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                                                                 Exhibit: 10.2FT


                        FUTECH INTERACTIVE PRODUCTS, INC.
                             1998 STOCK OPTION PLAN

1.       PURPOSE

         The purposes of the 1998 Stock Option Plan (the "Plan") of Futech
Interactive Products, Inc., an Arizona corporation (the "Company"), are to
attract and retain the best available employees and directors of the Company or
any parent or subsidiary or affiliate of the Company which now exists or
hereafter is organized or acquired by or acquires the Company, as well as
appropriate third parties who can provide valuable services to the Company, to
provide additional incentive to such persons and to promote the success of the
business of the Company. To the extent applicable, this Plan is intended to
comply with Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934,
as amended or any successor rule ("Rule 16b-3"), and, to the extent applicable,
the Plan shall be construed, interpreted and administered to comply with Rule
16b-3 and Section 162(m) of the Code ("Section 162(m)").

2.       DEFINITIONS

         (a)      "Affiliate" means any corporation, partnership, joint venture
or other entity, domestic or foreign, in which the Company, either directly or
through another affiliate or affiliates, has a 50% or more ownership interest.

         (b)      "Affiliated Group" means the group consisting of the Company
and any entity that is an "affiliate," a "Parent" or a "subsidiary" of the
Company.

         (c)      "Board" means the Board of Directors of the Company.

         (d)      "Committee" means the Compensation or Stock Option Committee
of the Board (as designated by the Board), if such a committee has been
appointed.

         (e)      "Code" means the United States Internal Revenue Code of 1986,
as amended.

         (f)      "Incentive Stock Options" means options intended to qualify as
incentive stock options under Section 422 of the Code, or any successor
provision.

         (g)      "ISO Group" means the group consisting of the Company and any
corporation that is a "parent" or a "subsidiary" of the Company.

         (h)      "Nonemployee Director" shall have the meaning assigned in
Section 4(a)(ii) hereof
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         (i)      "Nonqualified Stock Options" means options that are not
intended to qualify for favorable income tax treatment under Sections 421
through 424 of the Code.

         (j)      "Parent" means a corporation that is a "parent" of the Company
within the meaning of Code Section 424(e).

         (k)      "Section 16" means Section 16 of the Securities Exchange Act
of 1934, as amended.

         (l)      "Subsidiary" means a corporation that is a "subsidiary" of the
Company within the meaning, of Code Section 424(f).

3.       INCENTIVE AND NONQUALIFIED STOCK OPTIONS

         Two types of options (referred to herein as "options," without
distinction between such two types) may be granted under the Plan: Incentive
Stock Options and Nonqualified Stock Options.

4.       ELIGIBILITY AND ADMINISTRATION

         (a)      Eligibility. The following individuals shall be eligible to
receive grants pursuant to the Plan as follows:

                  (i)      Any employee (including any officer or director who
is an employee) of the Company or any ISO Group member shall be eligible to
receive either Incentive Stock Options or Nonqualified Stock Options under the
Plan. An employee may receive more than one option under the Plan.

                  (ii)     Any director who is not an employee of the Company or
any Affiliated Group member (a "Nonemployee Director") shall be eligible to
receive only Nonqualified Stock Options.

                  (iii)    Any other individual whose participation the Board or
the Committee determines is in the best interests of the Company shall be
eligible to receive Nonqualified Stock Options.

         (b)      Administration. The Plan may be administered by the Board or
by a Committee appointed by the Board which, to the extent applicable, is
constituted so to permit the Plan to comply under Rule 16b-3 and Section 162(m).
The Company shall indemnify and hold harmless each director and Committee member
for any action or determination made in good faith with respect to the Plan or
any option. The Board or the Committee shall have full and final authority to
waive, in whole or in part, any limitations, restrictions or conditions
previously imposed on any option. Determinations by the Committee or the Board
shall be final and conclusive upon all parties.


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5.       SHARES SUBJECT TO OPTIONS

         The stock available for grant of options under the Plan shall be shares
of the Company's authorized but unissued or reacquired voting common stock. The
aggregate number of shares that may be issued pursuant to exercise of options
granted under the Plan shall be 7,200,000 shares. If any outstanding option
grant under the Plan for any reason expires or is terminated, the shares of
common stock allocable to the unexercised portion of the option grant shall
again be available for options under the Plan as if no options had been granted
with respect to such shares. No individual may be granted options covering more
than 200,000 shares in any calendar year.

6.       TERMS AND CONDITION OF OPTIONS

         Option grants under the Plan shall be evidenced by agreements in such
form and containing such provisions as are consistent with the Plan as the Board
or the Committee shall from time to time approve. Each agreement shall specify
whether the option(s) granted thereby are Incentive Stock Options or
Nonqualified Stock Options. Such agreements may incorporate all or any of the
terms hereof by reference and shall comply with and be subject to the following
terms and conditions:

         (a)      Shares Granted. Each option grant agreement shall specify the
number of Incentive Stock Options and/or Nonqualified Stock Options being
granted; one option shall be deemed granted for each share of stock. In
addition, each option grant agreement shall specify the exercisability and/or
vesting schedule of such options, if any.

         (b)      Purchase Price. The purchase price for a share subject to (i)
a Nonqualified Stock Option may be any amount determined in good faith by the
Committee, and (ii) an Incentive Stock Option shall not be less than 100% of the
fair market value of the share on the date the option is granted, provided,
however, the option price of an Incentive Stock Option shall not be less than
110% of the fair market value of such share on the date the option is granted to
an individual then owning (after the application of the family and other
attribution rules of Section 424(d) or any successor rule of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
any ISO Group member. For purposes of the Plan, "fair market value" at any date
shall be (i) the reported closing price of such stock on the New York Stock
Exchange or other established stock exchange or Nasdaq National Market on such
date, or if no sale of such stock shall have been made on that date, on the
preceding date on which there was such a sale, (ii) if such stock is not then
listed on an exchange or the Nasdaq National Market, the last trade price per
share for such stock in the over-the-counter market as quoted on Nasdaq or the
pink sheets or successor publication of the National Quotation Bureau on such
date, or (iii) if such stock is not then listed or quoted as referenced above,
an amount determined in good faith by the Board or the Committee.

         (c)      Termination. Unless otherwise provided herein or in a specific
option grant agreement which may provide for accelerated vesting and/or longer
or shorter periods of exercisability, no option shall be exercisable after the
expiration of the earliest of


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         (i)      in the case of an Incentive Stock Option:

                  (1)      10 years from the date the option is granted, or five
         years from the date the option is granted to an individual owning
         (after the application of the family and other attribution rules of
         Section 424(d) of the Code) at the time such option was granted, more
         than 10% of the total combined voting power of all classes of stock of
         the Company or any ISO Group member,

                  (2)      immediately after the date the optionee ceases to
         perform services for the Company or any ISO Group member, if such
         cessation is for any reason other than death, disability (within the
         meaning of Code Section 22[e][3]), or cause,

                  (3)      one year after the date the optionee ceases to
         perform services for the Company or any ISO Group member, if such
         cessation is by reason of death or disability (within the meaning of
         Code Section 22[e][3]), or

                  (4)      the date the optionee ceases to perform services for
         the Company or any ISO Group member, if such cessation is for cause, as
         determined by the Board or the Committee in its sole discretion;

         (ii)     in the case of a Nonqualified Stock Option;

                  (1)      10 years from the date the option is granted,

                  (2)      one year after the date the optionee ceases to
         perform services for the Company or any Affiliated Group member, if
         such cessation is for any reason other than death, permanent
         disability, retirement or cause,

                  (3)      two years after the date the optionee ceases to
         perform services for the Company or any Affiliated Group member, if
         such cessation is by reason of death, permanent disability or
         retirement, or

                  (4)      the date the optionee ceases to perform services for
         the Company or any Affiliated Group member, if such cessation is for
         cause, as determined by the Board or the Committee in its sole
         discretion;

provided, that, unless otherwise provided in a specific option grant agreement,
an option shall only be exercisable for the periods above following the date an
optionee ceases to perform services to the extent the option was exercisable on
the date of such cessation.

         (d)      Method of Payment. The purchase price for any share purchased
pursuant to the exercise of an option granted under the Plan shall be paid in
full upon exercise of the option by any of the following methods, (i) by cash,
(ii) by check, or (iii) to the extent permitted under the


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particular grant agreement, by transferring to the Company shares of stock of
the Company at their fair market value as of the date of exercise of the option
as determined in accordance with paragraph 6(b), provided that the optionee held
the shares of stock for at least six months. Notwithstanding the foregoing, the
Company may arrange for or cooperate in permitting broker-assisted cashless
exercise procedures. The Company may also extend and maintain, or arrange for
the extension and maintenance of, credit to an optionee to finance the
optionee's purchase of shares pursuant to the exercise of options, on such terms
as may be approved by the Board or the Committee, subject to applicable
regulations of the Federal Reserve Board and any other applicable laws or
regulations in effect at the time such credit is extended.

         (e)      Exercise. Except for options which have been transferred
pursuant to paragraph 6(f), no option shall be exercisable during the lifetime
of an optionee by any person other than the optionee, his or her guardian or
legal representative. The Board or the Committee shall have the power to set the
time or times within which each option shall be exercisable and to accelerate
the time or times of exercise; provided, however, no options may be exercised
prior to the later of the expiration of six months from the date of grant
thereof or shareholder approval, unless otherwise provided by the Board or
Committee. To the extent that an optionee has the right to exercise one or more
options and purchase shares pursuant thereto, the option(s) may be exercised
from time to time by written notice to the Company stating the number of shares
being purchased and accompanied by payment in full of the purchase price for
such shares. Any certificate for shares of outstanding stock used to pay the
purchase price shall be accompanied by a stock power duly endorsed in blank by
the registered owner of the certificate (with the signature thereon guaranteed).
If the certificate tendered by the optionee in such payment covers more shares
than are required for such payment, the certificate shall also be accompanied by
instructions from the optionee to the Company's transfer agent with respect to
the disposition of the balance of the shares covered thereby.

         (f)      Nontransferability. No Incentive Stock Option shall be
transferable by an optionee otherwise than by will or the laws of descent and
distribution. No Nonqualified Stock Option shall be transferable by an optionee
otherwise than by will or the laws of descent and distribution; provided that
the Board or Committee in its discretion may grant Nonqualified Stock Options
that are transferable, without payment of consideration, to immediate family
members of the optionee or to trusts or partnerships for such family members;
the Board or Committee may also amend outstanding Nonqualified Stock Options to
provide for such transferability.

         (g)      ISO $100,000 Limit. If required by applicable tax rules
regarding a particular grant, to the extent that the aggregate fair market value
(determined as of the date an Incentive Stock Option is granted) of the shares
with respect to which an Incentive Stock Option grant under this Plan (when
aggregated, if appropriate, with shares subject to other Incentive Stock Option
grants made before said grant under this Plan or another plan maintained by the
Company or any ISO Group member) is exercisable for the first time by an
optionee during any calendar year exceeds $100,000 (or such other limit as is
prescribed by the Code), such option grant shall be treated as a grant of
Nonqualified Stock Options pursuant to Code Section 422(d).


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         (h)      Investment Representation. Unless the shares of stock covered
by the Plan have been registered with the Securities and Exchange Commission
pursuant to Section 5 of the Securities Act of 1933, as amended, each optionee
by accepting an option grant represents and agrees, for himself or herself and
his or her transferees by will or the laws of descent and distribution, that all
shares of stock purchased upon the exercise of the option grant will be acquired
for investment and not for resale or distribution. Upon such exercise of any
portion of any option grant, the person entitled to exercise the same shall upon
request of the Company furnish evidence satisfactory to the Company (including a
written and signed representation) to the effect that the shares of stock are
being acquired in good faith for investment and not for resale or distribution.
Furthermore, the Company may if it deems appropriate affix a legend to
certificates representing shares of stock purchased upon exercise of options
indicating that such shares have not been registered with the Securities and
Exchange Commission and may so notify its transfer agent.

         (i)      Rights of Optionee. An optionee or transferee holding an
option grant shall have no rights as a shareholder of the Company with respect
to any shares covered by any option grant until the date one or more of the
options granted thereunder have been properly exercised and the purchase price
for such shares has been paid in full. No adjustment shall be made for dividends
(ordinary or extraordinary, whether cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such share certificate is issued, except as provided for in paragraph 6(k).
Nothing in the Plan or in any option grant agreement shall confer upon any
optionee any right to continue performing services for the Company or any
Affiliated Group member, or interfere in any way with any right of the Company
or any Affiliated Group member to terminate the optionee's services at any time.

         (j)      Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of an option. The value of any fractional
share subject to an option grant shall be paid in cash in connection with an
exercise that results in all full shares subject to the grant having been
exercised.

         (k)      Reorganizations, Etc. Subject to paragraph 9 hereof, if the
outstanding shares of stock of the class then subject to this Plan are increased
or decreased, or are changed into or exchanged for a different number or kind of
shares or securities, as a result of one or more reorganizations, stock splits,
reverse stock splits, stock dividends, spin-offs, other distributions of assets
to shareholders, appropriate adjustments shall be made in the number and/or type
of shares or securities for which options may thereafter be granted under this
Plan and for which options then outstanding under this Plan may thereafter be
exercised. Any such adjustments in outstanding options shall be made without
changing the aggregate exercise price applicable to the unexercised portions of
such options.

         (l)      Option Modification. Subject to the terms and conditions and
within the limitations of the Plan, the Board or the Committee may modify,
extend or renew outstanding options granted under the Plan, accept the surrender
of outstanding options (to the extent not theretofore exercised), reduce the
exercise price of outstanding options, or authorize the granting of new options
in


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substitution therefor (to the extent not theretofore exercised). Notwithstanding
the foregoing, no modification of an option (either directly or through
modification of the Plan) shall, without the consent of the optionee, alter or
impair any rights of the optionee under the option.

         (m)      Grants to Foreign Optionees. The Board or the Committee in
order to fulfill the Plan purposes and without amending the Plan may modify
grants to optionees who are foreign nationals or performing services for the
Company or an Affiliated Group member outside the United States to recognize
differences in local law, tax policy or custom.

         (n)      Other Terms. Each option grant agreement may contain such
other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Board or the Committee, such as without limitation
discretionary performance standards, tax withholding provisions, or other
forfeiture provisions regarding competition and confidential information.

7.       TERMINATION OR AMENDMENT OF THE PLAN

         The Board may at any time terminate or amend the Plan; provided, that,
to the extent applicable, shareholder approval shall be obtained of any action
for which shareholder approval is required in order to comply with Rule 16b-3,
the Code or other applicable laws or regulatory requirements within such time
periods prescribed.

8.       SHAREHOLDER APPROVAL AND TERM OF THE PLAN

         The Plan shall be effective as of January 31, 1998, subject, to the
extent applicable, to ratification by the shareholders of the Company within
(each of) the time period(s) prescribed under Rule 16b-3, the Code, and any
other applicable laws or regulatory requirements, and shall continue thereafter
until terminated by the Board. Unless sooner terminated by the Board, in its
sole discretion, the Plan will expire on January 31, 2008, solely with respect
to the granting of Incentive Stock Options or such later date as may be
permitted by the Code for Incentive Stock Options, provided that options
outstanding upon termination or expiration of the Plan shall remain in effect
until they have been exercised or have expired or been forfeited.

9.       MERGER, CONSOLIDATION OR REORGANIZATION

         In the event of a merger, consolidation or reorganization with another
corporation in which the Company is not the surviving corporation, the Board,
the Committee (subject to the approval of the Board) or the board of directors
of any corporation assuming the obligations of the Company hereunder shall take
action regarding each outstanding and unexercised option pursuant to either
clause (a) or (b) below:

         (a)      Appropriate provision may be made for the protection of such
option by the substitution on an equitable basis of appropriate shares of the
surviving corporation, provided that the excess of the aggregate fair market
value (as defined in paragraph 6[b]) of the shares subject to


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such option immediately before such substitution over the exercise price thereof
is not more than the excess of the aggregate fair market value of the
substituted shares made subject to option immediately after such substitution
over the exercise price thereof; or

         (b)      Appropriate provision may be made for the cancellation of such
option. In such event, the Company, or the corporation assuming the obligations
of the Company hereunder, shall pay the optionee an amount of cash (less normal
withholding taxes) equal to the excess of the highest fair market value (as
defined in paragraph 6[b]) per share of the Common Stock during the 60-day
period immediately preceding the merger, consolidation or reorganization over
the option exercise price, multiplied by the number of shares subject to such
options (whether or not then exercisable).

10.      DISSOLUTION OR LIQUIDATION.

         Anything contained herein to the contrary notwithstanding, on the
effective date of any dissolution or liquidation of the Company, the holder of
each then outstanding option (whether or not then exercisable) shall receive the
cash amount described in paragraph 9(b) hereof and such option shall be
cancelled.

11.      WITHHOLDING TAXES

         (a)      General Rule. Pursuant to applicable federal and state laws,
the Company is or may be required to collect withholding taxes upon the exercise
of an option. The Company may require, as a condition to the exercise of an
option or the issuance of a stock certificate, that the optionee concurrently
pay to the Company (either in cash or, at the request of optionee but in the
discretion of the Board or the Committee and subject to such rules and
regulations as the Board or the Committee may adopt from time to time, in shares
of Common Stock of the Company) the entire amount or a portion of any taxes
which the Company is required to withhold by reason of such exercise, in such
amount as the Committee or the Board in its discretion may determine.

         (b)      Withholding from Shares to be Issued. In lieu of part or all
of any such payment, the optionee may elect, subject to such rules and
regulations as the Board or the Committee may adopt from time to time, or the
Company may require that the Company withhold from the shares to be issued that
number of shares having a fair market value (as defined in paragraph 6[b]) equal
to the amount which the Company is required to withhold.

         (c)      Special Rule for Insiders. To the extent applicable, any such
request or election (to satisfy a withholding obligation using shares) by an
individual who is subject to the provisions of Section 16 shall be made in
accordance with the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.


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