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                                                                    EXHIBIT 10.1










                           DIRECT III MARKETING, INC.

                                STOCK OPTION PLAN


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                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

ARTICLE 1.  DEFINITIONS                                                     1
     1.1.     General                                                       1

ARTICLE 2.  SHARES SUBJECT TO PLAN                                          4
     2.1.     Shares Subject to Plan                                        4
     2.2.     Add-back of Options                                           5

ARTICLE 3.  GRANTING OF OPTIONS                                             5
     3.1.     Eligibility                                                   5
     3.2.     Qualification for Incentive Stock Options                     5
     3.3.     Granting of Options                                           5

ARTICLE 4.  TERMS OF OPTIONS                                                6
     4.1.     Option Agreement                                              6
     4.2.     Option Price                                                  6
     4.3.     Option Term                                                   7
     4.4.     Option Vesting                                                7
     4.5.     Continued Employment                                          8

ARTICLE 5.  EXERCISE OF OPTIONS                                             8
     5.1.     Partial Exercise                                              8
     5.2.     Manner of Exercise                                            8
     5.3.     Conditions to Issuance of Stock                               9
     5.4.     Rights as Stockholders                                        9
     5.5.     Ownership and Transfer Restrictions                           9
     5.6.     Limitations on Exercise of Options                            10

ARTICLE 6.  ADMINISTRATION                                                  10
     6.1.     Compensation Committee                                        10
     6.2.     Duties and Powers of Committee                                11
     6.3.     Majority Rule; Unanimous Written Consent                      11
     6.4.     Compensation; Professional Assistance: Good Faith Actions     11

ARTICLE 7.  MISCELLANEOUS PROVISIONS                                        11
     7.1.     Not Transferable                                              11
     7.2.     Amendment, Suspension or Termination of this Plan             12
     7.3.     Changes in Common Stock or Assets of the Company,
              Acquisition or Liquidation of the Company and Other
              Corporate Events.                                             12

                                       (i)

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     7.4.     Approval of Plan by Stockholders                              14
     7.5.     Tax Withholding                                               15
     7.6.     Loans                                                         15
     7.7.     Forfeiture Provisions                                         15
     7.8.     Limitations Applicable to Section 16 Persons and
              Performance-Based Compensation                                15
     7.9.     Effect of Plan Upon Options and Compensation Plans            16
     7.10.    Compliance with Laws                                          16
     7.11.    Titles                                                        16
     7.12.    Governing Law                                                 16


                                      (ii)

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                           DIRECT III MARKETING, INC.

                                STOCK OPTION PLAN


         DIRECT III MARKETING, INC., a Delaware corporation (the "Company"),
adopts the Direct III Marketing, Inc. Stock Option Plan (the "Plan"), effective
April 21, 1999, for the benefit of eligible Employees of the Employer (as
defined in Section 1.1).

         The purposes of this Plan are (a) to recognize and compensate selected
Employees of the Company who contribute to the development and success of the
Company; (b) to maintain the competitive position of the Company by attracting
and retaining Employees; and (c) to provide incentive compensation to such key
Employees based upon the Company's performance.


                             ARTICLE 1. DEFINITIONS

              0.1. General. Wherever the following initially capitalized terms
are used in this Plan they shall have the meanings specified below, unless the
context clearly indicates otherwise.

                  "Award Limit" shall mean One Hundred Thousand (100,000) shares
of Common Stock.

                  "Board" shall mean the Board of Directors of the Company, as
comprised from time to time.

                  "Change in Control" shall mean a change in ownership or
control of the Company effected through any of the following transactions:

                           (a) Any person or related group of persons (other
than the Company or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which the
Board does not recommend such stockholders to accept; or

                           (b) There is a change in the composition of the Board
over a period of no more than thirty-six (36) consecutive months such that a
majority of the Board members (rounded up to the nearest whole number) ceases,
by reason of one or more proxy contests for the election of Board members, to be
comprised of individuals who either (i) have been Board members continuously
since the beginning of such period or (ii) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (i) who were still in office at the time such
election or nomination was approved by the Board; or


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                           (c) There is a successful initial public offering of
the Company's Common Stock.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                  "Committee" shall mean the Compensation Committee of the
Board, appointed as provided in Section 6.1, as comprised from time to time, or
such other Committee designated by the Board to administer the provisions of
this Plan.

                  "Common Stock" shall mean the common stock of the Company.

                  "Company" shall mean Direct III Marketing, Inc., a Delaware
corporation.

                  "Corporate Transaction" shall mean any of the following
stockholder-approved transactions to which the Company is a party:

                           (a) A merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to (i) change the State in which the Company is incorporated, (ii) form
a holding company, or (iii) effect a similar reorganization as to form whereupon
this Plan and all Options are assumed by the successor entity;

                           (b) The sale, transfer, exchange or other disposition
of all or substantially all of the assets of the Company, in complete
liquidation or dissolution of the Company in a transaction not covered by the
exceptions to clause (a), above; or

                           (c) Any reverse merger in which the Company is the
surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding securities
are transferred or issued to a person or persons different from those who held
such securities immediately prior to such merger.

                  "Director" shall mean a member of the Board.

                  "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Employer.

                  "Employer" shall mean the Company and each member of (i) a
controlled group of corporations or (ii) trades or businesses under common
control, or (iii) an affiliated service group which, in each case, shall include
the Company, as determined under Section 414 of the Code.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

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                  "Fair Market Value" of a share of Common Stock, as of a given
date shall be (i) the closing price of a share of Common Stock on the principal
exchange on which shares of Common Stock are then trading, if any (or as
reported on any composite index which includes such principal exchange), on the
trading day previous to such date, or if shares were not traded on the trading
day previous to such date, then on the next preceding date on which a trade
occurred, or (ii) if Common Stock is not traded on an exchange but is quoted on
NASDAQ or a successor quotation system, either the (i) closing sale price or
(ii) the mean between the closing representative bid and asked prices for the
Common Stock on the trading day previous to such date as reported by NASDAQ or
such successor quotation systems, as may be appropriate, or (iii) if Common
Stock is not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the Fair Market Value of a share of Common Stock as
established by the Committee acting in good faith.

                  "Incentive Stock Option" shall mean an option which conforms
to the applicable provisions of Section 422 of the Code and which is designated
as an Incentive Stock Option by the Committee.

                  "Independent Director" shall mean a member of the Board who is
not also an Employee of the Employer.

                  "Non-Qualified Stock Option" shall mean an Option which the
Committee does not designate as an Incentive Stock Option.

                  "Option" shall mean a stock option granted under Article 3 of
this Plan. An option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to Independent Directors shall be
Non-Qualified Stock Options.

                  "Optionee" shall mean an Employee granted an Option under this
Plan.

                  "Plan" shall mean the Direct III Marketing, Inc. Stock Option
Plan, as amended from time to time.

                  "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.

                  "Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.

                  "Section 162(m) Participant" shall mean any Employee
designated by the Committee to receive Options whose compensation for the fiscal
year in which the Employee is so designated or a future fiscal year may be
subject to the limit on deductible compensation imposed by Section 162(m) of the
Code, as determined by the Committee in its sole discretion.


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                  "Subsidiary" shall mean a corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

                  "Termination of Employment" shall mean the time when the
employee-employer relationship between an Optionee and the Employer is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement, but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of an Optionee by the Employer, and (ii)
at the discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship. The Committee, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Employment (subject to the provisions of any agreement between an
Employee and the Employer), including, but not by way of limitation, the
question of whether a Termination of Employment resulted from a discharge for
good cause, the application of the provisions of Section 7.7, and all questions
of whether particular leaves of absence constitute Terminations of Employment,
provided, however, that, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section. Notwithstanding, any other provision of
this Plan, the Employer has an absolute and unrestricted right to terminate an
Employee's employment at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in writing.

                        ARTICLE 2. SHARES SUBJECT TO PLAN

              2.1 Shares Subject to Plan.

                  (a) The stock subject to an Option shall be shares of the
Company's authorized but unissued, reacquired, or treasury Common Stock. The
aggregate number of such shares which may be issued upon exercise of such
Options shall not exceed Two Million (2,000,000).

                  (b) The maximum number of shares which may be subject to
Options granted under the Plan to any individual in any fiscal year shall not
exceed the Award Limit. To the extent required by Section 162(m) of the Code,
shares subject to Options which are canceled continue to be counted against the
Award Limit and if, after grant of an Option, the price of shares subject to
such Option is reduced, the transaction is treated as a cancellation of the
Option and a grant of a new Option and both the Option deemed to be canceled and
the Option deemed to be granted are counted against the Award Limit.

              2.2 Add-back of Options. If any Option expires or is canceled
without having been fully exercised, or is exercised in whole or in part for
cash as permitted by this Plan, the number of shares

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subject to such Option but as to which such Option was not exercised prior to
its expiration, cancellation or exercise may again be optioned, granted or
awarded hereunder, subject to the limitations of Section 2.1. Furthermore, any
shares subject to Options which are adjusted pursuant to Section 7.3 and become
exercisable with respect to shares of stock of another corporation shall be
considered canceled and may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. Shares of Common Stock which are
delivered by the Optionee or withheld by the Company upon the exercise of any
Option or other award under this Plan, in payment of the exercise price thereof,
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Notwithstanding the provisions of this Section 2.2, no shares of
Common Stock may again be optioned, granted or awarded if such action would
cause an Incentive Stock Option to fail to qualify as an incentive stock option
under Section 422 of the Code.

                         ARTICLE 3. GRANTING OF OPTIONS

              3.1 Eligibility. Any individual selected by the Committee pursuant
to Section 3.3.1 shall be eligible to be granted an Option.

              3.2 Qualification for Incentive Stock Options. No person may be
granted an Incentive Stock Option under this Plan if such person (i) is not an
Employee, or (ii) at the time the Incentive Stock Option is granted, the
Employee owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any then existing
Subsidiary or parent corporation (within the meaning of Section 422 of the Code)
unless such Incentive Stock Option conforms to the applicable provisions of
Section 422 of the Code.

              3.3 Granting of Options.

                  (a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of this Plan:

                      (1) Determine who (including Employees who have previously
received Options under this Plan) should be granted Options;

                      (2) Subject to the Award Limit, determine the number of
shares to be subject to such Options granted to the selected Employees;

                      (3) Subject to Section 3.2 above, determine whether such
Options are to be Incentive Stock Options or Non-Qualified Stock Options; and

                      (4) Determine the terms and conditions of such Options,
consistent with this Plan, provided, however, that the terms and conditions of
Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall include, but not be limited to, such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the Code.


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                  (b) The Committee shall issue the Option and may impose such
conditions on the grant of the Option as it deems appropriate. Without limiting
the generality of the preceding sentence, the Committee may, in its discretion
and on such terms as it deems appropriate, require as a condition on the grant
of an Option to an Employee that the Employee surrender for cancellation some or
all of the unexercised Options which have been previously granted to him or her
under this Plan or otherwise. An Option, the grant of which is conditioned upon
such surrender, may have an option price lower (or higher) than the exercise
price of such surrendered Option, may cover the same (or a lesser or greater)
number of shares as such surrendered Option or other award, may contain such
other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.

                  (c) Any Incentive Stock Option granted under this Plan may be
modified by the Committee to disqualify such option from treatment as an
"incentive stock option" under Section 422 of the Code.

                           ARTICLE 4. TERMS OF OPTIONS

              4.1 Option Agreement. Each Option shall be evidenced by a written
Stock Award Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan. Stock Award Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Stock Award Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.

              4.2 Option Price. The price per share of the shares subject to
each Option shall be set by the Committee, provided, however, that such price
shall be greater than the par value of a share of Common Stock, unless otherwise
permitted by applicable state law, and (i) in the case of Incentive Stock
Options and Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code, such price shall not be less than
100% of the Fair Market Value of a share of Common Stock on the date the Option
is granted; (ii) in the case of Incentive Stock Options granted to an individual
then owning (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 any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code) such price shall not be less than 110% of the Fair Market Value of a
share of Common Stock on the date the Option is granted; and (iii) in the case
of Non-Qualified Stock Options granted to Independent Directors after the
Company is subject to the Exchange Act, such price shall equal 100% of the Fair
Market Value of a share of Common Stock on the date the Option is granted.

              4.3 Option Term. The term of an Option shall be set by the
Committee in its discretion, provided, however, that, (i) in the case of
Non-Qualified Stock Options granted to Independent Directors, the term shall be
ten (10) years from the date the Option is granted, without variation or

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acceleration hereunder, but subject to Section 5.6, and (ii) in the case of
Incentive Stock Options, the term shall not be more than ten (10) years from the
date the Incentive Stock Option is granted, or five (5) years from such date if
the Incentive Stock Option is granted to an Employee then owning (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 any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code). Such
Incentive Stock Options shall be subject to Section 5.6. Except as limited by
requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options and by Section 7.2 hereof, the Committee
may extend the term of any outstanding Option in connection with any Termination
of Employment of the Optionee, or amend any other term or condition of such
Option relating to such a termination.

              4.4 Option Vesting.

                  (a) The period during which the right to exercise an Option in
whole or in part vests in the Optionee shall be set by the Committee and the
Committee may determine that an Option may not be exercised in whole or in part
for a specified period after it is granted; provided, however, that Options
granted to Independent Directors shall become exercisable in full on the date of
Option grant. At any time after grant of an Option, the Committee may, in its
sole and absolute discretion and subject to whatever terms and conditions it
selects, accelerate the period during which an Option vests.

                  (b) No portion of an Option which is non-vested at Termination
of Employment shall thereafter become exercisable, except as may be otherwise
provided by the Committee either in the Stock Award Agreement or by action of
the Committee or the Board, as the case may be, following the grant of the
Option.

                  (c) To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to Section 422(d) of the Code) are
exercisable for the first time by an Optionee during, any calendar year (under
the Plan and all other incentive stock option plans of the Company and any
Subsidiary) exceeds $100,000, such Options shall be treated as Non-Qualified
Options to the extent required or permitted by Section 422 of the Code. The rule
set forth in the preceding sentence shall be applied by taking Options into
account in the order in which they were granted. For purposes of this Section
4.4.3., the Fair Market Value of stock shall be determined as of the time the
Option with respect to such stock is granted.

              4.5 Continued Employment. Nothing in this Plan or in any Stock
Award Agreement hereunder shall confer upon any Optionee any right to continue
in the employ of the Employer, or shall interfere with or restrict any of the
rights of the Employer, hereby expressly reserved, to discharge any Optionee at
any time for any reason whatsoever, with or without good cause.


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                         ARTICLE 5. EXERCISE OF OPTIONS

              5.1 Partial Exercise. An exercisable Option may be exercised in
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Committee may require that, by the terms of the
Option, a partial exercise can only be effective with respect to a minimum
number of shares.

              5.2 Manner of Exercise. All or a portion of an exercisable Option
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his or her office:

                  (a) A written notice stating that the Option, or a portion
thereof, is exercised. The notice shall be signed by the Optionee or other
person then entitled to exercise the Option or such portion and shall specify
the number of shares in respect of which the Option is to be exercised;

                  (b) Such representations and documents as the Committee, in
its absolute discretion, deems necessary or advisable to effect compliance with
all applicable provisions of the Securities Act of 1933, as amended, and any
other federal or state securities laws or regulations. The Committee or Board
may, in its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;

                  (c) In the event that the Option shall be exercised pursuant
to Section 7.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option (such as a
copy of the appropriate court order); and

                  (d) The Committee may specify in the stock option award
agreement that the option can be exercised by one or more of the following
methods: full cash payment to the Secretary of the Company for the shares with
respect to which the Option, or portion thereof, is exercised. However, the
Committee, may in its discretion (i) allow a delay in payment up to thirty (30)
days from the date the Option, or portion thereof, is exercised, (ii) allow
payment, in whole or in part, through the delivery of shares of Common Stock
owned by the Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof, (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration, (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee or the Board, (vi) allow payment, in whole
or in part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration

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provided in the foregoing subparagraphs (iii), (iv), (v) and (vi). In the case
of a promissory note, the Committee may also prescribe the form of such note and
the security to be given for such note. The Option may not be exercised,
however, by delivery of a promissory note or by a loan from the Company when or
where such loan or other extension of credit is prohibited by law.

              5.3 Conditions to Issuance of Stock. The Company shall not be
required to issue or deliver any certificate or other indicium evidencing
ownership of shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:

                  (a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;

                  (b) The completion of any registration or other qualification
of such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body which the Committee or Board shall in its absolute discretion,
deem necessary or advisable;

                  (c) The obtaining of any approval or other clearance from any
state or federal governmental agency or transfer agent based on Committee
instructions for non-certificated shares which the Committee (or Board, in the
case of Options granted to Independent Directors) shall, in its absolute
discretion, determine to be necessary or advisable;

                  (d) The lapse of such reasonable period of time following, the
exercise of the Option as the Committee (or Board, in the case of Options
granted to Independent Directors) may establish from time to time for reasons of
administrative convenience; and

                  (e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.

              5.4 Rights as Stockholders. The holders of Options shall not be,
nor have any of the rights or privileges of, stockholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates or other indicia representing such shares have
been issued by the Company to such holders.

              5.5 Ownership and Transfer Restrictions. The Committee (or Board,
in the case of Options granted to Independent Directors), in its absolute
discretion, may impose at the time of grant such restrictions on the ownership
and transferability of the shares purchasable upon the exercise of an Option as
it deems appropriate. Any such restriction shall be set forth in the respective
Stock Award Agreement and may be referred to on the certificates or other
indicia evidencing such shares. The Committee may require the Employee to give
the Company prompt notice of any disposition of shares of Common Stock acquired
by exercise of an Incentive Stock Option within (i) two (2) years from the date
of granting such Option to such Employee or (ii) one year after the transfer of
such shares to such Employee. The Committee may direct that the certificates or
other indicia evidencing shares acquired by exercise of an Option refer to such
requirement to give prompt notice of disposition.

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              5.6 Limitations on Exercise of Options.

                  (a) Incentive Stock Options. Unless otherwise granted by
Committee to an Employee for a shorter period, no Incentive Stock Option granted
hereunder may be exercised to any extent by anyone after the first to occur of
the following events: (a) the expiration of twelve (12) months from the date of
the Optionee's death; (b) the expiration of twelve (12) months from the date of
the Optionee's Termination of Employment by reason of his or her permanent and
total disability (within the meaning of Section 22(e)(3) of the Code); or (c)
the expiration of three (3) months from the date of the Optionee's Termination
of Employment for any reason other than such Optionee's death or his or her
permanent and total disability, unless the Optionee dies within said three-month
period.

                  (b) Non-Qualified Stock Options. Non-Qualified Stock Options
may be exercised up and until their expiration date. No Option may be exercised
after its expiration date. The Committee, in its complete discretion, may limit
the exercise of Non-Qualified Stock Options.

                            ARTICLE 6. ADMINISTRATION

              6.1 Compensation Committee.

                   (a) The Compensation Committee shall consist of:

                       (1) For awards to Independent Directors, the entire
Board;

                       (2) For awards to Section 162(m) Participants, solely of
2 or more Independent Directors appointed by and holding office at the pleasure
of the Board, each of whom is both a "non-employee director" as defined by Rule
16b-3 and as "outside director" for purposes of Section 162(m) of the Code; or

                       (3) For all other awards as determined by the
Compensation Committee.

                  (b) Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. The Board may fill vacancies in the
Committee. If a Committee is not appointed, the Board shall be the Committee.

              6.2 Duties and Powers of Committee. It shall be the duty of the
Committee to conduct the general administration of this Plan in accordance with
its provisions. The Committee shall have the power to interpret this Plan and
the agreements pursuant to which Options are granted, and to adopt such rules
for the administration, interpretation, and application of this Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
Notwithstanding the foregoing, the full

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Board, acting by a majority of its members in office, shall conduct the general
administration of the Plan with respect to Options granted to Independent
Directors. Any such grant or award under this Plan need not be the same with
respect to each Optionee. Any such interpretations and rules with respect to
Incentive Stock Options shall be consistent with the provisions of Section 422
of the Code. In its absolute discretion, the Board may at any time and from time
to time exercise any and all rights and duties of the Committee under this Plan
except with respect to matters which under Rule 16b-3 or Section 162(m) of the
Code, or any regulations or rules issued thereunder, are required to be
determined in the sole discretion of the Committee.

              6.3 Majority Rule; Unanimous Written Consent. The Committee shall
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.

              6.4 Compensation; Professional Assistance; Good Faith Actions.
Unless otherwise determined by the Board, members of the Committee shall receive
no compensation for their services. All expenses and liabilities which members
of the Committee incur in connection with the administration of this Plan shall
be borne by the Company. The Committee may, with the approval of the Board,
employ attorneys, consultants, accountants, appraisers, brokers, or other
persons. The Committee, the Company and the Company's officers and Directors
shall be entitled to rely upon the advice, opinions or valuations of any such
persons. All actions taken and all interpretations and determinations made by
the Committee or the Board in good faith shall be final and binding upon all
Optionees, the Company and all other interested persons. No members of the
Committee or Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Plan, and all members of
the Committee and the Board shall be fully protected by the Company in respect
of any such action, determination or interpretation.

                       ARTICLE 7. MISCELLANEOUS PROVISIONS

              7.1 Not Transferable. Options under this Plan may not be sold,
pledged, assigned, or transferred in any manner other than by will or the laws
of descent and distribution or pursuant to a QDRO, unless and until such rights
or awards have been exercised, or the shares underlying such rights or awards
have been issued, and all restrictions applicable to such shares have lapsed. No
Option or interest or right therein shall be liable for the debts, contracts or
engagements of the Optionee or his or her successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

                  During the lifetime of the Optionee, only he or she or his or
her personal representatives may exercise an Option (or any portion thereof)
granted to him or her under the Plan, unless it has been disposed of pursuant to
a QDRO. After the death of the Optionee, any exercisable portion of an Option
may, prior to the time when such portion becomes unexercisable under the Plan

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or the applicable Stock Award Agreement or other agreement, be exercised by his
or her personal representative or by any person empowered to do so under the
deceased Optionee's will or under the then applicable laws of descent and
distribution.

              7.2 Amendment, Suspension or Termination of this Plan. Except as
otherwise provided in this Section 7.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without the approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 7.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, regulation
or rule. No amendment, suspension or termination of this Plan shall, without the
consent of the holder of Options, alter or impair any rights or obligations
under any Options theretofore granted or awarded, unless the award itself
otherwise expressly so provides. No Options may be granted during any period of
suspension or after termination of this Plan, and in no event may any Incentive
Stock Option be granted under this Plan after the first to occur of the
following events:

                  (a) The expiration of ten (10) years from the initial date the
Plan is adopted by the Board: or

                  (b) The expiration of ten (10) years from the date the Plan
initially is approved by the Company's stockholders under Section 7.4 below.

              7.3 Changes in Common Stock or Assets of the Company, Acquisition
or Liquidation of the Company and Other Corporate Events.

                  (a) In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Common Stock, other
securities, or other property), on account of a recapitalization,
reclassification, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, liquidation,
dissolution, or sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company (including, but not limited to, a
Corporate Transaction), or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event, in
the Committee's sole discretion (or in the case of Options granted to
Independent Directors, the Board's sole discretion), affects the Common Stock
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to an Option, then
the Committee shall, in such manner as it may deem equitable, adjust any or all
of:

                      (1) The number and kind of shares of Common Stock with
respect to which Options may be granted under the Plan (including, but not
limited to, adjustments of the limitations in Section 2.1 on the maximum number
and kind of shares which may be issued and adjustments of the Award Limit),

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<PAGE>





                      (2) The number and kind of shares of Common Stock subject
to outstanding Options, and

                      (3) The grant or exercise price with respect to any
Option.

                  (b) In the event of any Corporate Transaction or other
transaction or event described in Section 7.3.1 or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company, or
the financial statements of the Company or any affiliate, or of changes in
applicable laws, regulations, or accounting principles, the Committee in its
discretion is hereby authorized to take any one or more of the following actions
whenever the Committee determines that such action is appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or with respect to any option, right or
other award under this Plan, to facilitate such transactions or events or to
give effect to such changes in laws, regulations or principles:

                      (1) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may provide, either by the
terms of the agreement or by action taken prior to the occurrence of such
transaction or event and either automatically or upon the Optionee's request,
for the purchase of any such Option for the payment of an amount of cash equal
to the amount that could have been attained upon the exercise of such option or
realization of the Optionee's rights had such option been currently exercisable
or payable or fully vested or the replacement of such option with other rights
or property selected by the Committee in its sole discretion;

                      (2) In its sole and absolute discretion, the Committee may
provide in terms of such Option that it cannot be exercised after such event;

                      (3) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may provide, by the terms
of such Option or by action taken prior to the occurrence of such transaction or
event, that for a specified period of time prior to such transaction or event,
such option or award shall be exercisable as to all shares covered thereby,
notwithstanding anything to the contrary in (i) Section 4.4 or (ii) the
provisions of such Option;

                      (4) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may provide, by the terms
of such Option or by action taken prior to the occurrence of such transaction or
event, that upon such event, such option or award be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be substituted
for by similar options or awards covering the stock of the successor or survivor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices; and


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<PAGE>



                      (5) In its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, the Committee may make adjustments in
the number and type of shares of Common Stock subject to outstanding Options
and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future.

                      (6) None of the foregoing discretionary actions taken
under this Section 7.3 shall be permitted with respect to Options granted to
Independent Directors to the extent that such discretion would be inconsistent
with the applicable exemptive conditions of Rule 16b-3.

                  (c) Subject to Section 7.3.4 and 7.8, the Committee may, in
its discretion, at the time of grant, include such further provisions and
limitations in any Option agreement or certificate, as it may deem equitable and
in the best interests of the Company.

                  (d) With respect to Options which are granted to Section
162(m) Participants and are intended to qualify as performance-based
compensation under Section 162(m)(4)(C), no adjustment or action described in
this Section 7.3 or in any other provision of the Plan shall be authorized to
the extent that such adjustment or action would cause the Plan to violate
Section 422(b)(1) of the Code or would cause such option to fail to so qualify
under Section 162(m)(4)(C), as the case may be, or any successor provisions
thereto. Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability
under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the
Committee determines that the option or other award is not to comply with such
exemptive conditions. The number of shares of Common Stock subject to any option
or award shall always be rounded to the next whole number.

              7.4 Approval of Plan by Stockholders. This Plan will be submitted
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of this Plan. If the stockholders fail to
approve such Plan, all options granted hereunder shall be Non-Qualified Stock
Options.

              7.5 Tax Withholding. The Company shall be entitled to require
payment in cash or deduction from other compensation payable to each Optionee of
any sums required by federal, state or local tax law to be withheld with respect
to the issuance, vesting or exercise of any Option. The Committee may in its
discretion and in satisfaction of the foregoing requirement allow such Optionee
to elect to have the Company withhold shares of Common Stock otherwise issuable
under such Option (or allow the return of shares of Common Stock) having a Fair
Market Value equal to the sums required to be withheld.

              7.6 Loans. The Committee may, in its discretion, extend one or
more loans to Employees in connection with the exercise or receipt of an Option
granted under this Plan. The terms and conditions of any such loan shall be set
by the Committee.


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              7.7 Forfeiture Provisions. Pursuant to its general authority to
determine the terms and conditions applicable to awards under the Plan, the
Committee shall have the right (to the extent consistent with the applicable
exemptive conditions of Rule 16b-3) to provide, in the terms of Options, or to
require the recipient to agree by separate written instrument, that (i) any
proceeds, gains or other economic benefit actually or constructively received by
the recipient upon any receipt or resale of any Common Stock underlying such
award, must be paid to the Company, and (ii) the award shall terminate and any
unexercised portion of such award (whether or not vested) shall be forfeited, if
(a) a Termination of Employment occurs prior to a specified date, or within a
specified time period following receipt or exercise of the award, or (b) the
recipient at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Committee (or
the Board, as applicable).

              7.8 Limitations Applicable to Section 16 Persons and
Performance-Based Compensation. Notwithstanding any other provision of this
Plan, any Option granted to any individual who is then subject to Section 16 of
the Exchange Act shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any
amendment to Rule 16b-3 of the Exchange Act) that are requirements for the
application of such exemptive rule. To the extent permitted by applicable law
and the Plan, Options granted or awarded hereunder shall be deemed amended to
the extent necessary to conform to such applicable exemptive rule. Furthermore,
notwithstanding any other provision of this Plan, any Option which is granted to
a Section 162(m) Participant and is intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall be subject
to any additional limitations set forth in Section 162(m) of the Code (including
any amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and this Plan
shall be deemed amended to the extent necessary to conform to such requirements.

              7.9 Effect of Plan Upon Options and Compensation Plans. The
adoption of this Plan shall not affect any other compensation or incentive plans
in effect for the Employer. Nothing in this Plan shall be construed to limit the
right of the Employer (i) to establish any other forms of incentives or
compensation for Employees, or (ii) to grant or assume options or other rights
otherwise than under this Plan in connection with any proper corporate purpose
including but not by way of limitation, the grant or assumption of options in
connection with the acquisition by purchase, lease, merger, consolidation or
otherwise, of the business stock or assets of any corporation, partnership,
limited liability company, firm or association.

              7.10 Compliance with Laws. This Plan, the granting and vesting of
Options under this Plan and the issuance and delivery of shares of Common Stock
and the payment of money under this Plan or under Options awarded hereunder are
subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law and
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under
this Plan shall be subject to such restrictions, and the

                                       15

<PAGE>


person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.

              7.11 Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of this Plan.

              7.12 Governing Law. This Plan and any agreements hereunder shall
be administered, interpreted and enforced under the internal laws of the State
of Delaware without regard to conflicts of laws thereof.

              I hereby certify that the foregoing Plan was duly adopted by the
Board of Directors of Direct III Marketing, Inc., on April 21, 1999.

              Executed on this 21st day of April, 1999, at San Diego, California



                                                   /s/ DOUGLAS L. FEIST
                                                   -----------------------------
                                                   DOUGLAS L. FEIST
                                                   Secretary and General Counsel


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