As filed with the Securities and Exchange Commission on February 17, 2004
Registration No. 333-______

==============================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                        ---------------------------------


                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                        ---------------------------------

                         MANHATTAN PHARMACEUTICALS, INC.
             (Exact name of registrant as specified in its charter)



          Delaware           787 Seventh Avenue, 48th Floor      36-3898269
      (State or other            New York, NY 10019           (I.R.S. Employer
      jurisdiction of          Telephone (212) 554-4525      Identification No.)
      Incorporation or         Facsimile (212) 554-4545
       organization)

                         -------------------------------

                              2003 Stock Option Plan
                            (Full title of the Plans)

                           ---------------------------

         Nicholas J. Rossettos                         Copies to:
        Chief Financial Officer                Christopher J. Melsha, Esq.
    Manhattan Pharmaceuticals, Inc.        Maslon Edelman Borman & Brand, LLP
     787 Seventh Avenue, 48th Floor          90 South 7th Street, Suite 3300
           New York, NY 10019                 Minneapolis, Minnesota 55402
        Telephone (212) 554-4555                Telephone: (612) 672-8200
 (Name and address of agent for service)        Facsimile: (612) 642-8343

                      ------------------------------------


                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
                                                    Proposed
                                  Proposed          Maximum
                                   Maximum          Offering
           Title of             Amount to be        Price Per        Aggregate         Amount of
  Securities to be Registered    Registered (1)     Share Fee (2)   Offering Price   Registration
--------------------------------------------------------------------------------------------------
<S>                               <C>                <C>             <C>               <C>
Common Stock,  par  value         5,400,000          $1.60           $8,640,000        $1,094.69
$.001 per share
--------------------------------------------------------------------------------------------------
</TABLE>

(1)   There is also being registered hereunder an indeterminate number of shares
      of common stock as shall be issuable as a result of a stock split, stock
      dividend, combination or other change in the outstanding shares of common
      stock.
(2)   Estimated solely for the purpose of calculating the registration fee in
      accordance with paragraphs (c) and (h) of Rule 457 of the Securities Act
      based upon a $1.60 per share average of high and low prices of the
      Registrant's common stock on the OTC Bulletin Board on February 13, 2004.




==============================================================================


<PAGE>




                                     PART I

      As permitted by the rules of the Securities and Exchange Commission, this
registration statement omits the information specified in Part I of Form S-8.
The documents containing the information specified in Part I of this
registration statement will be sent or given to eligible employees as specified
in Rule 428(b) promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Such documents are not being filed with the Commission either
as part of this registration statement or as prospectuses or prospectus
supplements pursuant to Rule 424 promulgated under the Securities Act.













                                       1
<PAGE>

                                     PART II

Item 3.  Incorporation of Documents by Reference.
------------------------------------------------

      The following documents filed by the Registrant with the Securities and
Exchange Commission are hereby incorporated by reference herein:

1.       Annual Report on Form 10-KSB for the fiscal year ended December 31,
         2002 (filed on April 14, 2003);

2.       Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2003
         (including amendment thereto filed on August 11, 2003), June 30, 2003,
         and September 30, 2003;

3.       Current Reports on Form 8-K filed March 10, 2003, August 15, 2003,
         September 23, 2003, and November 11, 2003, and on Form 8-K/A filed May
         9, 2003; and

4.       The description of capital stock as set forth on Form 8-A filed on
         November 28, 1995 (No. 00-27282).

      All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.

Item 4.  Description of Securities.
----------------------------------

      Not applicable.

Item 5.  Interests of Named Experts and Counsel.
-----------------------------------------------

      As a condition to consenting to allow the Registrant to incorporate by
reference into this registration statement its audit report, KPMG LLP ("KPMG")
has required the Registrant, and the Registrant has agreed, to indemnify and
hold KPMG harmless against and from any and all legal costs and expenses
incurred by KPMG in successful defense of any legal action or proceeding that
arises as a result of KPMG's consent to the incorporation by reference of its
audit report on the Registrant's past financial statements incorporated by
reference in this registration statement.

Item 6.  Indemnification of Directors and Officers.
--------------------------------------------------

      Under provisions of the certificate of incorporation and bylaws of the
Registrant, directors and officers will be indemnified for any and all
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys fees, in connection with threatened, pending or completed actions,
suits or proceedings, whether civil, or criminal, administrative or
investigative (other than an action arising by or in the right of the
Registrant), if such director or officer has been wholly successful on the
merits or otherwise, or is found to have acted in good faith and in a manner he
or she reasonably believes to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In addition,
directors and officers will be indemnified for reasonable expenses in connection
with threatened, pending or completed actions or suits by or in the right of
Registrant if such director or officer has been wholly successful on the merits
or otherwise, or is found to have acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Registrant, except in the case of certain findings by a court that such person
is liable for negligence or misconduct in his or her duty to the Registrant
unless such court or the Delaware Court of Chancery also finds that such person
is nevertheless fairly and reasonably entitled to indemnity. The Registrant's
Certificate of Incorporation also eliminates the liability of directors of the
Registrant for monetary damages to the fullest extent permissible under Delaware
law.

      Section 145 of the Delaware General Corporation Law states:

            (a) A corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action arising by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.

            (b) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expense which the Court of Chancery or
such other court shall deem proper.

Item 7.  Exemption from Registration Claimed.
--------------------------------------------

      Not applicable.

Item 8.  Exhibits.
-----------------

   Exhibit      Description
     4.1        Registrant's 2003 Stock Option Plan.
     5.1        Opinion of Maslon Edelman Borman & Brand, LLP.
    23.1        Consent of J.H. Cohn LLP.
    23.2        Consent of Weinberg & Company, P.A.
    23.3        Consent of KPMG LLP.
    23.4        Consent of Maslon Edelman Borman & Brand, LLP
                (included in Exhibit 5.1).
    24.1        Power of Attorney (included on signature page hereof).

Item 9.  Undertakings.
---------------------

(a) The undersigned registrant hereby undertakes:

      (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

            (i) To include any prospectus required by Section 10(a)(3) of the
      Securities Act of 1933;

            (ii) To reflect in the prospectus any facts or events arising after
      the effective date of the registration statement (or the most recent
      post-effective amendment thereof) which, individually or in the aggregate,
      represent a fundamental change in the information set forth in the
      registration statement;

            (iii) To include any material information with respect to the plan
      of distribution not previously disclosed in the registration statement or
      any material change to such information in the registration statement;

      Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.

      (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person connected with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.


<PAGE>



                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and State of New York, on the 11th day of February,
2004.

                              MANHATTAN PHARMACEUTICALS, INC.


                              By:   /s/ Leonard Firestone
                                    --------------------------------------
                                    Leonard Firestone
                                    President and Chief Executive Officer

                                POWER OF ATTORNEY

      Each person whose signature to this Registration Statement appears below
hereby constitutes and appoints Nicholas J. Rossettos as his or her true and
lawful attorney-in-fact and agent, with full power of substitution, to sign on
his or her behalf individually and in the capacity stated below and to perform
any acts necessary to be done in order to file all amendments to this
Registration Statement and any and all instruments or documents filed as part of
or in connection with this Registration Statement or the amendments thereto and
each of the undersigned does hereby ratify and confirm all that said
attorney-in-fact and agent, or his substitutes, shall do or cause to be done by
virtue hereof. The undersigned also grants to said attorney-in-fact, full power
and authority to do and perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted. This Power of
Attorney shall remain in effect until revoked in writing by the undersigned.

      Pursuant to the requirements of the Securities Exchange Act of 1933, this
Registration Statement has been signed as of the 11th day of February, 2004, by
the following persons in the capacities indicated.

                 Name                                    Title
   /s/ Leonard Firestone               President and Chief Executive Officer
------------------------------------   (Principal Executive Officer)
      Leonard Firestone

   /s/ Nicholas J. Rossettos           Chief Operating Officer, Chief Financial
------------------------------------   Officer, Treasurer and Secretary
      Nicholas J. Rossettos            (Principal Financial and Accounting
                                       Officer)

   /s/ Joshua Kazam                    Director
------------------------------------
      Joshua Kazam

   /s/ Joan Pons Gimbert               Director
------------------------------------
      Joan Pons Gimbert

   /s/ David M. Tanen                  Director
------------------------------------
      David M. Tanen

   /s/ Michael Weiser                  Director
------------------------------------
      Michael Weiser


<PAGE>



                                INDEX TO EXHIBITS

   Exhibit      Description
   -------      -----------

     4.1        Registrant's 2003 Stock Option Plan.

     5.1        Opinion of Maslon Edelman Borman & Brand, LLP.

    23.1        Consent of J.H. Cohn LLP.

    23.2        Consent of Weinberg & Company, P.A.

    23.3        Consent of KPMG LLP.

    23.4        Consent of Maslon Edelman Borman & Brand, LLP (included in
                Exhibit 5.1).

    24.1        Power of Attorney (included on signature page hereof).


<PAGE>


                                                                     EXHIBIT 4.1

                         MANHATTAN PHARMACEUTICALS, INC.

                             2003 STOCK OPTION PLAN

      1. Purpose. The purpose of the 2003 Stock Option Plan (the "Plan") of
Manhattan Pharmaceuticals, Inc., a Delaware corporation (the "Company"), is to
increase stockholder value and to advance the interests of the Company by
furnishing a variety of economic incentives ("Incentives") designed to attract,
retain and motivate employees, directors and consultants. Incentives may consist
of opportunities to purchase or receive shares of common stock, $0.001 par
value, of the Company ("Common Stock"), monetary payments or both on terms
determined under this Plan.

      2. Administration.

            2.1 The Plan shall be administered by a committee (the "Committee")
      of the Board of Directors of the Company (the "Board"). The Committee
      shall consist of not less than two directors of the Company who shall be
      appointed from time to time by the board of directors of the Company. Each
      member of the Committee shall be a "non-employee director" within the
      meaning of Rule 16b-3 of the Exchange Act of 1934, as amended (together
      with the rules and regulations promulgated thereunder, the "Exchange
      Act"), and an "outside director" as defined in Section 162(m) of the
      Internal Revenue Code of 1986, as amended (the "Code"). The Committee
      shall have complete authority to determine all provisions of all
      Incentives awarded under the Plan (as consistent with the terms of the
      Plan), to interpret the Plan, and to make any other determination which it
      believes necessary and advisable for the proper administration of the
      Plan. The Committee's decisions and matters relating to the Plan shall be
      final and conclusive on the Company and its participants. No member of the
      Committee will be liable for any action or determination made in good
      faith with respect to the Plan or any Incentives granted under the Plan.
      The Committee will also have the authority under the Plan to amend or
      modify the terms of any outstanding Incentives in any manner; provided,
      however, that the amended or modified terms are permitted by the Plan as
      then in effect and that any recipient on an Incentive adversely affected
      by such amended or modified terms has consented to such amendment or
      modification. No amendment or modification to an Incentive, however,
      whether pursuant to this Section 2 or any other provisions of the Plan,
      will be deemed to be a re-grant of such Incentive for purposes of this
      Plan. If at any time there is no Committee, then for purposes of the Plan
      the term "Committee" shall mean the entire Board.

            2.2 In the event of (i) any reorganization, merger, consolidation,
      recapitalization, liquidation, reclassification, stock dividend, stock
      split, combination of shares, rights offering, extraordinary dividend or
      divestiture (including a spin-off) or any other similar change in
      corporate structure or shares, (ii) any purchase, acquisition, sale or
      disposition of a significant amount of assets or a significant business,
      (iii) any change in accounting principles or practices, or (iv) any other
      similar change, in each case with respect to the Company or any other
      entity whose performance is relevant to the grant or vesting of an
      Incentive, the Committee (or, if the Company is not the surviving
      corporation in any such transaction, the board of directors of the
      surviving corporation) may, without the consent of any affected
      participant, amend or modify the vesting criteria of any outstanding
      Incentive that is based in whole or in part on the financial performance
      of the Company (or any subsidiary or division thereof) or such other
      entity so as equitably to reflect such event, with the desired result that
      the criteria for evaluating such financial performance of the Company or
      such other entity will be substantially the same (in the sole discretion
      of the Committee or the board of directors of the surviving corporation)
      following such event as prior to such event; provided, however, that the
      amended or modified terms are permitted by the Plan as then in effect.

      3. Eligible Participants. Employees of the Company or its subsidiaries
(including officers and employees of the Company or its subsidiaries), directors
and consultants, advisors or other independent contractors who provide services
to the Company or its subsidiaries (including members of the Company's
scientific advisory board) shall become eligible to receive Incentives under the
Plan when designated by the Committee. Participants may be designated
individually or by groups or categories (for example, by pay grade) as the
Committee deems appropriate. Participation by officers of the Company or its
subsidiaries and any performance objectives relating to such officers must be
approved by the Committee; provided, however, that if the entire Board is
serving as the Committee, then any Incentive awarded to an officer shall be
approved by a majority of the "non-employee directors" (within the meaning of
Rule 16b-3 of the Exchange Act). Participation by others and any performance
objectives relating to others may be approved by groups or categories (for
example, by pay grade) and authority to designate participants who are not
officers and to set or modify such targets may be delegated.

      4. Types of Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (Section 6); (b) stock appreciation rights ("SARs")
(Section 7); (c) stock awards (Section 8); (d) restricted stock (Section 8); and
(e) performance shares (Section 9).

       5. Shares Subject to the Plan.

            5.1. Number of Shares. Subject to adjustment as provided in Section
      11.6, the number of shares of Common Stock which may be issued under the
      Plan shall not exceed 5,400,000 shares of Common Stock. Shares of Common
      Stock that are issued under the Plan or that are subject to outstanding
      Incentives will be applied to reduce the maximum number of shares of
      Common Stock remaining available for issuance under the Plan.

            5.2. Cancellation. To the extent that cash in lieu of shares of
      Common Stock is delivered upon the exercise of an SAR pursuant to Section
      7.4, the Company shall be deemed, for purposes of applying the limitation
      on the number of shares, to have issued the greater of the number of
      shares of Common Stock which it was entitled to issue upon such exercise
      or on the exercise of any related option. In the event that a stock option
      or SAR granted hereunder expires or is terminated or canceled unexercised
      or unvested as to any shares of Common Stock, such shares may again be
      issued under the Plan either pursuant to stock options, SARs or otherwise.
      In the event that shares of Common Stock are issued as restricted stock or
      pursuant to a stock award and thereafter are forfeited or reacquired by
      the Company pursuant to rights reserved upon issuance thereof, such
      forfeited and reacquired shares may again be issued under the Plan, either
      as restricted stock, pursuant to stock awards or otherwise. The Committee
      may also determine to cancel, and agree to the cancellation of, stock
      options in order to make a participant eligible for the grant of a stock
      option at a lower price than the option to be canceled.

      6. Stock Options. A stock option is a right to purchase shares of Common
Stock from the Company. The Committee may designate whether an option is to be
considered an incentive stock option or a non-statutory stock option. To the
extent that any incentive stock option granted under the Plan ceases for any
reason to qualify as an "incentive stock option" for purposes of Section 422 of
the Code, such incentive stock option will continue to be outstanding for
purposes of the Plan but will thereafter be deemed to be a non-statutory stock
option. Each stock option granted by the Committee under this Plan shall be
subject to the following terms and conditions:

            6.1. Price. The option price per share shall be determined by the
      Committee, subject to adjustment under Section 11.6.

            6.2. Number. The number of shares of Common Stock subject to the
      option shall be determined by the Committee, subject to adjustment as
      provided in Section 11.6. The number of shares of Common Stock subject to
      a stock option shall be reduced in the same proportion that the holder
      thereof exercises a SAR if any SAR is granted in conjunction with or
      related to the stock option. No individual may receive options to purchase
      more than 2,000,000 shares in any year.

            6.3. Duration and Time for Exercise. Subject to earlier termination
      as provided in Section 11.4, the term of each stock option shall be
      determined by the Committee but in no event shall be more than ten years
      from the date of grant. Each stock option, or portion thereof, shall
      become exercisable at such time or times as may be designated by the
      Committee at the time of the stock option grant. The Committee may
      accelerate the vesting of any stock option.

            6.4. Manner of Exercise. Subject to the conditions contained in this
      Plan and in the agreement with the recipient evidencing such option, a
      stock option may be exercised, in whole or in part, by giving written
      notice to the Company, specifying the number of shares of Common Stock to
      be purchased and accompanied by the full purchase price for such shares.
      The exercise price shall be payable (a) in United States dollars upon
      exercise of the option and may be paid by cash; uncertified or certified
      check; bank draft; (b) by delivery of shares of Common Stock that are
      already owned by the participant in payment of all or any part of the
      exercise price, which shares shall be valued for this purpose at the Fair
      Market Value on the date such option is exercised; or (c) at the
      discretion of the Committee, by instructing the Company to withhold from
      the shares of Common Stock issuable upon exercise of the stock option
      shares of Common Stock in payment of all or any part of the exercise price
      and/or any related withholding tax obligations, which shares shall be
      valued for this purpose at the Fair Market Value. The shares of Common
      Stock delivered by the participant pursuant to Section 6.4(b) must have
      been held by the participant for a period of not less than six months
      prior to the exercise of the option, unless otherwise determined by the
      Committee. Prior to the issuance of shares of Common Stock upon the
      exercise of a stock option, a participant shall have no rights as a
      stockholder. Except as otherwise provided in the Plan, no adjustment will
      be made for dividends or distributions with respect to such stock options
      as to which there is a record date preceding the date the participant
      becomes the holder of record of such shares, except as the Committee may
      determine in its discretion.

            6.5. Incentive Stock Options. Notwithstanding anything in the Plan
      to the contrary, the following additional provisions shall apply to the
      grant of stock options which are intended to qualify as Incentive Stock
      Options (as such term is defined in Section 422 of the Code):

                  (a) The aggregate Fair Market Value (determined as of the time
            the option is granted) of the shares of Common Stock with respect to
            which Incentive Stock Options are exercisable for the first time by
            any participant during any calendar year (under the Plan and any
            other incentive stock option plans of the Company or any subsidiary
            or parent corporation of the Company) shall not exceed $100,000. The
            determination will be made by taking incentive stock options into
            account in the order in which they were granted.

                  (b) Any Incentive Stock Option certificate authorized under
            the Plan shall contain such other provisions as the Committee shall
            deem advisable, but shall in all events be consistent with and
            contain all provisions required in order to qualify the options as
            Incentive Stock Options.

                  (c) All Incentive Stock Options must be granted within ten
            years from the earlier of the date on which this Plan was adopted by
            board of directors or the date this Plan was approved by the
            Company's stockholders.

                  (d) Unless sooner exercised, all Incentive Stock Options shall
            expire no later than 10 years after the date of grant. No Incentive
            Stock Option may be exercisable after ten (10) years from its date
            of grant (five (5) years from its date of grant if, at the time the
            Incentive Stock Option is granted, the Participant owns, directly or
            indirectly, more than 10% of the total combined voting power of all
            classes of stock of the Company or any parent or subsidiary
            corporation of the Company).

                  (e) The exercise price for Incentive Stock Options shall be
            not less than 100% of the Fair Market Value of one share of Common
            Stock on the date of grant with respect to an Incentive Stock
            Option; provided that the exercise price shall be 110% of the Fair
            Market Value if, at the time the Incentive Stock Option is granted,
            the participant owns, directly or indirectly, more than 10% of the
            total combined voting power of all classes of stock of the Company
            or any parent or subsidiary corporation of the Company.

      7. Stock Appreciation Rights. An SAR is a right to receive, without
payment to the Company, a number of shares of Common Stock, cash or any
combination thereof, the amount of which is determined pursuant to the formula
set forth in Section 7.4. An SAR may be granted (a) with respect to any stock
option granted under this Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as to all or any
portion of the shares of Common Stock subject to the stock option), or (b)
alone, without reference to any related stock option. Each SAR granted by the
Committee under this Plan shall be subject to the following terms and
conditions:

            7.1. Number; Exercise Price. Each SAR granted to any participant
      shall relate to such number of shares of Common Stock as shall be
      determined by the Committee, subject to adjustment as provided in Section
      11.6. In the case of an SAR granted with respect to a stock option, the
      number of shares of Common Stock to which the SAR pertains shall be
      reduced in the same proportion that the holder of the option exercises the
      related stock option. The exercise price of an SAR will be determined by
      the Committee, in its discretion, at the date of grant but may not be less
      than 100% of the Fair Market Value of one share of Common Stock on the
      date of grant.

            7.2. Duration. Subject to earlier termination as provided in Section
      11.4, the term of each SAR shall be determined by the Committee but shall
      not exceed ten years and one day from the date of grant. Unless otherwise
      provided by the Committee, each SAR shall become exercisable at such time
      or times, to such extent and upon such conditions as the stock option, if
      any, to which it relates is exercisable. The Committee may in its
      discretion accelerate the exercisability of any SAR.

            7.3. Exercise. An SAR may be exercised, in whole or in part, by
      giving written notice to the Company, specifying the number of SARs which
      the holder wishes to exercise. Upon receipt of such written notice, the
      Company shall, within 90 days thereafter, deliver to the exercising holder
      certificates for the shares of Common Stock or cash or both, as determined
      by the Committee, to which the holder is entitled pursuant to Section 7.4.

            7.4. Payment. Subject to the right of the Committee to deliver cash
      in lieu of shares of Common Stock (which, as it pertains to officers and
      directors of the Company, shall comply with all requirements of the
      Exchange Act), the number of shares of Common Stock which shall be
      issuable upon the exercise of an SAR shall be determined by dividing:

                  (a) the number of shares of Common Stock as to which the SAR
            is exercised multiplied by the amount of the appreciation in such
            shares (for this purpose, the "appreciation" shall be the amount by
            which the Fair Market Value of the shares of Common Stock subject to
            the SAR on the exercise date exceeds (1) in the case of an SAR
            related to a stock option, the exercise price of the shares of
            Common Stock under the stock option or (2) in the case of an SAR
            granted alone, without reference to a related stock option, an
            amount which shall be determined by the Committee at the time of
            grant, subject to adjustment under Section 11.6); by

                  (b) the Fair Market Value of a share of Common Stock on the
            exercise date.

            In lieu of issuing shares of Common Stock upon the exercise of a
      SAR, the Committee may elect to pay the holder of the SAR cash equal to
      the Fair Market Value on the exercise date of any or all of the shares
      which would otherwise be issuable. No fractional shares of Common Stock
      shall be issued upon the exercise of an SAR; instead, the holder of the
      SAR shall be entitled to receive a cash adjustment equal to the same
      fraction of the Fair Market Value of a share of Common Stock on the
      exercise date or to purchase the portion necessary to make a whole share
      at its Fair Market Value on the date of exercise.

      8. Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
The participant receiving a stock award will have all voting, dividend,
liquidation and other rights with respect to the shares of Common Stock issued
to a participant as a stock award under this Section 8 upon the participant
becoming the holder of record of such shares. A share of restricted stock
consists of shares of Common Stock which are sold or transferred by the Company
to a participant at a price determined by the Committee (which price shall be at
least equal to the minimum price required by applicable law for the issuance of
a share of Common Stock) and subject to restrictions on their sale or other
transfer by the participant, which restrictions and conditions may be determined
by the Committee as long as such restrictions and conditions are not
inconsistent with the terms of the Plan. The transfer of Common Stock pursuant
to stock awards and the transfer and sale of restricted stock shall be subject
to the following terms and conditions:

            8.1. Number of Shares. The number of shares to be transferred or
      sold by the Company to a participant pursuant to a stock award or as
      restricted stock shall be determined by the Committee.

            8.2. Sale Price. The Committee shall determine the price, if any, at
      which shares of restricted stock shall be sold or granted to a
      participant, which may vary from time to time and among participants and
      which may be below the Fair Market Value of such shares of Common Stock at
      the date of sale.

            8.3. Restrictions. All shares of restricted stock transferred or
      sold hereunder shall be subject to such restrictions as the Committee may
      determine, including, without limitation any or all of the following:

                  (a) a prohibition against the sale, transfer, pledge or other
            encumbrance of the shares of restricted stock, such prohibition to
            lapse at such time or times as the Committee shall determine
            (whether in annual or more frequent installments, at the time of the
            death, Disability or retirement of the holder of such shares, or
            otherwise);

                  (b) a requirement that the holder of shares of restricted
            stock forfeit, or (in the case of shares sold to a participant)
            resell back to the Company at his or her cost, all or a part of such
            shares in the event of termination of his or her employment or
            consulting engagement during any period in which such shares are
            subject to restrictions; or

                  (c) such other conditions or restrictions as the Committee may
            deem advisable.

            8.4. Escrow. In order to enforce the restrictions imposed by the
      Committee pursuant to Section 8.3, the participant receiving restricted
      stock shall enter into an agreement with the Company setting forth the
      conditions of the grant. Shares of restricted stock shall be registered in
      the name of the participant and deposited, together with a stock power
      endorsed in blank, with the Company. Each such certificate shall bear a
      legend in substantially the following form:

            The transferability of this certificate and the shares of Common
            Stock represented by it are subject to the terms and conditions
            (including conditions of forfeiture) contained in the 2003 Stock
            Option Plan of Manhattan Pharmaceuticals, Inc. (the "Company"), and
            an agreement entered into between the registered owner and the
            Company. A copy of the 2003 Stock Option Plan and the agreement is
            on file in the office of the secretary of the Company.

            8.5. End of Restrictions. Subject to Section 11.5, at the end of any
      time period during which the shares of restricted stock are subject to
      forfeiture and restrictions on transfer, such shares will be delivered
      free of all restrictions to the participant or to the participant's legal
      representative, beneficiary or heir.

            8.6. Stockholder. Subject to the terms and conditions of the Plan,
      each participant receiving restricted stock shall have all the rights of a
      stockholder with respect to shares of stock during any period in which
      such shares are subject to forfeiture and restrictions on transfer,
      including without limitation, the right to vote such shares. Dividends
      paid in cash or property other than Common Stock with respect to shares of
      restricted stock shall be paid to the participant currently. Unless the
      Committee determines otherwise in its sole discretion, any dividends or
      distributions (including regular quarterly cash dividends) paid with
      respect to shares of Common Stock subject to the restrictions set forth
      above will be subject to the same restrictions as the shares to which such
      dividends or distributions relate. In the event the Committee determines
      not to pay dividends or distributions currently, the Committee will
      determine in its sole discretion whether any interest will be paid on such
      dividends or distributions. In addition, the Committee in its sole
      discretion may require such dividends and distributions to be reinvested
      (and in such case the participant consents to such reinvestment) in shares
      of Common Stock that will be subject to the same restrictions as the
      shares to which such dividends or distributions relate.

      9. Performance Shares. A performance share consists of an award which
shall be paid in shares of Common Stock, as described below. The grant of a
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:

            9.1. Performance Objectives. Each performance share will be subject
      to performance objectives for the Company or one of its operating units to
      be achieved by the participant before the end of a specified period. The
      number of performance shares granted shall be determined by the Committee
      and may be subject to such terms and conditions, as the Committee shall
      determine. If the performance objectives are achieved, each participant
      will be paid in shares of Common Stock or cash as determined by the
      Committee. If such objectives are not met, each grant of performance
      shares may provide for lesser payments in accordance with formulas
      established in the award.

            9.2. Not Stockholder. The grant of performance shares to a
      participant shall not create any rights in such participant as a
      stockholder of the Company, until the payment of shares of Common Stock
      with respect to an award.

            9.3. No Adjustments. No adjustment shall be made in performance
      shares granted on account of cash dividends which may be paid or other
      rights which may be issued to the holders of Common Stock prior to the end
      of any period for which performance objectives were established.

            9.4. Expiration of Performance Share. If any participant's
      employment or consulting engagement with the Company is terminated for any
      reason other than normal retirement, death or Disability prior to the
      achievement of the participant's stated performance objectives, all the
      participant's rights on the performance shares shall expire and terminate
      unless otherwise determined by the Committee. In the event of termination
      of employment or consulting by reason of death, Disability, or normal
      retirement, the Committee, in its own discretion may determine what
      portions, if any, of the performance shares should be paid to the
      participant.

      10. Change of Control.

            10.1 Change in Control. For purposes of this Section 10, a "Change
      in Control" of the Company will mean the following:

                  (a) the sale, lease, exchange or other transfer, directly or
            indirectly, of all or substantially all of the assets of the Company
            (in one transaction or in a series of related transactions) to a
            person or entity that is not controlled by the Company;

                  (b) the approval by the stockholders of the Company of any
            plan or proposal for the liquidation or dissolution of the Company;

                  (c) any person becomes after the effective date of the Plan
            the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
            Act), directly or indirectly, of (i) 20% or more, but not 50% or
            more, of the combined voting power of the Company's outstanding
            securities ordinarily having the right to vote at elections of
            directors, unless the transaction resulting in such ownership has
            been approved in advance by the Continuing Directors (as defined
            below), or (ii) 50% or more of the combined voting power of the
            Company's outstanding securities ordinarily having the right to vote
            at elections of directors (regardless of any approval by the
            Continuing Directors); provided that a traditional institution or
            venture capital financing transaction shall be excluded from this
            definition;

                  (d) a merger or consolidation to which the Company is a party
            if the stockholders of the Company immediately prior to effective
            date of such merger or consolidation have "beneficial ownership" (as
            defined in Rule 13d-3 under the Exchange Act), immediately following
            the effective date of such merger or consolidation, of securities of
            the surviving corporation representing (i) 50% or more, but less
            than 80%, of the combined voting power of the surviving
            corporation's then outstanding securities ordinarily having the
            right to vote at elections of directors, unless such merger or
            consolidation has been approved in advance by the Continuing
            Directors, or (ii) less than 50% of the combined voting power of the
            surviving corporation's then outstanding securities ordinarily
            having the right to vote at elections of directors (regardless of
            any approval by the Continuing Directors).

            10.2 Continuing Directors. For purposes of this Section 10,
      "Continuing Directors" of the Company will mean any individuals who are
      members of the Board on the effective date of the Plan and any individual
      who subsequently becomes a member of the Board whose election, or
      nomination for election by the Company's stockholders, was approved by a
      vote of at least a majority of the Continuing Directors (either by
      specific vote or by approval of the Company's proxy statement in which
      such individual is named as a nominee for director without objection to
      such nomination).

            10.3 Acceleration of Incentives. Without limiting the authority of
      the Committee under the Plan, if a Change of Control of the Company occurs
      whereby the acquiring entity or successor to the Company does not assume
      the Incentives or replace them with substantially equivalent incentive
      awards, then upon the effective date of any such Change in Control (a) all
      outstanding options and SARs will vest and will become immediately
      exercisable in full and will remain exercisable for the remainder of their
      terms, regardless of whether the participant to whom such options or SARs
      have been granted remains in the employ or service of the Company or any
      subsidiary of the Company or any acquiring entity or successor to the
      Company; (b) the restrictions on all shares of restricted stock awards
      shall lapse immediately; and (c) all performance shares shall be deemed to
      be met and payment made immediately.

            10.4 Cash Payment for Options. If a Change in Control of the Company
      occurs, then the Committee, if approved by the Committee in its sole
      discretion either in an agreement evidencing an option at the time of
      grant or at any time after the grant of an option, and without the consent
      of any participant affected thereby, may determine that:

                  (a) some or all participants holding outstanding options will
            receive, with respect to some or all of the shares of Common Stock
            subject to such options, as of the effective date of any such Change
            in Control of the Company, cash in an amount equal to the excess of
            the Fair Market Value of such shares immediately prior to the
            effective date of such Change in Control of the Company over the
            exercise price per share of such options; and

                  (b) any options as to which, as of the effective date of any
            such Change in Control, the Fair Market Value of the shares of
            Common Stock subject to such options is less than or equal to the
            exercise price per share of such options, shall terminate as of the
            effective date of any such Change in Control.

      If the Committee makes a determination as set forth in subparagraph (a) of
      this Section 10.4, then as of the effective date of any such Change in
      Control of the Company, such options will terminate as to such shares and
      the participants formerly holding such options will only have the right to
      receive such cash payment(s). If the Committee makes a determination as
      set forth in subparagraph (b) of this Section 10.4, then as of the
      effective date of any such Change in Control of the Company such options
      will terminate, become void and expire as to all unexercised shares of
      Common Stock subject to such options on such date, and the participants
      formerly holding such options will have no further rights with respect to
      such options.

      11. General.

            11.1. Effective Date. The Plan will become effective upon approval
      by the Board.

            11.2. Duration. The Plan shall remain in effect until all Incentives
      granted under the Plan have either been satisfied by the issuance of
      shares of Common Stock or the payment of cash or been terminated under the
      terms of the Plan and all restrictions imposed on shares of Common Stock
      in connection with their issuance under the Plan have lapsed. No
      Incentives may be granted under the Plan after the tenth anniversary of
      the date the Plan is approved by the stockholders of the Company.

            11.3. Non-transferability of Incentives. Except, in the event of the
      holder's death, by will or the laws of descent and distribution to the
      limited extent provided in the Plan or the Incentive, unless approved by
      the Committee, no stock option, SAR, restricted stock or performance award
      may be transferred, pledged or assigned by the holder thereof, either
      voluntarily or involuntarily, directly or indirectly, by operation of law
      or otherwise, and the Company shall not be required to recognize any
      attempted assignment of such rights by any participant. During a
      participant's lifetime, an Incentive may be exercised only by him or her
      or by his or her guardian or legal representative.

            11.4. Effect of Termination, Death or Disability. In the event that
      a participant ceases to be an employee of or consultant to the Company, or
      the participants other service with the Company is terminated, for any
      reason, including death, but excluding "Disability," any Incentives may be
      exercised or shall expire at such times as may be determined by the
      Committee in its sole discretion in the agreement evidencing an Incentive.
      Notwithstanding any provision to the contrary contained in the Plan, in
      the event that a participant ceases to be employed or engaged by the
      Company, or is otherwise unable to render services to the Company, as a
      result of a Disability, any portion of a stock option Incentive that has
      vested as of the date of such Disability shall remain exercisable for the
      remaining term of such stock option, or such lesser period as provided in
      the agreement evidencing the terms of such stock option; provided,
      however, that all portions of a stock option Incentive that have not yet
      vested or are scheduled to vest in the future shall not vest and the
      employee's rights to such portion of the stock option shall terminate.
      Notwithstanding the other provisions of this Section 11.4, upon a
      participant's termination of employment or other service with the Company
      and all subsidiaries (other than as a result of a Disability), the
      Committee may, in its sole discretion (which may be exercised at any time
      on or after the date of grant, including following such termination),
      cause options and SARs (or any part thereof) then held by such participant
      to become or continue to become exercisable and/or remain exercisable
      following such termination of employment or service and Restricted Stock
      Awards, Performance Shares and Stock Awards then held by such participant
      to vest and/or continue to vest or become free of transfer restrictions,
      as the case may be, following such termination of employment or service,
      in each case in the manner determined by the Committee; provided, however,
      that no Incentive may remain exercisable or continue to vest beyond its
      expiration date. Any Incentive Stock Option that remains unexercised more
      than one (1) year following termination of employment by reason of death
      or Disability or more than three (3) months following termination for any
      reason other than death or Disability will thereafter be deemed to be a
      Non-Statutory Stock Option. The term "Disability" shall mean, with respect
      to a participant, that such participant is unable to perform a significant
      part of his or her duties and responsibilities as an employee, director,
      consultant or other advisor to the Company by reason of such participant's
      physical or mental injury or illness, and such inability lasts for a
      period of at least 180 consecutive days.

            11.5. Additional Conditions. Notwithstanding anything in this Plan
      to the contrary: (a) the Company may, if it shall determine it necessary
      or desirable for any reason, at the time of award of any Incentive or the
      issuance of any shares of Common Stock pursuant to any Incentive, require
      the recipient of the Incentive, as a condition to the receipt thereof or
      to the receipt of shares of Common Stock issued pursuant thereto, to
      deliver to the Company a written representation of present intention to
      acquire the Incentive or the shares of Common Stock issued pursuant
      thereto for his or her own account for investment and not for
      distribution; and (b) if at any time the Company further determines, in
      its sole discretion, that the listing, registration or qualification (or
      any updating of any such document) of any Incentive or the shares of
      Common Stock issuable pursuant thereto is necessary on any securities
      exchange or under any federal or state securities or blue sky law, or that
      the consent or approval of any governmental regulatory body is necessary
      or desirable as a condition of, or in connection with the award of any
      Incentive, the issuance of shares of Common Stock pursuant thereto, or the
      removal of any restrictions imposed on such shares, such Incentive shall
      not be awarded or such shares of Common Stock shall not be issued or such
      restrictions shall not be removed, as the case may be, in whole or in
      part, unless such listing, registration, qualification, consent or
      approval shall have been effected or obtained free of any conditions not
      acceptable to the Company. Notwithstanding any other provision of the Plan
      or any agreements entered into pursuant to the Plan, the Company will not
      be required to issue any shares of Common Stock under this Plan, and a
      participant may not sell, assign, transfer or otherwise dispose of shares
      of Common Stock issued pursuant to any Incentives granted under the Plan,
      unless (a) there is in effect with respect to such shares a registration
      statement under the Securities Act of 1933, as amended (the "Securities
      Act"), and any applicable state or foreign securities laws or an exemption
      from such registration under the Securities Act and applicable state or
      foreign securities laws, and (b) there has been obtained any other
      consent, approval or permit from any other regulatory body which the
      Committee, in its sole discretion, deems necessary or advisable. The
      Company may condition such issuance, sale or transfer upon the receipt of
      any representations or agreements from the parties involved, and the
      placement of any legends on certificates representing shares of Common
      Stock, as may be deemed necessary or advisable by the Company in order to
      comply with such securities law or other restrictions.

            11.6. Adjustment. In the event of any merger, consolidation or
      reorganization of the Company with any other corporation or corporations,
      there shall be substituted for each of the shares of Common Stock then
      subject to the Plan, including shares subject to restrictions, options, or
      achievement of performance share objectives, the number and kind of shares
      of stock or other securities to which the holders of the shares of Common
      Stock will be entitled pursuant to the transaction. In the event of any
      recapitalization, reclassification, stock dividend, stock split,
      combination of shares or other similar change in the corporate structure
      of the Company or shares of the Company, the exercise price of an
      outstanding Incentive and the number of shares of Common Stock then
      subject to the Plan, including shares subject to restrictions, options or
      achievements of performance shares, shall be adjusted in proportion to the
      change in outstanding shares of Common Stock in order to prevent dilution
      or enlargement of the rights of the participants. In the event of any such
      adjustments, the purchase price of any option, the performance objectives
      of any Incentive, and the shares of Common Stock issuable pursuant to any
      Incentive shall be adjusted as and to the extent appropriate, in the
      discretion of the Committee, to provide participants with the same
      relative rights before and after such adjustment.

            11.7. Incentive Plans and Agreements. Except in the case of stock
      awards or cash awards, the terms of each Incentive shall be stated in a
      plan or agreement approved by the Committee. The Committee may also
      determine to enter into agreements with holders of options to reclassify
      or convert certain outstanding options, within the terms of the Plan, as
      Incentive Stock Options or as non-statutory stock options and in order to
      eliminate SARs with respect to all or part of such options and any other
      previously issued options.

            11.8. Withholding.

                  (a) The Company shall have the right to (i) withhold and
            deduct from any payments made under the Plan or from future wages of
            the participant (or from other amounts that may be due and owing to
            the participant from the Company or a subsidiary of the Company), or
            make other arrangements for the collection of, all legally required
            amounts necessary to satisfy any and all foreign, federal, state and
            local withholding and employment-related tax requirements
            attributable to an Incentive, or (ii) require the participant
            promptly to remit the amount of such withholding to the Company
            before taking any action, including issuing any shares of Common
            Stock, with respect to an Incentive. At any time when a participant
            is required to pay to the Company an amount required to be withheld
            under applicable income tax laws in connection with a distribution
            of Common Stock or upon exercise of an option or SAR, the
            participant may satisfy this obligation in whole or in part by
            electing (the "Election") to have the Company withhold from the
            distribution shares of Common Stock having a value up to the amount
            required to be withheld. The value of the shares to be withheld
            shall be based on the Fair Market Value of the Common Stock on the
            date that the amount of tax to be withheld shall be determined ("Tax
            Date").

                  (b) Each Election must be made prior to the Tax Date. The
            Committee may disapprove of any Election, may suspend or terminate
            the right to make Elections, or may provide with respect to any
            Incentive that the right to make Elections shall not apply to such
            Incentive. An Election is irrevocable.

                  (c) If a participant is an officer or director of the Company
            within the meaning of Section 16 of the Exchange Act, then an
            Election is subject to the following additional restrictions:

                        (1) No Election shall be effective for a Tax Date which
                  occurs within six months of the grant or exercise of the
                  award, except that this limitation shall not apply in the
                  event death or Disability of the participant occurs prior to
                  the expiration of the six-month period.

                        (2) The Election must be made either six months prior to
                  the Tax Date or must be made during a period beginning on the
                  third business day following the date of release for
                  publication of the Company's quarterly or annual summary
                  statements of sales and earnings and ending on the twelfth
                  business day following such date.

            11.9. No Continued Employment, Engagement or Right to Corporate
      Assets. No participant under the Plan shall have any right, because of his
      or her participation, to continue in the employ of the Company for any
      period of time or to any right to continue his or her present or any other
      rate of compensation. Nothing contained in the Plan shall be construed as
      giving an employee, a consultant, such persons' beneficiaries or any other
      person any equity or interests of any kind in the assets of the Company or
      creating a trust of any kind or a fiduciary relationship of any kind
      between the Company and any such person.

            11.10. Deferral Permitted. Payment of cash or distribution of any
      shares of Common Stock to which a participant is entitled under any
      Incentive shall be made as provided in the Incentive. Payment may be
      deferred at the option of the participant if provided in the Incentive.

            11.11. Amendment of the Plan. The Board may amend, suspend or
      discontinue the Plan at any time; provided, however, that no amendments to
      the Plan will be effective without approval of the stockholders of the
      Company if stockholder approval of the amendment is then required pursuant
      to Section 422 of the Code or the rules of any stock exchange or Nasdaq or
      similar regulatory body. No termination, suspension or amendment of the
      Plan may adversely affect any outstanding Incentive without the consent of
      the affected participant; provided, however, that this sentence will not
      impair the right of the Committee to take whatever action it deems
      appropriate under Section 11.6 of the Plan.

            11.12. Definition of Fair Market Value. For purposes of this Plan,
      the "Fair Market Value" of a share of Common Stock at a specified date
      shall, unless otherwise expressly provided in this Plan, be the amount
      which the Committee or the board of directors of the Company determines in
      good faith in the exercise of its reasonable discretion to be 100% of the
      fair market value of such a share as of the date in question; provided,
      however, that notwithstanding the foregoing, if such shares are listed on
      a U.S. securities exchange or are quoted on the Nasdaq National Market
      System or Nasdaq SmallCap Stock Market (collectively, "Nasdaq"), then Fair
      Market Value shall be determined by reference to the last sale price of a
      share of Common Stock on such U.S. securities exchange or Nasdaq on the
      applicable date. If such U.S. securities exchange or Nasdaq is closed for
      trading on such date, or if the Common Stock does not trade on such date,
      then the last sale price used shall be the one on the date the Common
      Stock last traded on such U.S. securities exchange or Nasdaq.

            11.13 Breach of Confidentiality, Assignment of Inventions, or
      Non-Compete Agreements. Notwithstanding anything in the Plan to the
      contrary, in the event that a participant materially breaches the terms of
      any confidentiality, assignment of inventions, or non-compete agreement
      entered into with the Company or any subsidiary of the Company, whether
      such breach occurs before or after termination of such participant's
      employment or other service with the Company or any subsidiary, the
      Committee in its sole discretion may immediately terminate all rights of
      the participant under the Plan and any agreements evidencing an Incentive
      then held by the participant without notice of any kind.

            11.14 Governing Law. The validity, construction, interpretation,
      administration and effect of the Plan and any rules, regulations and
      actions relating to the Plan will be governed by and construed exclusively
      in accordance with the laws of the State of Delaware, notwithstanding the
      conflicts of laws principles of any jurisdictions.

            11.15 Successors and Assigns. The Plan will be binding upon and
      inure to the benefit of the successors and permitted assigns of the
      Company and the participants in the Plan.
[{"type": "S-8", "sequence": "1", "filename": "v01586_s8.txt", "secsgml_size_bytes": 68841}]
{"company-data": {"conformed-name": "MANHATTAN PHARMACEUTICALS INC", "cik": "0001001316", "assigned-sic": "2834", "irs-number": "363898269", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-112889", "film-number": "04608401"}, "business-address": {"street1": "787 SEVENTH AVENUE", "street2": "48TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10019", "phone": "2125544555"}, "mail-address": {"street1": "787 SEVENTH AVENUE", "street2": "48TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10019"}, "former-company": [{"former-conformed-name": "ATLANTIC TECHNOLOGY VENTURES INC", "date-changed": "20000330"}, {"former-conformed-name": "ATLANTIC PHARMACEUTICALS INC", "date-changed": "19960703"}]}
As filed with the Securities and Exchange Commission on February 17, 2004
Registration No. 333-______

==============================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                        ---------------------------------

                                    FORM S-8
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                        ---------------------------------

                         MANHATTAN PHARMACEUTICALS, INC.
             (Exact name of registrant as specified in its charter)

          Delaware           787 Seventh Avenue, 48th Floor      36-3898269
      (State or other            New York, NY 10019           (I.R.S. Employer
      jurisdiction of          Telephone (212) 554-4525      Identification No.)
      Incorporation or         Facsimile (212) 554-4545
       organization)

                         -------------------------------

                              2003 Stock Option Plan
                            (Full title of the Plans)

                           ---------------------------

         Nicholas J. Rossettos                         Copies to:
        Chief Financial Officer                Christopher J. Melsha, Esq.
    Manhattan Pharmaceuticals, Inc.        Maslon Edelman Borman & Brand, LLP
     787 Seventh Avenue, 48th Floor          90 South 7th Street, Suite 3300
           New York, NY 10019                 Minneapolis, Minnesota 55402
        Telephone (212) 554-4555                Telephone: (612) 672-8200
 (Name and address of agent for service)        Facsimile: (612) 642-8343

                      ------------------------------------

                         CALCULATION OF REGISTRATION FEE
==================================================================================================
                                                    Proposed
                                  Proposed          Maximum
                                   Maximum          Offering
           Title of             Amount to be        Price Per        Aggregate         Amount of
  Securities to be Registered    Registered (1)     Share Fee (2)   Offering Price   Registration
--------------------------------------------------------------------------------------------------
Common Stock,  par  value         5,400,000          $1.60           $8,640,000        $1,094.69
$.001 per share
--------------------------------------------------------------------------------------------------
(1)   There is also being registered hereunder an indeterminate number of shares
      of common stock as shall be issuable as a result of a stock split, stock
      dividend, combination or other change in the outstanding shares of common
      stock.
(2)   Estimated solely for the purpose of calculating the registration fee in
      accordance with paragraphs (c) and (h) of Rule 457 of the Securities Act
      based upon a $1.60 per share average of high and low prices of the
      Registrant's common stock on the OTC Bulletin Board on February 13, 2004.

==============================================================================
PART I

      As permitted by the rules of the Securities and Exchange Commission, this
registration statement omits the information specified in Part I of Form S-8.
The documents containing the information specified in Part I of this
registration statement will be sent or given to eligible employees as specified
in Rule 428(b) promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). Such documents are not being filed with the Commission either
as part of this registration statement or as prospectuses or prospectus
supplements pursuant to Rule 424 promulgated under the Securities Act.

                                       1
PART II

Item 3.  Incorporation of Documents by Reference.
------------------------------------------------

      The following documents filed by the Registrant with the Securities and
Exchange Commission are hereby incorporated by reference herein:

1.       Annual Report on Form 10-KSB for the fiscal year ended December 31,
         2002 (filed on April 14, 2003);

2.       Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2003
         (including amendment thereto filed on August 11, 2003), June 30, 2003,
         and September 30, 2003;

3.       Current Reports on Form 8-K filed March 10, 2003, August 15, 2003,
         September 23, 2003, and November 11, 2003, and on Form 8-K/A filed May
         9, 2003; and

4.       The description of capital stock as set forth on Form 8-A filed on
         November 28, 1995 (No. 00-27282).

      All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.

Item 4.  Description of Securities.
----------------------------------

      Not applicable.

Item 5.  Interests of Named Experts and Counsel.
-----------------------------------------------

      As a condition to consenting to allow the Registrant to incorporate by
reference into this registration statement its audit report, KPMG LLP ("KPMG")
has required the Registrant, and the Registrant has agreed, to indemnify and
hold KPMG harmless against and from any and all legal costs and expenses
incurred by KPMG in successful defense of any legal action or proceeding that
arises as a result of KPMG's consent to the incorporation by reference of its
audit report on the Registrant's past financial statements incorporated by
reference in this registration statement.

Item 6.  Indemnification of Directors and Officers.
--------------------------------------------------

      Under provisions of the certificate of incorporation and bylaws of the
Registrant, directors and officers will be indemnified for any and all
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys fees, in connection with threatened, pending or completed actions,
suits or proceedings, whether civil, or criminal, administrative or
investigative (other than an action arising by or in the right of the
Registrant), if such director or officer has been wholly successful on the
merits or otherwise, or is found to have acted in good faith and in a manner he
or she reasonably believes to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In addition,
directors and officers will be indemnified for reasonable expenses in connection
with threatened, pending or completed actions or suits by or in the right of
Registrant if such director or officer has been wholly successful on the merits
or otherwise, or is found to have acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
Registrant, except in the case of certain findings by a court that such person
is liable for negligence or misconduct in his or her duty to the Registrant
unless such court or the Delaware Court of Chancery also finds that such person
is nevertheless fairly and reasonably entitled to indemnity. The Registrant's
Certificate of Incorporation also eliminates the liability of directors of the
Registrant for monetary damages to the fullest extent permissible under Delaware
law.

      Section 145 of the Delaware General Corporation Law states:

            (a) A corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action arising by or in the right of the
corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.

            (b) A corporation shall have power to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and except that no indemnification shall be
made in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expense which the Court of Chancery or
such other court shall deem proper.

Item 7.  Exemption from Registration Claimed.
--------------------------------------------

      Not applicable.

Item 8.  Exhibits.
-----------------

   Exhibit      Description
     4.1        Registrant's 2003 Stock Option Plan.
     5.1        Opinion of Maslon Edelman Borman & Brand, LLP.
    23.1        Consent of J.H. Cohn LLP.
    23.2        Consent of Weinberg & Company, P.A.
    23.3        Consent of KPMG LLP.
    23.4        Consent of Maslon Edelman Borman & Brand, LLP
                (included in Exhibit 5.1).
    24.1        Power of Attorney (included on signature page hereof).

Item 9.  Undertakings.
---------------------

(a) The undersigned registrant hereby undertakes:

      (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

            (i) To include any prospectus required by Section 10(a)(3) of the
      Securities Act of 1933;

            (ii) To reflect in the prospectus any facts or events arising after
      the effective date of the registration statement (or the most recent
      post-effective amendment thereof) which, individually or in the aggregate,
      represent a fundamental change in the information set forth in the
      registration statement;

            (iii) To include any material information with respect to the plan
      of distribution not previously disclosed in the registration statement or
      any material change to such information in the registration statement;

      Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.

      (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person connected with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and State of New York, on the 11th day of February,
2004.

                              MANHATTAN PHARMACEUTICALS, INC.

                              By:   /s/ Leonard Firestone
                                    --------------------------------------
                                    Leonard Firestone
                                    President and Chief Executive Officer

                                POWER OF ATTORNEY

      Each person whose signature to this Registration Statement appears below
hereby constitutes and appoints Nicholas J. Rossettos as his or her true and
lawful attorney-in-fact and agent, with full power of substitution, to sign on
his or her behalf individually and in the capacity stated below and to perform
any acts necessary to be done in order to file all amendments to this
Registration Statement and any and all instruments or documents filed as part of
or in connection with this Registration Statement or the amendments thereto and
each of the undersigned does hereby ratify and confirm all that said
attorney-in-fact and agent, or his substitutes, shall do or cause to be done by
virtue hereof. The undersigned also grants to said attorney-in-fact, full power
and authority to do and perform any and all acts necessary or incidental to the
performance and execution of the powers herein expressly granted. This Power of
Attorney shall remain in effect until revoked in writing by the undersigned.

      Pursuant to the requirements of the Securities Exchange Act of 1933, this
Registration Statement has been signed as of the 11th day of February, 2004, by
the following persons in the capacities indicated.

                 Name                                    Title
   /s/ Leonard Firestone               President and Chief Executive Officer
------------------------------------   (Principal Executive Officer)
      Leonard Firestone

   /s/ Nicholas J. Rossettos           Chief Operating Officer, Chief Financial
------------------------------------   Officer, Treasurer and Secretary
      Nicholas J. Rossettos            (Principal Financial and Accounting
                                       Officer)

   /s/ Joshua Kazam                    Director
------------------------------------
      Joshua Kazam

   /s/ Joan Pons Gimbert               Director
------------------------------------
      Joan Pons Gimbert

   /s/ David M. Tanen                  Director
------------------------------------
      David M. Tanen

   /s/ Michael Weiser                  Director
------------------------------------
      Michael Weiser
INDEX TO EXHIBITS

   Exhibit      Description
   -------      -----------

     4.1        Registrant's 2003 Stock Option Plan.

     5.1        Opinion of Maslon Edelman Borman & Brand, LLP.

    23.1        Consent of J.H. Cohn LLP.

    23.2        Consent of Weinberg & Company, P.A.

    23.3        Consent of KPMG LLP.

    23.4        Consent of Maslon Edelman Borman & Brand, LLP (included in
                Exhibit 5.1).

    24.1        Power of Attorney (included on signature page hereof).
EXHIBIT 4.1

                         MANHATTAN PHARMACEUTICALS, INC.

                             2003 STOCK OPTION PLAN

      1. Purpose. The purpose of the 2003 Stock Option Plan (the "Plan") of
Manhattan Pharmaceuticals, Inc., a Delaware corporation (the "Company"), is to
increase stockholder value and to advance the interests of the Company by
furnishing a variety of economic incentives ("Incentives") designed to attract,
retain and motivate employees, directors and consultants. Incentives may consist
of opportunities to purchase or receive shares of common stock, $0.001 par
value, of the Company ("Common Stock"), monetary payments or both on terms
determined under this Plan.

      2. Administration.

            2.1 The Plan shall be administered by a committee (the "Committee")
      of the Board of Directors of the Company (the "Board"). The Committee
      shall consist of not less than two directors of the Company who shall be
      appointed from time to time by the board of directors of the Company. Each
      member of the Committee shall be a "non-employee director" within the
      meaning of Rule 16b-3 of the Exchange Act of 1934, as amended (together
      with the rules and regulations promulgated thereunder, the "Exchange
      Act"), and an "outside director" as defined in Section 162(m) of the
      Internal Revenue Code of 1986, as amended (the "Code"). The Committee
      shall have complete authority to determine all provisions of all
      Incentives awarded under the Plan (as consistent with the terms of the
      Plan), to interpret the Plan, and to make any other determination which it
      believes necessary and advisable for the proper administration of the
      Plan. The Committee's decisions and matters relating to the Plan shall be
      final and conclusive on the Company and its participants. No member of the
      Committee will be liable for any action or determination made in good
      faith with respect to the Plan or any Incentives granted under the Plan.
      The Committee will also have the authority under the Plan to amend or
      modify the terms of any outstanding Incentives in any manner; provided,
      however, that the amended or modified terms are permitted by the Plan as
      then in effect and that any recipient on an Incentive adversely affected
      by such amended or modified terms has consented to such amendment or
      modification. No amendment or modification to an Incentive, however,
      whether pursuant to this Section 2 or any other provisions of the Plan,
      will be deemed to be a re-grant of such Incentive for purposes of this
      Plan. If at any time there is no Committee, then for purposes of the Plan
      the term "Committee" shall mean the entire Board.

            2.2 In the event of (i) any reorganization, merger, consolidation,
      recapitalization, liquidation, reclassification, stock dividend, stock
      split, combination of shares, rights offering, extraordinary dividend or
      divestiture (including a spin-off) or any other similar change in
      corporate structure or shares, (ii) any purchase, acquisition, sale or
      disposition of a significant amount of assets or a significant business,
      (iii) any change in accounting principles or practices, or (iv) any other
      similar change, in each case with respect to the Company or any other
      entity whose performance is relevant to the grant or vesting of an
      Incentive, the Committee (or, if the Company is not the surviving
      corporation in any such transaction, the board of directors of the
      surviving corporation) may, without the consent of any affected
      participant, amend or modify the vesting criteria of any outstanding
      Incentive that is based in whole or in part on the financial performance
      of the Company (or any subsidiary or division thereof) or such other
      entity so as equitably to reflect such event, with the desired result that
      the criteria for evaluating such financial performance of the Company or
      such other entity will be substantially the same (in the sole discretion
      of the Committee or the board of directors of the surviving corporation)
      following such event as prior to such event; provided, however, that the
      amended or modified terms are permitted by the Plan as then in effect.

      3. Eligible Participants. Employees of the Company or its subsidiaries
(including officers and employees of the Company or its subsidiaries), directors
and consultants, advisors or other independent contractors who provide services
to the Company or its subsidiaries (including members of the Company's
scientific advisory board) shall become eligible to receive Incentives under the
Plan when designated by the Committee. Participants may be designated
individually or by groups or categories (for example, by pay grade) as the
Committee deems appropriate. Participation by officers of the Company or its
subsidiaries and any performance objectives relating to such officers must be
approved by the Committee; provided, however, that if the entire Board is
serving as the Committee, then any Incentive awarded to an officer shall be
approved by a majority of the "non-employee directors" (within the meaning of
Rule 16b-3 of the Exchange Act). Participation by others and any performance
objectives relating to others may be approved by groups or categories (for
example, by pay grade) and authority to designate participants who are not
officers and to set or modify such targets may be delegated.

      4. Types of Incentives. Incentives under the Plan may be granted in any
one or a combination of the following forms: (a) incentive stock options and
non-statutory stock options (Section 6); (b) stock appreciation rights ("SARs")
(Section 7); (c) stock awards (Section 8); (d) restricted stock (Section 8); and
(e) performance shares (Section 9).

       5. Shares Subject to the Plan.

            5.1. Number of Shares. Subject to adjustment as provided in Section
      11.6, the number of shares of Common Stock which may be issued under the
      Plan shall not exceed 5,400,000 shares of Common Stock. Shares of Common
      Stock that are issued under the Plan or that are subject to outstanding
      Incentives will be applied to reduce the maximum number of shares of
      Common Stock remaining available for issuance under the Plan.

            5.2. Cancellation. To the extent that cash in lieu of shares of
      Common Stock is delivered upon the exercise of an SAR pursuant to Section
      7.4, the Company shall be deemed, for purposes of applying the limitation
      on the number of shares, to have issued the greater of the number of
      shares of Common Stock which it was entitled to issue upon such exercise
      or on the exercise of any related option. In the event that a stock option
      or SAR granted hereunder expires or is terminated or canceled unexercised
      or unvested as to any shares of Common Stock, such shares may again be
      issued under the Plan either pursuant to stock options, SARs or otherwise.
      In the event that shares of Common Stock are issued as restricted stock or
      pursuant to a stock award and thereafter are forfeited or reacquired by
      the Company pursuant to rights reserved upon issuance thereof, such
      forfeited and reacquired shares may again be issued under the Plan, either
      as restricted stock, pursuant to stock awards or otherwise. The Committee
      may also determine to cancel, and agree to the cancellation of, stock
      options in order to make a participant eligible for the grant of a stock
      option at a lower price than the option to be canceled.

      6. Stock Options. A stock option is a right to purchase shares of Common
Stock from the Company. The Committee may designate whether an option is to be
considered an incentive stock option or a non-statutory stock option. To the
extent that any incentive stock option granted under the Plan ceases for any
reason to qualify as an "incentive stock option" for purposes of Section 422 of
the Code, such incentive stock option will continue to be outstanding for
purposes of the Plan but will thereafter be deemed to be a non-statutory stock
option. Each stock option granted by the Committee under this Plan shall be
subject to the following terms and conditions:

            6.1. Price. The option price per share shall be determined by the
      Committee, subject to adjustment under Section 11.6.

            6.2. Number. The number of shares of Common Stock subject to the
      option shall be determined by the Committee, subject to adjustment as
      provided in Section 11.6. The number of shares of Common Stock subject to
      a stock option shall be reduced in the same proportion that the holder
      thereof exercises a SAR if any SAR is granted in conjunction with or
      related to the stock option. No individual may receive options to purchase
      more than 2,000,000 shares in any year.

            6.3. Duration and Time for Exercise. Subject to earlier termination
      as provided in Section 11.4, the term of each stock option shall be
      determined by the Committee but in no event shall be more than ten years
      from the date of grant. Each stock option, or portion thereof, shall
      become exercisable at such time or times as may be designated by the
      Committee at the time of the stock option grant. The Committee may
      accelerate the vesting of any stock option.

            6.4. Manner of Exercise. Subject to the conditions contained in this
      Plan and in the agreement with the recipient evidencing such option, a
      stock option may be exercised, in whole or in part, by giving written
      notice to the Company, specifying the number of shares of Common Stock to
      be purchased and accompanied by the full purchase price for such shares.
      The exercise price shall be payable (a) in United States dollars upon
      exercise of the option and may be paid by cash; uncertified or certified
      check; bank draft; (b) by delivery of shares of Common Stock that are
      already owned by the participant in payment of all or any part of the
      exercise price, which shares shall be valued for this purpose at the Fair
      Market Value on the date such option is exercised; or (c) at the
      discretion of the Committee, by instructing the Company to withhold from
      the shares of Common Stock issuable upon exercise of the stock option
      shares of Common Stock in payment of all or any part of the exercise price
      and/or any related withholding tax obligations, which shares shall be
      valued for this purpose at the Fair Market Value. The shares of Common
      Stock delivered by the participant pursuant to Section 6.4(b) must have
      been held by the participant for a period of not less than six months
      prior to the exercise of the option, unless otherwise determined by the
      Committee. Prior to the issuance of shares of Common Stock upon the
      exercise of a stock option, a participant shall have no rights as a
      stockholder. Except as otherwise provided in the Plan, no adjustment will
      be made for dividends or distributions with respect to such stock options
      as to which there is a record date preceding the date the participant
      becomes the holder of record of such shares, except as the Committee may
      determine in its discretion.

            6.5. Incentive Stock Options. Notwithstanding anything in the Plan
      to the contrary, the following additional provisions shall apply to the
      grant of stock options which are intended to qualify as Incentive Stock
      Options (as such term is defined in Section 422 of the Code):

                  (a) The aggregate Fair Market Value (determined as of the time
            the option is granted) of the shares of Common Stock with respect to
            which Incentive Stock Options are exercisable for the first time by
            any participant during any calendar year (under the Plan and any
            other incentive stock option plans of the Company or any subsidiary
            or parent corporation of the Company) shall not exceed $100,000. The
            determination will be made by taking incentive stock options into
            account in the order in which they were granted.

                  (b) Any Incentive Stock Option certificate authorized under
            the Plan shall contain such other provisions as the Committee shall
            deem advisable, but shall in all events be consistent with and
            contain all provisions required in order to qualify the options as
            Incentive Stock Options.

                  (c) All Incentive Stock Options must be granted within ten
            years from the earlier of the date on which this Plan was adopted by
            board of directors or the date this Plan was approved by the
            Company's stockholders.

                  (d) Unless sooner exercised, all Incentive Stock Options shall
            expire no later than 10 years after the date of grant. No Incentive
            Stock Option may be exercisable after ten (10) years from its date
            of grant (five (5) years from its date of grant if, at the time the
            Incentive Stock Option is granted, the Participant owns, directly or
            indirectly, more than 10% of the total combined voting power of all
            classes of stock of the Company or any parent or subsidiary
            corporation of the Company).

                  (e) The exercise price for Incentive Stock Options shall be
            not less than 100% of the Fair Market Value of one share of Common
            Stock on the date of grant with respect to an Incentive Stock
            Option; provided that the exercise price shall be 110% of the Fair
            Market Value if, at the time the Incentive Stock Option is granted,
            the participant owns, directly or indirectly, more than 10% of the
            total combined voting power of all classes of stock of the Company
            or any parent or subsidiary corporation of the Company.

      7. Stock Appreciation Rights. An SAR is a right to receive, without
payment to the Company, a number of shares of Common Stock, cash or any
combination thereof, the amount of which is determined pursuant to the formula
set forth in Section 7.4. An SAR may be granted (a) with respect to any stock
option granted under this Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as to all or any
portion of the shares of Common Stock subject to the stock option), or (b)
alone, without reference to any related stock option. Each SAR granted by the
Committee under this Plan shall be subject to the following terms and
conditions:

            7.1. Number; Exercise Price. Each SAR granted to any participant
      shall relate to such number of shares of Common Stock as shall be
      determined by the Committee, subject to adjustment as provided in Section
      11.6. In the case of an SAR granted with respect to a stock option, the
      number of shares of Common Stock to which the SAR pertains shall be
      reduced in the same proportion that the holder of the option exercises the
      related stock option. The exercise price of an SAR will be determined by
      the Committee, in its discretion, at the date of grant but may not be less
      than 100% of the Fair Market Value of one share of Common Stock on the
      date of grant.

            7.2. Duration. Subject to earlier termination as provided in Section
      11.4, the term of each SAR shall be determined by the Committee but shall
      not exceed ten years and one day from the date of grant. Unless otherwise
      provided by the Committee, each SAR shall become exercisable at such time
      or times, to such extent and upon such conditions as the stock option, if
      any, to which it relates is exercisable. The Committee may in its
      discretion accelerate the exercisability of any SAR.

            7.3. Exercise. An SAR may be exercised, in whole or in part, by
      giving written notice to the Company, specifying the number of SARs which
      the holder wishes to exercise. Upon receipt of such written notice, the
      Company shall, within 90 days thereafter, deliver to the exercising holder
      certificates for the shares of Common Stock or cash or both, as determined
      by the Committee, to which the holder is entitled pursuant to Section 7.4.

            7.4. Payment. Subject to the right of the Committee to deliver cash
      in lieu of shares of Common Stock (which, as it pertains to officers and
      directors of the Company, shall comply with all requirements of the
      Exchange Act), the number of shares of Common Stock which shall be
      issuable upon the exercise of an SAR shall be determined by dividing:

                  (a) the number of shares of Common Stock as to which the SAR
            is exercised multiplied by the amount of the appreciation in such
            shares (for this purpose, the "appreciation" shall be the amount by
            which the Fair Market Value of the shares of Common Stock subject to
            the SAR on the exercise date exceeds (1) in the case of an SAR
            related to a stock option, the exercise price of the shares of
            Common Stock under the stock option or (2) in the case of an SAR
            granted alone, without reference to a related stock option, an
            amount which shall be determined by the Committee at the time of
            grant, subject to adjustment under Section 11.6); by

                  (b) the Fair Market Value of a share of Common Stock on the
            exercise date.

            In lieu of issuing shares of Common Stock upon the exercise of a
      SAR, the Committee may elect to pay the holder of the SAR cash equal to
      the Fair Market Value on the exercise date of any or all of the shares
      which would otherwise be issuable. No fractional shares of Common Stock
      shall be issued upon the exercise of an SAR; instead, the holder of the
      SAR shall be entitled to receive a cash adjustment equal to the same
      fraction of the Fair Market Value of a share of Common Stock on the
      exercise date or to purchase the portion necessary to make a whole share
      at its Fair Market Value on the date of exercise.

      8. Stock Awards and Restricted Stock. A stock award consists of the
transfer by the Company to a participant of shares of Common Stock, without
other payment therefor, as additional compensation for services to the Company.
The participant receiving a stock award will have all voting, dividend,
liquidation and other rights with respect to the shares of Common Stock issued
to a participant as a stock award under this Section 8 upon the participant
becoming the holder of record of such shares. A share of restricted stock
consists of shares of Common Stock which are sold or transferred by the Company
to a participant at a price determined by the Committee (which price shall be at
least equal to the minimum price required by applicable law for the issuance of
a share of Common Stock) and subject to restrictions on their sale or other
transfer by the participant, which restrictions and conditions may be determined
by the Committee as long as such restrictions and conditions are not
inconsistent with the terms of the Plan. The transfer of Common Stock pursuant
to stock awards and the transfer and sale of restricted stock shall be subject
to the following terms and conditions:

            8.1. Number of Shares. The number of shares to be transferred or
      sold by the Company to a participant pursuant to a stock award or as
      restricted stock shall be determined by the Committee.

            8.2. Sale Price. The Committee shall determine the price, if any, at
      which shares of restricted stock shall be sold or granted to a
      participant, which may vary from time to time and among participants and
      which may be below the Fair Market Value of such shares of Common Stock at
      the date of sale.

            8.3. Restrictions. All shares of restricted stock transferred or
      sold hereunder shall be subject to such restrictions as the Committee may
      determine, including, without limitation any or all of the following:

                  (a) a prohibition against the sale, transfer, pledge or other
            encumbrance of the shares of restricted stock, such prohibition to
            lapse at such time or times as the Committee shall determine
            (whether in annual or more frequent installments, at the time of the
            death, Disability or retirement of the holder of such shares, or
            otherwise);

                  (b) a requirement that the holder of shares of restricted
            stock forfeit, or (in the case of shares sold to a participant)
            resell back to the Company at his or her cost, all or a part of such
            shares in the event of termination of his or her employment or
            consulting engagement during any period in which such shares are
            subject to restrictions; or

                  (c) such other conditions or restrictions as the Committee may
            deem advisable.

            8.4. Escrow. In order to enforce the restrictions imposed by the
      Committee pursuant to Section 8.3, the participant receiving restricted
      stock shall enter into an agreement with the Company setting forth the
      conditions of the grant. Shares of restricted stock shall be registered in
      the name of the participant and deposited, together with a stock power
      endorsed in blank, with the Company. Each such certificate shall bear a
      legend in substantially the following form:

            The transferability of this certificate and the shares of Common
            Stock represented by it are subject to the terms and conditions
            (including conditions of forfeiture) contained in the 2003 Stock
            Option Plan of Manhattan Pharmaceuticals, Inc. (the "Company"), and
            an agreement entered into between the registered owner and the
            Company. A copy of the 2003 Stock Option Plan and the agreement is
            on file in the office of the secretary of the Company.

            8.5. End of Restrictions. Subject to Section 11.5, at the end of any
      time period during which the shares of restricted stock are subject to
      forfeiture and restrictions on transfer, such shares will be delivered
      free of all restrictions to the participant or to the participant's legal
      representative, beneficiary or heir.

            8.6. Stockholder. Subject to the terms and conditions of the Plan,
      each participant receiving restricted stock shall have all the rights of a
      stockholder with respect to shares of stock during any period in which
      such shares are subject to forfeiture and restrictions on transfer,
      including without limitation, the right to vote such shares. Dividends
      paid in cash or property other than Common Stock with respect to shares of
      restricted stock shall be paid to the participant currently. Unless the
      Committee determines otherwise in its sole discretion, any dividends or
      distributions (including regular quarterly cash dividends) paid with
      respect to shares of Common Stock subject to the restrictions set forth
      above will be subject to the same restrictions as the shares to which such
      dividends or distributions relate. In the event the Committee determines
      not to pay dividends or distributions currently, the Committee will
      determine in its sole discretion whether any interest will be paid on such
      dividends or distributions. In addition, the Committee in its sole
      discretion may require such dividends and distributions to be reinvested
      (and in such case the participant consents to such reinvestment) in shares
      of Common Stock that will be subject to the same restrictions as the
      shares to which such dividends or distributions relate.

      9. Performance Shares. A performance share consists of an award which
shall be paid in shares of Common Stock, as described below. The grant of a
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:

            9.1. Performance Objectives. Each performance share will be subject
      to performance objectives for the Company or one of its operating units to
      be achieved by the participant before the end of a specified period. The
      number of performance shares granted shall be determined by the Committee
      and may be subject to such terms and conditions, as the Committee shall
      determine. If the performance objectives are achieved, each participant
      will be paid in shares of Common Stock or cash as determined by the
      Committee. If such objectives are not met, each grant of performance
      shares may provide for lesser payments in accordance with formulas
      established in the award.

            9.2. Not Stockholder. The grant of performance shares to a
      participant shall not create any rights in such participant as a
      stockholder of the Company, until the payment of shares of Common Stock
      with respect to an award.

            9.3. No Adjustments. No adjustment shall be made in performance
      shares granted on account of cash dividends which may be paid or other
      rights which may be issued to the holders of Common Stock prior to the end
      of any period for which performance objectives were established.

            9.4. Expiration of Performance Share. If any participant's
      employment or consulting engagement with the Company is terminated for any
      reason other than normal retirement, death or Disability prior to the
      achievement of the participant's stated performance objectives, all the
      participant's rights on the performance shares shall expire and terminate
      unless otherwise determined by the Committee. In the event of termination
      of employment or consulting by reason of death, Disability, or normal
      retirement, the Committee, in its own discretion may determine what
      portions, if any, of the performance shares should be paid to the
      participant.

      10. Change of Control.

            10.1 Change in Control. For purposes of this Section 10, a "Change
      in Control" of the Company will mean the following:

                  (a) the sale, lease, exchange or other transfer, directly or
            indirectly, of all or substantially all of the assets of the Company
            (in one transaction or in a series of related transactions) to a
            person or entity that is not controlled by the Company;

                  (b) the approval by the stockholders of the Company of any
            plan or proposal for the liquidation or dissolution of the Company;

                  (c) any person becomes after the effective date of the Plan
            the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
            Act), directly or indirectly, of (i) 20% or more, but not 50% or
            more, of the combined voting power of the Company's outstanding
            securities ordinarily having the right to vote at elections of
            directors, unless the transaction resulting in such ownership has
            been approved in advance by the Continuing Directors (as defined
            below), or (ii) 50% or more of the combined voting power of the
            Company's outstanding securities ordinarily having the right to vote
            at elections of directors (regardless of any approval by the
            Continuing Directors); provided that a traditional institution or
            venture capital financing transaction shall be excluded from this
            definition;

                  (d) a merger or consolidation to which the Company is a party
            if the stockholders of the Company immediately prior to effective
            date of such merger or consolidation have "beneficial ownership" (as
            defined in Rule 13d-3 under the Exchange Act), immediately following
            the effective date of such merger or consolidation, of securities of
            the surviving corporation representing (i) 50% or more, but less
            than 80%, of the combined voting power of the surviving
            corporation's then outstanding securities ordinarily having the
            right to vote at elections of directors, unless such merger or
            consolidation has been approved in advance by the Continuing
            Directors, or (ii) less than 50% of the combined voting power of the
            surviving corporation's then outstanding securities ordinarily
            having the right to vote at elections of directors (regardless of
            any approval by the Continuing Directors).

            10.2 Continuing Directors. For purposes of this Section 10,
      "Continuing Directors" of the Company will mean any individuals who are
      members of the Board on the effective date of the Plan and any individual
      who subsequently becomes a member of the Board whose election, or
      nomination for election by the Company's stockholders, was approved by a
      vote of at least a majority of the Continuing Directors (either by
      specific vote or by approval of the Company's proxy statement in which
      such individual is named as a nominee for director without objection to
      such nomination).

            10.3 Acceleration of Incentives. Without limiting the authority of
      the Committee under the Plan, if a Change of Control of the Company occurs
      whereby the acquiring entity or successor to the Company does not assume
      the Incentives or replace them with substantially equivalent incentive
      awards, then upon the effective date of any such Change in Control (a) all
      outstanding options and SARs will vest and will become immediately
      exercisable in full and will remain exercisable for the remainder of their
      terms, regardless of whether the participant to whom such options or SARs
      have been granted remains in the employ or service of the Company or any
      subsidiary of the Company or any acquiring entity or successor to the
      Company; (b) the restrictions on all shares of restricted stock awards
      shall lapse immediately; and (c) all performance shares shall be deemed to
      be met and payment made immediately.

            10.4 Cash Payment for Options. If a Change in Control of the Company
      occurs, then the Committee, if approved by the Committee in its sole
      discretion either in an agreement evidencing an option at the time of
      grant or at any time after the grant of an option, and without the consent
      of any participant affected thereby, may determine that:

                  (a) some or all participants holding outstanding options will
            receive, with respect to some or all of the shares of Common Stock
            subject to such options, as of the effective date of any such Change
            in Control of the Company, cash in an amount equal to the excess of
            the Fair Market Value of such shares immediately prior to the
            effective date of such Change in Control of the Company over the
            exercise price per share of such options; and

                  (b) any options as to which, as of the effective date of any
            such Change in Control, the Fair Market Value of the shares of
            Common Stock subject to such options is less than or equal to the
            exercise price per share of such options, shall terminate as of the
            effective date of any such Change in Control.

      If the Committee makes a determination as set forth in subparagraph (a) of
      this Section 10.4, then as of the effective date of any such Change in
      Control of the Company, such options will terminate as to such shares and
      the participants formerly holding such options will only have the right to
      receive such cash payment(s). If the Committee makes a determination as
      set forth in subparagraph (b) of this Section 10.4, then as of the
      effective date of any such Change in Control of the Company such options
      will terminate, become void and expire as to all unexercised shares of
      Common Stock subject to such options on such date, and the participants
      formerly holding such options will have no further rights with respect to
      such options.

      11. General.

            11.1. Effective Date. The Plan will become effective upon approval
      by the Board.

            11.2. Duration. The Plan shall remain in effect until all Incentives
      granted under the Plan have either been satisfied by the issuance of
      shares of Common Stock or the payment of cash or been terminated under the
      terms of the Plan and all restrictions imposed on shares of Common Stock
      in connection with their issuance under the Plan have lapsed. No
      Incentives may be granted under the Plan after the tenth anniversary of
      the date the Plan is approved by the stockholders of the Company.

            11.3. Non-transferability of Incentives. Except, in the event of the
      holder's death, by will or the laws of descent and distribution to the
      limited extent provided in the Plan or the Incentive, unless approved by
      the Committee, no stock option, SAR, restricted stock or performance award
      may be transferred, pledged or assigned by the holder thereof, either
      voluntarily or involuntarily, directly or indirectly, by operation of law
      or otherwise, and the Company shall not be required to recognize any
      attempted assignment of such rights by any participant. During a
      participant's lifetime, an Incentive may be exercised only by him or her
      or by his or her guardian or legal representative.

            11.4. Effect of Termination, Death or Disability. In the event that
      a participant ceases to be an employee of or consultant to the Company, or
      the participants other service with the Company is terminated, for any
      reason, including death, but excluding "Disability," any Incentives may be
      exercised or shall expire at such times as may be determined by the
      Committee in its sole discretion in the agreement evidencing an Incentive.
      Notwithstanding any provision to the contrary contained in the Plan, in
      the event that a participant ceases to be employed or engaged by the
      Company, or is otherwise unable to render services to the Company, as a
      result of a Disability, any portion of a stock option Incentive that has
      vested as of the date of such Disability shall remain exercisable for the
      remaining term of such stock option, or such lesser period as provided in
      the agreement evidencing the terms of such stock option; provided,
      however, that all portions of a stock option Incentive that have not yet
      vested or are scheduled to vest in the future shall not vest and the
      employee's rights to such portion of the stock option shall terminate.
      Notwithstanding the other provisions of this Section 11.4, upon a
      participant's termination of employment or other service with the Company
      and all subsidiaries (other than as a result of a Disability), the
      Committee may, in its sole discretion (which may be exercised at any time
      on or after the date of grant, including following such termination),
      cause options and SARs (or any part thereof) then held by such participant
      to become or continue to become exercisable and/or remain exercisable
      following such termination of employment or service and Restricted Stock
      Awards, Performance Shares and Stock Awards then held by such participant
      to vest and/or continue to vest or become free of transfer restrictions,
      as the case may be, following such termination of employment or service,
      in each case in the manner determined by the Committee; provided, however,
      that no Incentive may remain exercisable or continue to vest beyond its
      expiration date. Any Incentive Stock Option that remains unexercised more
      than one (1) year following termination of employment by reason of death
      or Disability or more than three (3) months following termination for any
      reason other than death or Disability will thereafter be deemed to be a
      Non-Statutory Stock Option. The term "Disability" shall mean, with respect
      to a participant, that such participant is unable to perform a significant
      part of his or her duties and responsibilities as an employee, director,
      consultant or other advisor to the Company by reason of such participant's
      physical or mental injury or illness, and such inability lasts for a
      period of at least 180 consecutive days.

            11.5. Additional Conditions. Notwithstanding anything in this Plan
      to the contrary: (a) the Company may, if it shall determine it necessary
      or desirable for any reason, at the time of award of any Incentive or the
      issuance of any shares of Common Stock pursuant to any Incentive, require
      the recipient of the Incentive, as a condition to the receipt thereof or
      to the receipt of shares of Common Stock issued pursuant thereto, to
      deliver to the Company a written representation of present intention to
      acquire the Incentive or the shares of Common Stock issued pursuant
      thereto for his or her own account for investment and not for
      distribution; and (b) if at any time the Company further determines, in
      its sole discretion, that the listing, registration or qualification (or
      any updating of any such document) of any Incentive or the shares of
      Common Stock issuable pursuant thereto is necessary on any securities
      exchange or under any federal or state securities or blue sky law, or that
      the consent or approval of any governmental regulatory body is necessary
      or desirable as a condition of, or in connection with the award of any
      Incentive, the issuance of shares of Common Stock pursuant thereto, or the
      removal of any restrictions imposed on such shares, such Incentive shall
      not be awarded or such shares of Common Stock shall not be issued or such
      restrictions shall not be removed, as the case may be, in whole or in
      part, unless such listing, registration, qualification, consent or
      approval shall have been effected or obtained free of any conditions not
      acceptable to the Company. Notwithstanding any other provision of the Plan
      or any agreements entered into pursuant to the Plan, the Company will not
      be required to issue any shares of Common Stock under this Plan, and a
      participant may not sell, assign, transfer or otherwise dispose of shares
      of Common Stock issued pursuant to any Incentives granted under the Plan,
      unless (a) there is in effect with respect to such shares a registration
      statement under the Securities Act of 1933, as amended (the "Securities
      Act"), and any applicable state or foreign securities laws or an exemption
      from such registration under the Securities Act and applicable state or
      foreign securities laws, and (b) there has been obtained any other
      consent, approval or permit from any other regulatory body which the
      Committee, in its sole discretion, deems necessary or advisable. The
      Company may condition such issuance, sale or transfer upon the receipt of
      any representations or agreements from the parties involved, and the
      placement of any legends on certificates representing shares of Common
      Stock, as may be deemed necessary or advisable by the Company in order to
      comply with such securities law or other restrictions.

            11.6. Adjustment. In the event of any merger, consolidation or
      reorganization of the Company with any other corporation or corporations,
      there shall be substituted for each of the shares of Common Stock then
      subject to the Plan, including shares subject to restrictions, options, or
      achievement of performance share objectives, the number and kind of shares
      of stock or other securities to which the holders of the shares of Common
      Stock will be entitled pursuant to the transaction. In the event of any
      recapitalization, reclassification, stock dividend, stock split,
      combination of shares or other similar change in the corporate structure
      of the Company or shares of the Company, the exercise price of an
      outstanding Incentive and the number of shares of Common Stock then
      subject to the Plan, including shares subject to restrictions, options or
      achievements of performance shares, shall be adjusted in proportion to the
      change in outstanding shares of Common Stock in order to prevent dilution
      or enlargement of the rights of the participants. In the event of any such
      adjustments, the purchase price of any option, the performance objectives
      of any Incentive, and the shares of Common Stock issuable pursuant to any
      Incentive shall be adjusted as and to the extent appropriate, in the
      discretion of the Committee, to provide participants with the same
      relative rights before and after such adjustment.

            11.7. Incentive Plans and Agreements. Except in the case of stock
      awards or cash awards, the terms of each Incentive shall be stated in a
      plan or agreement approved by the Committee. The Committee may also
      determine to enter into agreements with holders of options to reclassify
      or convert certain outstanding options, within the terms of the Plan, as
      Incentive Stock Options or as non-statutory stock options and in order to
      eliminate SARs with respect to all or part of such options and any other
      previously issued options.

            11.8. Withholding.

                  (a) The Company shall have the right to (i) withhold and
            deduct from any payments made under the Plan or from future wages of
            the participant (or from other amounts that may be due and owing to
            the participant from the Company or a subsidiary of the Company), or
            make other arrangements for the collection of, all legally required
            amounts necessary to satisfy any and all foreign, federal, state and
            local withholding and employment-related tax requirements
            attributable to an Incentive, or (ii) require the participant
            promptly to remit the amount of such withholding to the Company
            before taking any action, including issuing any shares of Common
            Stock, with respect to an Incentive. At any time when a participant
            is required to pay to the Company an amount required to be withheld
            under applicable income tax laws in connection with a distribution
            of Common Stock or upon exercise of an option or SAR, the
            participant may satisfy this obligation in whole or in part by
            electing (the "Election") to have the Company withhold from the
            distribution shares of Common Stock having a value up to the amount
            required to be withheld. The value of the shares to be withheld
            shall be based on the Fair Market Value of the Common Stock on the
            date that the amount of tax to be withheld shall be determined ("Tax
            Date").

                  (b) Each Election must be made prior to the Tax Date. The
            Committee may disapprove of any Election, may suspend or terminate
            the right to make Elections, or may provide with respect to any
            Incentive that the right to make Elections shall not apply to such
            Incentive. An Election is irrevocable.

                  (c) If a participant is an officer or director of the Company
            within the meaning of Section 16 of the Exchange Act, then an
            Election is subject to the following additional restrictions:

                        (1) No Election shall be effective for a Tax Date which
                  occurs within six months of the grant or exercise of the
                  award, except that this limitation shall not apply in the
                  event death or Disability of the participant occurs prior to
                  the expiration of the six-month period.

                        (2) The Election must be made either six months prior to
                  the Tax Date or must be made during a period beginning on the
                  third business day following the date of release for
                  publication of the Company's quarterly or annual summary
                  statements of sales and earnings and ending on the twelfth
                  business day following such date.

            11.9. No Continued Employment, Engagement or Right to Corporate
      Assets. No participant under the Plan shall have any right, because of his
      or her participation, to continue in the employ of the Company for any
      period of time or to any right to continue his or her present or any other
      rate of compensation. Nothing contained in the Plan shall be construed as
      giving an employee, a consultant, such persons' beneficiaries or any other
      person any equity or interests of any kind in the assets of the Company or
      creating a trust of any kind or a fiduciary relationship of any kind
      between the Company and any such person.

            11.10. Deferral Permitted. Payment of cash or distribution of any
      shares of Common Stock to which a participant is entitled under any
      Incentive shall be made as provided in the Incentive. Payment may be
      deferred at the option of the participant if provided in the Incentive.

            11.11. Amendment of the Plan. The Board may amend, suspend or
      discontinue the Plan at any time; provided, however, that no amendments to
      the Plan will be effective without approval of the stockholders of the
      Company if stockholder approval of the amendment is then required pursuant
      to Section 422 of the Code or the rules of any stock exchange or Nasdaq or
      similar regulatory body. No termination, suspension or amendment of the
      Plan may adversely affect any outstanding Incentive without the consent of
      the affected participant; provided, however, that this sentence will not
      impair the right of the Committee to take whatever action it deems
      appropriate under Section 11.6 of the Plan.

            11.12. Definition of Fair Market Value. For purposes of this Plan,
      the "Fair Market Value" of a share of Common Stock at a specified date
      shall, unless otherwise expressly provided in this Plan, be the amount
      which the Committee or the board of directors of the Company determines in
      good faith in the exercise of its reasonable discretion to be 100% of the
      fair market value of such a share as of the date in question; provided,
      however, that notwithstanding the foregoing, if such shares are listed on
      a U.S. securities exchange or are quoted on the Nasdaq National Market
      System or Nasdaq SmallCap Stock Market (collectively, "Nasdaq"), then Fair
      Market Value shall be determined by reference to the last sale price of a
      share of Common Stock on such U.S. securities exchange or Nasdaq on the
      applicable date. If such U.S. securities exchange or Nasdaq is closed for
      trading on such date, or if the Common Stock does not trade on such date,
      then the last sale price used shall be the one on the date the Common
      Stock last traded on such U.S. securities exchange or Nasdaq.

            11.13 Breach of Confidentiality, Assignment of Inventions, or
      Non-Compete Agreements. Notwithstanding anything in the Plan to the
      contrary, in the event that a participant materially breaches the terms of
      any confidentiality, assignment of inventions, or non-compete agreement
      entered into with the Company or any subsidiary of the Company, whether
      such breach occurs before or after termination of such participant's
      employment or other service with the Company or any subsidiary, the
      Committee in its sole discretion may immediately terminate all rights of
      the participant under the Plan and any agreements evidencing an Incentive
      then held by the participant without notice of any kind.

            11.14 Governing Law. The validity, construction, interpretation,
      administration and effect of the Plan and any rules, regulations and
      actions relating to the Plan will be governed by and construed exclusively
      in accordance with the laws of the State of Delaware, notwithstanding the
      conflicts of laws principles of any jurisdictions.

            11.15 Successors and Assigns. The Plan will be binding upon and
      inure to the benefit of the successors and permitted assigns of the
      Company and the participants in the Plan.