HEALTHCARE SERVICES GROUP, INC.
                             2002 STOCK OPTION PLAN
                              AMENDED AND RESTATED
 
 
1. Purpose of the Plan.
 
   This 2002 Stock Option Plan (the "Plan") is intended as an incentive, to
retain in the employ of and as directors, consultants and advisors to
HEALTHCARE SERVICES GROUP, INC., a Pennsylvania corporation (the "Company")
and any Subsidiary of the Company, within the meaning of Section 424(f) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), persons
of training, experience and ability, to attract new employees, directors,
consultants and advisors whose services are considered valuable, to encourage
the sense of proprietorship and to stimulate the active interest of such
persons in the development and financial success of the Company and its
Subsidiaries.
 
   It is further intended that certain options granted pursuant to the Plan
shall constitute incentive stock options within the meaning of Section 422 of
the Code (the "Incentive Options") while certain other options granted
pursuant to the Plan shall be nonqualified stock options (the "Nonqualified
Options"). Incentive Options and Nonqualified Options are hereinafter referred
to collectively as "Options."
 
   The Company intends that the Plan meet the requirements of Rule 16b-3 ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and that transactions of the type specified in subparagraphs
(c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company
pursuant to the Plan will be exempt from the operation of Section 16(b) of the
Exchange Act. Further, the Plan is intended to satisfy the performance-based
compensation exception to the limitation on the Company's tax deductions
imposed by Section 162(m) of the Code with respect to those Options for which
qualification for such exception is intended. In addition, the Company intends
that neither the grant of or exercise of options pursuant to the Plan will be
subject to the provisions of Section 409A of the Code relating to nonqualified
deferred compensation plans. In all cases, the terms, provisions, conditions
and limitations of the Plan shall be construed and interpreted consistent with
the Company's intent as stated in this Section 1.
 
2. Administration of the Plan.
 
   The Board of Directors of the Company (the "Board") shall appoint and
maintain as administrator of the Plan a Committee (the "Committee") consisting
of two or more directors who are "Non-Employee Directors" (as such term is
defined in Rule 16b-3) and "Outside Directors" (as such term is defined in
Section 162(m) of the Code), who shall serve at the pleasure of the Board. The
Committee, subject to Sections 3 and 5 hereof, shall have full power and
authority to designate recipients of Options, to determine the terms and
conditions of respective Option agreements (which need not be identical) and
to interpret the provisions and supervise the administration of the Plan. The
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options. To the extent any Option does not qualify as an
Incentive Option, it shall constitute a separate Nonqualified Option.
 
   Subject to the provisions of the Plan, the Committee shall interpret the
Plan and all Options granted under the Plan, shall make such rules as it deems
necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defects or supply any omission or reconcile any
inconsistency in the Plan or in any Options granted under the Plan in the
manner and to the extent that the Committee deems desirable to carry into
effect the Plan or any Options. The act or determination of a majority of the
Committee shall be the act or determination of the Committee and any decision
reduced to writing and signed by all of the members of the Committee shall be
fully effective as if it had been made by a majority at a meeting duly held.
Subject to the provisions of the Plan, any action taken or determination made
by the Committee pursuant to this and the other Sections of the Plan shall be
conclusive on all parties.
 
   In the event that for any reason the Committee is unable to act or if the
Committee at the time of any grant, award or other acquisition under the Plan
of Options or Stock as hereinafter defined does not consist of two or
 
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more Non-Employee Directors, or if there shall be no such Committee, then the
Plan shall be administered by the Board, and references herein to the
Committee (except in the proviso to this sentence) shall be deemed to be
references to the Board, and any such grant, award or other acquisition may be
approved or ratified in any other manner contemplated by subparagraph (d) of
Rule 16b-3; provided, however, that options granted to the Company's Chief
Executive Officer or to any of the Company's other four most highly
compensated officers that are intended to qualify as performance-based
compensation under Section 162(m) of the Code may only be granted by the
Committee.
 
3. Designation of Optionees.
 
   The persons eligible for participation in the Plan as recipients of Options
(the "Optionees") shall include employees, officers and directors of, and
consultants and advisors to, the Company or any Subsidiary; provided that
Incentive Options may only be granted to employees of the Company and the
Subsidiaries. In selecting Optionees, and in determining the number of shares
to be covered by each Option granted to Optionees, the Committee may consider
the office or position held by the Optionee or the Optionee's relationship to
the Company, the Optionee's degree of responsibility for and contribution to
the growth and success of the Company or any Subsidiary, the Optionee's length
of service, promotions, potential and any other factors that the Committee may
consider relevant. An Optionee who has been granted an Option hereunder may be
granted an additional Option or Options, if the Committee shall so determine.
 
4. Stock Reserved for the Plan.
 
   Subject to adjustment as provided in Section 7 hereof, a total of 2,575,000
shares of the Company's Common Stock, $0.01 par value per share (the "Stock"),
shall be subject to the Plan. The maximum number of shares of Stock that maybe
subject to options granted under the Plan to any individual in any calendar
year shall not exceed 50,000, and the method of counting such shares shall
conform to any requirements applicable to performance-based compensation under
Section 162(m) of the Code. The shares of Stock subject to the Plan shall
consist of unissued or treasury shares or previously issued shares held by any
Subsidiary of the Company, and such amount of shares of Stock shall be and is
hereby reserved for such purpose. Any of such shares of Stock that may remain
unsold and that are not subject to outstanding Options at the termination of
the Plan shall cease to be reserved for the purposes of the Plan, but until
termination of the Plan the Company shall at all times reserve a sufficient
number of shares of Stock to meet the requirements of the Plan. Should any
Option expire or be canceled prior to its exercise in full or should the
number of shares of Stock to be delivered upon the exercise in full of an
Option be reduced for any reason, the shares of Stock theretofore subject to
such Option may be subject to future Options under the Plan, except where such
reissuance is inconsistent with the provisions of Section 162(m) of the Code.
 
5. Terms and Conditions of Options.
 
   Options granted under the Plan shall be subject to the following conditions
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Committee shall deem desirable:
 
   (a) Option Price. The purchase price of each share of Stock purchasable
under an Incentive Option shall be determined by the Committee at the time of
grant, but shall not be less than 100% of the Fair Market Value (as defined
below) of such share of Stock on the date the Option is granted; provided,
however, that with respect to an Optionee who, at the time such Incentive
Option is granted, owns (within the meaning of Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of stock of
the Company or of any Subsidiary, the purchase price per share of Stock shall
be at least 110% of the Fair Market Value per share of Stock on the date of
grant. The purchase price of each share of Stock purchasable under a
Nonqualified Option shall not be less than 100% of the Fair Market Value of
such share of Stock on the date the Option is granted. The exercise price for
each Option shall be subject to adjustment as provided in Section 7 below.
"Fair Market Value" means the closing price of publicly traded shares of Stock
on the principal securities exchange on which shares of Stock are listed (if
the shares of Stock are so listed), or on the NASDAQ Stock Market (if the
shares of Stock are regularly quoted on the NASDAQ Stock Market), or, if not
so listed or regularly quoted, the mean between the closing bid and asked
prices of publicly traded shares of Stock in the over-the-counter market, or,
if such bid and asked prices shall not be available, as reported by any
nationally recognized quotation service
 
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<PAGE>
selected by the Company, or as determined by the Committee in a manner
consistent with the provisions of the Code. Anything in this Section 5(a) to
the contrary notwithstanding, in no event shall the purchase price of a share
of Stock be less than the minimum price permitted under the rules and policies
of any national securities exchange on which the shares of Stock are listed.
 
   (b) Option Term. The term of each Option shall be fixed by the Committee,
but no Option shall be exercisable more than ten years after the date such
Option is granted and in the case of an Incentive Option granted to an
Optionee who, at the time such Incentive Option is granted, owns (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any Subsidiary, no
such Incentive Option shall be exercisable more than five years after the date
such Incentive Option is granted.
 
   (c) Exercisability. Subject to Section 5(j) hereof, Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at the time of grant.
 
   Upon the occurrence of a "Change in Control" (as hereinafter defined), the
Committee may accelerate the vesting and exercisability of outstanding
Options, in whole or in part, as determined by the Committee in its sole
discretion. In its sole discretion, the Committee may also determine that,
upon the occurrence of a Change in Control, each outstanding Option shall
terminate within a specified number of days after notice to the Optionee
thereunder, and each such Optionee shall receive, with respect to each share
of Company Stock subject to such Option, an amount equal to the excess of the
Fair Market Value of such shares immediately prior to such Change in Control
over the exercise price per share of such Option; such amount shall be payable
in cash, in one or more kinds of property (including the property, if any,
payable in the transaction) or a combination thereof, as the Committee shall
determine in its sole discretion.
 
   For purposes of the Plan, a Change in Control shall be deemed to have
occurred it:
 
(i)   a tender offer (or series of related offers) shall be made and consummated
      for the ownership of 50% or more of the outstanding voting securities of
      the Company, unless as a result of such tender offer more than 50% of the
      outstanding voting securities of the surviving or resulting corporation
      shall be owned in the aggregate by the shareholders of the Company (as of
      the time immediately prior to the commencement of such offer), any
      employee benefit plan of the Company or its Subsidiaries, and their
      affiliates;
 
(ii)  the Company shall be merged or consolidated with another corporation,
      unless as a result of such merger or consolidation more than 50% of the
      outstanding voting securities of the surviving or resulting corporation
      shall be owned in the aggregate by the shareholders of the Company (as of
      the time immediately prior to such transaction), any employee benefit plan
      of the Company or its Subsidiaries, and their affiliates;
 
(iii) the Company shall sell substantially all of its assets to another
      corporation that is not wholly owned by the Company, unless as a result
      of such sale more than 50% of such assets shall be owned in the aggregate
      by the shareholders of the Company (as of the time immediately prior to
      such transaction), any employee benefit plan of the Company or its
      Subsidiaries and their affiliates; or
 
(iv)  a Person (as defined below) shall acquire 50% or more of the outstanding
      voting securities of the Company (whether directly, indirectly,
      beneficially or of record), unless as a result of such acquisition more
      than 50% of the outstanding voting securities of the surviving or
      resulting corporation shall be owned in the aggregate by the shareholders
      of the Company (as of the time immediately prior to the first acquisition
      of such securities by such Person), any employee benefit plan of the
      Company or its Subsidiaries, and their affiliates;
 
(v)   a majority of the members of the Board is replaced during any 12-month
      period by directors whose appointment or election is not endorsed by a
      majority of the members of the Board prior to the date of the appointment
      or election.
 
   For purposes of this Section 5(c), ownership of voting securities shall take
into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the
Exchange Act. In addition, for such purposes, "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, however, a Person shall not include (A) the Company
or any of its Subsidiaries; (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
Subsidiaries; (C) an underwriter temporarily holding securities pursuant
 
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to an offering of such securities; or (D) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportion as their ownership of stock of the Company.
 
   (d) Method of Exercise. Options (to the extent then exercisable) may be
exercised in whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the purchase price, in cash, or
by check or such other instrument as may be acceptable to the Committee. As
determined by the Committee, in its sole discretion, at or after grant,
payment in full or in part may be made at the election of the Optionee (i) in
the form of Stock owned by the Optionee (based on the Fair Market Value of the
Stock on the trading day before the Option is exercised) which is not the
subject of any pledge or security interest, (ii) in the form of shares of
Stock withheld by the Company from the shares of Stock otherwise to be
received with such withheld shares of Stock having a Fair Market Value on the
date of exercise equal to the exercise price of the Option, or (iii) by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any shares surrendered to the
Company is at least equal to such exercise price and except with respect to
(ii) above, such method of payment will not cause a disqualifying disposition
of all or a portion of the Stock received upon exercise of an Incentive
Option. An Optionee shall have the right to dividends and other rights of a
stockholder with respect to shares of Stock purchased upon exercise of an
Option at such time as the Optionee has given written notice of exercise and
has paid in full for such shares and (ii) has satisfied such conditions that
may be imposed by the Company with respect to the withholding of taxes.
 
   (e) Non-transferability of Options. Options are not transferable and may be
exercised solely by the Optionee during his lifetime or after his death by the
person or persons entitled thereto under his will or the laws of descent and
distribution. The Committee, in its sole discretion, may permit a transfer of
a Nonqualified Option to (i) a trust for the benefit of the Optionee or (ii) a
member of the Optionee's immediate family (or a trust for his or her benefit).
Any attempt to transfer, assign, pledge or otherwise dispose of, or to subject
to execution, attachment or similar process, any Option contrary to the
provisions hereof shall be void and ineffective and shall give no right to the
purported transferee.
 
   (f) Termination by Death. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of
the estate or by the legatee of the Optionee under the will of the Optionee,
for a period of one year after the date of such death or until the expiration
of the stated term of such Option as provided under the Plan, whichever period
is shorter.
 
   (g) Termination by Reason of Disability. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of total and permanent
disability, any Option held by such Optionee may thereafter be exercised, to
the extent it was exercisable at the time of termination due to Disability (or
on such accelerated basis as the Committee shall determine at or after grant),
but may not be exercised after 90 days after the date of such termination of
employment or service or the expiration of the stated term of such Option,
whichever period is shorter; provided, however, that, if the Optionee dies
within such 90-day period, any unexercised Option held by such Optionee shall
thereafter be exercisable to the extent to which it was exercisable at the
time of death for a period of one year after the date of such death or for the
stated term of such Option, whichever period is shorter.
 
   (h) Termination by Reason of Retirement. Unless otherwise determined by the
Committee at grant, if any Optionee's employment with or service to the
Company or any Subsidiary terminates by reason of Normal or Early Retirement
(as such terms are defined below), any Option held by such Optionee may
thereafter be exercised to the extent it was exercisable at the time of such
Retirement (or on such accelerated basis as the Committee shall determine at
or after grant), but may not be exercised after 90 days after the date of such
termination of employment or service or the expiration of the stated term of
such Option, whichever period is shorter; provided, however, that, if the
Optionee dies within such 90-day period, any unexercised Option held by such
Optionee shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one year after the date of
such death or for the stated term of such Option, whichever period is shorter.
 
   For purposes of this paragraph (h) "Normal Retirement" shall mean retirement
from active employment with the Company or any Subsidiary on or after the
normal retirement date specified in the applicable Company
 
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<PAGE>
or Subsidiary pension plan or if no such pension plan, age 65, and "Early
Retirement" shall mean retirement from active employment with the Company or
any Subsidiary pursuant to the early retirement provisions of the applicable
Company or Subsidiary pension plan or if no such pension plan, age 55.
 
   (i) Other Termination. Unless otherwise determined by the Committee at
grant, if any Optionee's employment with or service to the Company or any
Subsidiary terminates for any reason other than death, Disability or Normal or
Early Retirement, the Option shall thereupon terminate, except that the
portion of any Option that was exercisable on the date of such termination of
employment or service may be exercised for the lesser of 90 days after the
date of termination or the balance of such Option's term if the Optionee's
employment or service with the Company or any Subsidiary is terminated by the
Company or such Subsidiary without cause (the determination as to whether
termination was for cause to be made by the Committee). The transfer of an
Optionee from the employ of or service to the Company to the employ of or
service to a Subsidiary, or vice versa, or from one Subsidiary to another,
shall not be deemed to constitute a termination of employment or service for
purposes of the Plan.
 
   (j) Limit on Value of Incentive Option. The aggregate Fair Market Value,
determined as of the date the Incentive Option is granted, of Stock for which
Incentive Options are exercisable for the first time by any Optionee during
any calendar year under the Plan (and/or any other stock option plans of the
Company or any Subsidiary) shall not exceed $100,000.
 
   (k) Incentive Option Shares. A grant of an Incentive Option under this Plan
shall provide that (a) the Optionee shall be required as a condition of the
exercise to furnish to the Company any payroll (employment) tax required to be
withheld, and (b) if the Optionee makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any
share or shares of Stock issued to him upon exercise of an Incentive Option
granted under the Plan within the two-year period commencing on the day after
the date of the grant of such Incentive Option or within a one-year period
commencing on the day after the date of transfer of the share or shares to him
pursuant to the exercise of such Incentive Option, he shall, within 10 days
after such disposition, notify the Company thereof and immediately deliver to
the Company any amount of United States federal, state and local income tax
withholding required by law.
 
6. Term of Plan.
 
   No Option shall be granted pursuant to the Plan on or after April 4, 2012,
but Options theretofore granted may extend beyond that date.
 
7. Capital Change of the Company.
 
   In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, or other change in corporate structure affecting the Stock,
the Committee shall make an appropriate and equitable adjustment in the number
and kind of shares reserved for issuance under the Plan and in the number and
option price of shares subject to outstanding Options granted under the Plan,
to the end that after such event each Optionee's proportionate interest shall
be maintained as it existed immediately before the occurrence of such event.
The Committee shall, to the extent feasible, make such other adjustments as
may be required under the tax laws so that (i) any Incentive Options
previously granted shall not be deemed modified within the meaning of Section
424(h) of the Code, and (ii) the provisions set forth in Section 409A of the
Code are not applicable.
 
8. Purchase for Investment.
 
   Unless the Options and shares covered by the Plan have been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or the Company
has determined that such registration is unnecessary, each person exercising
an Option under the Plan may be required by the Company to give a
representation in writing that he is acquiring the shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
 
 
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9. Taxes.
 
   The Company may make such provisions as it may deem appropriate, consistent
with applicable law, in connection with any Options granted under the Plan
with respect to the withholding of any taxes (including income or employment
taxes) or any other tax matters.
 
10. Effective Date of Plan.
 
   The Plan shall be effective on April 4, 2005, provided however that the Plan
shall subsequently be approved by majority vote of the Company's stockholders
not later than May 24, 2005.
 
11. Amendment and Termination.
 
   The Board may amend, suspend, or terminate the Plan, except that no
amendment shall be made that would impair the rights of any Optionee under any
Option theretofore granted without the Optionee's consent, and except that no
amendment shall be made which, without the approval of the stockholders of the
Company would:
 
materially increase the number of shares that may be issued under the Plan,
except as is provided in Section 7;
 
materially increase the benefits accruing to the Optionees under the Plan;
 
materially modify the requirements as to eligibility for participation in the
Plan;
 
decrease the exercise price of an Incentive Option to less than 100% of the
Fair Market Value per share of Stock on the date of grant thereof or the
exercise price of a Nonqualified Option to less than 80% of the Fair Market
Value per share of Stock on the date of grant thereof; or
 
extend the term of any Option beyond that provided for in Section 5(b).
 
   The Committee may amend the terms of any Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights
of any Optionee without the Optionee's consent except as may be required under
the tax laws. The Committee may also substitute new Options for previously
granted. Options, including options granted under other plans applicable to
the participant and previously granted Options having higher option prices,
upon such terms as the Committee may deem appropriate.
 
12. Government Regulations.
 
   The Plan, and the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options, shall
be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies, national securities exchanges and
interdealer quotation systems as may be required.
 
13. General Provisions.
 
   (a) Certificates. All certificates for shares of Stock delivered under the
Plan shall be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, or other securities
commission having jurisdiction, any applicable Federal or state securities
law, any stock exchange or interdealer quotation system upon which the Stock
is then listed or traded and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions.
 
   (b) Employment Matters. The adoption of the Plan shall not confer upon any
Optionee of the Company or any Subsidiary any right to continued employment
or, in the case of an Optionee who is a director, continued service as a
director, with the Company or a Subsidiary, as the case may be, nor shall it
interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of any of its employees, the service of any of its
directors or the retention of any of its consultants or advisors at any time.
 
 
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   (c) Limitation of Liability. No member of the Board or the Committee, or
any officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.
 
   (d) Registration of Stock. Notwithstanding any other provision in the Plan,
no Option may be exercised unless and until the Stock to be issued upon the
exercise thereof has been registered under the Securities Act and applicable
state securities laws, or are, in the opinion of counsel to the Company,
exempt from such registration in the United States. The Company shall not be
under any obligation to register under applicable federal or state securities
laws any Stock to be issued upon the exercise of an Option granted hereunder
in order to permit the exercise of an Option and the issuance and sale of the
Stock subject to such Option, although the Company may in its sole discretion
register such Stock at such time as the Company shall determine. If the
Company chooses to comply with such an exemption from registration, the Stock
issued under the Plan may, at the direction of the Committee, bear an
appropriate restrictive legend restricting the transfer or pledge of the Stock
represented thereby, and the Committee may also give appropriate stop transfer
instructions with respect to such Stock to the Company's transfer agent.
 
HEALTHCARE SERVICES GROUP, INC.