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                                                               Exhibit 10.3





















                            INTERNET OUTFITTERS, INC.
                        1996 INCENTIVE STOCK OPTION PLAN
                              (AS AMENDED 12/20/97)


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1. PURPOSES OF THE PLAN. The purposes of this 1996 Incentive Stock Option
Plan are:

       - to attract and retain the best available personnel for
positions of substantial responsibility,

       - to provide additional incentive to Employees and Consultants, and

       - to promote the success of the Company's business.

Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of the grant.

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

                  (a) "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4
of the Plan.

                  (b) "Applicable Laws" means the legal requirements relating
to the administration of stock option plans under state corporate and
securities laws and the Code.

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

                  (d) "Code" means the Internal Revenue Code of 1986, as
amended.

                  (e) "Committee" means a Committee appointed by the Board
in accordance with Section 4 of the Plan.

                  (f) "Common Stock" means the Common Stock of the Company.

                  (g) "Company" means Internet Outfitters, Inc., a California
corporation.

                  (h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who
is compensated for such services, provided that the term "Consultant" shall
not include Directors who are paid only a director's fee by the Company or
who are not compensated by the Company for their services as Directors.

                  (i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship is not interrupted or
terminated by the Company, any Parent or Subsidiary. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of:
(i) any leave of absence approved by the Board, including sick leave,
military leave, or any other personal leave; PROVIDED, HOWEVER, that for
purposes of Incentive Stock Options, any such leave may not


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exceed ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract (including certain Company policies) or
statute; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor.

                  (j) "Director" means a member of the Board.

                  (k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (l) "Employee" means any person, including Officers and
Directors employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

                  (m) "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                               (i)  If the  Common  Stock is listed on any
established  stock  exchange  or a national market system, including without
limitation, the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair
Market Value of a Share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales are reported) as quoted on such
system or exchange (or the exchange with the greatest volume of trading in
Common Stock) on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Administrator deems reliable;

                               (ii) If the Common Stock is quoted on the
NASDAQ System (but not on the National Market System thereof) or is regularly
quoted by recognized securities dealers but selling prices are not reported,
the Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last market
trading day prior to the day of determination, as reported in the Wall Street
Journal or such other source as the Administrator deems reliable;

                               (iii) In the absence of any established
market for the Common  Stock,  the Fair Market Value shall be determined in
good faith by the Administrator with reference to the earnings history, book
value and prospects of the Company in light of market conditions generally,
and such other factors as the Administrator may deem appropriate to reflect
the fair market value thereof.

                  (o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.


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                  (p) "Nonstatutory  Stock Option"  means an Option not
intended to qualify as an Incentive  Stock Option.

                  (q) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option grant. The Notice of
Grant is part of the Option Agreement.

                  (r) "Officer" means a person who is an officer of the
Company within the meaning of Section 15 of the Exchange Act and the rules
and regulations promulgated thereunder.

                  (s) "Option" means a stock option granted pursuant to the
Plan.

                  (t) "Option Agreement" means a written agreement between
the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.

                  (u) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.

                  (v) "Optioned Stock" means the Common Stock subject to an
Option.

                  (w) "Optionee" means an Employee or Consultant who holds an
outstanding Option.

                  (x) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (y) "Plan" means this 1996 Incentive Stock Option Plan.

                  (z) "Share" means a share of the Common Stock,  as
adjusted in accordance with Section 12 of the Plan.

                  (aa) "Subsidiary"  means a  "subsidiary  corporation,"
whether  now or  hereafter  existing,  as defined in Section 424(f) of the
Code.

         3. STOCK SUBJECT TO THE PLAN.

         Subject to the provisions of Section 13 of the Plan, the maximum
aggregate number of Shares which may be optioned under the Plan is 5,000,000
Shares of Common Stock. The Shares may be authorized, but unissued, or
reacquired Common Stock. However, should the Company reacquire Shares which
were issued pursuant to the exercise of an Option, such Shares shall not
become available for future grant under the Plan.


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         If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program,
the unpurchased Shares which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has terminated).

         4. ADMINISTRATION OF THE PLAN.

                  (a) PROCEDURE.

                               (i)  MULTIPLE ADMINISTRATIVE BODIES. The
Plan may be administered by different bodies with respect to Directors,
Officers who are not Directors, and Employees who are neither Directors nor
Officers.

                               (ii) ADMINISTRATION WITH RESPECT TO OTHER
PERSONS.  With respect to Option grants made to Employees or Consultants who
are neither Directors nor Officers of the Company, the Plan shall be
administered by (A) the Board or (B) a committee designated by the Board,
which committee shall be constituted to satisfy Applicable Laws. Once
appointed, such Committee shall serve in its designated capacity until
otherwise directed by the Board. The Board may increase the size of the
Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), and
remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by Applicable Laws.

                  (b) POWERS OF THE ADMINISTRATOR. Subject to the provisions
of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                               (i) to determine the Fair Market Value of
the  Common Stock, in accordance with Section 2(n) of the Plan;

                               (ii) to select the Consultants and Employees
to whom Options may be granted hereunder;

                               (iii) to determine whether and to what
extent Options are granted hereunder;

                               (iv) to determine the number of shares of
Common Stock to be covered by each Option granted hereunder;

                               (v) to approve forms of agreement for use
under the Plan;

                               (vi) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any award granted hereunder.
Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Options may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture


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restrictions, and any restriction or limitation regarding any Option or the
Shares of Common Stock relating thereto based in each case on such factors as
the Administrator, in its sole discretion, shall determine, including but not
limited to a requirement that Shares of Common Stock acquired pursuant to
exercise of an Option be subject to (i) certain restrictions on transfer
(including without limitation a right of first refusal in favor of the
Company) and (ii) a right of repurchase in favor of the Company upon
termination of the Optionee's employment, which right shall terminate no
later than the date on which the Company's securities become publicly traded
and shall satisfy the requirements of Rule 260.140.41(k) promulgated under
the California Corporations Code, as amended;

                               (vii) to determine whether, to what extent and
under what circumstances Common Stock and other amounts payable with respect
to an award under this Plan shall be deferred either automatically or at the
election of the participant (including providing for and determining the
amount (if any) of any deemed earnings on any deferred amount during any
deferral period);

                               (viii) to  reduce  the  exercise  price
of any  Option  to the then  current  Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option shall have declined since
the date the Option was granted;

                               (ix) to construe and interpret the terms of
the Plan;

                               (x) to prescribe, amend and rescind rules and
regulations relating to the Plan;

                               (xi) to modify or amend each Option (subject
to Section 15(c) of the Plan);

                               (xii) to authorize  any person to execute
on behalf of the Company any instrument required to effect the grant
of an Option previously granted by the Administrator;

                               (xiii) to institute an Option Exchange Program;

                               (xiv) to determine the terms and restrictions
applicable to Options; and

                               (xv) to make  all other determinations
deemed necessary or advisable for administering the Plan.

                  (c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on
all Optionees and any other holders of the Options.

         5. ELIGIBILITY. Nonstatutory Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been
granted an Option may be granted additional Options.


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         6. LIMITATIONS.

                  (a) DESIGNATION. Each option shall be designated in the
Notice of Grant as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate Fair market Value:

                               (i)  of Shares subject to an Optionee's
Incentive Stock Options granted by the Company, any parent or Subsidiary,
which (ii) become exercisable for the first time during any calendar year
(under all plans of the Company or any parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 6(a), incentive stock options shall be taken
into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time of grant.

                  (b) NO EMPLOYMENT RIGHTS. Neither the Plan nor any Option
shall confer upon an Optionee any right with respect to continuing the
Optionee's employment or consulting relationship with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to
terminate such employment or consulting relationship at any time, with or
without cause.

         7. TERMS OF THE PLAN. Subject to Section 19 of the Plan, the Plan
shall become effective upon the earlier to occur of its adoption by the Board
or its approval by the shareholders of the Company as described in Section 19
of the Plan. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan. Unless otherwise provided
herein, the termination of the Plan shall not affect the validity of any
option agreement outstanding at the date of such termination.

         8. TERM OF OPTION. The term of each Option shall be stated in the
Notice of Grant; PROVIDED, HOWEVER, in no event may the term be more than ten
(10) years form the date of the Grant. In addition, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of capital stock of the Company or any
Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years form the date of grant or such shorter term as may be provided in
the Notice of Grant.

         9. OPTION EXERCISE PRICE AND CONSIDERATION.

                  (a) EXERCISE PRICE. The price per share exercise price for
the Share to be issued pursuant to exercise of an Option shall be determined
by the Administrator, subject to the following:

                               (i)  In the case of an Incentive Stock Option.


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                                    (A) granted to an Employee who, at
the time of the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of capital
stock of the Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the Fair Market Value per Share on the
date of grant.

                                    (B) granted to any other Employee, the
per Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.

                               (ii) In the case of a Nonstatutory Stock Option:

                                    (A) granted to an Employee or Consultant
who, at the time the Incentive  Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes
of capital stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share
on the date of grant.

                                    (B) granted to any other Employee or
Consultant the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.

                  (b) WAITING PERIOD AND EXERCISE DATES. At the time an
Option is granted, the Administrator shall fix the period within which the
Option may be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised. In so doing, the Administrator
may specify that an Option may not be exercised until the completion of a
service period.

                  (c) FORM OF CONSIDERATION. The Administrator shall
determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option,
the Administrator shall determine the acceptable form of consideration at the
time of grant. Such consideration may consist entirely of:

                               (i)  cash;

                               (ii) a promissory note made by the Optionee in
favor of the Company;

                               (iii) other Shares which have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;

                               (iv) delivery of a properly executed exercise
notice together with such other documentation as the Administrator and the
Optionee's broker, if applicable, shall require to effect an exercise of the
Option and delivery to the Company of the sale or loan proceeds required to
pay the exercise price;

                               (v)  any combination of the foregoing methods
of payment; or


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                               (vi) such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.

         10. EXERCISE OF OPTION.

                  (a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option granted hereunder shall be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement; PROVIDED, HOWEVER, that
each Option shall become exercisable as to at least 20% of the Shares of
Common Stock covered thereby on each anniversary of the date such Option is
granted.

         An Option may not be exercised for a fraction of a Share.

         An Option shall be deemed exercised when the Company receives: (1)
written notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, (ii) full payment for the Shares with
respect to which the Option is exercised and (iii) all representations,
indemnifications and documents reasonably requested by the Administrator.
Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Optionee or, if requested by the Optionee, in the name of the Optionee
and his or her spouse. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or
receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option.
Subject to Section 12, the Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will
be made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in Section 13 of
the Plan. Notwithstanding the foregoing, the Administrator in its discretion
may require the Company to retain possession of any certificate evidencing
Shares of Common Stock acquired upon exercise of an Option which remains
subject to repurchase under the provisions of the Option Agreement or any
other agreement sighed by the Optionee in order to facilitate such repurchase
provisions.

         Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

                  (b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP.
In the event that an Optionee's Continuous Status as an Employee or
Consultant terminates (other than upon the Optionee's death or Disability),
the Optionee may exercise his or her Option, but only within such period of
time as is determined by the Administrator (but in no event shall such period
of time be less than thirty (30) days),


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and only to the extent that the Optionee was entitled to exercise it at the
date of termination (but in no event later than the expiration of the term of
such Option as set forth in the Notice of grant). In the case of an Incentive
Stock Option, the Administrator shall determine such period of time (in no
event to exceed ninety (90) days from the date of termination) when the
Option is granted. If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

                  (c) DISABILITY OF OPTIONEE. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or his Option at any
time within six (6) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination
the Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

                  (d) DEATH OF OPTIONEE. In the event of the death of an
Optionee, the Option may be exercised at any time within six (6) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), 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 the Optionee was entitled
to exercise the Option at the date of death. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the Shares
covered by unexercisable portion of the Option shall immediately revert to
the Plan. If, after death, the Optionee's estate or a person who acquires the
right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

                  (e) DISQUALIFYING DISPOSITIONS OF INCENTIVE STOCK OPTIONS.
If Common Stock acquired upon exercise of any Incentive Stock Option is
disposed of in a disposition that, under Section 422 of the Code,
disqualifies the holder from the application of Section 421(a) of the Code,
the holder of the Common Stock immediately before the disposition shall
comply with any requirements imposed by the Company in order to enable the
Company to secure the related income tax deduction to which it is entitled in
such event.

         11.      NON-TRANSFERABILITY OF OPTIONS.

                  (a) NO TRANSFER. An Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than
by will or by the laws


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of descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.

                  (b) DESIGNATION OF BENEFICIARY. An Optionee may file a
written designation of a beneficiary who is to receive any Options that
remain unexercised in the event of the Optionee's death. If a participant is
married, and the designated beneficiary is not the spouse, spousal consent
shall be required for such designation to be effective. Such designation of
beneficiary may be changed by the Optionee at any time by written notice,
subject to the above spousal consent conditions.

                  (c) EFFECT OF NO DESIGNATION. In the event of the death of
the Optionee and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Optionee's death, the Company shall
deliver such options to the executor or administrator of the estate of the
Optionee, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such
options to the spouse or to any one or more dependents or relatives of the
participant or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

         12. WITHHOLDING TAXES. Upon (i) the disposition by an Optionee of
shares of Common Stock acquired pursuant to the exercise of an Incentive
Stock Option within two years of the granting of such Incentive Stock Option
or within one year after exercise of such Incentive Stock Option, or (ii) the
exercise of a Nonstatutory Stock Option, the Company shall have the right to
require such Optionee to pay the Company the amount of any taxes which the
Company may be required to withhold with respect to such shares of Common
Stock, and the Company may withhold the delivery of certificates representing
the Shares acquired upon exercise of the Option until such payment is
received.

         13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER,
ASSET SALE OR CHANGE OF CONTROL.

                  (a) CHANGES IN CAPITALIZATION. Subject to any required
action by the shareholders of the Company, if the outstanding shares of
Common Stock are increased, decreased, changed into or exchanged for a
different number or kind of shares of securities of the Company through
reorganization, recapitalization, reclassification, stock combination, stock
dividend, stock split, reverse stock split or other similar transaction, an
appropriate and proportionate adjustment shall be made in the maximum number
and kind of shares as to which Options may be granted under this Plan. A
corresponding adjustment changing the number or kind of shares allocated to
unexercised Options which have been granted prior to any such change, shall
likewise be made. Any such adjustment in the outstanding Options shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Options but with a corresponding adjustment in the
price for each share or other unit of any security covered by the Option.
Such adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive.


<PAGE>


         Where an adjustment under this Section 15(a) is made to an Incentive
Stock Option, the adjustment will be made in a manner which will not be
considered a "modification" under the provisions of subSection 424(h)(3) of
the Code.

                  (b) DISSOLUTION OR LIQUIDATION. In the event of the
proposed dissolution or liquidation of the Company, to the extent that an
Option had not been previously exercised, it will terminate immediately prior
to the consummation of such proposed action. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.

                  (c) MERGER OR ASSET SALE. In connection with a
reorganization of the Company in which another entity is the survivor, a
merger or reorganization of the Company under which more than fifty percent
(50%) of the Common Stock outstanding prior to the merger or reorganization
is converted into cash or into another security, a sale of more than fifty
percent (50%) of the Company's assets, or a similar event that the
Administrator determines, in its discretion, would materially alter the
structure of the Company or its ownership, the Administrator, upon 30 days
prior written notice to the Option holders, may, in its discretion, do one or
more of the following: (i) shorten the period during which Options are
exercisable (provided they remain exercisable for at least 30 days after the
date the notice is given); (ii) accelerate any vesting schedule to which an
option is subject; (iii) arrange to have the surviving or successor entity
grant replacement options with appropriate adjustments in the number and kind
of securities and option prices; or (iv) cancel options upon payment to the
Option holders in cash, with respect to each Option to the extent then
exercisable (including any options as to which the exercise has been
accelerated as contemplated in clause (ii) above), of any amount that is the
equivalent of the Fair Market Value of the Common Stock (at the effective
time of the merger, reorganization, sale of other event) or the fair market
value of the Option. The Administrator may also provide for one or more of
the foregoing alternatives in any particular Option Agreement. In the case of
a change in corporate control, the Administrator may, in considering the
advisability or the terms and conditions of any acceleration of the
exercisability of any option pursuant to this Section 15(c), take into
account the penalties that may result directly or indirectly from such
acceleration to either the Company or the Option holder, or both, under
Sections 28OG and 4999 of the Code, and may decide to limit such acceleration
to the extent necessary to avoid or mitigate such penalties or their effects.

         14. DATE OF GRANT. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination
granting such Option, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.


<PAGE>


         15. AMENDMENT AND TERMINATION OF THE PLAN.

                  (a) AMENDMENT AND  TERMINATION.  The Board may at any time
amend,  alter or suspend or terminate the Plan.

                  (b) SHAREHOLDER APPROVAL. The company shall obtain
shareholder approval of any Plan amendment to the extent necessary and
desirable to comply with Section 422 of the Code (or any successor statute)
or other applicable law, rule or regulation, including the requirements of
any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.

                  (c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of
an Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee
and the Company.

         16. CONDITIONS UPON ISSUANCE OF SHARES.

                  (a) LEGAL COMPLIANCE. Shares shall not be issued pursuant
to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated
thereunder, Applicable Laws, the requirements of any stock exchange or
quotation system upon which the Shares may then be listed or quoted, and any
other requirements of law or of any regulatory bodies having jurisdiction
over such issuance and delivery, and shall be further subject to the approval
of counsel for the Company with respect to such compliance. Any securities
delivered under the Plan shall be subject to such restrictions, and the
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 and options
granted hereunder shall be deemed amended to the extent necessary to conform
to such laws, rules and regulations.

                  (b) INVESTMENT REPRESENTATION. As a condition to the
exercise of an Option, the Company may require the person exercising such
Option to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell, transfer or distribute such Shares.

         17. LIABILITY OF COMPANY.

                  (a) INABILITY TO OBTAIN AUTHORITY. The 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 Shares


<PAGE>


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.

                  (b) GRANTS EXCEEDING ALLOTTED SHARES. If the Optioned Stock
covered by an Option exceeds, as of the date of grant, the number of Shares
which may be issued under the Plan without additional shareholder approval,
such Option shall be void with respect to such excess Optioned Stock, unless
shareholder approval of an amendment sufficiently increasing the number of
Shares subject to the Plan is timely obtained in accordance with Section
15(b) of the Plan.

                  (c) RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Company
shall pay all amounts payable hereunder only to the Option holder or
beneficiaries entitled thereto pursuant to the Plan. The Company shall not be
liable for the debts, contracts or engagements of any Option holder or his or
her beneficiaries, and rights to cash payments under the Plan may not be
taken in execution by attachment or garnishment, or by any other legal or
equitable proceeding while in the hands of the Company.

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

         19. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months
before or after the date the Plan is adopted. Such shareholder approval shall
be obtained in the manner and to the degree required under applicable federal
and state law. Options may be granted but not exercised prior to shareholder
approval of the Plan. If any options are so granted and stockholder approval
shall not have been obtained within twelve months of the date of adoption of
this Plan by the Board of Directors, such options shall terminate
retroactively as of the date they were granted.

         20. INFORMATION TO OPTIONEES. Each Option holder shall be provided
with a copy of financial statements of the Company at least annually and, in
any event, prior to his or her purchase of Common Stock pursuant to the
exercise of an option.

         21. LEGENDING SHARE CERTIFICATES. In order to enforce any
restrictions imposed upon Common Stock issued upon exercise of an Option
granted under the Plan or to which such Common Stock may be subject, the
Administrator may cause a legend or legends to be placed on any share
certificates representing such Common Stock, which legend or legends shall
make appropriate reference to such restrictions, including, but not limited
to, a restriction against sale of such Common Stock for any period of time as
may be required by applicable laws or regulations. If any restriction with
respect to which a legend was placed on any certificate ceases to apply to
Common Stock represented by such certificate, the owner of the Common Stock
represented by such certificate may require the Company to cause the issuance
of a new certificate not bearing the legend.


<PAGE>


         Additionally, and not by way of limitation, the Administrator may
impose such restrictions on any Common Stock issued pursuant to the Plan as
it may deem advisable.

         22. GOVERNING LAW. The Plan shall be governed by, and construed in
accordance with the laws of the State of California (without giving effect to
conflicts of law principles).

<PAGE>



               FIRST AMENDMENT TO THE INTERNET OUTFITTERS, INC.
                       1996 INCENTIVE STOCK OPTION PLAN

         Internet Outfitters, Inc., a California corporation (the "COMPANY"),
hereby makes this First Amendment to the Internet Outfitters, Inc. 1996
Incentive Stock Option Plan as of December 10, 1997 with reference to the
following facts:

         A. Internet Outfitters,  Inc. maintains the Internet
Outfitters,  Inc. 1996 Incentive Stock Option Plan for the benefit of its
officers, directors, employees, consultants and advisers (the "PLAN").

         B. Section 3 of the Plan limits the maximum number of shares for
which options may be granted over the term of the Plan to 1,500,000 shares.

         C. The Company wishes to amend the Plan to increase the maximum
number of shares for which options may be granted over the term of the Plan
to 5,000,000 shares and has obtained the approval of its Board of Directors
and its shareholders to such amendment.

         NOW, THEREFORE, the Plan is hereby amended as follows:

         1. The first sentence of Section 3 of the Plan is hereby  amended,
effective  December 20, 1997 to read in its entirety as follows:

                  "Subject to the provisions of Section 13 of the Plan, the
maximum aggregate number of Shares which may be optioned under the Plan is
5,000,000 Shares of Common Stock."

         2. In all other respects, the terms and provisions of the Plan are
hereby ratified and declared to be in full force and effect.

         3. IN WITNESS WHEREOF, Internet Outfitters, Inc. has executed this
First Amendment to be effective as of December 20, 1997.


<PAGE>


INTERNET OUTFITTERS, INC.


BY: /s/ Chris Paine
--------------------------
Chris Paine, its President