Exhibit 10.11

                                AXM PHARMA, INC.
                  Incentive and Nonstatutory Stock Option Plan


A. Purpose

This  Incentive and  Nonstatutory  Stock Option Plan (the "Plan") is intended to
further the growth and financial success of AXM Pharma, Inc. (the "Corporation")
by  providing  additional  incentives  to  directors,  executives  and  selected
employees of and  consultants to the Corporation so that such  participants  may
acquire or increase  their  proprietary  interest in the  Corporation.  The term
"Corporation" shall include any parent corporation or subsidiary  corporation of
the  Corporation  as those  terms are  defined in Section  424(e) and (f) of the
Internal  Revenue Code of 1986, as amended (the "Code").  Stock options  granted
under the Plan ("Options") may be either  "Incentive Stock Options",  as defined
in Code  section 422 and any  regulations  promulgated  under that  Section,  or
"Nonstatutory  Options"  at the  discretion  of the  Board of  Directors  of the
Corporation  (the  "Board")  and as reflected in the  respective  written  stock
option agreements granted pursuant to this Plan.

B. Administration

The Plan shall be administered by the Board;  provided  however,  that the Board
may delegate  such  administration  to a committee of not fewer than two members
(the  "Committee"),  each of whom is a member  of the  Board and all of whom are
disinterested  persons, as contemplated by Rule 16b-3 ("Rule 16b-3") promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act").

Subject to the provisions of the Plan, the Board and/or the Committee shall have
authority to (a) grant, in its discretion, Incentive Stock Options in accordance
with Code section 422 or Nonstatutory  Options;  (b) determine in good faith the
fair  market  value of the stock  covered  by an  Option;  (c)  determine  which
eligible persons shall be granted Options, the number of shares to be covered by
the Options and the restrictions, terms and conditions thereof; (d) construe and
interpret the Plan;  (e)  promulgate,  amend and rescind  rules and  regulations
relating  to  its   administration,   and   correct   defects,   omissions   and
inconsistencies in the Plan or any Option; (f) consistent with the Plan and with
the consent of the Optionee,  as appropriate,  amend any  outstanding  Option or
amend the  exercise  date or dates;  (g)  determine  the duration and purpose of
leaves of  absence  which  may be  granted  to  Optionees  without  constituting
termination  of their  employment  for the purpose of the Plan; and (h) make all
other determinations  necessary or advisable for the Plan's administration.  The
interpretation and construction by the Board of any provisions of the Plan or of
any  Option  it shall be  conclusive  and  final.  No member of the Board or the
Committee  shall be liable  for any action or  determination  made in good faith
with respect to the Plan or any Option.

C. Eligibility

The  persons  who shall be  eligible  to  receive  Options  shall be  directors,
officers and employees of the  Corporation  and  consultants to the  Corporation
("Optionees").  The  term  consultant  shall  mean  any  person,  other  than an
employee,  who  is  engaged  by  the  Corporation  to  render  services  and  is
compensated for such services,  and any director of the  Corporation  whether or
not compensated for such services;  provided that, if the Corporation  registers


<PAGE>

any of its securities  pursuant to the Exchange Act, the term  consultant  shall
thereafter not include  directors who are not  compensated for their services or
are paid only a director fee by the Corporation.

(a)  Incentive  Stock  Options.  Incentive  Stock  Options may only be issued to
employees of the Corporation. Incentive Stock Options may be granted to officers
or directors, provided they are also employees of the Corporation.  Payment of a
director's  fee  shall  not  be  sufficient  to  constitute  employment  by  the
Corporation. Any grant of option, subsequent to the first registration of any of
the  securities  of  the  Corporation  under  the  Securities  Act,  may  at the
discretion  of the  Board be made  subject  to  certain  conditions,  including,
without  limitation,  condition  which are intended to avoid the  imposition  of
liability  under  Section  16(b) of the 1934 Act. An Optionee may hold more than
one Option.

The Corporation  shall not grant an Incentive Stock Option under the Plan to any
employee if the grant would result in the employee holding the right to exercise
for the first time in any one calendar year,  under all Incentive  Stock Options
granted under the Plan or any other plan maintained by the Corporation,  Options
with  respect  to  shares  of stock  having  an  aggregate  fair  market  value,
determined as of the date the Option is granted,  in excess of $100,000.  Should
it be determined  that an Incentive  Stock Option granted under the Plan exceeds
such  maximum  for any  reason  other  than a failure in good faith to value the
stock  subject  to such  Option,  the  excess  portion  of the  Option  shall be
considered a Nonstatutory  Option.  To the extent the employee holds two or more
such Options  which become  exercisable  for the first time in the same calendar
year, the foregoing limitation on the exercisability of such Option as Incentive
Stock  Options  under the  Federal tax laws shall be applied on the basis of the
order in which the Options are  granted.  If, for any reason,  an entire  option
does not  qualify  as an  Incentive  Stock  Option by reason of  exceeding  such
maximum, that option shall be considered a Nonstatutory Option.

(b) Nonstatutory  Option.  The provisions of Section 3(a) shall not apply to any
Option designated as a "Nonstatutory Stock Option Agreement" or which sets forth
the intention of the parties that the option be a Nonstatutory Option.

D. Stock

The stock subject to Options shall be shares of the Corporation's authorized but
unissued or reacquired common stock (the "Stock").

(a) Number of Shares.  Subject to  adjustment  as provided in Paragraph  5(i) of
this Plan,  the total number of shares of Stock which may be  purchased  through
exercise of Options granted under this Plan shall not exceed  3,000,000.  If any
Option shall for any reason terminate or expire,  any shares  allocated  thereto
but remaining  unpurchased  upon such  expiration or termination  shall again be
available for the grant of Options with respect to that Option under the Plan as
though no Option had been granted  with  respect to such  shares.  Any shares of
Stock issued pursuant to an Option and repurchased  pursuant to the terms of the
Option shall be available for future Options as though not previously covered by
an Option.

(b) Reservation of Shares.  The Corporation  shall reserve and keep available at
all  times  during  the term of the  Plan  such  number  of  shares  as shall be
sufficient  to  satisfy  the  requirements  of the Plan.  If,  after  reasonable
efforts, which efforts shall not include the registration of the Plan or Options
under the Securities Act, the Corporation is unable to obtain authority from any
applicable  regulatory  body,  which  authorization is deemed necessary by legal
counsel for the  Corporation for the lawful  issuance of shares  hereunder,  the


<PAGE>

Corporation  shall be relieved of any  liability  with respect to its failure to
issue  and sell the  shares  for  which  such  requisite  authority  was  deemed
necessary unless and until the authority is obtained.

(c) Application of Funds. The proceeds received by the Corporation from the sale
of Stock pursuant to the exercise of Options will be used for general  corporate
purposes.

(d) No Obligation to Exercise Option.  The granting of an Option shall impose no
obligation upon the Optionee to exercise such Option.

(e) Adjustment of Shares. In the event of any change in the outstanding Stock by
reason  of  a  stock  split,   stock  dividend,   combination,   subdivision  or
reclassification  of shares,  recapitalization,  merger,  or similar event,  the
Board or the  Committee may adjust  proportionately  (a) the number of shares of
Stock  reserved  under the Plan and available  for  Incentive  Stock Options and
Nonstatutory  Options;  and (b)  the  exercise  prices  related  to  outstanding
Options.  In  the  event  of  any  other  change  affecting  the  Stock  or  any
distribution  (other  than  normal  cash  dividends)  to holders of Stock,  such
adjustments as may be deemed equitable by the Board or the Committee,  including
adjustments to avoid fractional  shares,  shall be made to give proper effect to
such event. In the event of a corporate  merger,  consolidation,  acquisition of
property or stock, separation,  reorganization or liquidation,  the Board or the
Committee  shall be authorized to issue or assume  Options,  whether or not in a
transaction to which Code section 424(a)  applies,  by means of  substitution of
new Options for previously  issued Options or an assumption of previously issued
Options.

E. Terms and Conditions of Options

Options  granted  hereunder  shall  be  evidenced  by  agreements   between  the
Corporation  and the  respective  Optionees,  in such form and  substance as the
Board or Committee shall from time to time approve.  Such agreements need not be
identical,  and in each  case  may  include  such  provisions  as the  Board  or
Committee may determine, but all such agreements shall be subject to and limited
by the following terms and conditions:

(a) Number of Shares.  Each Option  shall state the number of shares to which it
pertains.

(b) Option  Price.  Each Option shall state the exercise  price,  which shall be
determined as follows:

(i) Any Stock  Option  granted to a person who at the time the Option is granted
owns (or is deemed to own pursuant to Code section 424(d)) stock possessing more
than  ten  percent  (10%) of the  total  combined  voting  power or value of all
classes  of stock of the  Corporation,  ("Ten  Percent  Holder")  shall  have an
exercise price of no less than one hundred ten percent (110%) of the fair market
value of the common stock as of the date of grant; and

(ii) Incentive  Stock Options  granted to a person who at the time the Option is
granted is not a Ten Percent Holder shall have an exercise price of no less than
one hundred  percent  (100%) of the fair market  value of the common stock as of
the date of grant.

(iii)  Nonstatutory  Options  granted  to a person who at the time the Option is
granted is not a Ten Percent Holder shall have an exercise price of no less than
eighty-five percent (85%) of the fair market value of the common stock as of the
date of grant.  For the purposes of this  Paragraph  5(b), the fair market value
shall be as determined by the Board, in good faith, which determination shall be


<PAGE>

conclusive and binding;  provided however,  that if there is a public market for
the Stock,  the fair market  value per share shall be the average of the bid and
asked prices (or the closing price if the stock is listed on the NASDAQ National
Market  System)  on the date of grant of the  Option,  or if  listed  on a stock
exchange, the closing price on such exchange on the date of grant.

(c)  Medium  and  Time of  Payment.  The  Option  exercise  price  shall  become
immediately  due upon  exercise of the Option and shall be paid in cash or check
made payable to the Corporation.  Should the  Corporation's  outstanding  common
stock be  registered  under  Section  12(g) of the  Exchange Act at the time the
Option is exercised, then the exercise price may also be paid as follows:

(i) in shares of Stock held by the Optionee for the requisite  period  necessary
to avoid a charge to the Corporation's earnings for financial reporting purposes
and valued at fair market value on the exercise date, or

(ii)  through a special  sale and  remittance  procedure  pursuant  to which the
Optionee shall concurrently  provide irrevocable  written  instructions (a) to a
Corporation  designated  brokerage  firm to  effect  the  immediate  sale of the
purchased  shares  and  remit  to the  Corporation,  out of  the  sale  proceeds
available  on the  settlement  date,  sufficient  funds to cover  the  aggregate
exercise  price payable for the purchased  shares plus all  applicable  Federal,
state and local  income and  employment  taxes  required  to be  withheld by the
Corporation  by reason of such purchase,  and (b) to the  Corporation to deliver
the  certificates  for the purchased  shares  directly to such brokerage firm in
order to complete the sale transaction.

At the discretion of the Board,  exercisable  either at the time of Option grant
or of Option  exercise,  the exercise  price may also be paid (i) by  Optionee's
delivery  of a  promissory  note  in  form  and  substance  satisfactory  to the
Corporation and permissible under the Nevada Securities  Regulations and bearing
interest at a rate  determined  by the Board in its sole  discretion,  but in no
event less than the minimum rate of interest required to avoid the imputation of
compensation  income to the Optionee under the Federal tax laws, or (ii) in such
other form of consideration  permitted by the Nevada  Corporation Laws as may be
acceptable to the Board.

(d) Term and  Exercise  of  Options.  Any Option  granted to an  Employee of the
Corporation  shall become  exercisable  over a period of no longer than 5 years,
and no less than twenty percent (20%) of the shares covered thereby shall become
exercisable annually. No Option shall be exercisable, in whole or in part, prior
to one (1) year from the date it is granted unless the Board shall  specifically
determine  otherwise,  as  provided  herein.  In no event  shall  any  Option be
exercisable after the expiration of 10 years from the date it is granted, and no
Incentive  Stock Option granted to a Ten Percent Holder shall,  by its terms, be
exercisable after the expiration of 5 years from the date of the Option.  Unless
otherwise specified by the Board or the Committee in the resolution  authorizing
such Option,  the date of grant of an Option shall be deemed to be the date upon
which the Board or the Committee authorizes the granting of the Option.

Each Option shall be exercisable to the nearest whole share,  in installments or
otherwise,  as the respective Option agreements may provide. During the lifetime
of an Optionee,  the Option shall be exercisable  only by the Optionee and shall
not be assignable  or  transferable  by the Optionee,  and no other person shall
acquire any rights therein.  To the extent not exercised,  installments (if more
than one) shall accumulate, but shall be exercisable,  in whole or in part, only


<PAGE>

during the period for exercise as stated in the Option agreement, whether or not
other installments are then exercisable.

(e)  Termination  of Status as Employee,  Consultant or Director.  If Optionee's
status as an  employee  shall  terminate  for any reason  other than  Optionee's
disability  or death,  then  Optionee (or if the  Optionee  shall die after such
termination,  but prior to exercise,  Optionee's personal  representative or the
person  entitled to succeed to the Option)  shall have the right to exercise the
portions of any of Optionee's  Incentive Stock Options which were exercisable as
of the date of such termination,  in whole or in part, not less than 30 days nor
more  than  three  (3)  months  after  such  termination,  or,  in the  event of
"termination  for cause" (as that term is defined in Nevada  Labor Code and case
law related  thereto) or by the terms of the Plan or the Option  Agreement or an
employment  agreement,  the  Option  shall  automatically  terminate  as of  the
termination of employment as to all shares covered by the Option.

With  respect  to  Nonstatutory  Options  granted  to  employees,  directors  or
consultants,  the Board may specify such period for  exercise,  not less than 30
days except that in the case of "termination for cause" or removal of a director
pursuant  to  the  Nevada  Corporation  Laws,  the  Option  shall  automatically
terminate as of the  termination  of employment or services as to shares covered
by the Option,  following  termination  of  employment  or services as the Board
deems reasonable and appropriate.  The Option may be exercised only with respect
to  installments  that  the  Optionee  could  have  exercised  at  the  date  of
termination of employment or services. Nothing contained herein or in any Option
granted  pursuant hereto shall be construed to affect or restrict in any way the
right of the  Corporation to terminate the employment or services of an Optionee
with or without cause.

(f)  Disability of Optionee.  If an Optionee is disabled  (within the meaning of
Code section  22(e)(3)) at the time of  termination,  the three (3) month period
set forth in Paragraph  5(e) shall be a period,  as  determined by the Board and
set forth in the Option, of not less than 6 months nor more than one year.

(g) Death of  Optionee.  If an Optionee  dies while  employed  by,  engaged as a
consultant  to or serving as a Director of the  Corporation,  the portion of the
Optionee's  Option which was  exercisable at the date of death may be exercised,
in whole or in part, by the estate of the decedent or by a person  succeeding to
the right to exercise the Option at any time within (i) a period,  as determined
by the Board and set forth in the Option, of not less than three months nor more
than ten year after  Optionee's  death,  which period shall not be more,  in the
case  of  a  Nonstatutory   Option,  than  the  period  for  exercise  following
termination of employment or services,  or (ii) during the remaining term of the
Option,  whichever  is the  lesser.  The  Option may be so  exercised  only with
respect to  installments  exercisable  at the time of  Optionee's  death and not
previously exercised by the Optionee.

(h)  Nontransferability  of  Option.  No  Option  shall be  transferable  by the
Optionee, except by will or by the laws of descent and distribution.

(i) Recapitalization. Subject to any required action of shareholders, the number
of shares covered by each outstanding  Option,  and the exercise price per share
set forth in each Option, shall be proportionately  adjusted for any increase or
decrease in the number of issued shares of Stock resulting from a subdivision or
consolidation  of  shares  or the  payment  of a stock  dividend,  or any  other
increase or decrease in the number of such shares  affected  without  receipt of
consideration  by the  Corporation;  provided,  however,  the  conversion of any


<PAGE>

convertible  securities  of the  Corporation  shall  not be  deemed to have been
effected without receipt of consideration by the Corporation.

In the event a proposed dissolution or liquidation of the Corporation,  a merger
or consolidation in which the Corporation is not the surviving entity, or a sale
of all or  substantially  all of the assets or capital stock of the  Corporation
(collectively, a "Reorganization"), unless otherwise provided by the Board, this
Option shall  terminate  immediately  prior to such date as is determined by the
Board, which date shall be no later than the consummation of the Reorganization.
In such event, if the entity which shall be the surviving entity does not tender
to Optionee  an offer,  having no  obligation  to do so, to  substitute  for any
unexercised  Option a stock option or capital stock of the surviving  entity, as
applicable,  which  on an  equitable  basis  shall  provide  the  Optionee  with
substantially  the same economic  benefit as the  unexercised  Option,  then the
Board may grant to the Optionee, in its sole and absolute discretion and without
obligation,  the  right  for a period  commencing  30 days  prior to and  ending
immediately  prior to the date  determined  by the  Board  pursuant  hereto  for
termination of the Option or during the remaining term of the Option,  whichever
is the lesser, to exercise any unexpired Option or Options without regard to the
installment  provisions of Paragraph 5(d) of the Plan;  provided,  that any such
right  granted  shall be  granted to all  Optionees  not  receiving  an offer to
receive substitute options on a consistent basis, and provided further, that any
such exercise shall be subject to the consummation of the Reorganization.

Subject to any required action of stockholders,  if the Corporation shall be the
surviving  entity  in any  merger  or  consolidation,  each  outstanding  Option
thereafter  shall  pertain to and apply to the  securities  to which a holder of
shares of Stock  equal to the  shares  subject  to the  Option  would  have been
entitled by reason of the merger or consolidation.

In the event of a change in the Stock as presently constituted, which is limited
to a change of all of its  authorized  shares  without  par value  into the same
number of shares  with a par value,  the shares  resulting  from any such change
shall be deemed to be the Stock  within the  meaning of the Plan.

To the extent that the  foregoing  adjustments  relate to stock or securities of
the  Corporation,   such  adjustments   shall  be  made  by  the  Board,   whose
determination in that respect shall be final, binding and conclusive.  Except as
expressly  provided in this Paragraph 5(i), the Optionee shall have no rights by
reason of any  subdivision or  consolidation  of shares of stock of any class or
the  payment of any stock  dividend  or any other  increase  or  decrease in the
number  of shares of stock of any  class,  and the  number or price of shares of
Stock subject to any Option shall not be affected by, and no adjustment shall be
made by reason of, any dissolution,  liquidation,  merger, consolidation or sale
of assets or capital stock,  or any issue by the  Corporation of shares of stock
of any class or securities convertible into shares of stock of any class.

The  grant of an Option  pursuant  to the Plan  shall not  affect in any way the
right or power of the  Corporation to make any  adjustments,  reclassifications,
reorganizations  or changes in its  capital or business  structure  or to merge,
consolidate,  dissolve,  or  liquidate or to sell or transfer all or any part of
its business or assets.

(j) Rights as a  Stockholder.  An Optionee shall have no rights as a stockholder
with respect to any shares  covered by an Option until the effective date of the
issuance  of the  shares  following  exercise  of this  Option by  Optionee.  No
adjustment shall be made for dividends  (ordinary or  extraordinary,  whether in
cash,  securities or other property) or  distributions or other rights for which


<PAGE>

the record date is prior to the date such stock certificate is issued, except as
expressly provided in Paragraph 5(i) of this Plan.

(k) Modification,  Acceleration,  Extension,  and Renewal of Options. Subject to
the terms and conditions  and within the  limitations of the Plan, the Board may
modify an Option, or once an Option is exercisable, accelerate the rate at which
it may be exercised,  and may extend or renew outstanding  Options granted under
the Plan or accept the surrender of  outstanding  Options (to the extent not yet
exercised)  and authorize the granting of new Options in  substitution  for such
Options,  provided such action is permissible under Code and under the Corporate
Securities Rules of the Nevada  Corporations  Commissioner.  Notwithstanding the
provisions of this Paragraph 5(k),  however, no modification of an Option shall,
without the consent of the Optionee, alter to the Optionee's detriment or impair
any rights or obligations under any Option theretofore granted under the Plan.

(l) Exercise  Before  Exercise Date. At the discretion of the Board,  the Option
may,  but need not,  include  a  provision  whereby  the  Optionee  may elect to
exercise all or any portion of the Option prior to the stated  exercise  date of
the Option or any  installment  thereof.  Any shares so  purchased  prior to the
stated  exercise  date shall be subject to repurchase  by the  Corporation  upon
termination of Optionee's  employment as contemplated by Paragraphs 5(n) of this
Plan prior to the exercise date stated in the Option and such other restrictions
and conditions as the Board or Committee may deem advisable.

(m) Reacquisition,  Replacement and Reissuance of Options.  (a) The Board or the
Committee,  with or without the consent of the  Optionee,  may at any time cause
the Corporation to reacquire and cancel any outstanding and unexercised  Option,
or any  portion  therefor.  In such  event,  the  Corporation  shall pay to such
Optionee  an amount in cash equal to the excess (if any) of (i) the fair  market
value of the shares of Stock subject to such Option, or portion thereof,  at the
time of  reacquisition,  over (ii) the option price of such  Option,  or portion
thereof. The Corporation may withhold from any such payment applicable taxes and
other amounts.  The shares of Stock subject to such Option,  or portion thereof,
reacquired and canceled in consideration for a cash payment to an Optionee shall
not again be available for option under the Plan. In the event that the exercise
price of such Option,  or portion thereof,  exceeds the fair market value of the
shares of Stock  subject  to such  Option,  or portion  thereof,  at the time of
reacquisition, such Option may be reacquired and canceled by the Company without
payment  therefor.  The  shares of Stock  subject  to such  Option,  or  portion
thereof,  reacquired and canceled without payment therefor to the Optionee,  may
again be subject to an Option under the Plan.

(n) Other  Provisions.  The Option  agreements  authorized under this Plan shall
contain such other provisions, including, without limitation,  restrictions upon
the exercise of the Options, as the Board or the Committee shall deem advisable.
Shares  shall  not be issued  pursuant  to the  exercise  of an  Option,  if the
exercise of such Option or the issuance of shares  thereunder would violate,  in
the  opinion  of  legal  counsel  for the  Corporation,  the  provisions  of any
applicable law or the rules or regulations  of any  applicable  governmental  or
administrative  agency  or body,  such as the  Code,  the  Securities  Act,  the
Exchange Act, the Nevada  Securities  Rules, and the rules promulgated under the
foregoing or the rules and  regulations of any exchange upon which the shares of
the  Corporation are listed.  Without  limiting the generality of the foregoing,
the  exercise of each Option  shall be subject to the  condition  that if at any
time the Corporation  shall  determine that (i) the  satisfaction of withholding
tax  or  other  similar  liabilities,  or  (ii)  the  listing,  registration  or
qualification  of any  shares  covered  by such  exercise  upon  any  securities
exchange or under any state or federal  law, or (iii) the consent or approval of


<PAGE>

any  regulatory  body, or (iv) the  perfection  of any  exemption  from any such
withholding,  listing,  registration,  qualification,  consent  or  approval  is
necessary  or  desirable  in  connection  with such  exercise or the issuance of
shares thereunder,  then in any such event, such exercise shall not be effective
unless the withholding, listing registration,  qualification,  consent, approval
or  exemption  shall  have been  effected,  obtained  or  perfected  free of any
conditions not acceptable to the Corporation.

(o)  Repurchase  Agreement.  The Board  may,  in its  discretion,  require  as a
condition to the grant of an Option under this Plan, that an Optionee execute an
agreement with the Corporation,  in form and substance satisfactory to the Board
in its discretion ("Repurchase Agreement"), (i) restricting the Optionee's right
to transfer shares  purchased under the Option without first offering the shares
to the Corporation or another stockholder of the Corporation upon the same terms
and conditions as provided therein;  and (ii) providing that upon termination of
Optionee's employment with the Corporation,  for any reason, the Corporation (or
another stockholder of the Corporation, as provided in the Repurchase Agreement)
shall  have  the  right  at its  discretion  (or the  discretion  of such  other
shareholders) to purchase and/or redeem all such shares owned by the Optionee on
the date of  termination  of his or her  employment  at a price equal to (A) the
fair  value  of the  shares  as of  such  date  of  termination,  or (B) if such
repurchase  right  lapses at twenty  percent  (20%) of the  number of shares per
year,  the original  purchase  price of such  shares,  and upon terms of payment
permissible  under the Nevada  Securities  Rules;  provided  that in the case of
Options  or  Stock  Awards  granted  to  officers,  directors,   consultants  or
affiliates  of  the  Company,  such  repurchase  provisions  may be  subject  to
additional or greater restrictions as determined by the Board or Committee.

(p)  Investment  Intent.  Unless and until the  issuance  and sale of the shares
subject to the Plan are  registered  under the Securities Act or shall be exempt
pursuant to the rules promulgated  thereunder,  each Option under the Plan shall
provide that the purchases of shares thereunder shall be for investment purposes
and not with a view to,  or for  resale in  connection  with,  any  distribution
thereof. Further, unless the issuance and sale of the stock have been registered
under the  Securities  Act,  each Option  shall  provide that no shares shall be
purchased  upon the  exercise  of such  Option  unless  and  until  (i) any then
applicable  requirements of state and federal laws and regulatory agencies shall
have been fully complied with to the  satisfaction  of the  Corporation  and its
counsel,  and  (ii)  if  requested  to do  so by  the  Corporation,  the  person
exercising  the Option shall (i) give  written  assurances  as to knowledge  and
experience  of such  person (or a  representative  employed  by such  person) in
financial   and   business   matters   and  the   ability  of  such  person  (or
representative)  to evaluate the merits and risks of exercising the Option,  and
(ii) execute and deliver to the Corporation a letter of investment intent and/or
such other form related to applicable exemptions from registration,  all in such
form and  substance as the  Corporation  may require.  If shares are issued upon
exercise of an Option without  registration under the Securities Act, subsequent
registration  of the  shares  shall  relieve  the  purchaser  of any  investment
restrictions or representations made upon the exercise of such Options.

(q) Tax Withholding. The Company shall have the right to deduct applicable taxes
from any Option  payment  and  withhold,  at the time of delivery or exercise of
Options or vesting of shares under such Options, an appropriate number of shares
for  payment of taxes  required  by law or to take such  other  action as may be
necessary  in  the  opinion  of the  Company  to  satisfy  all  obligations  for
withholding  of such  taxes.  If Stock is used to satisfy tax  withholding,  the
Stock shall be valued  based on the fair market  value of the Stock when the tax
withholding is required to be made.


<PAGE>


F. Amendment and Termination of Plan

The Board may,  insofar as permitted by law, from time to time,  with respect to
any shares at the time not subject to Options,  suspend or terminate the Plan or
revise or amend it in any respect  whatsoever,  except that without the approval
of the shareholders of the Corporation,  no such revision or amendment shall (i)
increase the number of shares  subject to the Plan,  (ii)  decrease the price at
which  Options  may be  granted,  (iii)  materially  increase  the  benefits  to
Optionees, or (iv) change the class of persons eligible to receive Options under
the Plan; provided, however, no such action shall alter or impair the rights and
obligations  under any Option  outstanding  as of the date  thereof  without the
written consent of the Optionee  thereunder.  No Option may be granted while the
Plan is  suspended  or after it is  terminated,  but the rights and  obligations
under any Option  granted  while the Plan is in effect  shall not be impaired by
suspension or termination of the Plan.

G. Availability of Information

During the term of the Plan and any  additional  period  during  which an Option
granted  pursuant to the Plan shall be exercisable,  the Corporation  shall make
available,  not later  than 90 days  following  the close of each of its  fiscal
years,  such  financial and other  information  regarding the  Corporation as is
required by the bylaws of the  Corporation and applicable law to be furnished in
an annual report to the stockholders of the Corporation.

H. Notices

All notices,  requests,  demands, and other communications pursuant to this Plan
shall be in  writing  and shall be deemed to have been duly given on the date of
service if served  personally on the party to whom notice is to be given,  or on
the third day following  mailing to the party to whom notice is to be given,  by
first class mail, registered or certified, postage prepaid.

I. Indemnification of Board

In  addition  to such  other  rights  or  indemnifications  as they  may have as
directors or otherwise, and to the extent allowed by applicable law, the members
of the Board and the Committee shall be indemnified by the  Corporation  against
the  reasonable  expenses,  including  attorney fees,  actually and  necessarily
incurred  in  connection  with  the  defense  of  any  claim,  action,  suit  or
proceeding,  or in connection with any appeal  thereof,  to which they or any of
them may be a party by reason of any action taken,  or failure to act,  under or
in connection  with the Plan or any Option  granted under the Plan,  and against
all amounts paid by them in  settlement  thereof  (provided  the  settlement  is
approved by independent  legal counsel  selected by the  Corporation) or paid by
them  in  satisfaction  of a  judgment  in  any  such  claim,  action,  suit  or
proceeding,  except in any case in  relation  to matters as to which it shall be
adjudged in such claim,  action,  suit or proceeding that the Board or Committee
member is liable for  negligence or misconduct in the  performance of his or her
duties;  provided that within seven days after  institution  of any such action,
suit or Board  proceeding the member  involved shall offer the  Corporation,  in
writing, the opportunity, at its own expense, to handle and defend the same.

J. Governing Law

The Plan and all  determinations  made and actions taken  pursuant to it, to the
extent not otherwise  governed by the Code or the securities  laws of the United
States,  shall be  governed  by the laws of the  State of Nevada  and  construed
accordingly.