealers Automated Quotation
System ("NASDAQ"),  the Fair Market Value on any given date shall be the average
of the highest bid and lowest asked prices of the Common 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;  or (ii) if the
Common Stock is admitted to trading on a United  States  securities  exchange or
the NASDAQ  National  Market System,  the Fair Market Value on any date shall be
the closing  price  reported for the Common 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;  (iii)  notwithstanding  the
foregoing,  the Fair Market Value of the Common Stock on the  effective  date of
the Company's  Initial Public Offering shall be the offering price to the public
of the Common  Stock on such  date;  and (iv) in the  absence of an  established
market for the Common  Stock,  the Fair Market Value thereof shall be determined
in good faith by the Plan Administrator.

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

          (m)  "Initial Public  Offering"  means the first  underwritten  public
offering  pursuant to an effective  registration  statement under the Securities
Act of 1933, as amended,  covering the offer and sale of the Common Stock to the
public.

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

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

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

          (q)  "Optionee" means an Employee, Consultant or Non-Employee Director
who receives an Option.

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

          (s)  "Plan" means this 2000 Stock Plan.

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

          (u)  "Restricted Stock" means shares of Common Stock acquired pursuant
to a Restricted Stock Award under Section 12 below.

          (v)  "Restricted  Stock  Award"  means any Award  granted  pursuant to
Section 12 of the Plan.

          (w) "Share" means a share of the Common Stock, as may be adjusted from
time to time in accordance with Section 15 of the Plan.

                                      -2-
<PAGE>

          (x) "Stock  Award" means any award  granted  pursuant to Section 13 of
the Plan.

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

          (z)  "Termination  for Cause" shall include,  but not be limited to, a
finding  by the  Board of the  Participant's:  (i)  performance  of duties in an
incompetent  manner;  (ii)  commission  of any  act of  fraud,  insubordination,
misappropriation  or personal dishonesty relating to or involving the Company in
any  material  way;  (iii)  gross  negligence;  (iv)  violation  of any  express
direction  of the Company or any  material  violation  of any rule,  regulation,
policy  or plan  established  by the  Company  from time to time  regarding  the
conduct of its employees or its business,  if such  violation is not remedied by
the  Participant  within thirty (30) days of receiving  notice of such violation
from the Company;  (v) violation of any obligation of  Participant's  consulting
relationship  or  Continuous  Status as an  Employee  with the  Company  that is
demonstrably  willful  and  deliberate  on  the  Participant's  part  and is not
remedied by the Participant  within thirty (30) days after  receiving  notice of
such  violation  from  the  Company;  (vi)  disclosure  or use  of  confidential
information  of the Company,  other than as required in the  performance  of the
Participant's  duties;  (vii)  actions  that are  clearly  contrary  to the best
interest of the Company;  (viii) conviction of a crime  constituting a felony or
any other crime involving moral turpitude, or no conviction, but the substantial
weight of credible evidence  indicates that the Participant has committed such a
crime;  or (ix) the  Participant's  use of  alcohol or any  unlawful  controlled
substance  to  an  extent  that  it  interferes  with  the  performance  of  the
Participant's duties.

     3.   STOCK SUBJECT TO THE PLAN.   Subject to the  provisions of  Section 15
          -------------------------
of the Plan,  the initial  maximum  number of shares of Common Stock that may be
issued  under  the  Plan  shall be one  million  (1,000,000)  shares;  provided,
                                                                       --------
however,  that the  maximum  number of  shares  available  under the Plan  shall
-------
automatically  be increased to an amount  equal to twenty  percent  (20%) of the
shares of Common Stock outstanding on any December 31, beginning on December 31,
2000; and provided,  further, that the foregoing formula shall never result in a
decrease in the maximum number of shares of Common Stock  available for issuance
under the Plan. For purposes of the foregoing  limitation,  the shares of Common
Stock  underlying  any Awards which are forfeited,  canceled,  reacquired by the
Company,  satisfied without the issuance of Common Stock or otherwise terminated
(other than by  exercise)  shall be added back to the number of shares of Common
Stock available for issuance under the Plan.  Notwithstanding the foregoing: (i)
no more than one million  (1,000,000) shares shall be available for the award of
Incentive Stock Options; and (ii) on and after the date that the Plan is subject
to Section 162(m) of the Code,  Options with respect to no more than two hundred
fifty  thousand  (250,000)  shares of Common  Stock  may be  granted  to any one
individual  Participant during any one (1) calendar year period. Common Stock to
be issued under the Plan may be either  authorized and unissued shares or shares
held in treasury by the Company.

                                      -3-
<PAGE>

     4.   ADMINISTRATION  OF THE  PLAN.   The  Plan  shall be  administered  by:
          ----------------------------
(i) the full Board;  or (ii) a committee  of the Board  comprised of two or more
"Non-Employee  Directors"  within the  meaning of Rule  16b-3(b)(3)  promulgated
under  the  Exchange  Act.  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 Common  Stock  to be covered by
               any Award;

          (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 Options may be exercised;
               and

          (h)  determine at any time  whether,  to what  extent,  and under what
               circumstances Common 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.

     5.  DELEGATION OF AUTHORITY TO GRANT AWARDS. The Plan Administrator, in its
         ---------------------------------------
discretion,  may delegate to the Chief  Executive  Officer 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 Chief
Executive Officer that were consistent with the terms of the Plan.

                                      -4-
<PAGE>

     6.   ELIGIBILITY.
          -----------

          (a)  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.

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

      7.  STOCK OPTIONS.
          -------------

          (a)  Options granted pursuant to the Plan may be either  Options which
are Incentive  Stock Options or  Nonstatutory  Stock  Options.  Incentive  Stock
Options and Nonstatutory  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  Nonstatutory  Stock  Options;  provided,  however,  that:  (i)
                                                 --------   -------
Incentive  Stock  Options may be granted only to Employees of the Company or any
Subsidiary;  and (ii) no  Incentive  Stock Option may be granted  following  the
tenth (10th)  anniversary  of the effective  date of the Plan. The provisions of
the Plan and any 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.

          (b)  To the extent that Options  designated as Incentive Stock Options
(under all plans of the Company or any Parent or Subsidiary)  become exercisable
by a  Participant  for the first time during any calendar  year for Common Stock
having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the  portion of such  Options  which  exceeds  such  amount  shall be treated as
Nonstatutory  Stock Options.  For purposes of this Section 7, Options designated
as  Incentive  Stock  Options  shall be taken into account in the order in which
they were granted, and the Fair Market Value of Common Stock shall be determined
as of the time the Option with respect to such Common  Stock is granted.  If the
Code is amended to provide  for a  different  limitation  from that set forth in
this Section 7, such different  limitation shall be deemed  incorporated  herein
effective as of the amendment  date and with respect to such Options as required
or  permitted  by such  amendment  to the Code.  If an Option is  treated  as an
Incentive  Stock  Option in part and as a  Nonstatutory  Stock Option in part by
reason  of the  limitation  set forth in this  Section  7, the  Participant  may
designate  which portion of such Option the  participant is  exercising.  In the
absence of such  designation,  the Participant shall be deemed to have exercised
the Incentive  Stock Option portion of the Option first.  Separate  certificates
representing each such portion shall be issued upon the exercise of the Option.

     8.   TERM OF PLAN.  The  Plan  shall  become  effective  on  June 20, 2000,
          ------------
provided the Plan has been  previously  adopted by the Board and approved by the
shareholders  of the Company as  described  in Section 22 of the Plan.  The Plan
shall remain in effect until terminated under Section 18 of the Plan.

                                      -5-
<PAGE>

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

     10.  OPTION EXERCISE PRICE AND CONSIDERATION.
          ---------------------------------------

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

               (i)  In the case of an Incentive Stock Option

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

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

               (ii) In the  case of a  Nonstatutory  Stock Option granted to any
     person,  the per Share  exercise  price  shall be no less than  eighty-five
     percent (85%) of the Fair Market Value per Share on the date of grant.

          (b)  The Option exercise price of each share  purchased pursuant to an
Option shall be paid in full at the time of each exercise of the Option:  (i) in
cash; (ii) by check; (iii) by cash equivalent; (iv) by delivering to the Company
a notice of exercise with an irrevocable direction to a broker-dealer registered
under the Exchange  Act to sell a  sufficient  portion of the shares and deliver
the sale proceeds  directly to the Company to pay the exercise price; (v) 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 exercise price must have been held by the  Participant  for at
least six (6) months in order to be utilized to pay the exercise  price; or (vi)
in the  discretion of the Plan  Administrator,  through any  combination  of the
foregoing methods of payment.

                                      -6-
<PAGE>

     11.  EXERCISE OF OPTION.
          ------------------

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

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

               An Option shall be deemed to be exercised  when written notice of
such exercise has been given to the Company in accordance  with the terms of the
Option by the person  entitled to exercise  the Option and full  payment for the
Shares with  respect to which the Option is exercised  has been  received by the
Company  through a method of payment  allowable under Section 10(b) of the Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued)  such stock  certificate  promptly  upon  exercise of the Option.  No
adjustment  will be made for a dividend or other right for which the record date
is prior to the date the stock  certificate  is issued,  except as  provided  in
Section 15 of the Plan.

          (b)  Termination  of Employment.   Except as set  forth below,  in the
               --------------------------
event  of  termination  of an  Optionee's  Continuous  Status  as  an  Employee,
consulting  relationship  or  Director  status with the Company (as the case may
be),  such  Optionee may, but only within ninety (90) days (or such other period
of time as is determined by the Board, with such determination in the case of an
Incentive  Stock  Option  being  made at the time of grant of the Option and not
exceeding  ninety (90) days) after the date of such termination (but in no event
later than the  expiration  date of the term of such  Option as set forth in the
Option  Agreement),  exercise his or her Option to the extent that  Optionee was
entitled  to  exercise  it at the date of such  termination.  To the extent that
Optionee  was  not  entitled  to  exercise  the  Option  at  the  date  of  such
termination,  or if  Optionee  does not  exercise  such  Option to the extent so
entitled within the time specified herein, the Option shall terminate.

          (c)  Disability  of  Optionee.    Notwithstanding  the  provisions  of
               ------------------------
Section 11(b) above,  in the event of  termination  of an Optionee's  Continuous
Status as an Employee,  consulting  relationship or Director status (as the case
may be) as a result of his or her total and permanent  disability (as defined in
Section 22(e)(3) of the Code),  Optionee may, but only within twelve (12) months
from the date of such  termination  (but in no event  later than the  expiration
date of the term of such Option as set forth in the Option Agreement),  exercise
the Option to the extent the Optionee was  otherwise  entitled to exercise it at
the date of such  termination.  To the extent that  Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such  Option to the extent so entitled  within the time  specified  herein,  the
Option shall terminate.

                                      -7-
<PAGE>

          (d)  Death of Optionee.
               -----------------

               (i)  In the event of the death of an Optionee  during the term of
Optionee's Continuous Status as an Employee, consulting relationship or Director
status with the Company (as the case may be),  the Option may be  exercised,  at
any time within twelve (12) months  following the date of death (but in no event
later than the  expiration  date of the term of such  Option as set forth in the
Option  Agreement),  by the  Optionee's  estate or by a person who  acquired the
right to exercise the Option by bequest or  inheritance,  but only to the extent
the Optionee  was  entitled to exercise the Option at the date of death.  To the
extent that  Optionee  was not  entitled  to exercise  the Option at the date of
death, or if the Option is not exercised by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or  inheritance  to the
extent so entitled within the time specified herein, the Option shall terminate.

               (ii) In the  event of the  death of  an  Optionee  within  thirty
(30) days after the termination of Optionee's  Continuous Status as an Employee,
consulting relationship or Director status with the Company (as the case may be)
pursuant to Section 11(b) above, the Option may be exercised, at any time within
six (6)  months  following  the date of death  (but in no event  later  than the
expiration  date  of the  term  of  such  Option  as  set  forth  in the  Option
Agreement),  by the  Optionee's  estate or by a person who acquired the right to
exercise  the  Option by  bequest  or  inheritance,  but only to the  extent the
Optionee was entitled to exercise the Option at the date of death. To the extent
that  Optionee was not entitled to exercise the Option at the date of death,  or
if the  Option is not  exercised  by the  Optionee's  estate or by a person  who
acquired  the right to  exercise  the Option by bequest  or  inheritance  to the
extent so entitled within the time specified herein, the Option shall terminate.

          (e)  Termination  for  Cause  or  Post-Termination  Relationship  with
               -----------------------------------------------------------------
Competing  Business.  Notwithstanding  the provisions of Section 11(b) above, in
-------------------
the event of "Termination  for Cause" of an Optionee's  Continuous  Status as an
Employee,  consulting  relationship  or Director status with the Company (as the
case may be) or in the event that such  Optionee  within the option term becomes
an employee, consultant or director of a Competing Business (as defined herein),
any Option held by the Optionee,  whether  vested or unvested,  shall  forthwith
terminate.  In  addition to the  immediate  forfeiture  of all Options  upon the
occurrence of the events  specified in the preceding  sentence,  Optionee  shall
automatically  forfeit all shares  underlying any exercised portion of an Option
for which the Company has not yet delivered the share certificates,  upon refund
by the Company of the exercise  price paid by the Optionee for such Shares.  For
purposes  of this Plan,  the term  "Competing  Business"  shall mean any person,
corporation or other entity engaged in the business of: (i) providing  strategic
Internet  consulting  services,  interactive  Internet  solutions,   application
management  services  and  management  consulting  services;  or (ii) selling or
attempting  to sell any  product or  service  which is the same as or similar to
products  or  services  sold by the  Company  within  the  last  year  prior  to
termination  of  such  Participant's  employment,   consulting  relationship  or
Director status, as the case may be, hereunder.

                                      -8-
<PAGE>

     12.  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 Common Stock
subject  to such  restrictions  and  conditions  as the Plan  Administrator  may
determine at the time of grant. 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 Common 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
                                             --------   -------
Common Stock  subject to  Restricted  Stock Awards that have not vested shall be
subject to the restrictions on transferability described in Section 12(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 12(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 Common 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.

     13.  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 Company or its Subsidiaries,
pursuant to which such individual may receive shares of Common 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.

     14.  WITHHOLDING TAX OBLIGATIONS.
          ---------------------------

          (a)  Whenever  Shares are to be issued  under the  Plan,  the  Company
shall  have the right to  require  the  Participant  to remit to the  Company an
amount sufficient to satisfy applicable federal, state and local tax withholding
requirements  prior to the  delivery of any  certificate  for Shares;  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 14 shall

                                      -9-
<PAGE>

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 (2) years after the Option was granted
or one (1) 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 combination of the procedures set forth in subsections (i) and (ii) of
this Section 14(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 Nonstatutory  Stock Option, the receipt
of a Restricted Stock Award or Stock 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  issued 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  14(c) must be in writing and  delivered to the Company prior to the Tax
Date.

     15.  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 Common 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 Common Stock or other securities, the
Plan Administrator shall make an appropriate or proportionate adjustment in: (i)
the number of 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  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 Options remain exercisable;  and (iv) the maximum

                                      -10-
<PAGE>

number of shares that may be issued under the Plan, the maximum number of shares
that are  available  for the award of  Incentive  Stock  Options and the maximum
number of shares that may be granted to any one  individual  Participant  during
any one (1)  calendar  year period,  each as set forth in Section 3 hereof.  The
adjustment by the Plan Administrator shall be final, binding and conclusive.

          (b)  In   the  event  that,   by  reason   of  a   corporate   merger,
consolidation,  acquisition of property or stock, separation,  reorganization or
liquidation,  the Board shall  authorize the issuance or assumption of an Option
or 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.

          (c)  No  adjustment or  substitution  provided for in this  Section 15
shall  require  the  Company to issue or to sell a  fractional  share  under any
Option   Agreement  or  share  award  agreement  and  the  total  adjustment  or
substitution  with  respect to each  Option and share award  agreement  shall be
limited accordingly.

          (d)  In the case of the  dissolution  or  liquidation of the  Company,
the Plan and all Awards granted hereunder shall terminate.  In the event of such
proposed termination, each Participant shall be notified of such termination and
shall be permitted to exercise for a period of at least  fifteen (15) days prior
to the date of such termination all Options held by such  Participant  which are
then exercisable.

          (e)  In the case of:  (i) a merger, reorganization or consolidation in
which the Company is acquired by another  person or entity (other than a holding
company formed by the Company); (ii) the sale of all or substantially all of the
assets  of  the  Company  to an  unrelated  person  or  entity  which  is not an
"affiliate"  (as  defined  in Rule  144 of the  Securities  Act of  1933) of the
Company;  or (iii) the sale of all of the  capital  stock of the  Company  to an
unrelated  person or entity which is not an  "affiliate" of the Company (in each
case, a "Fundamental  Transaction"),  all Options shall be assumed or equivalent
options  shall be  substituted  by such  successor  corporation  or a parent  or
subsidiary of such successor  corporation.  For the purposes of this  paragraph,
the  Options  shall  be  considered   assumed  if,   following  the  Fundamental
Transaction, the Options confer the right to purchase, for each Share subject to
the Options immediately prior to the Fundamental Transaction,  the consideration
(whether  stock,  cash,  or  other  securities  or  property)  received  in  the
Fundamental  Transaction  by holders of Common  Stock for each Share held on the
effective  date of the  Fundamental  Transaction  (and if holders were offered a
choice of  consideration,  the type of consideration  chosen by the holders of a
majority  of  the  outstanding  Shares);   provided,   however,   that  if  such
                                           --------    -------
consideration  received in the  Fundamental  Transaction  was not solely  common
stock of the  successor  corporation  or its  Parent,  the Board  may,  with the
consent  of the  successor  corporation  and the  Participant,  provide  for the
consideration  to be received  upon the exercise of the Options,  for each Share
subject to the Options,  to be solely common stock of the successor  corporation
or its Parent equal in Fair Market Value to the per share consideration received
by holders of Common Stock in the Fundamental Transaction.

                                      -11-
<PAGE>

          In the event that such successor  corporation does not agree to assume
the Options or to  substitute  equivalent  options,  the Board shall provide for
each  Optionee  to have the  right to  exercise  all  Options  then held by such
Optionee,  including  Options which would not otherwise be exercisable.  In such
event,  the Board shall notify each  Optionee  that such Options  shall be fully
exercisable  for a period of fifteen  (15) days from the date of receipt of such
notice, and that such Options will terminate upon the expiration of such period.

          Notwithstanding anything in the Plan to the contrary, the acceleration
of  exercisability  in this  Section  shall  not  occur in the  event  that such
acceleration would, in the opinion of the Company's independent  auditors,  make
the  Fundamental  Transaction  ineligible  for pooling of  interests  accounting
treatment  and the Company  intends to use such  treatment  with respect to such
transaction.  The Board  shall  obtain a written  statement  from the  Company's
independent auditors with respect to the effect of accelerated exercisability of
outstanding Options prior to providing any Optionee with the notice contemplated
by this Section.

          (f)  In the event that the  Company  shall be  merged or  consolidated
with another  corporation  or entity,  other than with a  corporation  or entity
which is an  "affiliate"  of the  Company,  under the terms of which  holders of
capital  stock of the Company  will  receive  upon  consummation  thereof a cash
payment for each share of capital stock of the Company  surrendered  pursuant to
such  transaction  (the "Cash Purchase  Price"),  the Board may provide that all
outstanding  options shall terminate upon  consummation of such  transaction and
each Optionee shall receive,  in exchange therefor,  a cash payment equal to the
amount (if any) by which (i) the Cash Purchase Price multiplied by the number of
shares of Capital Stock of the Company  subject to  outstanding  options held by
such optionee exceeds (ii) the aggregate exercise price of such options.

     16.  NONTRANSFERABILITY.  A Participant's rights under the Plan,  including
          ------------------
the right to any shares or amounts  payable  may not be  assigned,  pledged,  or
otherwise  transferred  except,  in the event of a  Participant's  death, to the
Participant's  designated  beneficiary or, in the absence of such a designation,
by will or by the laws of descent and distribution;  provided, however, that the
                                                     --------  -------
Plan  Administrator  may,  in  its  discretion,  at  the  time  of  grant  of  a
Nonstatutory  Stock  Option  or by  amendment  of an  Option  Agreement  for  an
Incentive  Stock Option or a  Nonstatutory  Stock  Option,  provide that Options
granted to or held by a Participant may be transferred,  in whole or in part, to
one or more transferees and exercised by any such  transferee,  provided further
that: (i) any such transfer must be without consideration;  (ii) each transferee
must be a member of such Participant's  "immediate family" (as defined below) or
a trust, family limited partnership or other estate planning vehicle established
for the exclusive benefit of one or more members of the Participant's  immediate
family;   and  (iii)  such  transfer  is  specifically   approved  by  the  Plan
Administrator  following  the receipt of a written  request for  approval of the
transfer;  and provided further that any Incentive Stock Option which is amended
to permit  transfers  during the  lifetime of the  Participant  shall,  upon the
effectiveness of such amendment,  be treated  thereafter as a Nonstatutory Stock
Option.  In the event an Option is transferred as  contemplated in this Section,
such transfer shall become effective when approved by the Plan Administrator and
such Option may not be subsequently  transferred by the transferee other than by
will or the laws of descent  and  distribution.  Any  transferred  Option  shall
continue to be governed by and subject to the terms and  conditions of this Plan
and the relevant Option Agreement, and the transferee shall be

                                      -12-
<PAGE>

entitled  to the same  rights as the  Participant  as if no  transfer  had taken
place. As used in this Section,  "immediate  family" shall mean, with respect to
any person,  any spouse,  child,  stepchild  or  grandchild,  and shall  include
relationships arising from legal adoption.

     17.  TERMINATION - CERTAIN FORFEITURES. Notwithstanding any other provision
          ---------------------------------
of the Plan to the contrary,  a Participant  shall have no right to exercise any
Option or vest or receive  payment of any Restricted  Stock Award or Stock Award
if: (a) the  Participant  is  Terminated  for  Cause;  or (b) if  following  the
Participant's  termination from the Company and prior to the Company's  delivery
of the shares of Common Stock  underlying an Award,  the Participant  becomes an
officer or director  of, a  consultant  to or employed by a Competing  Business.
Furthermore, notwithstanding any other provision of the Plan to the contrary, in
the event that a Participant  receives or is entitled to the delivery or vesting
of Common  Stock  pursuant to an Award during the twelve (12) month period prior
to the  Participant's  termination  from the  Company or during the twelve  (12)
months following the Participant's termination from the Company, the Company, in
its sole  discretion,  may require the Participant to return or forfeit the cash
and/or Common Stock  received with respect to such award (or its economic  value
as of (i) the  date of the  exercise  of  Options;  (ii)  the  date  immediately
following the end of the Restricted Period for Restricted Stock Awards; or (iii)
the date of grant with respect to Stock Awards, as the case may be) in the event
that the  Participant  becomes an officer or  director  of, a  consultant  to or
employed  by  a  Competing   Business   within  eighteen  (18)  months  of  such
Participant's  termination  from the  Company.  The  Company's  right to require
forfeiture under this Section 17 must be exercised within ninety (90) days after
the  discovery of an occurrence  triggering  the Plan  Administrator's  right to
require  forfeiture but in no event later than twenty-four (24) months after the
Participant's termination from the Company.

     18.  AMENDMENT AND TERMINATION OF THE PLAN.

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

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

     19.  CONDITIONS  UPON  ISSUANCE  OF  SHARES.   Shares  shall  not be issued
          --------------------------------------
pursuant to any Award under the Plan unless the  issuance  and  delivery of such
Shares  pursuant  thereto  shall  comply with all  relevant  provisions  of law,
including,  without  limitation,  the  Securities  Act of 1933, as amended,  the
Exchange  Act,  the  rules  and  regulations  promulgated  thereunder,  and  the

                                      -13-
<PAGE>

requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

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

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

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

     21.  AGREEMENTS.    Options   and   Restricted   Stock   Awards   shall  be
          ----------
evidenced by written  agreements  in such form as the Board shall approve from
time to time.

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

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

                                    * * * * *

                                      -14-<PAGE>

                                                                    Exhibit 10.1

                            VIROPHARMA INCORPORATED
                               STOCK OPTION PLAN

                    Originally Effective September 20, 1995
                 Amended and Restated, Effective March 3, 1998
                       As Amended Through June 22, 2000.
<PAGE>

                            VIROPHARMA INCORPORATED
                               STOCK OPTION PLAN

     Section 1.  Purposes.
                 --------

     The ViroPharma Incorporated 1995 Stock Option Plan was originally effective
September 20, 1995.  The ViroPharma Incorporated Stock Option Plan (the "Plan"),
effective March 13, 1998, is an amendment and restatement of this prior plan.
The Plan was most recently amended on March 13, 2000.  The purposes of the Plan
are to: (a) further the growth and success of ViroPharma Incorporated (the
"Company") and its Subsidiaries by enabling selected employees, directors,
consultants and advisors of the Company and any Subsidiaries to acquire shares
of common stock of the Company, thereby increasing their personal interest in
such growth and success and (b) to provide a means of rewarding outstanding
performance of such persons to the Company and/or its Subsidiaries.  The Options
granted pursuant to the Plan are intended to constitute either Incentive Stock
Options within the meaning of Section 422 of the Code, or non-qualified stock
options, as determined by the Board or the Committee at the time of award.  The
type of Options awarded will be specified in the Option Agreement between the
Company and the Optionee.  The terms of the Plan shall be incorporated in the
Option Agreement to be executed by the Optionee.

     Section 2.  Definitions
                 -----------

     (a) "Affiliate" shall mean, with respect to a Person, a Person that
          ---------
directly or indirectly controls, or is controlled by, or is under common control
with such Person.

     (b) "Award" shall mean a grant of an Option or Options to an Eligible
          -----
Person pursuant to the provisions of this Plan.  Each separate grant of an
Option or Options to an Eligible Person and each group of Options which vests on
a separate date, is treated as a separate Award.

     (c) "Board" shall mean the Board of Directors of the Company, as
          -----
constituted from time to time.

     (d) "Change of Control" shall mean the happening of an event, which shall
          -----------------
be deemed to have occurred upon the earliest to occur of the following events:

         (i)  the date the stockholders of the Company (or the Board, if
              stockholder action is not required) approve a plan or other
              arrangement pursuant to which the Company will be dissolved or
              liquidated, or

         (ii) the date the stockholders of the Company (or the Board, if
              stockholder action is not required) approve a definitive agreement
              to sell or otherwise dispose of all or substantially all of the
              assets of the Company, or

                                       1
<PAGE>

       (iii)  the date the stockholders of the Company (or the Board, if
              stockholder action is not required) and the stockholders of the
              other constituent corporations (or their respective boards of
              directors, if and to the extent that stockholder action is not
              required) have approved a definitive agreement to merge or
              consolidate the Company with or into another corporation, other
              than, in either case, a merger or consolidation of the Company in
              which holders of shares of the Company's voting capital stock
              immediately prior to the merger or consolidation will have at
              least 50% of the ownership of voting capital stock of the
              surviving corporation immediately after the merger or
              consolidation (on a fully diluted basis), which voting capital
              stock is to be held in the same proportion (on a fully diluted
              basis) as such holders' ownership of voting capital stock of the
              Company immediately before the merger or consolidation, or

        (iv)  the date any entity, Person or group (within the meaning of
              Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), other
              than (A) the Company, or (B) any of its Subsidiaries, or (C) any
              employee benefit plan (or related trust) sponsored or maintained
              by the Company or any of its Subsidiaries or (D) any Affiliate (as
              such term is defined in Rule 405 promulgated under the Securities
              Act) of any of the foregoing, shall have acquired beneficial
              ownership of, or shall have acquired voting control over more than
              50% of the outstanding shares of the Company's voting capital
              stock (on a fully diluted basis), unless the transaction pursuant
              to which such Person, entity or group acquired such beneficial
              ownership or control resulted from the original issuance by the
              Company of shares of its voting capital stock and was approved by
              at least a majority of Directors who shall have been either
              members of the Board on the date that this Plan was originally
              adopted by the Board or members of the Board for at least twelve
              (12) months prior to the date of such approval, or

         (v)  the first day after the date of this Plan when Directors are
              elected such that there shall have been a change in the
              composition of the Board such that a majority of the Board shall
              have been members of the Board for less than twelve (12) months,
              unless the nomination for election of each new Director who was
              not a Director at the beginning of such twelve (12) month period
              was approved by a vote of at least sixty percent (60%) of the
              Directors then still in office who were Directors at the beginning
              of such period, or

        (vi)  the date upon which the Board determines (in its sole discretion)
              that based on then current available information, the events
              described in clause (iv) are reasonably likely to occur.

                                       2
<PAGE>

          (e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
               ----

          (f) "Committee" shall mean a committee appointed by the Board in
               ---------
accordance with Section 4(a) of the Plan, and if one is appointed, then such
committee shall possess all of the power and authority of, and shall be
authorized to take any and all actions required to be taken hereunder by, and
make any and all determinations required taken hereunder by, the Board.

          (g) "Common Stock" shall mean common stock of the Company, $.002 par
               ------------
value per Share.

          (h) "Company" shall mean ViroPharma Incorporated.
               -------

          (i) "Company Plan" means any restricted stock, stock bonus, stock
               ------------
option or other compensation plan, program or arrangement established or
maintained by the Company or an Affiliate.

          (j) "Director" shall mean an individual who is a member of the Board
               --------
of Directors of the Company.

          (k) "Disability" shall mean a mental or physical disability of an
               ----------
Eligible Person which renders such Eligible Person unable to perform the full
extent of his duties and responsibilities by reason of his illness or incapacity
for a period of 90 consecutive days or longer, or for 90 days during any six-
month period.

          (l) "Eligible Person" shall mean any person employed by the Company or
               ---------------
any of its Subsidiaries. Additionally, the term "Eligible Person" shall include
advisors and consultants to the Company or any Subsidiary, as well as Directors
and members of the board of directors of a Subsidiary; provided that Options to
Eligible Persons who are not employees of the Company or any of its Subsidiaries
shall be limited to non-qualified stock options.

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

          (n) "Fair Market Value Per Share" shall mean the fair market value of
               ---------------------------
a share of Common Stock, as determined pursuant to Section 8 hereof.

          (o) "Incentive Stock Option" shall mean an Option which is an
               ----------------------
incentive stock option as described in Section 422 of the Code.

          (p) "Non-Employee Director" shall have the meaning set forth in Rule
               ---------------------
16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission under the
Exchange Act, or any successor definition adopted by the Securities and Exchange
Commission; provided, however, that the Board or the Committee may, to the
extent it deems it necessary or desirable to comply with Section 162(m) of the
Code and applicable regulations thereunder, ensure that each Non-Employee
Director also qualifies as an outside director as that term is defined in the
regulations under Section 162(m) of the Code.

                                       3
<PAGE>

          (q)  "Option(s)" shall mean an Incentive Stock Option or a non-
               ---------
               qualified stock option to purchase Shares that is awarded
               pursuant to the Plan.

          (r) "Option Agreement" shall mean a written agreement substantially in
               ----------------
the form of Exhibit A-1 or A-2, or such other form or forms as the Board or the
Committee (subject
to the terms and conditions of this Plan) may from time to time approve
evidencing and
reflecting the terms of an Option.

          (s) "Optionee" shall mean an Eligible Person to whom an Option is
               --------
awarded.

          (t) "Other Available Shares" means, as of any date, the excess, if any
               ----------------------
of:

               (i)  the total number of  Shares owned by an Optionee; over

               (ii) the sum of:

                    (A)  the number of Shares owned by such Optionee for less
                         than six months; plus

                    (B)  the number of Shares owned by such Optionee that has,
                         within the preceding six months, been surrendered as
                         payment in full or in part, of the exercise price for
                         an option to purchase any securities of the Company or
                         an Affiliate under any Company Plan.

          (u) "Participant" shall mean each Eligible Person of the Company or a
               -----------
Subsidiary to whom an Award is granted pursuant to the Plan.

          (v) "Person" shall mean an individual, partnership, corporation,
               ------
limited liability company, trust, joint venture, unincorporated association, or
other entity or association.

          (w) "Plan" shall mean the ViroPharma Incorporated Stock Option Plan,
               ----
as amended from time to time.

          (x) "Pool" shall mean the pool of Shares subject to the Plan, as
               ----
described in Section 6, and as adjusted in accordance with Section 9 of the
Plan.

          (y) "Securities Act" shall mean the Securities Act of 1933, as
               --------------
amended.

          (z) "Shares" shall mean shares of Common Stock.
               ------

          (aa) "Subsidiary" shall mean a subsidiary corporation, whether now or
                ----------
hereafter existing, as defined in Sections 424(f) and (g) of the Code.

          Section  3.  Participation.
                       -------------

          Participants in the Plan shall be selected by the Board or the
Committee from the Eligible Persons.  The Board or the Committee may make Awards
at any time and from time to

                                       4
<PAGE>

time to Eligible Persons. Any Award may include or exclude any Eligible Person,
as the Board or the Committee shall determine in its sole discretion.

          Section 4.  Administration.
                      --------------

          (a) Procedure.  The Plan shall be administered by the Board.  The
              ---------
Board may at any time appoint a Committee consisting of not less than two
persons to administer the Plan on behalf of the Board, each of whom is a Non-
Employee Director, subject to such terms and conditions as the Board may
prescribe.  Members of the Committee shall serve for such period of time as the
Board may determine.  Members of the Board or the Committee who are eligible for
Options or have been awarded Options may vote on any matters affecting the
administration of the Plan or the award of any Options pursuant to the Plan,
except that no such member shall act upon the award of an Option to himself or
herself, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board or the Committee during which action is taken
with respect to the award of Options to himself or herself.

          From time to time the Board may increase the size of the Committee and
appoint additional members thereto, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies however caused, or
remove all members of the Committee and thereafter directly administer the Plan.

          (b) Powers of the Board and the Committee.  Subject to the provisions
              -------------------------------------
of the Plan, the Board or the Committee shall have the authority, in its
discretion:

              (i)   to make Awards;

              (ii)  to determine the Fair Market Value Per Share;

              (iii) to determine the exercise price of the Options to be awarded
                    in accordance with Section 7 of the Plan;

              (iv)  to determine the Eligible Persons to whom, and the time or
                    times at which, Awards shall be made, and the number of
                    Shares to be subject to each Award;

              (v)   to prescribe, amend and rescind rules and regulations
                    relating to the Plan;

              (vi)  to determine the terms and provisions of each Award under
                    the Plan and each Option Agreement (which need not be
                    identical with the terms of other Awards and Option
                    Agreements) and, with the consent of the Optionee, to modify
                    or amend an outstanding Award or Option Agreement;

                                       5
<PAGE>

              (vii)  to determine the conditions which must be satisfied in
                     order for an Award to vest and become exercisable, which
                     conditions may include satisfaction of performance goals,
                     vesting over time, and other criteria as determined by the
                     Board or the Committee;

              (viii) to accelerate the vesting or exercise date of any Award;

              (ix)   to interpret the Plan or any agreement entered into with
                     respect to an Award or exercise of Options;

              (x)    to authorize any person to execute on behalf of the Company
                     any instrument required to effectuate an Award or to take
                     such other actions as may be necessary or appropriate with
                     respect to the Company's rights pursuant to Awards or
                     agreements relating to the Award or exercise thereof; and

              (xi)   to make such other determinations and establish such other
                     procedures as it deems necessary or advisable for the
                     administration of the Plan.

          (c) Effect of Decisions.  All decisions, determinations and
              -------------------
interpretations of the Board or the Committee shall be final and binding with
respect to all Awards under the Plan.

          (d) Limitation of Liability.  Notwithstanding anything herein to the
              -----------------------
contrary, no member of the Board or the Committee shall be liable for any good
faith determination, act or failure to act in connection with the Plan or any
Award hereunder.

          Section 5.  Eligibility.  Awards may be made only to Eligible Persons.
                      -----------
An Eligible Person who has received an Award, if he or she is otherwise
eligible, may receive additional Awards.

          Section 6.  Stock Subject to the Plan.    Subject to the provisions of
                      -------------------------
this Section 6 and the provisions of Section 9 of the Plan, the maximum
aggregate number of Shares which may be awarded and sold under the Plan is
2,750,000 Shares of Common Stock (collectively, the "Pool"). The maximum
aggregate number of Shares which may be awarded and sold under the Plan to any
individual Optionee is 500,000 Shares of Common Stock. Options awarded from the
Pool may be either Incentive Stock Options or non-qualified stock options, as
determined by the Board or the Committee. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the Shares
which were subject thereto shall, unless the Plan shall have been terminated, be
returned to the Pool and become available for future award under the Plan.

          Section 7.  Terms and Conditions of Options.
                      -------------------------------

          Each Option awarded pursuant to the Plan shall be authorized by the
Board or the Committee and shall be evidenced by an Option Agreement in such
form as the Board or the Committee may from time to time determine.  Each Option
Agreement shall incorporate by reference all other terms and conditions of the
Plan, including the following terms and

                                       6
<PAGE>

conditions:

          (a) Number of Shares.  The number of Shares subject to the Option,
              ----------------
which shall not include fractional Shares.

          (b) Option Price.  The price per Share payable on the exercise of any
              ------------
Option  shall be stated in the Option Agreement and shall be no less than the
Fair Market Value Per Share of the Common Stock on the date such Option is
awarded, without regard to any restriction other than a restriction which will
never lapse.  Notwithstanding the foregoing, if an Option which is an Incentive
Stock Option shall be awarded under this Plan to any person who, at the time of
the award of such Option, owns stock possessing more than 10% of the total
combined voting power of all classes of the Company's stock, the price per Share
payable upon exercise of such Incentive Stock Option shall be no less than 110
percent (110%) of the Fair Market Value Per Share of the Common Stock on the
date such Option is awarded.   Neither the Board nor the Committee may reprice
any outstanding Options.

          (c) Consideration.  The consideration to be paid for the Shares to be
              -------------
issued upon the exercise of an Option, including the method of payment, shall be
determined by the Board or the Committee and may consist entirely of cash,
personal or certified check, or, at the election of the Optionee and as the
Board or the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value per Share equal to the aggregate
Option price, or by delivering such combination of Shares and cash as the Board
or the Committee may, in its sole discretion, approve; provided, however, that
                                                       -----------------
Shares may be surrendered in satisfaction of the Option price only if the
Optionee certifies in writing to the Company that the Optionee owns a number of
Other Available Shares as of the date the Option is exercised that is at least
equal to the number of  Shares to be surrendered in satisfaction of the Option
price; provided further, that the Option price may not be paid in Shares if the
       ----------------
Board or the Committee determines that such method of payment would result in
liability under Section 16(b) of the Exchange Act to an Optionee.

          Except as otherwise provided by the Board or the Committee, if payment
is made in whole or in part in Shares, the Optionee shall deliver to the Company
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having an aggregate Fair Market Value on the date
of delivery that is not greater than the aggregate Option price accompanied by
stock powers duly endorsed in blank by the record holder of the Shares
represented by such certificates. If the Board or the Committee, in its sole
discretion, should refuse to accept Shares in payment of the Option price, any
certificates representing Shares which were delivered to the Company shall be
returned to the Optionee with notice of the refusal of the Board or the
Committee to accept such Shares in payment of the option price. The Board or the
Committee may impose such limitations and prohibitions on the use of Shares to
exercise an Option as it deems appropriate.

          (d) Form of Option.  The Option Agreement will state whether the
              --------------
Option awarded is an Incentive Stock Option or a non-qualified stock option, and
will constitute a binding determination as to the form of Option awarded.

                                       7
<PAGE>

          (e) Exercise of Options.  Any Option awarded hereunder shall be
              -------------------
exercisable at such times and under such conditions as shall be set forth in the
Option Agreement (as may be determined by the Board or the Committee and as
shall be permissible under the terms of the Plan), which may include performance
criteria with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan.

          An Option may be exercised in accordance with the provisions of this
Plan as to all or any portion of the Shares then exercisable under an Option
from time to time during
the term of the Option.  If an Option is exercised for a fraction of a Share,
the Fair Market Value of such fractional Share, as of the date of exercise, will
be paid in cash.

          An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company at its principal executive office in
accordance with the terms of the Option Agreement by the person entitled to
exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company, accompanied by any
agreements required by the terms of the Plan and/or Option Agreement.  Full
payment may consist of such consideration and method of payment allowable under
this Section 7 of the Plan.  No adjustment shall be made for a dividend or other
right for which the record date is prior to the date the Option is exercised,
except as provided in Section 9 of the Plan.

          As soon as practicable after any proper exercise of an Option in
accordance with the provisions of the Plan, the Company shall, without transfer
or issue tax to the Optionee, deliver to the Optionee at the principal executive
office of the Company or such other place as shall be mutually agreed upon
between the Company and the Optionee, a certificate or certificates representing
the Shares for which the Option shall have been exercised.

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

          (f)  Term and Vesting of Options.
               ---------------------------

               (i)  Except as provided in Section 7(g)(iv), Options awarded
                    hereunder shall vest and become exercisable in whole or in
                    part, in accordance with such vesting conditions as the
                    Board or the Committee shall determine, which conditions
                    shall be stated in the Option Agreement. Options may be
                    exercised in any order elected by the Optionee whether or
                    not the Optionee holds any unexercised Options under this
                    Plan or any other plan of the Company.

               (ii) Notwithstanding any other provision of this Plan, no Option
                    shall be (A) awarded under this Plan after ten (10) years
                    from the date on which this Plan is adopted by the Board, or
                    (B) exercisable more than ten (10) years from the date of
                    award; provided, however, that if an Option that is intended
                           --------  -------
                    to be an Incentive Stock Option shall be awarded under this
                    Plan to any person who, at the time of the award of such
                    Option, owns stock possessing more than

                                       8
<PAGE>

                    10% of the total combined voting power for all classes of
                    the Company's stock, the foregoing clause (B) shall be
                    deemed modified by substituting "five (5) years" for the
                    term "ten (10) years" that appears therein.

             (iii)  No Option awarded to any Optionee shall be treated as an
                    Incentive Stock Option, to the extent such Option would
                    cause the aggregate Fair Market Value Per Share (determined
                    as of the date of award of each such Option) of the Shares
                    with respect to which Incentive Stock Options are
                    exercisable by such Optionee for the first time during any
                    calendar year to exceed $100,000. For purposes of
                    determining whether an Incentive Stock Option would cause
                    such aggregate Fair Market Value Per Share to exceed the
                    $100,000 limitation, such Incentive Stock Options shall be
                    taken into account in the order awarded.  For purposes of
                    this subsection, Incentive Stock Options include all
                    Incentive Stock Options under all plans of the Company that
                    are Incentive Stock Option plans within the meaning of
                    Section 422 of the Code.

        (g)  Termination of Options.
             ----------------------

             (i)  Unless sooner terminated as provided in this Plan, each
                  Option shall be exercisable for such period of time as shall
                  be determined by the Board or the Committee and set forth in
                  the Option Agreement, and shall be void and unexercisable
                  thereafter.

             (ii) Except as otherwise provided herein or by the terms of any
                  Award, with respect to an Optionee who is an employee or
                  Director, upon the termination of such Optionee's employment
                  or other relationship with the Company for any reason, Options
                  exercisable on the date of such termination shall be
                  exercisable by the Optionee (or in the case of the Optionee's
                  death subsequent to termination of employment or such other
                  relationship, by the Optionee's executor(s) or
                  administrator(s)) for a period of three (3) months from the
                  date of the Optionee's termination.

                  Except as otherwise provided herein or by the terms of any
                  Award, with respect to an Optionee who is an advisor or
                  consultant, the termination of such Optionee's relationship
                  with the Company for any reason shall not accelerate the
                  expiration date of Options exercisable on the date of
                  termination; provided however, that if such Optionee dies
                               ----------------
                  following such termination, the Option shall be exercisable
                  for a period of twelve (12) months commencing on the date of
                  the Optionee's death by such Optionee's executor(s) or
                  administrator(s).

                                       9
<PAGE>

          (iii)  Except as otherwise provided herein or by the terms of any
                 Award, upon the Disability or death of an Optionee while in the
                 service of the Company, Options held by such Optionee which are
                 exercisable on the date of Disability or death shall be
                 exercisable for a period of twelve (12) months commencing on
                 the date of the Optionee's Disability or death, by the Optionee
                 or his legal guardian or representative or, in the case of
                 death, by his executor(s) or administrator(s).

          (iv)   Options may be terminated at any time by agreement between the
                 Company and the Optionee.

     (h)  Forfeiture.
          ----------

          (i) Termination for Cause.  Notwithstanding any other provision of
              ---------------------
this Plan, if the Optionee's employment or engagement is terminated by the
Company, and the Board or the Committee makes a determination that the Optionee:

              (A)  has engaged in any type of disloyalty to the Company,
                   including without limitation, fraud, embezzlement,
                   theft, or dishonesty in the course of his employment or
                   engagement, or has otherwise breached any fiduciary
                   duty owed to the Company;

              (B)  has been convicted of a felony;

              (C)  has disclosed trade secrets or confidential information
                   of the Company; or

              (D)  has breached any agreement with or duty to the Company
                   in respect of confidentiality, non-disclosure, non-
                   competition or otherwise,

then all unexercised Options shall terminate upon the date of such a finding,
or, if earlier, the date of termination of employment or engagement for such a
finding, and the Optionee shall forfeit all Shares for which the Company has not
yet delivered share certificates to the Optionee and the Company shall refund to
the Optionee the Option purchase price paid to it, if any, in the same form as
it was paid (or in cash at the Company's discretion).  Notwithstanding anything
herein to the contrary, the Company may withhold delivery of share certificates
pending the resolution of any inquiry that could lead to a finding resulting in
forfeiture.

          (ii) Non-Competition.  Notwithstanding any other provision of this
               ---------------
Plan, if, during the 3-month period following a termination of service, which
period shall be extended to 12 months in the event of a termination due to
Disability, an Optionee who is not a consultant or advisor commences any
employment or engagement with or by a competitor of the Company (including, but
not limited to, full or part-time employment or independent consulting

                                       10
<PAGE>

work), as determined in the sole discretion of the Board or the Committee, all
unexercised Options shall terminate immediately upon the commencement thereof.
In the event an Optionee who is a consultant or advisor has entered into an
agreement with the Company which contains non-competition covenants and such
consultant or advisor violates the terms of his or her non-competition covenant,
all unexercised Options shall terminate immediately upon the date of such
violation.

          Section 8.  Determination of Fair Market Value Per Share of Common
                      ------------------------------------------------------
     Stock.
     ------

          (a) Except to the extent otherwise provided in this Section 8, the
Fair Market Value Per Share of Common Stock shall be determined by the Board or
the Committee in its sole discretion.

          (b) Notwithstanding the provisions of Section 8(a), in the event that
shares of Common Stock are traded in the over-the-counter market, the Fair
Market Value Per Share of Common Stock shall be the mean of the bid and asked
prices for a share of Common Stock on the relevant valuation date as reported in
The Wall Street Journal (or, if not so reported, as otherwise reported by the
-----------------------
National Association of Securities Dealers Automated Quotations ("NASDAQ")
System), as applicable or, if there is no trading on such date, on the next
preceding date on which there were reported share prices.  In the event shares
of Common Stock are listed on a national or regional securities exchange or
traded through the NASDAQ National Market, the Fair Market Value of a share of
Common Stock shall be the closing price for a share of Common Stock on the
exchange or on the NASDAQ National Market, as reported in The Wall Street
                                                          -------- ------
Journal on the relevant valuation date, or if there is no trading on that date,
-------
on the next preceding date on which there were reported share prices.

          Section 9.  Adjustments.
                      -----------

          (a) Subject to required action by the stockholders, if any, the number
of Shares as to which Awards may be made under this Plan, including the
individual limit specified in Section 6, and the number of Shares subject to
outstanding Options and the Option prices thereof shall be adjusted
proportionately for any increase or decrease in the number of outstanding Shares
of Common Stock of the Company resulting from stock splits, reverse stock
splits, stock dividends, reclassifications and recapitalizations, merger,
consolidation, exchange of shares, or any similar change affecting Common Stock.

          (b) No fractional Shares shall be issuable on account of any action
mentioned in Section 9(a), and the aggregate number of Shares into which Shares
then covered by the Award, when changed as the result of such action, shall be
increased to the next highest whole number of Shares resulting from such action,
provided that no such increase shall be made if such increase would cause an
Incentive Stock Option to lose its status as such without the consent of the
Optionee.

          Section 10.  Rights as a Stockholder.
                       -----------------------

          A recipient of an Award shall have no rights as a stockholder of the
Company and shall neither have the right to vote nor receive dividends with
respect to any Shares subject

                                       11
<PAGE>

to an Option until such Option has been exercised and a certificate with respect
to the Shares purchased upon such exercise has been issued to him.

          Section 11.  Time of Awarding Options.
                       ------------------------

          The date of an Award shall, for all purposes, be the date which the
Board or the Committee specifies when the Board or the Committee makes its
determination that an Award is made, or if none is specified, then the date of
such determination.  Notice of the determination shall be given to each Eligible
Person to whom an Award is made within a reasonable time after the date of such
Award.

          Section 12.  Modification, Extension and Renewal of Option.
                       ---------------------------------------------

          Subject to the terms and conditions of the Plan, the Board or the
Committee may modify, extend or renew an Award, or accept the surrender of an
Award (to the extent not theretofore exercised).  Notwithstanding the foregoing,
(a) no modification of an Award which adversely affects the Optionee shall be
made without the consent of the Optionee, and (b) no Incentive Stock Option may
be modified, extended or renewed if such action would cause it to cease to be an
"Incentive Stock Option" within the meaning of Section 422 of the Code, unless
the Optionee specifically acknowledges and consents to the tax consequences of
such action.

          Section 13.  Purchase for Investment and Other Restrictions.
                       ----------------------------------------------

          (a) The obligation of the Company to issue Shares to an Optionee upon
the exercise of an Option granted under the Plan is conditioned upon such
issuance complying with all relevant provisions of applicable law, including,
without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder and any applicable foreign laws.

          (b) At the option of the Board or the Committee, the obligation of the
Company to issue Shares to an Optionee upon the exercise of an Option granted
under the Plan may be conditioned upon obtaining appropriate representations,
warranties, restrictions and agreements of the Optionee.  Among other
representations, warranties, restrictions and agreements, the Optionee may be
required to represent and agree that the purchase of Shares shall be for
investment, and not with a view to the public resale or distribution thereof,
unless the Shares are registered under the Securities Act and the issuance and
sale of the Shares complies with all other laws, rules and regulations
applicable thereto.  Unless the issuance of such Shares is registered under the
Securities Act (and any similar law of a foreign jurisdiction applicable to the
Optionee), the Optionee shall acknowledge that the Shares purchased are not
registered under the Securities Act (or any such other law) and may not be sold
or otherwise transferred unless the Shares have been registered under the
Securities Act (or any such other law) in connection with the sale or other
transfer thereof, or that counsel satisfactory to the Company has issued an
opinion satisfactory to the Company that the sale or other transfer of such
Shares is exempt from registration under the Securities Act (or any such other
law), and unless said sale or transfer is in compliance with all other
applicable laws, rules and regulations, including all applicable federal, state
and foreign securities laws, rules and regulations.  Unless the Shares subject
to an Award are registered under the Securities Act, the certificates
representing such Shares issued shall contain the following legend in
substantially the following form:

                                       12
<PAGE>

          THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE
          SECURITIES LAWS.  THESE SHARES HAVE NOT BEEN ACQUIRED WITH A VIEW TO
          DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED,
          MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED
          OF, BY GIFT OR OTHERWISE, OR IN ANY WAY ENCUMBERED WITHOUT AN
          EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES
          ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR
          A SATISFACTORY OPINION OF COUNSEL SATISFACTORY TO VIROPHARMA
          INCORPORATED THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND
          UNDER APPLICABLE STATE SECURITIES LAWS.

If required under the laws of any jurisdiction in which the Optionee resides,
the certificate or certificates may bear any such legend.

          Section 14.  Transferability.
                       ---------------

          No Option shall be assignable or transferable otherwise than by will
or by the laws of descent and distribution.  During the lifetime of the
Optionee, his Options shall be exercisable only by such Optionee, or, in the
event of his or her legal incapacity or Disability, then by the Optionee's legal
guardian or representative.

          Section 15.  Other Provisions.
                       ----------------

          The Option Agreement may contain such other provisions as the Board or
the Committee in its discretion deems advisable and which are not inconsistent
with the provisions of this Plan, including, without limitation, restrictions
upon or conditions precedent to the exercise of the Option.

          Section 16.  Change of Control.
                       -----------------

          (a) Notwithstanding anything to the contrary set forth in this Plan,
in the event of a Change of Control in which the Plan is not continued by a
successor corporation, or in which equivalent, substituted options for common
stock in a successor corporation are not provided to Optionees, the Plan shall
be terminated and, with respect to Optionees who are employees of the Company or
any of its Subsidiaries or who are members of the Board, all unvested Options
shall vest as follows: (i) with respect to such Optionees who have been employed
by the Company or a Subsidiary or who have served on the Board for at least two
years as of the Change of Control, Options shall be fully and immediately vested
and exercisable; and (ii) with respect to all other such Optionees, fifty
percent (50%) of that portion of the Options which are not vested as of the date
of the Change of Control shall be immediately vested and exercisable and the
remaining portion of the Options which are not vested shall lapse and be
forfeited.

                                       13
<PAGE>

          (b) In the event of a Change of Control in which the Plan is continued
by a successor corporation or in which equivalent substituted options for common
stock in a successor corporation are provided to Optionees, with respect to
Optionees who are employees of the Company or any of its Subsidiaries or who are
members of the Board, Options shall vest as follows:  (i) if an Optionee who is
employed by the Company and serves on the Company's management team (each, an
"Executive Officer") or is a member of the Board at the time of the Change of
Control is not offered substantially equivalent employment with the successor
corporation or a related employer (both in terms of duties and compensation),
then any unvested Options as of the date of the Change of Control held by such
Executive Officer or member of the Board shall be fully and immediately vested
and exercisable in accordance with Section 16(a)(i) or 16(a)(ii), as applicable,
taking into account all service performed with the Company in any capacity for
purposes of vesting; and (ii) if any Optionee is offered substantially
equivalent employment with the successor corporation or a related employer (both
in terms of duties and compensation), then Options shall not be subject to
accelerated vesting; provided however, that if the Optionee's employment with
the successor corporation or related employer is terminated by the successor
corporation or related employer during the six month period following such
Change of Control, then any unvested Options or substituted options shall be
fully and immediately vested and exercisable at the date of the Optionee's
termination of employment in accordance with Section 16(a)(i) or 16(a)(ii), as
applicable, taking  into account service performed with the Company and the
successor corporation and all related employers for purpose of vesting.

          (c) Notwithstanding Sections 16(a) and (b) hereof, any Optionee who is
a "disqualified individual", as that term is defined in Section 280G(c) of the
Code, shall be notified by the Committee of any event which may constitute a
Change of Control in advance of the effective date of such Change of Control.
Notice shall be provided, in the sole discretion of the Committee, as soon as
reasonably practicable prior to the Change of Control. The disqualified
individual may refuse to accept accelerated vesting of his or her Options after
consideration of the tax consequences to such disqualified individual resulting
from the Change of Control, provided that any such refusal shall be communicated
to the Committee in writing prior to the Change of Control. If it is not
practicable to provide advance notice of such Change of Control, the
disqualified individual will be deemed to have elected to refuse such
acceleration, but only to the extent that it is determined, as soon as
practicable after the Change of Control, that accelerated vesting will result in
negative tax consequences under Section 280G of the Code.

          (d) In addition to arranging for the exchange of Options for options
to purchase common stock in a successor corporation, in the event of a Change of
Control of the Company by reason of a merger, consolidation or tax free
reorganization or sale of all or substantially all of the assets of the Company,
the Board shall have the authority, in its discretion, to terminate this Plan
and to distribute to each Optionee cash and/or other property in an amount equal
to and in the same form as the Optionee would have received from the successor
corporation if the Optionee had owned the Shares subject to the Option rather
than the Option at the time of the Change of Control, provided that any such
amount paid to an Optionee shall reflect the deduction of the exercise price the
Optionee would have paid to purchase such

                                       14
<PAGE>

Shares. The form of payment or distribution to the Optionee pursuant to this
Section shall be determined by the Committee.

          Section 17.  Amendment of the Plan.
                       ---------------------

          Insofar as permitted by law and the Plan, and subject to Section
20(c), the Board or the Committee may from time to time suspend, terminate or
discontinue the Plan or revise or amend it in any respect whatsoever with
respect to any Shares at the time not subject to an Option, including amendments
necessary or advisable to assure that the Incentive Stock Options or the non-
qualified stock options available under the Plan continue to be treated as such,
respectively, under all applicable laws.

          Section 18.  Application of Funds.
                       --------------------

          The proceeds received by the Company from the sale of Shares pursuant
to the exercise of Options shall be used for general corporate purposes or such
other purpose as may be determined by the Board.

          Section 19.  No Obligation to Exercise Option.
                       --------------------------------

          The awarding of an Option shall impose no obligation upon the Optionee
to exercise such Option.

          Section 20.  Approval of Stockholders.
                       ------------------------

          (a) Effective Date of Plan.  This amendment and restatement of the
              ----------------------
Plan shall become effective on the date that it is adopted by the Board;

provided, however, that this amendment and restatement shall be rescinded, and
-----------------
all actions taken pursuant to the Plan, as amended and restated (except the
granting of Options with respect to Shares initially authorized

for award under the Plan prior this amendment and restatement), shall be null
and void as of the first anniversary of the date of adoption by the Board
unless, before such first anniversary, the Plan, as amended and restated, is
approved by a majority of the votes cast at a duly held stockholder meeting at
which a quorum representing a majority of the Company's outstanding voting
shares is present, either in person or by proxy.

          (b) Awards Prior to Stockholder Approval.  The Board or the Committee
              ------------------------------------
may make Awards hereunder before the stockholder meeting at which the Plan, as
amended and restated, will be presented to the Company's stockholders for
approval; provided, however, that any and all Options awarded for Shares in
          -----------------
excess of 2,000,000 Shares, the number of Shares initially authorized for award
under the Plan prior to this amendment and restatement, shall lapse
automatically on the first anniversary of the date of adoption by the Board if
the Plan is not approved by such stockholders on or before such date. With
respect to Options awarded before the earlier of the date the Plan is approved
by the Company's stockholders or the first

                                       15
<PAGE>

anniversary of the date the Plan is adopted by the Board, the Board or the
Committee shall designate whether the Option is for Shares previously authorized
for award under the Plan, or is for Shares as to which stockholder approval is
pending.

         (c) Stockholder Approval of  Certain Amendments.
             -------------------------------------------

             (i)   If the Board or the Committee amends the Plan to increase the
                   aggregate number of Shares for which Options may be awarded
                   hereunder, and approval of the stockholders by a majority of
                   the votes cast at a duly held stockholder meeting at which a
                   quorum representing a majority of the Company's outstanding
                   voting shares is present (either in person or by proxy), is
                   not obtained within twelve (12) months of the adoption of
                   such amendment, all Options awarded with respect to such
                   increased number of shares shall lapse automatically on the
                   first anniversary of the date of the adoption of such
                   amendment.

             (ii)  If the Board or the Committee amends the Plan to change the
                   designation of the class of employees eligible to receive
                   Options, and approval of the stockholders by a majority of
                   the votes cast at a duly held stockholder meeting at which a
                   quorum representing a majority of the Company's outstanding
                   voting shares is present (either in person or by proxy), is
                   not obtained within twelve (12) months of the adoption of
                   such amendment, all Incentive Stock Options awarded after the
                   date of such adoption automatically shall be converted into
                   non-qualified stock options on the first anniversary of the
                   date of the adoption of such amendment.

             (iii) Section 7(b) of the Plan may not be amended to permit the
grant of Options with an exercise price below Fair Market Value or to permit
outstanding Options to be repriced unless such amendment is approved by the
stockholders by a majority of the votes cast at a duly held stockholder meeting
at which a quorum representing a majority of the Company's outstanding voting
shares is present (either in person or by proxy).

         Section 21.  Conditions Upon Issuance of Shares.
                      ----------------------------------

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

         Section 22.  Reservation of Shares.
                      ---------------------

                                       16
<PAGE>

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

          The Company, during the term of this Plan, shall use its best efforts
to seek to obtain from appropriate regulatory agencies any requisite
authorization in order to issue and sell such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  The inability of the
Company to obtain from any such regulatory agency having jurisdiction the
requisite authorization(s) deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any Shares hereunder, or the inability of the
Company to confirm to its satisfaction that any issuance and sale of any Shares
hereunder will meet applicable legal requirements, shall relieve the Company of
any liability in respect to the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

          Section 23.  Stock Option Agreements.
                       -----------------------

          Options shall be evidenced by an Option Agreement in such form or
forms as the Board or the Committee shall approve from time to time.

          Section 24.  Taxes, Fees, Expenses and Withholding of Taxes.
                       ----------------------------------------------

          (a) The Company shall pay all original issue and transfer taxes (but
not income taxes, if any) with respect to the award of Options and/or the issue
and transfer of Shares pursuant to the exercise thereof, and all other fees and
expenses necessarily incurred by the Company in connection therewith, and will
use its best efforts to comply with all laws and regulations which, in the
opinion of counsel for the Company, shall be applicable thereto.

          (b) The award of Options hereunder and the issuance of Shares pursuant
to the exercise of Options is conditioned upon the Company's reservation of the
right to withhold in accordance with any applicable law, from any compensation
or other amounts payable to the Optionee, any taxes required to be withheld
under federal, state or local law as a result of the award or exercise of such
Option or the sale of the Shares issued upon exercise thereof.  To the extent
that compensation or other amounts, if any, payable to the Optionee is
insufficient to pay any taxes required to be so withheld, the Company may, in
its sole discretion, require the Optionee (or such other person entitled herein
to exercise the Option), as a condition of the exercise of an Option, to pay in
cash to the Company an amount sufficient to cover such tax liability or
otherwise to make adequate provision for the Company's satisfaction of its
withholding obligations under federal, state and local law, provided that such
satisfaction of tax liability is made within 60 days of the date on which
written notice of exercise has been given to the Company.

          Section 25.  Notices.
                       -------

          Any notice to be given to the Company pursuant to the provisions of
this Plan shall be addressed to the Company in care of its Secretary (or such
other person as the Company may designate from time to time) at its principal
executive office, and any notice to be given to an Optionee shall be delivered
personally or addressed to him or her at the address given beneath his or her
signature on his or her Option Agreement, or at such other address as such
Optionee or his or her permitted transferee (upon the transfer of the Shares)
may hereafter designate in

                                       17
<PAGE>

writing to the Company. Any such notice shall be deemed duly given on the date
and at the time delivered via hand delivery, courier or recognized overnight
delivery service or, if sent via telecopier, on the date and at the time
telecopied with confirmation of delivery or, if mailed, on the date five (5)
days after the date of the mailing (which shall be by regular, registered or
certified mail). Delivery of a notice by telecopy (with confirmation) shall be
permitted and shall be considered delivery of a notice notwithstanding that it
is not an original that is received. It shall be the obligation of each Optionee
and each permitted transferee holding Shares purchased upon exercise of an
Option to provide the Secretary of the Company, by letter mailed as provided
herein, with written notice of his or her direct mailing address.

          Section 26.  No Enlargement of Optionee Rights.
                       ---------------------------------

          This Plan is purely voluntary on the part of the Company, and the
continuance of the Plan shall not be deemed to constitute a contract between the
Company and any Optionee, or to be consideration for or a condition of the
employment or service of any Optionee.  Nothing contained in this Plan shall be
deemed to give any Optionee the right to be retained in the employ or service of
the Company or any Subsidiary, or to interfere with the right of the Company or
any such corporation to discharge or retire any Optionee thereof at any time
subject to applicable law.  No Optionee shall have any right to or interest in
Awards authorized hereunder prior to the award thereof to such Optionee, and
upon such Award he shall have only such rights and interests as are expressly
provided herein, subject, however, to all applicable provisions of the Company's
Certificate of Incorporation, as the same may be amended from time to time.

          Section 27.  Information to Optionees.
                       ------------------------

          The Company, upon request, shall provide without charge to each
Optionee copies of such annual and periodic reports as are provided by the
Company to its stockholders generally.

          Section 28.  Availability of Plan.
                       --------------------

          A copy of this Plan shall be delivered to the Secretary of the Company
and shall be shown by him to any eligible person making reasonable inquiry
concerning it.

          Section 29.  Invalid Provisions.
                       ------------------

          In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid or
unenforceable provision was not contained herein.

          Section 30.  Applicable Law.
                       --------------

          This Plan shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania.

                                       18
<PAGE>

          Executed this 13th day of March, 2000.

[CORPORATE SEAL]                        VIROPHARMA INCORPORATED

Attest: _________________________       By:_______________________________

                                       19

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