[SUBJECT TO STOCKHOLDER APPROVAL]


                                APOLLO GENETICS, INC.

                           1996 DIRECTOR STOCK OPTION PLAN

    The purpose of this 1996 Director Stock Option Plan (the "Plan") of 
Apollo Genetics, Inc. (the "Company") is to attract and retain highly 
qualified non-employee directors of the Company and to encourage ownership of 
stock of the Company by such Directors so as to provide additional incentives 
to promote the success of the Company.

1.  ADMINISTRATION OF THE PLAN.

    Grants of stock options under the Plan shall be automatic as provided in 
Section 6.  However, all questions of interpretation with respect to the Plan 
and options granted under it shall be determined by the Board of Directors of 
the Company (the "Board") or by a committee consisting of one or more 
directors appointed by the Board and such determination shall be final and 
binding upon all persons having an interest in the Plan.

2.  PERSONS ELIGIBLE TO PARTICIPATE IN THE PLAN.

    All directors of the Company who are not employees of the Company or of 
any subsidiary of the Company shall be eligible to participate in the Plan, 
unless such director irrevocably elects not to participate.

3.  SHARES SUBJECT TO THE PLAN.

    (a)  The aggregate number of shares of the Company's Common Stock which 
may be subject to options under this Plan is 90,000 shares.  Shares issued 
under the Plan may consist in whole or in part of authorized but unissued 
shares or treasury shares.

    (b)  In the event of a stock dividend, split-up, combination or 
reclassification of shares, recapitalization or other similar capital change 
relating to the Company's Common Stock, the maximum aggregate number and kind 
of shares or securities of the Company as to which options may be granted 
under this Plan and as to which options then outstanding shall be 
exercisable, and the exercise price of such options shall be appropriately 
adjusted so that the proportionate number of shares or other securities as to 
which options may be granted and the proportionate interest of holders of 
outstanding options shall be maintained as before the occurrence of such 
event.

    (c)  In the event of a consolidation or merger of the Company with 
another corporation where the Company's stockholders do not own a majority in 
interest of the surviving or resulting corporation, or the sale or exchange 
of all or substantially all of the assets of the Company, or a reorganization 
or liquidation of the Company, any deferred exercise period shall be 
automatically accelerated and each holder of an outstanding option



shall be entitled to receive, upon exercise and payment in accordance with 
the terms of the option, the same shares, securities or property as he would 
have been entitled to receive upon the occurrence of such event if he had 
been, immediately prior to such event, the holder of the number of shares of 
Common Stock purchasable under his or her option; provided, however, that in 
lieu of the foregoing the Board may, upon written notice to each holder of an 
outstanding option or right under the Plan, provide that such option or right 
shall terminate on a date not less than 20 days after the date of such notice 
unless theretofore exercised.

    (d)  Whenever options under this Plan lapse or terminate or otherwise 
become unexercisable, the shares of Common Stock which were subject to such 
options may again be subject to options under this Plan.  The Company shall, 
at all times while this Plan is in force, reserve such number of shares of 
Common Stock as will be sufficient to satisfy the requirements of this Plan.

4.  NON-STATUTORY STOCK OPTIONS.

    All options granted under this Plan shall be non-statutory options, not 
entitled to special tax treatment under Section 422 of the Internal Revenue 
Code of 1986, as amended (the "Code").

5.  FORM OF OPTIONS.

    Options granted hereunder shall be evidenced by certificates in 
substantially the form of the attached EXHIBIT A, or in such other form as 
the Board or any committee appointed pursuant to Section 1 above may from 
time to time determine.

6.  GRANT OF OPTIONS AND OPTION TERMS.

    (a)  AUTOMATIC GRANT OF OPTIONS.  

         (i) On the date of the annual meeting of the stockholders in every 
third year (a "Grant Year"), beginning with the 1996 annual meeting, each 
eligible director continuing in office after such meeting shall automatically 
be granted options under the Plan to purchase 9,000 shares of Common Stock.

         (ii) Upon the initial election of an eligible director other than at 
an annual meeting of the stockholders in a Grant Year (whether by the Board 
or the stockholders and whether to fill a vacancy or otherwise), such 
director shall automatically be granted options to purchase 3,000 shares of 
Common Stock under the Plan for each year, or portion thereof, between the 
date of such election and the date of the next annual meeting in a Grant Year.

         (iii) No options shall be granted hereunder after ten years from the 
date on which this Plan was initially approved and adopted by the Board.



    (b) DATE OF GRANT.  The "Date of Grant" for options granted under this 
Plan shall be the date of the annual meeting of stockholders in a Grant Year, 
the date of the annual meeting of stockholders (if not in a Grant Year) at 
which the option holder is first elected, or the date on which the option 
holder is elected by the Board to fill a vacancy, as the case may be.

    (c) EXERCISE PRICE.  The per share exercise price for each option granted 
under this Plan shall be the current fair market value of a share of Common 
Stock of the Company as determined (i) prior to date on which the Company 
becomes subject to the Securities Exchange Act of 1934, as amended (the 
"Exchange Act"), by the Board in good faith or in the manner established by 
the Board from time to time, and (ii) on or after the date on which the 
Company is subject to the Exchange Act, by the last sale price for the 
Company's Common Stock as reported by the Nasdaq Stock Market for the 
business day immediately preceding the Date of Grant.  

    (d) TERM OF OPTION.  The term of each option granted under this Plan 
shall be ten years from the Date of Grant.

    (e) EXERCISABILITY OF OPTIONS.  Options granted under this Plan shall 
become exercisable with respect to 3,000 shares on the Date of Grant and on 
each annual meeting of stockholders of the Company following the Date of 
Grant, if and only if the option holder is a member of the Board at the 
opening of business on that date (e.g., options to purchase 9,000 shares of 
Common Stock granted at the 1996 annual meeting will become exercisable with 
respect to 3,000 shares at each of the 1996, 1997 and 1998 annual meetings).

    (f) GENERAL EXERCISE TERMS.  Directors holding exercisable options under 
this Plan who cease to serve as members of the Board may, during their 
lifetime, exercise the rights they had under such options at the time they 
ceased being a director for the full unexpired term of such option.  Any 
rights that have not yet become exercisable shall terminate upon cessation of 
membership on the Board.  Upon the death of a director, those entitled to do 
so shall have the right, at any time within twelve months after the date of 
death, to exercise, in whole or in part, any rights which were available to 
the director at the time of his or her death.  The rights of the option 
holder may be exercised by the holder's guardian or legal representative in 
the case of disability and by the beneficiary designated by the holder in 
writing delivered to the Company or, if none has been designated, by the 
holder's estate or his or her transferee on death in accordance with this 
Plan, in the case of death.  Options granted under the Plan shall terminate, 
and no rights thereunder may be exercised, after the expiration of the 
applicable exercise period.  Notwithstanding the foregoing provisions of this 
section, no rights under any options may be exercised after the expiration of 
ten years from their Date of Grant.

    (g) METHOD OF EXERCISE AND PAYMENT.  Options may be exercised only by 
written notice to the Company at its head office accompanied by payment of 
the full exercise price for the shares of Common Stock as to which they are 
exercised.  The exercise price shall be paid in cash or by check or in shares 
of Common Stock of the Company, or in any combination thereof.  Shares of 
Common Stock surrendered in payment of the exercise price shall have been 
held by the person exercising the option for at least six months, unless



otherwise permitted by the Board or any committee appointed pursuant to 
Section 1 above.  The value of shares delivered in payment of the exercise 
price shall be their fair market value, as determined in accordance with 
Section 6(c) above, as of the date of exercise.  Upon receipt of such notice 
and payment, the Company shall promptly issue and deliver to the optionee (or 
other person entitled to exercise the option) a certificate or certificates 
for the number of shares as to which the exercise is made.

    (h) NON-TRANSFERABILITY.  Options granted under this Plan shall not be 
transferable by the holder thereof otherwise than by will or the laws of 
descent and distribution or as permitted by the Board or any committee 
appointed pursuant to Section 1 above.

7.  LIMITATION OF RIGHTS.

    (a) NO RIGHT TO CONTINUE AS A DIRECTOR.  Neither the Plan, nor the 
granting of an option or any other action taken pursuant to the Plan, shall 
constitute an agreement or understanding, express or implied, that the 
Company will retain an option holder as a director for any period of time or 
at any particular rate of compensation.

    (b) NO STOCKHOLDERS' RIGHTS FOR OPTIONS.  A director shall have no rights 
as a stockholder with respect to the shares covered by options until the date 
the director exercises such options and pays the exercise price to the 
Company, and no adjustment will be made for dividends or other rights for 
which the record date is prior to the date such option is exercised and paid 
for.

8.  AMENDMENT OR TERMINATION.

    The Board may amend or terminate this Plan at any time, provided that, to 
the extent necessary to comply with Rule 16b-3 under the Securities Exchange 
Act of 1934, this Plan shall not be amended more than once every six months, 
other than to comport with changes in the Code, ERISA or the rules thereunder.

9.  STOCKHOLDER APPROVAL.

    This Plan is subject to approval by the stockholders of the Company by 
the affirmative vote of the holders of a majority of the shares of Common 
Stock of the Company present, or represented and entitled to vote, at a 
meeting duly held in accordance with the laws of the State of Delaware.  In 
the event such approval is not obtained, all options granted under this Plan 
shall be void and without effect.

10.  GOVERNING LAW.

    This Plan shall be governed by and interpreted in accordance with the 
laws of the State of Delaware.