ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.

                         STOCK OPTION AND INCENTIVE PLAN

     1.   PURPOSE  OF  THE  PLAN.  In  January,   1997,  Atlantic  International
Entertainment,  Ltd.  ("AIE"),  by and through its Board of Directors adopted an
Incentive Stock Option Plan that granted to the Board of Directors discretion in
the  enactment  of  the  plan.  The  Board,   having   determined  the  specific
requirements  of the Plan has adopted this Stock Option and Incentive  Plan. The
Plan shall be known as the Atlantic International Entertainment, Ltd. 1999 Stock
Option and Incentive  Plan (the  "Plan").  The purpose of the Plan is to attract
and retain the best available personnel as officers, directors and key employees
and to provide additional incentive to employees of AIE or any present or future
parent or subsidiary of AIE to promote the success of the business.  The Plan is
intended  to provide  for the grant of  "Incentive  Stock  Options",  within the
meaning of Section 422 of the  Internal  Revenue  Code of 1954,  as amended (the
"Code") and Non-Incentive Stock Options. Each and every one of the provisions of
the Plan relating to Incentive  Stock Options shall be interpreted to conform to
the requirements of Section 422 of the Code.

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

          (a) "AIE" shall mean Atlantic International Entertainment, Ltd.

          (b) "Award"  means the grant by the  Committee of an  Incentive  Stock
Option or a Non-Incentive  Stock Option or any combination  thereof, as provided
in the Plan.

          (c) "Board" shall mean the Board of Directors of AIE.

          (d) "Common  Stock"  shall mean  common  stock,  par value  $0.001 per
share, of AIE.

          (e) "Code" shall mean the Internal Revenue Code of 1954, as amended.

          (f) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with paragraph 4(a) of the Plan.

          (g) "Continuous  Employment"  or  "Continuous  Status as an  Employee"
shall mean the absence of any  interruption  or termination of employment by AIE
or any present or future Parent or Subsidiary  of AIE.  Employment  shall not be
considered  interrupted  in the case of sick leave,  military leave or any other
leave of absence  approved by AIE or in the case of  transfers  between  payroll
locations of AIE or between AIE, its Parent, its Subsidiaries or a successor.

          (h) "Effective Date" shall mean January 1, 1999.

          (i) "Employee"  shall mean any person employed on a full-time basis by
AIE or any present or future Parent or Subsidiary of AIE.

          (j) "Incentive  Stock  Option"  means an  option  to  purchase  Shares
granted by the  Committee  pursuant to Section 7 hereof  which is subject to the
limitations  and  restrictions  of Section 7 hereof and is  intended  to qualify
under Section 422 of the Code.


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          (k) "Non-Incentive  Stock Option"  means an option to purchase  Shares
granted by the Committee  pursuant to Section 8, which option is not intended to
qualify under Section 422 of the Code.

          (l) "Option" shall mean an Incentive Stock Option granted  pursuant to
this Plan.

          (m) "Optioned  Stock"  shall mean stock  subject to an Option  granted
pursuant to the Plan.

          (n) "Optionee" shall mean any person who receives an Option.

          (o) "Parent" shall mean any present or future  corporation which would
be a "parent corporation" as defined in Subsections 425(e) and (g) of the Code.

          (p) "Participant"  means any  director,  officer or employee of AIE or
any Parent or Subsidiary  of AIE or any other person  providing a service to AIE
who is selected by the Committee.

          (q) "Plan" shall mean this plan.

          (r) "Share" shall mean one share of the Common Stock.

          (s) "Subsidiary"  shall mean any present or future  corporation  which
would be a "subsidiary  corporation" as defined in Subsections 425(f) and (g) of
the Code.

     3.   SHARES  SUBJECT  TO THE PLAN.  Except  as  otherwise  required  by the
provisions of Section 11 hereof,  the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed  250,000  shares,
allocated in accordance with Exhibit "A" attached hereto and made a part hereof.
Such Shares may either be authorized but unissued or treasury shares.

     4.   ADMINISTRATION OF THE PLAN.

          (a)  Composition of the Committee.  The Plan shall be  administered by
the Committee, consisting of not less than three persons appointed by the Board.
The Board may from time to time appoint members of the committee in substitution
for members previously  appointed and may fill vacancies.  Officers,  directors,
key  employees and other  persons who are  designated by the Committee  shall be
eligible to receive Awards under the Plan. All persons  designated as members of
the Committee shall be "disinterested  persons" within the meaning of Rule 16b-3
under the  Securities  Exchange Act of 1934,  and shall be ineligible to receive
Awards under the Plan.

          (b) Powers of the Committee.  The Committee is authorized (but only to
the extent not contrary to the express  provisions of the Plan or to resolutions
adopted by the Board) to interpret  the Plan,  to  prescribe,  amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the  administration  or the Plan,  and shall have and may exercise
such other power and  authority as may be delegated to it by the Board from time
to time. A majority of the entire  Committee  shall  constitute a quorum and the
action of a majority of the members  present at any meeting at which a quorum is
present  shall be  deemed  the  action  of the  Committee.  In no

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event may the Committee  revoke  outstanding  Awards  without the consent of the
Participant.  Any action permitted to be taken by the Committee at a meeting may
be taken without a meeting if a consent in writing,  setting forth the action so
taken, is signed by all members of the Committee.  The President of AIE and such
other officers as shall be designated by the Committee are hereby  authorized to
execute  instruments  evidencing Awards on behalf of AIE and to cause them to be
delivered to the Participants.

          (c) Effect of Committee's Decision. All decisions,  determinations and
interpretations  of the Committee  shall be final and  conclusive on all persons
affected thereby.

     5.   ELIGIBILITY.  Awards  may  be  granted  to  officers,  directors,  key
employees and other persons.  The  Committee,  shall from time to time determine
the  officers,  directors,  key employees and other persons who shall be granted
Options  or Awards  under  the  Plan,  the  number  to be  granted  to each such
officers, directors, key employees and other persons under the Plan, and whether
Options  granted to each such Employee under the Plan shall be Incentive  and/or
Non-Incentive  Stock Options.  In selecting  Participants and in determining the
number of shares of Common Stock to be granted to each such Participant pursuant
to each Award granted  under the Plan,  the Committee may consider the nature of
the services rendered by each such Participant,  each such Participant's current
and potential  contribution to AIE, and such other factors as the Committee may,
in its sole discretion,  deem relevant.  Officers,  directors,  key employees or
other  persons who have been  granted an Award may, if  otherwise  eligible,  be
granted additional Options or Awards.

     The aggregate  fair market value  (determined  as of the date the Option is
granted)  of the Shares  for which any  Employee  may be granted  Options in any
calendar year (under all Incentive Stock Option plans, as defined in Section 422
of the Code, of the Corporation or any present or future Parent or Subsidiary of
AIE) shall not exceed $1,000,000,  plus any unused limit carryover to such year,
as defined in Section 422(c) of the Code.  Notwithstanding  the prior provisions
of this Section 5, the  Committee  may grant  Options in excess of the foregoing
limitations,  provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options, as defined in Section 422 of the Code.

     6.   TERM OF PLAN. The Plan shall continue in effect for a term of ten (10)
years from the Effective Date, unless sooner terminated  pursuant to Section 16.
No  Option  shall be  granted  under  the Plan  after  ten (10)  years  from the
Effective Date.

     7.   TERMS AND  CONDITIONS  OF INCENTIVE  STOCK  OPTIONS.  Incentive  Stock
Options may be granted only to  Participants  who are Employees.  Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such  form as the  Committee  shall  from time to time  approve.  Each and every
Incentive  Stock Option  granted  pursuant to the Plan shall comply with, and be
subject to, the following terms and conditions:

          (a)  Option Price.

               (i) The price  per share at which  each  Incentive  Stock  Option
granted  under  the  Plan  may be  exercised  shall  not,  as to any  particular
Incentive  Stock Option,  be less than the fair market value of the Common Stock
at the time such Incentive  Stock Option is granted.  For such purposes,  if the

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Common Stock is traded otherwise than on a national  securities  exchange at the
time of the  granting  of an  Option,  then the price per share of the  Optioned
Stock  shall be not less than the mean  between  the bid and asked  price on the
date the  Incentive  Stock  Option is  granted  or, if there be no bid and asked
price on said date, then on the next prior business day on which there was a bid
and asked price. If no such bid and asked price is available, then the price per
share shall be determined by the  Committee.  If the Common Stock is listed on a
national  securities  exchange at the time of the  granting an  Incentive  Stock
Option,  then the  price per share  shall be not less  than the  average  of the
highest and lowest  selling  price on such  exchange on the date such  Incentive
Stock Option is granted or, if there were no sales on said date,  then the price
shall be not less than the mean between the bid and asked price on such date.

               (ii)  In  the  case  of  an  Employee   who  owns  Common   Stock
representing more than ten percent (10%) of the outstanding  Common Stock at the
time the Incentive  Stock Option is granted,  the  Incentive  Stock Option price
shall not be less than one  hundred  and ten  percent  (110%) of the fair market
value of the Common Stock at the time the Incentive Stock Option is granted.

          (b)  Payment.

          Full  payment  for  each  share of  Common  Stock  purchased  upon the
exercise of any  Incentive  Stock  Option  granted  under the Plan shall be made
within 15 days of the date of exercise of each such  Incentive  Stock Option and
shall be paid in cash (in United States Dollars),  Common Stock or a combination
of cash and Common Stock.  Common Stock  utilized in full or partial  payment of
the  exercise  price  shall be  valued at its fair  market  value at the date of
exercise.  AIE shall accept full or partial  payment in Common Stock only to the
extent  permitted by  applicable  law. No shares of Common Stock shall be issued
until full payment therefor has been received by AIE, and no Optionee shall have
any of the  rights  of a  shareholder  or AIE until  shares of Common  Stock are
issued to him.

          (c)  Term of Incentive Stock Option.

               The term of each Incentive  Stock Option granted  pursuant to the
Plan shall be five (5) years from the date each such  Incentive  Stock Option is
granted.

          (d)  Exercise Generally.

               Except as  otherwise  provided in Section 9 hereof,  no Incentive
Stock Option may be exercised  unless the Optionee shall have been in the employ
of AIE at all times  during the period  beginning  with the date of grant of any
such Incentive  Stock Option and ending on the date One (1) year after said date
of grant of any such  Incentive  Stock Option.  In the event the Optionee  shall
have  been in the  employ  of AIE for One (1) year from the date of the grant of
the Incentive  Stock Option,  then the Optionee shall be entitled to exercise no
more than 20% of the Incentive Stock Options then issued to the Optionee. In the
event the  Optionee  shall have been in the employ of AIE for Two (2) years from
the date of the grant of the Incentive Stock Options, then the Optionee shall be
entitled to exercise no more than 60% of the Incentive Stock Options then issued
to the Optionee.  In the event the Optionee shall have been in the employ of AIE
for Three (3) years from the date of the grant of the Incentive  Stock  Options,
then the  Optionee  shall be  entitled to exercise  all of the  Incentive  Stock



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Options  then  issued to the  Optionee.  The  Committee,  may impose  additional
conditions  upon the right of an Optionee to exercise any Incentive Stock Option
granted  hereunder which are not inconsistent  with the terms of the Plan or the
requirements for qualification as an Incentive Stock Option under Section 422 of
the Code.

          (e)  Transferability.

               Except as otherwise provided,  any Incentive Stock Option granted
pursuant to the Plan shall be exercised  during any Optionee's  lifetime only by
the Optionee to whom it was granted and shall not be assignable or  transferable
otherwise than by will or by the laws of descent and distribution.

     8.   TERMS  AND   CONDITIONS   OF   NON-INCENTIVE   STOCK   OPTIONS.   Each
Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee shall from time to time approve.

         (a)  Grant.

               (1) Individual Performance.  Each Participant that is an Employee
may be  granted  an Award in the  event  said  employee's  immediate  supervisor
determines that said employee's  annual  performance is either exceeds  standard
performance  or is determined  to be rated  "excellent"  in accordance  with the
policies and  procedures  of AIE.  The number of Options to be granted  shall be
determined by dividing (a) the amount of gross salary of each  Participant  that
is an Employee by (b) the  percentage set forth on Exhibit "A" (depending on the
supervisor's evaluation).

               (2)  Company  Performance.  Each  Participant  shall  be  granted
Options in the event  AIE's net income  before  taxes,  as defined by  generally
accepted  accounting  principles (GAAP),  exceeds $1,000,000 in any fiscal year.
However,  in no event shall the total number of Options granted hereunder exceed
options  on  60,000  Shares.  The  number  of  Options  to be  granted  shall be
determined  by  multiplying  (a) the  amount  of AIE net  income  in  excess  of
$1,000,000 by (b) 5%.

          (b) Terms. Each and every  Non-Incentive Stock Option granted pursuant
to the Plan  shall  comply  with  and be  subject  to the  following  terms  and
conditions:  (1) Option Price.  The exercise price per share of Common Stock for
each Non-Incentive  Stock Option granted pursuant to the Plan shall be 20% below
the bid price for the Shares at the close of trading in New York on  December 31
of each year of the Plan.

               (2)  Payment.

               Full  payment for each share of Common Stock  purchased  upon the
exercise of any Non-Incentive  Stock Option granted under the Plan shall be made
at the time of exercise  of each such  Non-Incentive  Stock  Option and shall be
paid in cash (in United States  Dollars),  Common Stock or a combination of cash
and Common  Stock.  Common  Stock  utilized  in full or  partial  payment of the
exercise price shall be valued at its fair market value at the date of exercise.
The Corporation shall accept full or partial payment in Common Stock only to the


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extent  permitted by  applicable  law. No shares of Common Stock shall be issued
until  full  payment  therefor  has been  received  by the  Corporation,  and no
Optionee shall have any of the rights of a shareholder of the Corporation  until
the shares of Common Stock are issued to him.

          (c)  Term.

               The term of each  Non-Incentive  Stock Option granted pursuant to
the  Plan  shall be not  more  than  five (5)  years  from  the date  each  such
Non-Incentive Stock Option is granted.

          (d)  Exercise Generally.

               The Committee may impose additional  conditions upon the right of
any  Participant to exercise any  Non-Incentive  Stock Option granted  hereunder
which are not inconsistent with the terms of the Plan.

          (e)  Transferability.

               Any Non-Incentive Stock Option granted pursuant to the Plan shall
be exercised during any Optionee's lifetime only by the Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent and distribution.

     9.   EFFECT OF TERMINATION OF EMPLOYMENT,  DISABILITY OR DEATH ON INCENTIVE
STOCK OPTIONS.

          (a)  Termination of Employment.

               In  the  event  that  any  Optionee's  employment  by  AIE  shall
terminate for any reason,  other than  Permanent and Total  Disability  (as such
term is defined in Section  105(d)(4)  of the Code),  death or  termination  for
cause, all of any such Optionee's  Awards, and all of any such Optionee's rights
to purchase or receive shares of Common Stock pursuant thereto,  as the case may
be, shall automatically terminate on the date of such termination of employment.
However, no termination of an Optionee's Incentive Stock Options shall occur if,
and to the extent that such  Incentive  Stock  Options are exercised at any time
prior  to the  earlier  of (i)  the  respective  expiration  dates  of any  such
Incentive Stock Options or (ii) the expiration of not more than three (3) months
after the date of such termination of employment, but only if, and to the extent
that, the Optionee was entitled to exercise any such Incentive  Stock Options at
the date of such  termination  of  employment.  In the event  that a  subsidiary
ceases to be a subsidiary of AIE, the employment of all of its employees who are
not  immediately  thereafter  employees of AIE shall be deemed to terminate upon
the date such subsidiary so ceases to be a subsidiary of AIE.

          (b)  Disability.

               In  the  event  that  any  Optionee's  employment  by  AIE  shall
terminate as the result of the Permanent and Total  disability of such Optionee,
such Optionee may exercise any Incentive  Stock Options  granted to him pursuant
to the Plan at any time prior to the  earlier of (i) the  respective  expiration
dates of any such Incentive Stock Options or (ii) the date which is one (1) year
after the date of such termination of employment, but only if, and to the extent


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that, the Optionee was entitled to exercise any such Incentive  Stock Options at
the date of such termination of employment.

          (c)  Death.

               In the event of the death of any Optionee,  any Awards granted to
any  such  Optionee  may be  exercised  by the  person  or  persons  to whom the
Optionee's  rights  under any such Awards pass by will or by the laws of descent
and  distribution   (including  the  Optionee's  estate  during  the  period  of
administration)  at  any  time  prior  to the  earlier  of  (i)  the  respective
expiration  dates of any such Incentive  Stock Options or (ii) the date which is
one (1) year after the date of death of such  Optionee (or such later period not
exceeding one (1) year to which the  Committee  may, in its  discretion,  extend
such period),  but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of death.  For purposes of
this Section  8(c),  any  Incentive  Stock  Option held by an Optionee  shall be
considered  exercisable  at the  date  of his  death  if  the  only  unsatisfied
condition  precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time.

          (d)  Termination for Cause.

               In the event any  Optionee's  employment by AIE is terminated for
"cause"  which  includes,  but is  not  limited  to,  termination  for  personal
dishonesty,  willful  misconduct,  breach of a fiduciary duty involving personal
profit,  intentional failure to perform stated duties,  willful violation of any
law,  rule,  regulation  (other  than a law,  rule or  regulation  relating to a
traffic violation or similar  offense),  termination under the provisions of any
employment  agreement,  or material  breach of any  provision  of an  employment
agreement, then Optionee's Awards shall terminate.

          (e)  Termination of Awards.

               To the  extent  that  any  Award  granted  under  the Plan to any
Optionee whose employment by AIE terminates shall not have been exercised within
the applicable period set forth in this Section,  any such Award, and all rights
to purchase or receive shares of Common Stock pursuant thereto,  as the case may
be, shall terminate on the last day of the applicable period.

     10.  RIGHT OF REPURCHASE AND RESTRICTIONS ON DISPOSITION AND RIGHT OF FIRST
REFUSAL.  AIE, in its sole discretion,  as a term of any Awards,  shall have the
right (the "Repurchase Right"), but not the obligation, to repurchase all or any
amount of the Shares  acquired  by an Optionee  pursuant to the  exercise of any
such Options.  The intent of the Repurchase  Right is to encourage the continued
employment of the Optionee. The Repurchase Right shall provide for a duration of
the Repurchase Right for Five (5) years from the date of issuance of the Shares,
a price per  Share at the  closing  bid price for the  Shares on the date of the
exercise  of  AIE's  rights  hereunder,  to be paid  upon  the  exercise  of the
Repurchase  Right and a  restriction  on the  disposition  of the  Shares by the
Optionee during the period of the Repurchase  Right. The Repurchase Right may be
transferred or assigned by AIE to another party. AIE may exercise the Repurchase
Right only to the extent permitted by applicable law.

     11.  RECAPITALIZATION, MERGER, CONSOLIDATION, CHANGE IN CONTROL AND SIMILAR
TRANSACTIONS.

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          (a)  Adjustment.

               Subject to any required  action by the  shareholders  of AIE, the
aggregate  number  of shares of Common  Stock  for which  stock  options  may be
granted  hereunder,  the  number  of  shares of  Common  Stock  covered  by each
outstanding  stock option,  and the exercise  price per share of Common Stock of
each such stock option,  shall all be proportionately  adjusted for any increase
or  decrease  in the number of issued  and  outstanding  shares of Common  Stock
resulting  from a  subdivision  or  consolidation  of shares or the payment of a
stock  dividend (but only on the Common Stock) or any other increase or decrease
in the number of such  shares of common  Stock  effected  without the receipt of
consideration by AIE.

          (b)  Change in Control.

               All outstanding  options shall become immediately  exercisable in
the event of  change in  control  or  imminent  change  in  control  of AIE,  as
determined by the Committee.  For purposes of this Section,  "change in control"
shall mean: (i) the execution of an agreement for the sale of all, or a material
portion,  of the assets of AIE;  (ii) the execution of an agreement for a merger
or recapitalization of AIE or any merger or recapitalization  whereby AIE is not
the surviving entity;  (iii) a change of control of AIE, as otherwise defined or
determined by the Securities Exchange  Commission or regulations  promulgated by
it; or (iv) the acquisition, directly or indirectly, of the beneficial ownership
(within  the  meaning  of  that  term  as it is used  in  Section  13(d)  of the
Securities  Exchange  Act of  1934  and the  rules  promulgated  thereunder)  of
twenty-five percent (25%) or more of the outstanding voting securities of AIE by
any person, trust, entity or group.

          (c)  Extraordinary Corporate Action.

               Subject to any required action by the shareholders of AIE, in the
event  of  any  Change  in  Control,  recapitalization,  merger,  consolidation,
exchange of shares, spin-off, reorganization, tender offer, liquidation or other
extraordinary  corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:

               (i)  appropriately  adjust the  number of shares of Common  Stock
subject to each stock option,  the exercise price per share of Common Stock, and
the  consideration  to be given or  received  by AIE  upon the  exercise  of any
outstanding Option;

               (ii) cancel any or all previously granted Options,  provided that
appropriate  consideration  is paid to the  Optionee  in  connection  therewith;
and/or

               (iii) make such other  adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary,  desirable,  appropriate
or advisable;  provided, however, that no action shall be taken by the Committee
which would cause Incentive  Stock Options granted  pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code.


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               Except as expressly  provided herein,  no Optionee shall have any
rights  by reason  of the  occurrence  of any of the  events  described  in this
Section.

          (d)  Acceleration.

          The  Committee  shall at all times  have the power to  accelerate  the
exercise date of Options previously granted under the Plan.

     12.  TIME OF GRANTING  OPTIONS.  The  initial  date of grant of the Options
under the Plan as set forth in Exhibit "A", shall, for all purposes,  be January
1, 1999 and  thereafter on each July 1 and January 1 thereafter for any employee
who at the time of the grant shall have been an  employee  for one year from the
initial  grant or at least  one year  from  each  January  and July or any other
person on which the Committee makes the  determination  of granting such Option.
Notice of the determination shall be given to each Employee to whom an Option is
so granted within a reasonable time after the date of such grant.

     13.  EFFECTIVE  DATE.  The Plan shall become  effective on January 1, 1999.
Options may be granted prior to ratification of the Plan by the  stockholders if
the exercise of such Options is subject to such stockholder ratification.

     14.  APPROVAL BY  SHAREHOLDERS.  The Plan shall be approved by stockholders
of AIE within twelve (12) months before or after the date it becomes effective.

     15.  MODIFICATION OF OPTIONS.  At any time and from time to time, the Board
may authorize  the Committee to direct the execution of an instrument  providing
for the modification of any outstanding  Option,  provided no such modification,
extension  or renewal  shall  confer on the  holder of said  Option any right or
benefit which could not be conferred on him by the grant of a new Option at such
time, or shall not materially  decrease the Optionee's benefits under the Option
without the consent of the holder of the Option,  except as otherwise  permitted
under this Plan.

     16.  AMENDMENT AND TERMINATION OF THE PLAN.

          (a)  Action by the Board.

               The Board may alter, suspend or discontinue the Plan, except that
no action of the Board may  increase  (other than as provided in Section 11) the
maximum  number of shares  permitted to be optioned  under the Plan,  materially
increase  the benefits  accruing to  participants  under the Plan or  materially
modify the  requirements  for eligibility for  participation  in the Plan unless
such action of the Board shall be subject to  approval  or  ratification  by the
shareholders of AIE.

          (b)  Change in Applicable Law.

               Notwithstanding any other provision contained in the Plan, in the
event of a change in any federal or state law,  rule or  regulation  which would
make the  exercise  of all or part of any  previously  granted  Incentive  Stock
Option  unlawful or subject AIE to any penalty,  the  Committee may restrict any
such  exercise  without the consent of the Optionee or other  holder  thereof in
order to  comply  with any such  law,  rule or  regulation  or to avoid any such
penalty.


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     17.  CONDITIONS  UPON  ISSUANCE OF SHARES.  Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation,  the Securities Act of 1933, as amended,  the rules and  regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed. The inability of
AIE to obtain  permission from any regulatory body or authority  deemed by AIE's
counsel to be necessary to the lawful issuance and sale of any Shares  hereunder
shall  relieve AIE of any  liability in respect of the  non-issuance  or sale of
such Shares.  As a condition  to the exercise of an Option,  AIE may require the
person exercising the Option to make such  representations and warranties as may
be necessary to assure the  availability  of an exemption from the  registration
requirements of federal or state securities law.

     18.  RESERVATION OF SHARES.  During the term of the Plan, AIE, will reserve
and keep available a number of Shares  sufficient to satisfy the requirements of
the Plan.

     19.  UNSECURED  OBLIGATION.  No  Participant  under the Plan shall have any
interest in any fund or special  asset of AIE by reason of the Plan or the grant
of any Award to him under the Plan. No trust fund shall be created in connection
with the Plan or any grant of any Award hereunder and there shall be no required
funding of amounts which may become payable to any participant.

     20.  WITHHOLDING  TAX.  AIE shall have the right to deduct from all amounts
paid in cash with  respect to the exercise of any Award under the Plan any taxes
required by law to be withheld with respect thereto.

     21.  GOVERNING  LAW.  The  Plan  shall  be  governed  by and  construed  in
accordance with the laws of the State of Delaware.