Exhibit 99(M)













                      PACIFIC ANIMATED IMAGING CORPORATION

                        INCENTIVE STOCK OPTION PLAN NO. 3


                             Effective May 22, 1997


















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         1.  Definitions..................................................  1
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         2.  Purpose......................................................  1
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         3.  Administration...............................................  1
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         4.  Shares Subject to Plan.......................................  2
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         5.  Eligible Employees...........................................  2
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         6.  Restrictions on Eligibility..................................  2
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         7.  Allotment of Shares..........................................  2
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         8.  Grant of Option..............................................  2
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         9.  Option Price.................................................  2
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         10. Option Period................................................  3
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         11. Termination of Option........................................  3
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         12. Rights in Event of Termination of Service, Retirement,
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               Disability or Death........................................  3
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         13. Payment and Notice of Exercise...............................  3
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         14. Exercise of Option...........................................  4
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         15. Changes in Capital Structures................................  4
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         16. Nontransferability...........................................  5
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         17. Transfers of Stock Received Upon Exercise....................  5
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         18. Re-Issuance of Shares........................................  5
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         19. Interpretation...............................................  5
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         20. Term of Plan, Amendment, Discontinuance......................  5
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         21. Effect of the Plan, etc......................................  6
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         22. Governing Law................................................  6
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                      PACIFIC ANIMATED IMAGING CORPORATION
                      ------------------------------------

                        INCENTIVE STOCK OPTION PLAN NO. 3
                        ---------------------------------

              1.  Definitions.   As used herein, the following terms shall have
the following meanings:

                  (a) "Board" shall mean the Board of Directors of Pacific
Animated Imaging Corporation.

                  (b) "Code" shall mean the Internal Revenue Code of 1986, as
amended. Reference herein to specific sections of the Code shall include
references to any successor provisions to such sections.

                  (c) "Committee" shall mean the committee appointed by the
Board pursuant to Section 3. of this Plan to administer this Plan.

                  (d) "Company" shall mean Pacific Animated Imaging Corporation
and its subsidiaries, if any.

                  (e) "Effective Date" shall mean the date this Plan is approved
by the stockholders of Pacific Animated Imaging Corporation, as provided in
Section 19. hereof.

                  (f) "Option Period" shall mean the period during which an
option granted under this Plan shall be exercisable, as set forth in Section 10.
hereof.

                  (g) "Subsidiary", for purposes of this Plan, shall mean any
corporation (or similar organization) of which the Company owns, directly or
indirectly, more than 50% of the total voting power of all classes of stock
entitled to vote therein.

              2.  Purpose.  The purpose of this Plan is to increase the interest
in the welfare of the Company of those employees of the Company who have made
valuable contributions to the business of the Company, to furnish such employees
with an incentive to continue their services to the Company, and to attract able
personnel to the employ of the Company through the grant to such employees of
options to purchase shares of the Company's Common Stock. The Company intends
that options granted pursuant to the provisions of this Plan will qualify as
"incentive stock options" within the meaning of Section 422 of the Code.

              3.  Administration.  This Plan shall be administered by the Board
or a committee (the "Committee") of not less than two (2) members of the Board.
Members of the Committee shall be appointed, and vacancies shall be filled, by
the Board. No member of the Board or Committee shall participate in any action
by the Board or Committee which allots or grants options to him/her personally.



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              4.  Shares Subject to Plan.  Options may be granted from time to
time under this Plan providing for the purchase of not more than eighty thousand
(80,000) shares of the common stock, par value $.0001 per share, of the Company
("Common Stock"), as constituted on the Effective Date (subject to adjustment
pursuant to Section 15.), plus such number of such shares as may become
available for reissuance pursuant to Section 17. Shares of authorized and
unissued Common Stock reacquired by the Company and held in its Treasury, as
from time to time determined by the Board, may be issued upon exercise of
options granted under this Plan.

              5.  Eligible Employees.  Except as provided in Section 6. hereof,
employees of the Company who are designated by the Board or the Committee shall
be eligible to be granted options under this Plan. Said designated employee
shall hereinafter be referred to as "Participant".

              6.  Restrictions on Eligibility.  No option shall be granted under
this Plan to any employee who, immediately before the option is granted, owns
stock possessing more than ten (10%) percent of the total combined voting power
of all classes of stock of (i) the Company or (ii) any of the Company's
subsidiaries (within the meaning of Section 422(b)(6) of the Code and the
Treasury Regulations thereunder), unless (a) at the time of such grant the
option price is at least one hundred ten (110%) percent of the fair market value
of the shares represented by such option on that date, and (b) such option is
not exercisable after the expiration of five (5) years from the date of grant.

              7.  Allotment of Shares.  The grant of an option to an eligible
employee under this Plan shall not be deemed either to entitle such employee to,
or to disqualify such employee from, participation in any other grant of options
under this Plan.

              8.  Grant of Option.  Except as otherwise provided in Section 6.,
options may be granted under this Plan from time to time prior to the expiration
of ten (10) year period commencing with the Effective Date. The aggregate fair
market value (determined as of the date such options are granted) of the stock
with respect to which incentive stock options are exercisable for the first time
by such Participant in any calendar year under all stock option plans of the
Company and its subsidiaries shall not exceed one hundred thousand ($100,000)
dollars, or such other amount as may be specified from time to time in Section
422(b)(7) of the Code. Grants under this Plan shall be made only by resolution
adopted by Board or the Committee. The grant of an option under this Plan shall
commence to have legal force and effect at the time of adoption by the Board or
the Committee of the resolutions making the grant, and the employee to whom such
option is granted shall become a Participant in this Plan at such time.

              9.  Option Price.  Except as otherwise provided in Section 6., the
price at which the Common Stock may be purchased upon the exercise of an option
granted under this Plan shall be fixed by the Board or the Committee but shall
be not less than the fair market value of such shares on the date on which the
option is granted. The fair market value of such shares shall be determined in

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accordance with the provisions of the Code and Treasury Regulations promulgated
thereunder.

             10.  Option Period.  Subject to the provisions of Section 14.
below, an option granted under this Plan may be exercised during the period (the
"Option Period") which begins on the date the option is granted (or such other
time as may be determined by the Committee as set forth in the resolutions
evidencing the grant of the option) and which ends

                  (a)      on the earlier of

                           (i)      the  expiration  of 10 years (5 years in the
case of an employee  described  in Section 6.) after the date the option is
granted; or

                           (ii)     the  termination of the  Participant's
employment with the Company (within the meaning of Section 422(a)(2) of the
Code) for any reason except as provided in Section 12. of this Plan; or

                  (b) such shorter period of time as may be determined by the
Board or the Committee, as set forth in the resolution evidencing the grant of
the option.

             11.  Termination of Option.  All rights to exercise an option
granted under this Plan shall terminate at the end of the Option Period, as
described in Section 10. above.

             12.  Rights in Event of Termination of Service, Retirement,
Disability or Death. If a Participant terminates service with the Company,
retires from the Company on or after attainment of age 65, has his/her
employment by the Company terminated due to disability (within the meaning of
Section 22(e)(3) of the Code, as determined by the Board or the Committee) or
dies without having fully exercised an option granted under this Plan, the
Participant, his/her representative or custodian (in the event of his/her
incompetency), or the executors, administrators, legatees or distributees of
his/her estate (in the event of his/her death) shall have the right, for a
period of three (3) months after the date of his/her termination of service,
retirement or death or for a period of one (1) year after the date of his/her
termination of employment due to disability, to exercise the unexercised and
unexpired portion, if any, of such option, in whole or in part, to the same
extent that the Participant could have exercised such option before the
expiration of such three-month or one-year period had the Participant continued
to be an employee of the Company.

             13.  Payment and Notice of Exercise.  Full payment of the purchase
price for shares purchased upon the exercise, in whole or in part, of an option
granted under this Plan shall be made at the time of such exercise. The purchase
price may be paid for with cash, stock in the Company, or a combination thereof.
No such shares shall be issued or transferred to a Participant until full
payment therefor has been made and the Participant has delivered his/her written
Notice of Exercise of the respective options to the Company at its principal
office, and a Participant who is not already a

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stockholder at the time of the issue shall have none of the rights of a
stockholder until shares are issued or transferred to him/her.


             14.  Exercise of Option.  No option under this Plan shall be
exercisable at any time by a Participant to whom an "incentive stock option" (as
such term is defined in Section 422 of the Code) has previously been granted
prior to December 31, 1986 while such previously granted incentive stock option
is "outstanding" (within the meaning of Section 422 of the Code), in whole or in
part. Unless the Board or Committee otherwise directs, options granted hereunder
shall be exercisable by a Participant pursuant to the Vesting Formula defined
below, provided the Participant is employed by Company on the Allocation Dates
as defined below. On the original date of grant the Participant shall have the
right to purchase as much as twenty (20%) percent of the shares of Common Stock
which are the subject of his/her option. On the first anniversary of the
original date of grant and on the second, third and fourth anniversary of the
original date of grant thereafter, Participant shall have the right to purchase
as much as an additional twenty (20%) percent of the shares of Common Stock
which are the subject of his/her option. As of the fourth anniversary of the
original date of grant, Participant shall have given the right to purchase one
hundred (100%) percent of the shares of Common Stock which are the subject of
his/her option. The Allocation Dates are the above mentioned four (4)
anniversary dates of the original date of grant. Options granted under this Plan
shall otherwise be exercisable during the Option Period at such times, in such
amounts, in accordance with such terms and conditions, and subject to such
restrictions as may be determined by the Board or Committee, and as are set
forth in the resolutions and the Notice of Grant evidencing a Participant's
exercise of such options. In no event shall an option be exercised or shares be
issued pursuant to an option if any applicable laws shall not have been
conformed with or if requisite approval or consent of any governmental authority
having jurisdiction over the exercise of the options or the issue and sale of
the Common Stock shall not have been secured, unless in the opinion of counsel
for the Company, the exercise or issuance is exempt from the obligation to
obtain such approval or consent. Each Participant shall agree not to offer,
sell, pledge, hypothecate or otherwise transfer any shares of Common Stock
purchased pursuant to the exercise of an option granted under this Plan unless
the shares have been registered under applicable federal and state securities
laws or unless the proposed transaction is exempt from such registration in the
opinion of counsel for the Company. Each Participant shall, at the time of
purchase of shares of Common Stock upon the exercise of an option, if requested
by the Company upon advice of its counsel that the same is necessary or
desirable, deliver to the Company his/her written representation that he/she is
purchasing the shares for his/her own account for investment and not with a view
to public distribution or with any present intention of reselling any of such
shares, and deliver such other written representations as may be reasonably
requested by the Company to assure compliance with applicable laws. If a
Participant so requests, shares purchased upon the exercise of any option may be
issued in or transferred into the name of the Participant and another person
jointly with right of survivorship.

             15.  Changes in Capital Structures.  In the event of the payment of
any dividend payable in, or the making of any distribution of, Common Stock of
the Company to holders of record of Common Stock of the Company, which increases
the outstanding Common Stock of the Company

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by more than twenty-five (25%) percent during the period any option granted
under this Plan is outstanding or in the event of any stock split, combination
of shares, recapitalization or other similar change in the authorized capital
stock of the Company during such period or in the event of the merger or
consolidation of the Company into or with any other corporation or the
reorganization, dissolution, liquidation or winding up of the Company during
such period, Participants shall be entitled, upon the exercise of any
unexercised option held by them, to receive such new, additional or other shares
of stock of any class, or other property (including cash), as they would have
been entitled to receive as a matter of law in connection with such payment,
distribution, stock split, combination, recapitalization, as the case may be,
had they held the shares of the Common Stock being purchased upon exercise of
such option on the record date set for such payment or distribution or on the
date of such stock split, combination, recapitalization, change, merger,
consolidation, reorganization, dissolution or liquidation, and the option price
under any such option shall be appropriately adjusted. In case any such event
shall occur during the term of this Plan, the number of shares that may be
optioned and sold under this Plan as provided in Section 4. shall be
appropriately adjusted. The decision of the Board or the Committee, with respect
to all such adjustments shall be conclusive.

             16.  Nontransferabiltiy.  Options granted under this Plan shall not
be transferable other than by will or by the laws of descent and distribution,
and shall be exercisable only by the Participant or by Participant's heirs or
personal representatives in accordance with Section 12. of this Plan.

             17.  Transfers of Stock Received Upon Exercise.  Pursuant to
423(a) of the Code, there shall be no income tax consequences incurred upon the
grant of an option or upon the exercise of an option, provided, a Participant
who has received stock pursuant to exercise of an option to purchase Common
Stock, does not dispose of such shares of stock for a period of 2 years from the
date of the grant of the option or for a period of 1 year from the date of
transfer of such stock to Participant, whichever is later.

             18.  Re-Issuance of Shares.  Any shares of Common Stock which, by
reason of the expiration of an option or otherwise, are no longer subject to
purchase pursuant to an option granted under this Plan shall be available for
re-issuance under this Plan.

             19.  Interpretation.  The Board or the Committee shall interpret
this Plan and prescribe, amend or rescind rules and regulations relating to it
and make any and all other determinations necessary or advisable for its
administration.

             20.  Term of Plan, Amendment, Discontinuance.  This Plan shall be
or has been submitted for approval by the holders of at least a majority of the
shares called for that purpose within twelve months before or after adoption of
the Plan by the Board. Upon stockholder approval, the Plan shall be deemed
effective and adopted as of such date. This Plan, unless sooner terminated or
discontinued by the Board pursuant to this Section 19., shall expire on the
tenth anniversary of the Effective Date (except to the extent necessary for
administration of options exercisable but unexercised on that date), and no
options shall be granted under this Plan after that date. The Board may
terminate

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or discontinue this Plan at any time and may suspend this Plan or amend or
modify this Plan in any respect at any time or from time to time, without the
approval of the stockholders, except that the number of shares of Common Stock
that may be optioned and sold under this Plan, as provided in Section 4., above,
may not be changed (except pursuant to Section 15., above) and the class of
eligible employees to whom options may be granted, as provided in Sections 5.
and 6. above, may not be modified without the approval of the stockholders of
the Company and the Board or the Committee. No action of the Board, the
Committee or stockholders may alter or impair the rights of a Participant under
any option theretofore granted to him/her without his/her consent to such
action.

             21.  Effect of the Plan, etc.  Neither the adoption of this Plan
nor any action of the Board or Committee, shall be deemed to give any employee
any right to be granted an option to purchase Common Stock of the Company or any
other rights hereunder unless and until the Board or Committee shall have
adopted a resolution granting such employee an option, and then only to the
extent and on such terms and conditions as may be set forth in such resolution;
the terms and conditions of options granted under this Plan may differ from one
another as the Board or Committee shall at its discretion determine, as long as
all options granted under the Plan satisfy the requirements in this Plan.

Date Adopted by Board:                         January 30, 1997

Date Approved by Shareholders:                 May 22, 1997

Effective Date:                                May 22, 1997

             22.  Governing Law.  The validity, construction, interpretation and
effect of this instrument shall exclusively be governed by and determined in
accordance with the laws of the State of Delaware, except to the extent
preempted by federal law, which shall to such extent govern.

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