EXHIBIT 10-13


                                 PETROGEN CORP.

                      2004 STOCK OPTION AND INCENTIVE PLAN

1.       PURPOSES OF THE PLAN.

         The  purposes  of this  Plan are to (i)  attract  and  retain  the best
available  personnel for positions of  responsibility  within Petrogen Corp (the
"Company"),  (ii)  provide  additional  incentives  to Employees of the Company,
(iii)  provide  Directors,  Consultants  and  Advisors  of the  Company  with an
opportunity to acquire a proprietary  interest in the Company to encourage their
continued  provision of services to the Company and to provide such persons with
incentives  and rewards for superior  performance  more  directly  linked to the
profitability of the Company's  business and increases in shareholder value, and
(iv)  generally  to  promote  the  success  of the  Company's  business  and the
interests  of the  Company  and all of its  stockholders,  through  the grant of
options to purchase shares of the Company's Common Stock and other incentives.

         Incentive  benefits  granted  hereunder may be either  Incentive  Stock
Options,  Non-qualified  Stock Options,  stock awards,  Restricted Shares,  cash
awards  or  other  incentives  determined  by  the  board,  as  such  terms  are
hereinafter  defined.  The types of options or other incentives granted shall be
reflected in the terms of written agreements.

2.       DEFINITIONS.

         As used herein, the following definitions shall apply:

         2.1      "BOARD" shall mean the Board of Directors of Petrogen Corp.

         2.2      "CHANGE OF CONTROL"  means a change in ownership or control of
the Company effected through any of the following transactions:

                  (a) the  direct  or  indirect  acquisition  by any  person  or
related group of persons (other than by the Company or a person that directly or
indirectly  controls,  is controlled  by, or is under common  control with,  the
Company)  of  beneficial  ownership  (within  the  meaning  of Rule 13d-3 of the
Exchange  Act) of  securities  possessing  more than 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   shareholders,   or  other
transaction,  in each case which the Board does not recommend such  shareholders
to accept; or

                  (b) a change in the  composition of the Board over a period of
12 consecutive months or less such that a majority of the Board members (rounded
up to the  next  whole  number)  ceases,  by  reason  of one or  more  contested
elections for Board  membership,  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) a Corporate Transaction as defined below.

         2.3  "CODE"  shall  mean  the US  Internal  Revenue  Code or  analogous
legislation,  as  amended  from  time to time,  and the  rules  and  regulations
promulgated thereunder.

         2.4  "COMMITTEE"  shall mean the  Committee  constituting  the Board in
accordance with Section 4.1 of the Plan, if one is appointed.

         2.5  "COMMON  STOCK" or  "COMMON  SHARES"  shall mean (i) shares of the
common stock, no par value, of the Company  described in the Company's  Articles
of Incorporation, as amended, and (ii) any security into which Common Shares may
be converted by reason of any  transaction  or event of the type  referred to in
Section 12 of this Plan.

         2.6  "COMPANY"  shall mean  Petrogen  Corp.  a Nevada  corporation, and
shall  include  any parent or subsidiary corporation of the Company.

         2.7 "CONSULTANTS" and "ADVISORS" shall include any third party retained
or engaged  by the  Company to provide  service to the  Company,  including  any
employee of such third party providing such services.

         2.8    "CORPORATE    TRANSACTION"    means   any   of   the   following
shareholder-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
change the state in which the Company is incorporated;

                  (b)  the  sale,  transfer  or  other  disposition  of  all  or
substantially  all of the  assets of the  Company  in  complete  liquidation  or
dissolution of the Company; or

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

         2.9  "DATE OF  GRANT"  means  the date  specified  by the  Board or the
Committee on which a grant of Options,  Stock Appreciation  Rights,  Performance
Shares of Performance  Units or a grant or sale of Restricted Shares or Deferred
Shares shall become effective.

         2.10  "DEFERRAL  PERIOD" means the period of time during which Deferred
Shares are subject to deferral limitations under Section 9.3 of this Plan.

         2.11  "DEFERRED  SHARES"  means an award  pursuant to Section 9 of this
Plan of the right to receive  Common  Shares at the end of a specified  Deferral
Period.


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         2.12  "DIRECTOR" shall mean a member of the Board.

         2.13  "EFFECTIVE DATE" shall have the meaning ascribed thereto in
Section 6.

         2.14  "EMPLOYEE"  shall  mean  any  person,   including   officers  and
directors,  employed  by the  Company.  The payment of a  director's  fee by the
Company shall not be sufficient to constitute  "employment" by the Company.  For
inclusiveness  purposes,  but not  having  legal  effect as to  obligations  and
liabilities,  Employee in this  Agreement  may also  encompass  Consultants  and
Advisors  where such is appropriate or where such is intended by the Board or by
a particular grant hereunder.

         2.15  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and all pertinent rules and regulations.

         2.16  "FAIR MARKET VALUE" shall mean,  with respect to the date a given
Option or other incentive is granted or exercised, the value of the Common Stock
determined  by the  Board  in such  manner  as it may  deem  equitable  for Plan
purposes but, in the case of an Incentive Stock Option, no less than is required
by applicable  laws or  regulations;  PROVIDED,  HOWEVER,  that where there is a
public market for the Common Stock, the fair Market Value per share shall be the
average of the bid and asked prices of the Common Stock on the Date of Grant, as
reported by the National  Association of Securities Dealers Automated  Quotation
System - Small Cap or National  Markets or the National  Association of Security
Dealers Over the Counter  Bulletin  Board or other exchange on which the Company
is listed and as determined by the Board.

         2.17  "INCENTIVE AGREEMENT" shall mean the written agreement between
the  Company  and  the   Participant   relating  to  Incentive   Stock  Options,
Non-qualified  Stock Options,  stock awards,  Restricted  Shares and cash awards
granted under the Plan, and shall include an Incentive  Stock Option  Agreement,
Non-qualified  Stock Option  Agreement  or other form of Agreement  which may be
approved by the Board.

         2.18  "INCENTIVE AWARD" shall mean the award of one or more Incentives.

         2.19  "INCENTIVE STOCK OPTION" shall mean an Option which is intended
         to qualify as an incentive  stock option  within the meaning of Section
422 of the Code, or any successor provision thereto.

         2.20  "INCENTIVES"  shall mean those  incentive  benefits  which may be
granted  from time to time under the terms of the Plan which  include  Incentive
Stock Options,  Non-qualified Stock Options, stock awards, Restricted Shares and
cash awards.

         2.21  "MANAGEMENT  OBJECTIVES"  means the  achievement  of  performance
objectives  established pursuant to this Plan for Participants who have received
grants of Performance  Shares or Performance Units or, when so determined by the
Board or the Committee, Restricted Shares.

         2.22  "NON-QUALIFIED STOCK OPTION" means an Option that is not intended
to qualify as a Tax-Qualified Option.


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         2.23  "OPTION PRICE" means the purchase price payable upon the exercise
of an Option.

         2.24  "OPTION"  means  the right to  purchase  Common  Shares  from the
Company upon the  exercise of a  Non-qualified  Stock Option or a  Tax-Qualified
Option granted pursuant to Section 7 of this Plan.

         2.25  "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.

         2.26  "OPTION TERM" shall have the meaning ascribed to it in Section
7.3.

         2.27  "OPTIONEE" shall mean an Employee, Director, Consultant or
Advisor of the Company who has been granted one or more Options.

         2.28  "PARENT"  shall  mean  a  "parent  corporation,"  whether  now or
hereafter existing, as defined in Section 424(e) of the Code.

         2.29  "PARTICIPANT"  means a person who is  selected  by the Board or a
Committee  to  receive  benefits  under  this  Plan  and (i) is at that  time an
officer, including without limitation an officer who may also be a member of the
Board,  director,  or other  employee  of, or a  Consultant  or Advisor,  to the
Company, or (ii) has agreed to commence serving in any such capacity.

         2.30  "PERFORMANCE  PERIOD" means, in respect of a Performance Share or
Performance  Unit, a period of time  established  pursuant to Section 10 of this
Plan within which the Management objectives relating thereto are to be achieved.

         2.31  "PERFORMANCE  SHARE" means a  bookkeeping  entry that records the
equivalent of one Common Share awarded pursuant to Section 10 of this Plan.

         2.32  "PERFORMANCE  UNIT" means a bookkeeping entry that records a unit
equivalent to the Board selected monetary unit awarded pursuant to Section 10 of
this Plan.

         2.33 "PLAN" shall mean this Stock Option and Incentive Plan, as amended
from time to time in accordance with the terms hereof.

         2.34  "RESTRICTED  SHARES" means Common Shares granted or sold pursuant
to section 8 of this Plan as to which neither the substantial risk of forfeiture
nor the restrictions on transfer referred to in Section 8.9 hereof has expired.

         2.35 "RULE 16B-3"  means Rule 16b-3,  as  promulgated  and amended from
time to time by the Securities and Exchange  Commission  under the Exchange Act,
or any successor rule to the same effect.

         2.36  "SHARE"  shall mean a share of the Common  Stock,  as adjusted in
accordance  with Section 11 of the Plan.


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         2.37  "SUBSIDIARY" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

         2.38  "TAX DATE"  shall mean the date an Optionee is required to pay
the Company an amount with respect to tax withholding  obligations in connection
with the exercise of an option.

         2.39  "TAX-QUALIFIED OPTION" means an Option that is intended to
qualify under particular provisions of the Code, including without limitation an
Incentive Stock Option.

         2.40  "TERMINATION DATE" shall have the meaning ascribed thereto in
Section 6.

3.       COMMON STOCK SUBJECT TO THE PLAN.

3.1 Subject to the provisions of Section 11 of the Plan,  the maximum  aggregate
number of shares which may be optioned and sold or otherwise  awarded  under the
Plan is Six Million  (6,000,000)  Common Shares. Any Common Shares available for
grants and  awards at the end of any  calendar  year  shall be carried  over and
shall be available for grants and awards in the  subsequent  calendar  year. For
the purposes of this Section 3:

                  (a) Upon  payment of cash in lieu of exercise  provided by any
award granted under this Plan, or upon  expiration or  cancellation of any award
granted  under this Plan,  any Common Shares that were covered by such award and
not issued shall again be available for issuance hereunder.

                  (b) Common Shares covered by any award granted under this Plan
shall be deemed  to have  been  issued  or  transferred,  and shall  cease to be
available for future  issuance or transfer in respect of any other award granted
hereunder,  at the  earlier  of the  time  when  they  are  actually  issued  or
transferred or the time when dividends or dividend equivalents are paid thereon;
PROVIDED, HOWEVER, that Restricted Shares shall be deemed to have been issued or
transferred  at the  earlier  of the time when  they  cease to be  subject  to a
substantial risk of forfeiture or the time when dividends are paid thereon.

                  (c) Performance Units that are granted under this Plan and are
paid in Common  Shares but are not earned by the  Participant  at the end of the
Performance Period shall be available for future grants of incentives hereunder.


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4.       ADMINISTRATION OF THE PLAN.

         4.1   PROCEDURE.

               (a) The  Board  shall  administer  the  Plan  and is the  body
responsible  for the Plan;  provided,  however,  that the  Board  may  appoint a
Committee  consisting  solely  of two (2) or more  "Non-Employee  Directors"  to
conduct  day-to-day  administration  of the  Plan on  behalf  of the  Board,  in
accordance with Rule 16b-3 and subject to the authority of the Board.

               (b) Once  appointed,  the  Committee  shall  continue to serve
until otherwise  directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause),  appoint new members in substitution therefor, and fill
vacancies  however  caused;  PROVIDED,  HOWEVER,  that at no time may any person
serve on the Committee if that person's membership would cause the committee not
to satisfy the requirements of Rule 16b-3.

               (c) A majority of the Committee shall constitute a quorum, and
the acts of the members of the Committee who are present at any meeting  thereof
at which a quorum is present, or acts unanimously approved by the members of the
Committee in writing, shall be the acts of the Committee.

               (d)  Any   reference   herein  to  the  Board   shall,   where
appropriate,   encompass  a  Committee  appointed  to  administer  the  Plan  in
accordance with this Section 4.

         4.2   POWER OF THE BOARD OR THE COMMITTEE

               (a)  Subject to the  provisions  of the Plan,  the Board shall
have the authority, in its discretion:  (i) to grant Options or Incentive Awards
to Participants;  (ii) to determine,  upon review of relevant information and in
accordance  with Section  2.16 of the Plan,  the Fair Market Value of the Common
stock; (iii) to determine the exercise price per share of Options to be granted,
which exercise price shall be determined in accordance  with Section 7.14 of the
Plan;  (iv) to determine the number of Common Shares to be  represented  by each
Option or Incentive  Award;  (v) to determine the  Participants to whom, and the
time or times at which,  Options and Incentive Awards shall be granted;  (vi) to
interpret the Plan; (vii) to prescribe,  amend and rescind rules and regulations
relating  to the Plan;  (viii) to  determine  the terms and  provisions  of each
Option and Incentive  Award granted (which need not be identical)  and, with the
consent of the grantee thereof,  modify or amend such Option or Incentive Award;
(ix) to  accelerate or defer (with the consent of the grantee) the exercise date
of any Option or  Incentive  Award;  (x) to  authorize  any person to execute on
behalf of the Company any  instrument  required  to  effectuate  the grant of an
Option or Incentive  Award  previously  granted by the Board;  (xi) to accept or
reject the election made by a grantee  pursuant to Section 7.5 of the Plan;  and
(xii) to make all other  determinations  deemed  necessary or advisable  for the
administration of the Plan.

               (b) The Board or a Committee may delegate to an officer of the
Company the authority to make decisions pursuant to this Plan,  provided that no
such  delegation  may be made that  would  cause any award or other  transaction
under the Plan to cease to be exempt from Section  16(b) of the Exchange  Act. A
Committee  may  authorize  any one or more of its  members or any officer of the
Company to execute and deliver documents on behalf of the Committee.


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         4.3   EFFECT OF  BOARD  OR  COMMITTEE  DECISIONS.   All  decisions  and
determinations  and  the  interpretation  and  construction  by the  Board  or a
Committee  of any  provision  of this  Plan or any  agreement,  notification  or
document  evidencing the grant of Options,  Restricted Shares,  Deferred Shares,
Performance Shares or Performance Units, and any determination by the Board or a
Committee  pursuant  to any  provision  of  this  plan  or any  such  agreement,
notification or document, shall be final, binding and conclusive with respect to
all grantees  and any other  holders of any Option or  Incentive  Award  granted
under the Plan.  No member of the Board or a  Committee  shall be liable for any
such action taken or determination made in good faith.

5.       ELIGIBILITY.

         Consistent with the Plan's  purposes,  Options and Incentive Awards may
be granted only to such Directors, Officers, Employees, Consultants and Advisors
of the Company as determined by the Board.  Subject to the terms of the Plan, an
Employee,  Officer,  Director,  Consultant  or Advisor  who has been  granted an
Option or  Incentive  Award  may,  if he is  otherwise  eligible,  be granted an
additional Option or Incentive Award.

6.       BOARD APPROVAL; EFFECTIVE DATE; TERMINATION DATE.

         The Plan shall take effect as of June 1, 2004 (the  "Effective  Date").
The Plan shall terminate on June 1, 2014 (the "Termination Date");  accordingly,
no  Incentive  Award  or  Option  under  this  Plan  may be  granted  after  the
Termination Date but the term of an award may extend beyond the Plan Termination
Date.

7.       STOCK OPTIONS.

         The Board or the  Committee may from time to time  authorize  grants to
Participants of Options to purchase Common Shares upon such terms and conditions
as the Board or the Committee  may  determine in  accordance  with the following
provisions:

         7.1   OPTIONS TO BE GRANTED; TERMS.

               (a)  Options  granted  pursuant  to  this  Section  7  may  be
Non-qualified  Stock Options or Tax-Qualified  Options or combinations  thereof.
The Board or the Committee shall determine the specific terms of Options.

               (b)  Each  grant  shall  specify  the  period  or  periods  of
continuous  employment,  or continuous  engagement of the consulting or advisory
services,  of the Optionee by the Company or any  Subsidiary  that are necessary
before the Options or installments thereof shall become exercisable.

               (c) Any grant of a Non-qualified  Stock Option may provide for
the payment to the Optionee of a dividend  equivalent  thereon in cash or Common
Shares on a current, deferred or contingent basis, or the Board or the Committee
may provide that any dividend  equivalents  shall be credited against the Option
Price.


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         7.2   NUMBER OF SHARES SUBJECT TO OPTIONS. Each grant shall specify the
number of Common Shares to which it pertains.  Successive  grants may be made to
the same Optionee  regardless of whether any Options  previously  granted to the
Optionee remain unexercised.

         7.3   TERM  OF OPTION;  EARLIER  TERMINATION.  Subject  to the  further
provisions of this Section 7, unless otherwise provided in the Option Agreement,
the term (the  "Option  Term") of each  Option  shall be five (5) years from the
Date of Grant.

         7.4   EXERCISE PRICE.

               (a) Each grant shall  specify an Option Price per Common Share
for the Common Share to be issued pursuant to exercise of an Option, which shall
be determined by the Board or the Committee.  Unless otherwise determined by the
Board an Incentive Stock Option shall be no less than one hundred percent (100%)
of the Fair  Market  Value per share on the Date of Grant,  and in the case of a
Non-qualified  Stock Option shall be no less than seventy-five  percent (75%) of
the Fair Market Value per share on the Date of Grant.

               (b) With respect to Incentive  Stock  Options,  the  aggregate
Fair Market Value  (determined as of the  respective  Date or Dates of Grant) of
the Common  Shares for which one or more options  granted to any Optionee  under
this Plan may for the first time become  exercisable as Incentive  Stock Options
under the  federal  tax laws during any one  calendar  year (under all  employee
benefit plans of the Company) shall not exceed $100,000.  To the extent that the
Optionee 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 options as Incentive  Stock Options under the deferral tax laws shall be
applied on the basis of the order in which such options are granted.  Should the
number of Common  Shares for which any  Incentive  Stock  Option  first  becomes
exercisable in any calendar year exceed the applicable $100,000 limitation, then
that Option may  nevertheless  be exercised in such calendar year for the excess
number of Shares as a Non-qualified Stock Option under the federal tax laws.

         7.5   PAYMENT FOR SHARES. The price of an exercised Option and any
taxes  attributable  to the delivery of Common Stock under the Plan,  or portion
thereof, shall be paid as follows:

               (a) Each grant shall specify the form of  consideration  to be
paid in  satisfaction  of the  Option  Price and the  manner of  payment of such
consideration,  which may include (i) cash in the form of United States currency
or  check  or  other  cash   equivalent   acceptable   to  the   Company,   (ii)
nonforfeitable,  unrestricted  or restricted  Common  Shares,  which are already
owned by the Optionee and have a market referenced value at the time of exercise
that is equal to the Option Price, (iii) any other legal  consideration that the
Board or the Committee may deem appropriate,  including  without  limitation any
form of consideration authorized pursuant to this Section 7 on such basis as the
Board or the Committee may determine in accordance  with this Plan, and (iv) any
combination  of the foregoing.  The Board (or Committee) in its sole  discretion
may permit a so-called "cashless exercise" (net exercise) of the Options.


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               In the event of a cashless  exercise of the Option the Company
shall issue the Option holder the number of Shares determined as follows:

               X = Y (A-B)/A
where:

               X  = the number of Shares to be issued to the Optionholder.

               Y = the number of Shares  with  respect to which the Option is
                   being exercised.

               A = the average of the closing sale prices of the Common Stock
                  for the five (5) Trading  Days  immediately  prior to (but not
                  including) the Date of Exercise.

               B = the Exercise Price.

               (b) Any grant of a Non-qualified Stock Option may provide that
payment of the Option  Price may also be made in whole or in part in the form of
Restricted  Shares  or  other  Common  Shares  that are not  subject  to risk of
forfeiture or  restrictions  on transfer in the manner  determined by the Board.
Unless  otherwise  determined by the Board or the Committee on or after the Date
of Grant,  whenever any Option Price is paid in whole or in part by means of any
of the forms of  consideration  specified  in this  Section  7.5(b),  the Common
Shares  received by the Optionee  upon the exercise of the  Non-qualified  Stock
Option shall be subject to the same risks of forfeiture as those that applied to
the  consideration  surrendered by the Optionee;  PROVIDED,  HOWEVER,  that such
risks of  forfeiture  shall  apply  only to the same  number  of  Common  Shares
received by the Optionee as applied to the forfeitable Common Shares surrendered
by the Optionee.

               (c) Any grant may allow for  deferred  payment  of the  Option
Price  through a sale and  remittance  procedure  by which a  Participant  shall
provide concurrent  irrevocable written instructions to (i) a Company-designated
brokerage firm to effect the immediate  sale of the purchased  Common Shares and
remit to the company, out of the sale proceeds available on the settlement date,
sufficient  funds to cover the aggregate  Option Price payable for the purchased
Common Share, and (ii) the Company to deliver the certificates for the purchased
Common Shares directly to such brokerage firm to complete the sale transaction.

               (d) The Board or Committee shall determine  acceptable methods
for tendering  Common Stock as payment upon exercise of an Option and may impose
such  limitations  and  prohibitions  on the use of Common  Stock to exercise an
Option as it deems appropriate.

         7.6   RIGHTS AS A  STOCKHOLDER. Until the issuance (as evidenced by the
appropriate  entry on the books of the Company or of a duly authorized  transfer
agent of the Company) of the stock certificate evidencing such Common Shares, no
right to vote or receive  dividends or any other rights as a  stockholder  shall
exist with respect to the Optioned  Stock,  notwithstanding  the exercise of the
Option.  No  adjustment  will be made for a dividend  or the right for which the
record  date is prior to the date the stock  certificate  is  issued,  except as
provided in Section 11 of the Plan.


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         7.7   LOANS OR INSTALLMENT PAYMENTS; BONUSES.

               (a) The Board or the Committee may, in its discretion,  assist
any Participant in the exercise of one or more awards under the plan,  including
the satisfaction of any federal,  state, local and foreign income and employment
tax obligations  arising  therefrom,  by (i) authorizing the extension of a loan
from the Company to such Participant;  or (ii) permitting the participant to pay
the exercise price or purchase price for the purchased  shares in  installments;
or (iii) a guaranty by the Company of a loan  obtained  by the  Optionee  from a
third  party;  or (iv)  granting a cash bonus to the  Participant  to enable the
Participant to pay federal,  state,  local and foreign income and employment tax
obligations arising from an award.

               (b) Any loan or installment  method of payment  (including the
interest rate and terms of  repayment)  shall be upon such terms as the Board or
the Committee specifies in the applicable Incentive Agreement or otherwise deems
appropriate  under  the  circumstances.  Loans or  installment  payments  may be
authorized with or without security or collateral.  However,  the maximum credit
available to the  Participant  may not exceed the exercise or purchase  price of
the acquired shares (less the par value of such shares) plus any federal,  state
and local income and  employment  tax liability  incurred by the  Participant in
connection with the acquisition of such shares. The amount of any bonus shall be
determined  by the  Board or the  Committee  in its sole  discretion  under  the
circumstances.

               (c)  The  Board  or  the   Committee   may,  in  its  absolute
discretion,  determine  that one or more loans  extended  under  this  financial
assistance  program may be subject to  forgiveness by the Company in whole or in
part  upon such  terms and  conditions  as the Board or the  Committee  may deem
appropriate;  PROVIDED,  HOWEVER,  that the  Board or the  Committee  shall  not
forgive  that  portion  of any loan owed to cover  the par  value of the  Common
Shares.

         7.8   EXERCISE OF OPTION.

               (a)      PROCEDURE FOR EXERCISE.

                        (i) Any Option granted hereunder shall be exercisable
at such times and under such  conditions as  determined by the Board,  including
performance  criteria with respect to the Company  and/or the  Optionee,  and as
shall be permissible under the terms of the Plan. Unless otherwise determined by
the Board at the time of grant,  an Option may be exercised in whole or in part.
An Option may not be exercised for a fraction of a share.

                        (ii) An Option shall be deemed to be  exercised  when
written notice of such exercise has been given to the Company in accordance with
the terms of the Option by the person  entitled to exercise  the Option and full
payment for the Common  Shares with respect to which the Option is exercised has
been  received by the Company.  Full payment  may, as  authorized  by the Board,
consist of any  consideration  and method of payment allowable under Section 7.5
of the Plan.

                        (iii)  Exercise  of an  Option  in any  manner  shall
result in a decrease in the number of Shares which  thereafter may be available,
both for  purposes of the Plan and for sale under the  Option,  by the number of
Common Shares as to which the Option is exercised.


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                                       11


               (b)  TERMINATION  OF STATUS AS AN EMPLOYEE.  Unless  otherwise
provided in an Incentive Agreement,  if an Employee's  employment by the Company
is  terminated,  except  if such  termination  is  voluntary  or  occurs  due to
retirement with the consent of the Board or due to death or disability, then the
Option,  to the extent not exercised,  shall  terminate on the date on which the
Employee's employment by the company is terminated. If an Employee's termination
is voluntary or occurs due to retirement with the consent of the Board, then the
Employee  may after  the date such  Employee  ceases  to be an  employee  of the
Company,  exercise his Option at any time within three (3) months after the date
he ceases to be an Employee of the  Company,  but only to the extent that he was
entitled to exercise it on the date of such  termination.  To the extent that he
was not entitled to exercise the Option at the date of such  termination,  or if
he does not exercise such Option (which he was entitled to exercise)  within the
time specified herein, the Option shall terminate. In no event may the period of
exercise  in the case of  Incentive  Stock  Options  extend  more than three (3)
months beyond termination of employment.

               (c)  DISABILITY.  Unless  otherwise  provided in the Incentive
Agreement,  notwithstanding the provisions of Section 7.8(b) above, in the event
an Employee is unable to continue his employment with the Company as a result of
his permanent and total disability (as defined in Section 22(e)(3) of the Code),
he may  exercise  his Option at any time  within six (6) months from the date of
termination,  but only to the extent he was  entitled to exercise it at the date
of such  termination.  To the extent that he was not  entitled  to exercise  the
Option at the date of termination, or if he does not exercise such Option (which
he was entitled to exercise) within the time specified herein,  the Option shall
terminate.  In no event may the period of exercise  in the case of an  Incentive
Stock  Option  extend more than six (6) months  beyond the date the  Employee is
unable to continue employment due to such disability.

               (d)  DEATH.   Unless  otherwise   provided  in  the  Incentive
Agreement,  if an Optionee dies during the term of the Option and is at the time
of his death an Employee who shall have been in continuous status as an Employee
since the date of Grant of the Option,  the Option may be  exercised at any time
within six (6) months following the date of death by the Optionee's estate or by
a  person  who  acquired  the  right  to  exercise  the  Option  by  bequest  or
inheritance,  but only to the extent that an Optionee  was  entitled to exercise
the  Option on the date of death,  or if the  Optionee's  estate,  or person who
acquired  the right to exercise the Option by bequest or  inheritance,  does not
exercise  such  Option  (which he was  entitled  to  exercise)  within  the time
specified  herein,  the Option  shall  terminate.  In no event may the period of
exercise  in the case of an  Incentive  Stock  Option  extent  more than six (6)
months beyond the date of the employee's death.

         7.9   OPTION REISSUANCE.  The  Board or the  Committee  shall  have the
authority to effect,  at any time and from time to time, with the consent of the
affected  Participant,  the cancellation of any or all outstanding Options under
this Section 7 and grant in substitution new Options under the Plan covering the
same or a different  number of Common Shares but with an exercise price not less
than (i) 75% of the Fair Market Value per share on the new Date of Grant or (ii)
100% of the Fair Market Value per share in the case of Incentive Stock Options.


<PAGE>


                                       12


         7.10  INCENTIVE STOCK OPTIONS - DISPOSITION OF SHARES. In the case of
an Incentive Stock Option,  a Participant who disposes of Common Shares acquired
upon exercise of such Incentive  Stock Option by sale or exchange (i) within two
(2) years  after the Date of Grant of the  Option,  or (ii)  within one (1) year
after the exercise of the Option,  shall notify the Company of such  disposition
and the amount realized upon such disposition.

         7.11  INCENTIVE  AGREEMENT.   Each  grant  shall  be  evidenced  by  an
agreement,  which  shall be  executed  on behalf of the  Company by any  officer
thereof and  delivered to and  accepted by the  Optionee and shall  contain such
terms and provisions as the Board or the Committee may determine consistent with
this Plan.

8.       RESTRICTED SHARES.

         Restricted  Shares  are  shares  of  Common  Stock  which  are  sold or
transferred  by the Company to a Participant at a price which may be below their
Fair Market Value, or for no payment,  but subject to restrictions on their sale
or other transfer by the Participant.  The transfer of Restricted Shares and the
transfer and sale of Restricted  Shares shall be subject to the following  terms
and conditions:

         8.1   NUMBER OF SHARES. The number of Restricted Shares to be
transferred  or sold by the Company to a Participant  shall be determined by the
Board or Committee, if any.

         8.2   SALE PRICE. The Board shall determine the prices, if any, at
which Restricted  Shares shall be sold to Participant,  which may vary from time
to time and among Participants,  and which may be below the Fair Market Value of
such shares of Common Stock on the date of sale.

         8.3   RESTRICTIONS. All Restricted Shares transferred or sold hereunder
shall be subject to such  restrictions  as the Board may  determine,  including,
without limitation, any or all of the following:

               (a) a prohibition against the sale, transfer,  pledge or other
encumbrance of the Restricted Shares,  such prohibition to lapse at such time or
times as the Board or the Committee shall  determine  (whether in annual or more
frequent installments, at the time of the death, disability or retirement of the
holder of such Restricted Shares, or otherwise);

               (b) a requirement that the holder of Restricted Shares forfeit
or resell back to the  Company,  at his cost,  all or a part of such  Restricted
Shares in the event of termination of his employment  during any period in which
such Restricted Shares are subject to restrictions; and

               (c) a  prohibition  against  employment  of the holder of such
Restricted  Shares by any  competitor  of the  Company  or a  subsidiary  of the
Company,  or against such holder's  dissemination  of any secret or confidential
information belonging to the Company or a subsidiary of the Company.

         8.4   ESCROW. In order to enforce the restrictions imposed by the Board
pursuant to Section 8.3 above, the Participant receiving Restricted Shares shall
enter into an agreement  with the Company  setting  forth the  conditions of the
grant.  Restricted Shares shall be registered in the name of the Participant and
deposited, together with a stock power endorsed in blank, with the Company.


<PAGE>


                                       13


         8.5   END OF RESTRICTIONS. Subject to Section 8.3, at the end of any
time period during which the  Restricted  Shares are subject to  forfeiture  and
restrictions on transfer, such Restricted Shares will be delivered,  free of all
restrictions,  to the Participant or to the Participant's legal  representative,
beneficiary or heir.

         8.6   STOCKHOLDER. Subject to the terms and conditions of the Plan,
each  Participant  receiving  Restricted  Shares  shall have all the rights of a
stockholder  with  respect to such shares of stock  during any period which such
shares are  subject to  forfeiture  and  restrictions  on  transfer,  including,
without  limitation,  the right to vote such shares.  Dividends  paid in cash or
property other than Common Stock with respect to the Restricted  Shares shall be
paid to the Participant currently.

         8.7   OWNERSHIP OF RESTRICTED SHARES. Each grant or sale shall
constitute an immediate  transfer of the ownership of the  Restricted  Shares to
the Participant in consideration of the performance of services,  entitling such
Participant  to  dividend,  voting and other  ownership  rights,  subject to the
"substantial  risk of  forfeiture"  and  restrictions  on  transfer  referred to
hereinafter.

         8.8   ADDITIONAL CONSIDERATION.  Each grant or sale may be made without
additional  consideration  from the Participant or in consideration of a payment
by the Participant that is less than the Fair Market Value per share on the Date
of Grant.

         8.9   SUBSTANTIAL RISK OF FORFEITURE.

               (a)  Each  grant or sale  shall  provide  that the  Restricted
Shares covered  thereby shall be subject to a  "substantial  risk of forfeiture"
within the  meaning of Section 83 of the Code for a period to be  determined  by
the Board or the Committee on the Date of Grant.

               (b) Each grant or sale shall provide  that,  during the period
for which substantial risk of forfeiture is to continue,  the transferability of
the Restricted Shares shall be prohibited or restricted in the manner and to the
extent  prescribed  by the Board or the  Committee  on the Date or  Grant.  Such
restrictions  may  include  without  limitation  rights of  repurchase  or first
refusal in the  Company or  provisions  subjecting  the  Restricted  Shares to a
continuing substantial risk of forfeiture in the hands of any transferee.

         8.10  DIVIDENDS. Any grant or sale may require that any or all
dividends or other distributions paid on the Restricted Shares during the period
of such restrictions be automatically sequestered and reinvested on an immediate
or deferred basis in additional Common Shares,  which may be subject to the same
restrictions as the underlying award or such other  restrictions as the Board of
the Committee may determine.

         8.11  ADDITIONAL  GRANTS. Successive grants or sales may be made to the
same Participant  regardless of whether any Restricted Shares previously granted
or sold to a Participant remain restricted.

9.       DEFERRED SHARES.

         The Board or the Committee  may  authorize  grants or sales of Deferred
Shares to  Participants  upon  such  terms  and  conditions  as the Board or the
Committee may determine in accordance with the following provisions:


<PAGE>


                                       14


         9.1   PERFORMANCE  CONDITIONS. Each grant or sale shall  constitute the
agreement by the Company to issue or transfer  Common Shares to the  Participant
in the future in  consideration  of the performance of services,  subject to the
fulfillment  during the Deferral  Period of such  conditions as the Board or the
Committee may specify.

         9.2   ADDITIONAL CONSIDERATION.  Each grant or sale may be made without
additional  consideration  from the Participant or in consideration of a payment
by the  participant  that is less than the Fair  Market  Value per shares on the
Date of Grant.

         9.3   DEFERRAL PERIOD. Each grant or sale shall provide that the
Deferred  Shares covered  thereby shall be subject to a Deferral  Period,  which
shall be fixed by the Board or the Committee on the Date of Grant.

         9.4   OWNERSHIP OF SHARES. During the Deferral  Period, the Participant
shall not have any right to transfer any rights under the subject  award,  shall
not have any rights of ownership  in the Deferred  Shares and shall not have any
right to vote the  Deferred  Shares,  but the Board or the  Committee  may on or
after the Date of Grant  authorize  the payment of dividend  equivalents  on the
Deferred  Shares in cash or additional  Common Shares on a current,  deferred or
contingent basis.

         9.5   ADDITIONAL GRANTS. Successive  grants or sales may be made to the
same Participant regardless of whether any Deferred Shares previously granted or
sold to a Participant have vested.

         9.6   AGREEMENT. Each grant or sale shall be evidenced by an agreement,
which shall be  executed  on behalf of the  Company by any  officer  thereof and
delivered to and accepted by the  Participant  and shall  contain such terms and
provisions  as the Board or the Committee  may  determine  consistent  with this
Plan.

10.      PERFORMANCE SHARES AND PERFORMANCE UNITS.

         The Board or the Committee may authorize  grants of Performance  Shares
and Performance  Units,  which shall become payable to the Participant  upon the
achievement of specified Management  Objectives,  upon such terms and conditions
as the Board or the Committee  may  determine in  accordance  with the following
provisions:

         10.1  NUMBER. Each grant shall specify the number of Performance Shares
or Performance Units to which it pertains, which may be subject to adjustment to
reflect changes in compensation or other factors.

         10.2  PERFORMANCE PERIOD.  The Performance  Period with respect to each
Performance  Share or  Performance  Unit shall be determined by the Board or the
Committee on the Date of Grant.


<PAGE>


                                       15


         10.3  MANAGEMENT OBJECTIVES.

               (a) Each grant shall specify the  Management  Objectives  that
are to be  achieved  by the  Participant,  which  may be  described  in terms of
Company-wide objectives or objectives that are related to the performance of the
individual  Participant  or the  Subsidiary,  division,  department  or function
within the Company or  Subsidiary in which the  Participant  is employed or with
respect to which the participant provides consulting services.

               (b) Each grant  shall  specify  in  respect  of the  specified
Management  Objectives a minimum  acceptable level of achievement below which no
payment will be made and shall set forth a formula for determining the amount of
any  payment to be made if  performance  is at or above the  minimum  acceptable
level  but  falls  short  of  full  achievement  of  the  specified   Management
Objectives.

               (c)  The  Board  or  the  Committee   may  adjust   Management
Objectives and the related  minimum  acceptable  level of achievement if, in the
sole  judgment  of the  Board or the  Committee,  events  or  transactions  have
occurred  after the Date of Grant that are unrelated to the  performance  of the
Participant and result in distortion of the Management Objectives or the related
minimum acceptable level of achievement.

         10.4  PAYMENT.

               (a) Each grant shall specify the time and manner of payment of
Performance  Shares or  Performance  Units that shall have been earned,  and any
grant may  specify  that any such  amount  may be paid by the  Company  in cash,
Common Shares or any combination thereof and may either grant to the Participant
or  reserve  to the  Board or the  Committee  the  right to  elect  among  those
alternatives.

               (b) Any  grant of  Performance  Shares  may  specify  that the
amount  payable with respect  thereto may not exceed a maximum  specified by the
Board or the Committee on the Date of Grant. Any grant of Performance  Units may
specify that the amount  payable,  on the number of Common Shares  issued,  with
respect thereto may not exceed maximums  specified by the Board or the Committee
Shares on the Date of Grant.

         10.5  DIVIDENDS.  On or after the Date of Grant of Performance  Shares,
the Board or the  Committee  may provide for the payment to the  Participant  of
dividend  equivalents  thereon in cash or additional Common Shares on a current,
deferred or contingent basis.

         10.6  ADDITIONAL  GRANTS.  Successive  grants  may be made to the  same
Participant  regardless of whether any Performance  Shares or Performance  Units
granted to any Participant have vested.

         10.7  AGREEMENT.  Each grant shall be evidenced by an agreement,  which
shall be executed on behalf of the Company by any officer  thereof and delivered
to and accepted by the  Participant  and shall contain such terms and provisions
as the Board or the Committee may determine consistent with this Plan.


<PAGE>


                                       16


11.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

         Subject to any required action by the stockholders of the Company,  the
number of shares of Common Stock covered by each outstanding Option or Incentive
Award,  and the number of shares of Common Stock which have been  authorized for
issuance under the Plan but as to which no Options nor Incentive Awards have yet
been  granted  or which  have been  returned  to the Plan upon  cancellation  or
expiration  of an Option or Incentive  Award,  as well as the price per share of
Common Stock covered by each such outstanding  Option or Incentive Award,  shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split,  reverse stock split, stock
dividend,  combination  or  reclassification  of the Common Stock,  or any other
increase  or decrease in the number of issued  shares of Common  Stock  effected
without  receipt  of  consideration  by the  Company;  provided,  however,  that
conversion of any  convertible  securities of the Company shall not be deemed to
have been "effected without receipt of consideration."  Such adjustment shall be
made by the Board, whose  determination in that respect shall be final,  binding
and conclusive.  Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities  convertible into shares of stock
of any class, shall affect,  and no adjustment by reason thereof,  shall be made
with  respect  to the  number or price of shares of Common  Stock  subject to an
Option or Incentive Award.

         In the event of the proposed dissolution or liquidation of the Company,
all  Options  and  Incentive  Awards  will  terminate  immediately  prior to the
consummation of such proposed action unless otherwise provided by the Board. The
Board may, in the exercise of its sole  discretion  in such  instances,  declare
that any Option or  Incentive  Award shall  terminate  as of a date fixed by the
Board and give each holder the right to exercise of its sole  discretion in such
instances,  declare that any Option or Incentive  Award shall  terminate as of a
date fixed by the Board and give each holder the right to exercise his Option or
Incentive Award as to all or any part thereof,  including Shares as to which the
Option or Incentive Award would not otherwise be exercisable.  In the event of a
proposed sale of all or substantially  all of the assets of the Company,  or the
merger of the Company with or into another corporation,  the Option or Incentive
Award  shall be assumed or an  equivalent  Option or  Incentive  Award  shall be
substituted  by such  successor  corporation  or a parent or  subsidiary of such
successor corporation,  unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the holder shall
have the  right to  exercise  the  Option  or  Incentive  Award as to all of the
Shares,  including  Shares as to which the Option or  Incentive  Award would not
otherwise  be  exercisable.  If the Board  makes an Option  or  Incentive  Award
exercisable  in lieu of assumption or  substitution  in the event of a merger or
sale of assets,  the Board shall  notify the holder that the Option or Incentive
Award shall be fully  exercisable  for a period of sixty (60) days from the date
of such notice (but not later than the  expiration  of the term of the Option or
Incentive  Award),  and the Option or Incentive  Award will  terminate  upon the
expiration of such period.

12.      TRANSFERABILITY.

         Except to the extent  otherwise  expressly  provided  in an award,  the
right to  acquire  Common  Shares  or  other  assets  under  the Plan may not be
assigned,  encumbered or otherwise  transferred by a Participant and any attempt
by a  Participant  to do so will be null and void.  However  Option or Incentive
Awards  granted under this Plan may be  transferred  by a Participant by will or
the laws of  descent  and  distribution  or  pursuant  to a  qualified  domestic
relations  order as  defined by the Code or Title I of the  Employee  Retirement
Income  Security Act, as amended,  or the rules  thereunder.  Unless assigned in
accordance  with the terms of an award,  options and other awards  granted under
this Plan may not be exercised  during a  Participant's  lifetime  except by the
Participant  or,  in the event of the  Participant's  legal  incapacity,  by his
guardian or legal representative acting in a fiduciary capacity on behalf of the
Participant under state law and court supervision.


<PAGE>


                                       17


13.      TIME OF GRANTING INCENTIVES.

         The  Date of Grant of an  Option  or  Incentive  Award  shall,  for all
purposes,  be the date on which the Board or Committee  makes the  determination
granting such Option or Incentive Award.  Notice of the  determination  shall be
given to each  Participant  to whom an Option or  Incentive  Award is so granted
within a reasonable time after the date of such grant.

14.      AMENDMENT AND TERMINATION OF THE PLAN.

         14.1  The  Board may amend or  terminate  the Plan from time to time in
such  respects  as the Board may deem  advisable;  provided,  however,  that the
following  revisions or amendments  shall  require  approval of the holders of a
majority of the outstanding  Shares of the Company entitled to vote thereon,  to
the extent required by law, rule or regulation:

               (a) Any increase in the number of Shares  subject to the Plan,
other than in connection with an adjustment under Section 11 of the Plan;

               (b) Any change in the designation of the persons  eligible (or
any change in the class of Employees  eligible,  in the case of Incentive  Stock
Options) to be granted Options or Incentive Awards involving Shares; or

               (c) If the Company has a class of equity  security  registered
under  Section 12 of the Exchange Act at the time of such revision or amendment,
any material increase in the benefits accruing to participants under the Plan.

         14.2  Notwithstanding  the foregoing,  stockholder  approval under this
Section 14 shall only be required at such time as (A) any rules of the  National
Association of Securities  Dealers' Automated Quotation  System-National  Market
System shall require stockholder  approval of a plan or arrangement  pursuant to
which  Common  Stock may be acquired by officers or  directors  of the  Company,
and/or (B) any rule or regulation  promulgated  by the  Securities  and Exchange
Commission, or (C) if Section 422 of the Code shall require shareholder approval
of an amendment to the Plan.

         14.3  Any such amendment  or  termination  of the Plan shall not affect
Options  already  granted and such Options shall remain in full force and effect
as if this Plan had not been  amended  or  terminated,  unless  mutually  agreed
otherwise between the Optionee and the Board, which agreement must be in writing
and signed by the Optionee and the Company.

         14.4  Notwithstanding the foregoing, this Plan shall terminate upon the
earlier of (i) the  Termination  Date or such  earlier  date as the Board  shall
determine,  or (ii) the date on which all awards  available  for issuance in the
last year of the Plan shall have been issued or canceled.  Upon  termination  of
the Plan, no further awards may be granted,  but all grants  outstanding on such
date shall  thereafter  continue to have force and effect in accordance with the
provisions of the agreements evidencing such grants.


<PAGE>


                                       18


15.      WITHHOLDING TAXES.

         The Company is  authorized to withhold  income taxes as required  under
applicable  laws or  regulations.  To the extent that the Company is required to
withhold federal,  state,  local or foreign taxes in connection with any payment
made or benefit  realized by a Participant  or other person under this Plan, and
the amounts  available to the Company for the withholding are  insufficient,  it
shall be a condition  to the receipt of any such payment or the  realization  of
any such benefit  that the  Participant  or such other person make  arrangements
satisfactory  to the Company for payment of the balance of any taxes required to
be  withheld.  At  the  discretion  of the  Board  or the  Committee,  any  such
arrangements may without limitation  include  relinquishment of a portion of any
such  payment or benefit or the  surrender of  outstanding  Common  Shares.  The
Company  and  any  Participant  or such  other  person  may  also  make  similar
arrangements  with  respect to the  payment  of any taxes with  respect to which
withholding is not required.

16.      CORPORATE TRANSACTION OR CHANGE OF CONTROL.

         The Board or the Committee  shall have the right in its sole discretion
to  include  with  respect  to any  award  granted  to a  Participant  hereunder
provisions  accelerating  the  benefits of the award in the event of a Corporate
Transaction or Change of Control,  which  acceleration  rights may be granted in
connection with an award pursuant to the agreement evidencing the same or at any
time after an award has been granted to a Participant.

17.      MISCELLANEOUS PROVISIONS.

         17.1  PLAN EXPENSE.  Any expenses of administering this Plan shall be
borne by the Company.

         17.2  CONSTRUCTION  OF PLAN.  The place of  administration  of the Plan
shall  be  in  the  State  of   Colorado,   and  the   validity,   construction,
interpretation,  administration  and  effect  of the Plan and of its  rules  and
regulations,  and rights relating to the Plan, shall be determined in accordance
with the  laws of the  State of  Colorado  without  regard  to  conflict  of law
principles and, where applicable, in accordance with the Code.

         17.3  OTHER COMPENSATION.  The Board or the Committee may condition the
grant of any award or  combination of awards  authorized  under this Plan on the
surrender or deferral by the  Participant  of his or her right to receive a cash
bonus or other compensation  otherwise payable by the Company or a Subsidiary to
the Participant.

         17.4  CONTINUATION OF EMPLOYMENT OR SERVICES. This Plan shall not
confer upon any  Participant any right with respect to continuance of employment
or other service with the Company or any  Subsidiary  and shall not interfere in
any way with any right that the Company or any Subsidiary  would  otherwise have
to terminate any Participant's  employment or other service at any time. Nothing
contained in the Plan shall prevent the Company or any Subsidiary  from adopting
other or additional compensation arrangements for its employees.


<PAGE>


                                       19


         17.5  TAX-QUALIFIED  OPTIONS.  To the extent that any provision of this
Plan would  prevent any Option that was  intended to qualify as a  Tax-Qualified
Option  from so  qualifying,  any such  provision  shall  be null and void  with
respect to any such Option;  PROVIDED,  HOWEVER,  that any such provision  shall
remain in effect with  respect to other  Options,  and there shall be no further
effect on any provision of this Plan.

         17.6  CERTAIN   TERMINATIONS  OF  EMPLOYMENT  OR  CONSULTING  SERVICES,
HARDSHIP AND APPROVED LEAVES OF ABSENCE.  Notwithstanding any other provision of
this  Plan to the  contrary,  in the  event  of  termination  of  employment  or
consulting  services by reason of death,  disability,  normal retirement,  early
retirement  with the  consent  of the  Company,  termination  of  employment  or
consulting  services to enter public or military service with the consent of the
Company or leave of absence approved by the Company, or in the event of hardship
or other special circumstances, of a Participant who holds an Option that is not
immediately  and  fully  exercisable,  any  Restricted  Shares  as to which  the
substantial risk of forfeiture or the prohibition or restriction on transfer has
not lapsed, any Performance Shares or Performance Units that have not been fully
earned,  or any  Common  Shares  that are  subject to any  transfer  restriction
pursuant  to Section 8 of this  Plan,  the Board or the  Committee  may take any
action  that it deems to be  equitable  under the  circumstances  or in the best
interest of the Company,  including without  limitation waiving or modifying any
limitation or requirement with respect to any award under this Plan.

         17.7  BINDING  EFFECT.  The  provisions  of the Plan shall inure to the
benefit of, and be binding upon, the Company and its successors or assigns,  and
the Participants, their legal representatives, their heirs or legacees and their
permitted assignees.

         17.8  EXCHANGE  ACT  COMPLIANCE.  With  respect to  persons  subject to
Section 16 of the  Exchange  Act,  transactions  under this Plan are intended to
comply with all applicable  conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provisions of the Plan or action by the Board or
the  Committee  fails to so comply,  they shall be deemed null and void,  to the
extent permitted by law and deemed advisable by the Board or the Committee.

         17.9  CONDITIONS UPON ISSUANCE OF SHARES.

               (a) Shares shall not be issued  pursuant to the exercise of an
Option or Incentive  Award unless the exercise of such Option or Incentive Award
and the issuance and delivery of such Shares pursuant  thereto shall comply with
all relevant  provisions of law, including,  without limitation,  the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed,  and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

               (b) As a condition  to the  exercise of an Option or Incentive
Award,  the Company may require the person  exercising  such Option or Incentive
Award to represent  and warrant at the time of any such exercise that the Shares
are being  purchased or otherwise  acquired only for  investment and without any
present  intention  to sell or  distribute  such  Shares  if, in the  opinion of
counsel  for  the  Company  such  a  representation  is  required  by any of the
aforementioned relevant provisions of law.


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               (c)  Inability  of the  Company to obtain  authority  from any
regulatory body having jurisdiction,  which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Share  hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell  such  Shares  as to which  such  requisite  authority  shall not have been
obtained.

         17.10 FRACTIONAL SHARES. The Company shall not be required to issue any
fractional  Common Shares  pursuant to this Plan. The Board or the Committee may
provide for the elimination of fractions or for the settlement thereof in cash.

         17.11 RESERVATION OF SHARES.  The Company will at all times reserve and
keep  available  such  number of Shares as shall be  sufficient  to satisfy  the
requirements of the Plan.

         17.12 INDEMNIFICATION.   In   addition   to  such  other   rights  of
indemnification  as they may have as members of the  Board,  the  members of the
Board and of the Committee shall be indemnified by the Company against all costs
and expenses  reasonably incurred by them in connection with any action, suit or
proceeding  to which  they or any of them may be party by reason  of any  action
taken or  failure to act under or in  connection  with the Plan or any Option or
Incentive  Award,  and against all amounts  paid by them in  settlement  thereof
(provided such settlement is approved by independent  legal counsel  selected by
the Company) or paid by them in  satisfaction  of a judgment in any such action,
suit or  proceeding,  except a  judgment  based  upon a  finding  of bad  faith;
provided  that upon the  institution  of any such action,  suit or  proceeding a
Board member or Committee  member  shall,  in writing,  give the Company  notice
thereof and an  opportunity,  at its own expense,  to handle and defend the same
before such Board member or Committee member  undertakes to handle and defend it
on his own behalf.

         17.13 GENDER.  For purposes of this Plan,  words used in the masculine
gender shall include the feminine and neuter, and the singular shall include the
plural and vice versa, as appropriate.

         17.14 USE OF PROCEEDS.  Any cash proceeds  received by the Company from
the sale of Common  Shares  under the Plan shall be used for  general  corporate
purposes.

         17.15 REGULATORY APPROVALS.

               (a) The implementation of the Plan, the granting of any awards
under the Plan and the  issuance  of any Common  Shares  shall be subject to the
Company's  procurement  of all  approvals  and permits  required  by  regulatory
authorities  having  jurisdiction over the Plan, the awards granted under it and
the Common Shares issued pursuant to it.

               (b) No  Common  Shares  or other  assets  shall be  issued  or
delivered under this Plan unless and until there shall have been compliance with
all applicable  requirements of federal and state securities laws, including the
filing and  effectiveness of the Form S-8 registration  statement for the Common
Shares issuable under the Plan, and all applicable  listing  requirements of any
securities exchange on which the Common Shares are then listed for trading.


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                                       21


         17.16 OTHER TAX MATTERS. Reference herein to the Code and any described
tax  consequences  related to the Plan or the  granting  or exercise of an award
hereunder  pertain only to those persons  (including the Company) subject to the
tax laws of the United  States of America or any state or territory  thereof and
include all amendments to the Code enacted hereafter.