EXHIBIT 10.40

                           ELEXSYS INTERNATIONAL, INC.

                             1995 STOCK OPTION PLAN

                              ADOPTED JULY 19, 1995

                      AMENDED AND RESTATED JANUARY 8, 1996








1. PURPOSES.

                  (a) The  purpose  of the Plan is to  provide  a means by which
selected  Employees and  Directors of and  Consultants  to the Company,  and its
Affiliates, may be given an opportunity to purchase stock of the Company.

                  (b) The  Company,  by means of the Plan,  seeks to retain  the
services of persons who are now Employees or Directors of or  Consultants to the
Company or its  Affiliates,  to secure and retain the services of new Employees,
Directors and Consultants,  and to provide  incentives for such persons to exert
maximum efforts for the success of the Company and its Affiliates.

                  (c) The Company intends that the Options issued under the Plan
shall,  in the discretion of the Board or any Committee to which  responsibility
for  administration of the Plan has been delegated  pursuant to subsection 3(c),
be either  Incentive  Stock Options or Nonstatutory  Stock Options.  All Options
shall be separately  designated  Incentive Stock Options or  Nonstatutory  Stock
Options at the time of grant,  and in such form as issued pursuant to Section 6,
and a separate  certificate or certificates  will be issued for shares purchased
on exercise of each type of Option.

<PAGE>


2.  DEFINITIONS.

                  (a)  "Affiliate"  means any parent  corporation  or subsidiary
corporation,  whether now or hereafter  existing,  as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.

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

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

                  (d)  "Committee"  means a Committee  appointed by the Board in
accordance with subsection 3(c) of the Plan.

                  (e) "Company"  means Elexsys  International,  Inc., a Delaware
corporation.

                  (f)  "Consultant"  means any  person,  including  an  advisor,
engaged by the Company or an Affiliate to render consulting  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.

                  (g) "Continuous Status as an Employee, Director or Consultant"
means that the service of an individual to the Company,  whether as an Employee,
Director or Consultant, is not interrupted or terminated. The Board, in its sole
discretion, may determine whether Continuous Status as an Employee,  Director or
Consultant  shall 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; or (ii) transfers between the Company, Affiliates or their
successors.

                  (h) "Covered  Employee" means the chief executive  officer and
the four (4) other  highest  compensated  officers of the Company for whom total
compensation is required to be 

                                       2.

<PAGE>

reported to  stockholders  under the Exchange Act, as determined for purposes of
Section 162(m) of the Code.

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

                  (j) "Disinterested Person" means a Director who either (i) was
not during the one year prior to service as an administrator of the Plan granted
or  awarded  equity  securities  pursuant  to the Plan or any other  plan of the
Company or any affiliate  entitling the  participants  therein to acquire equity
securities  of  the  Company  or any  affiliate  except  as  permitted  by  Rule
16b-3(c)(2)(i);  or (ii) is otherwise considered to be a "disinterested  person"
in  accordance  with  Rule  16b-3(c)(2)(i),   or  any  other  applicable  rules,
regulations or interpretations of the Securities and Exchange Commission.

                  (k)  "Employee"  means  any  person,  including  Officers  and
Directors,  employed by the Company or any  Affiliate  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.

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

                  (m) LESS  FLEXIBILITY:  "Fair Market Value"  means,  as of any
date, the value of the common stock of the Company determined as follows:

                           (1) 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 were  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

                                       3.
<PAGE>

day of  determination,  as  reported  in the Wall  Street  Journal or such other
source as the Board deems reliable;

                           (2) If the  common  stock  is  quoted  on the  NASDAQ
System (but not on the National Market System thereof) or is regularly quoted by
a recognized  securities  dealer but selling  prices are not reported,  the Fair
Market  Value of a share of common  stock shall be the mean  between the bid and
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 Board deems reliable;

                           (3) In the absence of an  established  market for the
common  stock,  the Fair Market Value shall be  determined  in good faith by the
Board.

                  (n)  "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.

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

                  (p) "Officer"  means a person who is an officer of the Company
within  the  meaning  of  Section  16 of the  Exchange  Act  and the  rules  and
regulations promulgated thereunder.

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

                  (r) "Option  Agreement" means a written  agreement between the
Company and an Optionee  evidencing  the terms and  conditions  of an individual
Option grant. Each Option Agreement shall be subject to the terms and conditions
of the Plan.

                                       4.

<PAGE>

                  (s) "Optionee" means a person who holds an outstanding Option.

                  (t) "Outside  Director" means a Director who either (i) is not
a current  employee of the Company or an  "affiliated  corporation"  (within the
meaning of the Treasury  regulations  promulgated  under  Section  162(m) of the
Code),  is not a former  employee of the Company or an "affiliated  corporation"
receiving  compensation  for prior  services  (other than  benefits  under a tax
qualified  pension  plan),  was not an officer of the Company or an  "affiliated
corporation"  at any time,  and is not  currently  receiving  direct or indirect
remuneration from the Company or an "affiliated corporation" for services in any
capacity other than as a Director,  or (ii) is otherwise  considered an "outside
director" for purposes of Section 162(m) of the Code.

                  (u) "Plan" means this Elexsys  International,  Inc. 1995 Stock
Option Plan.

                  (v) "Rule  16b-3"  means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3,  as in effect when  discretion is being  exercised with
respect to the Plan.

3.  ADMINISTRATION.

                  (a) The Plan  shall be  administered  by the Board  unless and
until  the  Board  delegates  administration  to a  Committee,  as  provided  in
subsection 3(c).

                  (b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

                           (1) To  determine  from  time  to time  which  of the
persons  eligible  under the Plan  shall be granted  Options;  when and how each
Option shall be granted;  whether an Option will be an Incentive Stock Option or
a Nonstatutory  Stock Option;  the provisions of each Option granted (which need
not be  identical),  including the time or times such Option may be exercised

                                       5.
<PAGE>

in whole or in part;  and the  number  of shares  for  which an Option  shall be
granted to each such person.

                           (2) To construe  and  interpret  the Plan and Options
granted under it, and to establish,  amend and revoke rules and  regulations for
its  administration.  The Board, in the exercise of this power,  may correct any
defect,  omission or inconsistency in the Plan or in any Option Agreement,  in a
manner and to the extent it shall deem  necessary  or expedient to make the Plan
fully effective.

                           (3) To amend  the Plan or an Option  as  provided  in
Section 11.

                           (4) Generally, to exercise such powers and to perform
such  acts as the  Board  deems  necessary  or  expedient  to  promote  the best
interests of the Company.

                  (c) The Board  may  delegate  administration  of the Plan to a
committee composed of not fewer than two (2) members (the  "Committee"),  all of
the members of which Committee shall be  Disinterested  Persons and may also be,
in  the  discretion  of the  Board,  Outside  Directors.  If  administration  is
delegated to a Committee,  the  Committee  shall have,  in  connection  with the
administration of the Plan, the powers  theretofore  possessed by the Board (and
references  in this Plan to the Board  shall  thereafter  be to the  Committee),
subject,  however, to such resolutions,  not inconsistent with the provisions of
the  Plan,  as may be  adopted  from  time to time by the  Board.  The Board may
abolish the Committee at any time and revest in the Board the  administration of
the Plan.  Notwithstanding anything in this Section 3 to the contrary, the Board
or the Committee may delegate to a committee of one or more members of the Board
the authority to grant Options to eligible  persons who (1) are not then subject
to Section  16 of the  Exchange  Act and/or (2) are either (i) not then  Covered
Employees  and  are  not  expected  to be

                                       6.
<PAGE>

Covered  Employees  at the time of  recognition  of income  resulting  from such
Option,  or (ii) not persons with  respect to whom the Company  wishes to comply
with Section 162(m) of the Code.

                  (d) Any  requirement  that an  administrator  of the Plan be a
Disinterested  Person  shall not apply if the Board or the  Committee  expressly
declares that such requirement shall not apply. Any  Disinterested  Person shall
otherwise comply with the requirements of Rule 16b-3.

4.  SHARES SUBJECT TO THE PLAN.

                  (a)  Subject  to the  provisions  of Section  10  relating  to
adjustments  upon  changes  in stock,  the stock  that may be sold  pursuant  to
Options shall not exceed in the aggregate One Million  (1,000,000) shares of the
Company's  common stock.  If any Option shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the stock
not purchased  under such Option shall revert to and again become  available for
issuance under the Plan.

                  (b) The stock  subject to the Plan may be  unissued  shares or
reacquired shares, bought on the market or otherwise.

5. ELIGIBILITY.

                  (a) Incentive  Stock Options may be granted only to Employees.
Nonstatutory  Stock  Options  may be granted  only to  Employees,  Directors  or
Consultants.

                  (b) A Director  shall in no event be eligible for the benefits
of the Plan unless at the time  discretion  is exercised in the selection of the
Director as a person to whom Options may be granted,  or in the determination of
the number of shares  which may be covered by Options  granted to the  Director:
(i) the Board  has  delegated  its  discretionary  authority  over the Plan to a
Committee  which  consists  solely of  Disinterested  Persons;  or (ii) the Plan
otherwise  complies

                                       7.

<PAGE>

with the  requirements of Rule 16b-3.  The Board shall otherwise comply with the
requirements of Rule 16b-3. This subsection 5(b) shall not apply if the Board or
Committee expressly declares that it shall not apply.

                  (c) No person  shall be eligible for the grant of an Incentive
Stock  Option if, at the time of grant,  such  person  owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock  possessing  more than ten percent
(10%) of the total combined  voting power of all classes of stock of the Company
or of any of its Affiliates  unless the exercise  price of such Incentive  Stock
Option is at least one hundred ten  percent  (110%) of the Fair Market  Value of
such  stock at the date of grant  and the  Option is not  exercisable  after the
expiration of five (5) years from the date of grant.

                  (d)  Subject  to the  provisions  of Section  10  relating  to
adjustments  upon  changes in stock,  no person  shall be eligible to be granted
Options  covering more than Four Hundred Fifty Thousand  (450,000) shares of the
Company's  common stock in any calendar  year.


6. OPTION PROVISIONS.

         Each  Option  shall be in such form and shall  contain  such  terms and
conditions  as the Board  shall deem  appropriate.  The  provisions  of separate
Options  need  not  be  identical,   but  each  Option  shall  include  (through
incorporation of provisions  hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

                  (a) Term. No Option shall be exercisable  after the expiration
of ten (10) years from the date it was granted.

                  (b) Price.  The exercise price of each Incentive  Stock Option
shall be not less than one hundred  percent  (100%) of the Fair Market  Value of
the stock subject to the Option on the 

                                       8.
<PAGE>

date the Option is granted; the exercise price of each Nonstatutory Stock Option
shall be not less than eighty-five percent (85%) of the Fair Market Value of the
stock  subject to the Option on the date the Option is granted.  Notwithstanding
the foregoing,  an Option  (whether an Incentive  Stock Option or a Nonstatutory
Stock Option) may be granted with an exercise price lower than that set forth in
the  preceding  sentence if such Option is granted  pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

                  (c)  Consideration.  The  purchase  price  of  stock  acquired
pursuant  to an Option  shall be paid,  to the extent  permitted  by  applicable
statutes  and  regulations,  either  (i) in  cash  at the  time  the  Option  is
exercised,  or (ii) at the discretion of the Board or the Committee, at the time
of the grant of the Option, (A) by delivery to the Company of other common stock
of the Company,  (B) according to a deferred  payment  arrangement,  except that
payment of the common  stock's "par value" (as defined in the  Delaware  General
Corporation  Law) shall not be made by deferred  payment,  or other  arrangement
(which may include, without limiting the generality of the foregoing, the use of
other common stock of the Company) with the person to whom the Option is granted
or to whom the Option is transferred  pursuant to subsection 6(d), or (C) in any
other form of legal consideration that may be acceptable to the Board.

         In the case of any  deferred  payment  arrangement,  interest  shall be
payable at least  annually  and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code,  of any amounts  other than  amounts  stated to be interest  under the
deferred payment arrangement.

                                       9.

<PAGE>

                  (d)  Transferability.  An Incentive  Stock Option shall not be
transferable  except by will or by the laws of  descent  and  distribution,  and
shall be  exercisable  during the  lifetime of the person to whom the  Incentive
Stock Option is granted only by such person.  A Nonstatutory  Stock Option shall
not be transferable except by will or by the laws of descent and distribution or
pursuant to a qualified  domestic relations order satisfying the requirements of
Rule 16b-3 and the rules thereunder (a "QDRO"),  and shall be exercisable during
the  lifetime of the person to whom the Option is granted only by such person or
any transferee pursuant to a QDRO. The person to whom the Option is granted may,
by  delivering  written  notice to the Company,  in a form  satisfactory  to the
Company, designate a third party who, in the event of the death of the Optionee,
shall thereafter be entitled to exercise the Option.

                  (e) Vesting. The total number of shares of stock subject to an
Option may, but need not, be allotted in periodic  installments  (which may, but
need not, be equal).  The Option  Agreement  may provide  that from time to time
during  each of such  installment  periods,  the Option  may become  exercisable
("vest") with respect to some or all of the shares allotted to that period,  and
may be  exercised  with  respect to some or all of the shares  allotted  to such
period  and/or any prior period as to which the Option became vested but was not
fully exercised. The Option may be subject to such other terms and conditions on
the time or times when it may be exercised (which may be based on performance or
other  criteria)  as the  Board may deem  appropriate.  The  provisions  of this
subsection  6(e) are  subject to any Option  provisions  governing  the  minimum
number of shares as to which an Option may be exercised.

                  (f)  Securities  Law  Compliance.  The Company may require any
Optionee,  or any person to whom an Option is transferred under subsection 6(d),
as a condition of  exercising  any

                                      10.
<PAGE>

such Option,  (1) to give written  assurances  satisfactory to the Company as to
the Optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative  reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters,  and that he
or  she  is  capable  of  evaluating,  alone  or  together  with  the  purchaser
representative,  the merits and risks of exercising the Option;  and (2) to give
written  assurances  satisfactory  to the  Company  stating  that such person is
acquiring  the stock subject to the Option for such person's own account and not
with any present  intention of selling or otherwise  distributing the stock. The
foregoing requirements,  and any assurances given pursuant to such requirements,
shall be  inoperative if (i) the issuance of the shares upon the exercise of the
Option  has  been  registered  under  a then  currently  effective  registration
statement under the Securities Act of 1933, as amended (the  "Securities  Act"),
or (ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may require the Optionee to provide
such other representations,  written assurances or information which the Company
shall determine is necessary, desirable or appropriate to comply with applicable
securities  and other laws as a condition of granting an Option to such Optionee
or permitting the Optionee to exercise such Option. The Company may, upon advice
of counsel to the Company,  place legends on stock certificates issued under the
Plan as such  counsel  deems  necessary or  appropriate  in order to comply with
applicable securities laws,  including,  but not limited to, legends restricting
the transfer of the stock.

                  (g) Termination of Employment or Relationship as a Director or
Consultant.  In the  event  an  Optionee's  Continuous  Status  as an  Employee,
Director  or  Consultant  terminates

                                      11.
<PAGE>

(other than upon the Optionee's death or disability),  the Optionee may exercise
his or her Option (to the extent that the  Optionee  was entitled to exercise it
as of the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months after the termination of the Optionee's
Continuous  Status as an  Employee,  Director or  Consultant,  or such longer or
shorter period specified in the Option Agreement,  or (ii) the expiration of the
term of the Option as set forth in the Option Agreement.  If, after termination,
the Optionee  does not exercise his or her Option  within the time  specified in
the Option Agreement, the Option shall terminate, and the shares covered by such
Option shall revert to and again become available for issuance under the Plan.

                  (h)  Disability  of  Optionee.  In  the  event  an  Optionee's
Continuous Status as an Employee,  Director or Consultant terminates as a result
of the  Optionee's  disability,  the Optionee may exercise his or her Option (to
the extent  that the  Optionee  was  entitled  to  exercise it as of the date of
termination),  but only  within such period of time ending on the earlier of (i)
the date  twelve  (12)  months  following  such  termination  (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the
term of the  Option as set  forth in the  Option  Agreement.  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
and again become  available for issuance under 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 and again become available for issuance under the Plan.

                                      12.
<PAGE>

         (i) Death of Optionee. In the event of the death of an Optionee during,
or within a period  specified in the Option  Agreement after the termination of,
the Optionee's  Continuous  Status as an Employee,  Director or Consultant,  the
Option may be exercised (to the extent the Optionee was entitled to exercise the
Option  as of the date of  death)  by the  Optionee's  estate,  by a person  who
acquired  the right to  exercise  the Option by bequest or  inheritance  or by a
person  designated to exercise the option upon the Optionee's  death pursuant to
subsection  6(d),  but only  within the period  ending on the earlier of (i) the
date eighteen (18) months following the date of death (or such longer or shorter
period specified in the Option Agreement), or (ii) the expiration of the term of
such Option as set forth in the Option Agreement.  If, at the time of death, the
Optionee  was not  entitled to  exercise  his or her entire  Option,  the shares
covered by the  unexercisable  portion of the Option  shall  revert to and again
become available for issuance under the Plan. If, after death, the Option is not
exercised within the time specified herein, the Option shall terminate,  and the
shares  covered by such Option shall revert to and again  become  available  for
issuance under the Plan.

                  (j) Early  Exercise.  The Option may, but need not,  include a
provision whereby the Optionee may elect at any time while an Employee, Director
or Consultant to exercise the Option as to any part or all of the shares subject
to the Option  prior to the full vesting of the Option.  Any unvested  shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.

                  (k)  Withholding.  To the extent  provided  by the terms of an
Option  Agreement,  the  Optionee  may satisfy any  federal,  state or local tax
withholding  obligation  relating  to the  exercise of such Option by any of the
following means or by a combination of such means: (1) tendering 

                                      13.
<PAGE>


a cash payment;  (2)  authorizing the Company to withhold shares from the shares
of the  common  stock  otherwise  issuable  to the  Optionee  as a result of the
exercise of the Option;  or (3) delivering to the Company owned and unencumbered
shares of the common stock of the Company.

7. COVENANTS OF THE COMPANY.

                  (a) During the terms of the  Options,  the Company  shall keep
available  at all times the number of shares of stock  required to satisfy  such
Options.

                  (b) The  Company  shall  seek to obtain  from each  regulatory
commission or agency having  jurisdiction over the Plan such authority as may be
required  to issue  and sell  shares  of stock  upon  exercise  of the  Options;
provided,  however,  that this  undertaking  shall not  require  the  Company to
register  under the  Securities  Act  either  the Plan,  any Option or any stock
issued or issuable  pursuant to any such Option.  If, after reasonable  efforts,
the Company is unable to obtain from any such  regulatory  commission  or agency
the  authority  which  counsel for the Company  deems  necessary  for the lawful
issuance and sale of stock under the Plan,  the Company  shall be relieved  from
any  liability for failure to issue and sell stock upon exercise of such Options
unless and until such  authority is obtained. 


8. USE OF PROCEEDS FROM STOCK.

         Proceeds from the sale of stock  pursuant to Options  shall  constitute
general funds of the Company.

9.  MISCELLANEOUS.

                  (a) The Board shall have the power to  accelerate  the time at
which an Option may first be exercised or the time during which an Option or any
part  thereof  will  vest  pursuant  to 

                                      14.
<PAGE>


subsection 6(e),  notwithstanding  the provisions in the Option stating the time
at which it may first be exercised or the time during which it will vest.

                  (b)  Neither an  Optionee  nor any person to whom an Option is
transferred  under  subsection  6(d)  shall be deemed to be the holder of, or to
have any of the rights of a holder with  respect to, any shares  subject to such
Option unless and until such person has satisfied all  requirements for exercise
of the Option pursuant to its terms.

                  (c) Nothing in the Plan or any  instrument  executed or Option
granted pursuant thereto shall confer upon any Employee, Director, Consultant or
Optionee  any right to continue  in the employ of the  Company or any  Affiliate
[(or to continue  acting as a Director or  Consultant) or shall affect the right
of the Company or any  Affiliate to terminate  the  employment  of any Employee,
with or without  cause,  to remove any  Director as  provided  in the  Company's
By-Laws  and the  provisions  of the  General  Corporation  Law of the  State of
Delaware,  or to terminate the relationship of any Consultant in accordance with
the terms of that Consultant's  agreement with the Company or Affiliate to which
such Consultant is providing services.

                  (d) To  the  extent  that  the  aggregate  Fair  Market  Value
(determined at the time of grant) of stock with respect to which Incentive Stock
Options are  exercisable  for the first time by any Optionee during any calendar
year under all plans of the  Company  and its  Affiliates  exceeds  one  hundred
thousand dollars  ($100,000),  the Options or portions thereof which exceed such
limit  (according to the order in which they were  granted)  shall be treated as
Nonstatutory Stock Options.

                  (e) (1) The Board or the Committee shall have the authority to
effect,  at any time and from time to time (i) the repricing of any  outstanding
Options  under the Plan and/or (ii) with

                                      15.
<PAGE>


the  consent  of the  affected  holders  of  Options,  the  cancellation  of any
outstanding Options and the grant in substitution  therefor of new Options under
the Plan covering the same or different  numbers of shares of common stock,  but
having an exercise  price per share not less than  eighty-five  percent (85%) of
the Fair Market  Value (one hundred  percent  (100%) of the Fair Market Value in
the case of an Incentive  Stock Option or, in the case an Incentive Stock Option
granted to a ten percent (10%)  stockholder (as defined in subsection 5(c)), not
less than one hundred and ten percent (110%) of the Fair Market Value) per share
of common stock on the new grant date.

                           (1) Shares  subject to an Option  canceled under this
subsection  9(e) shall  continue  to be counted  against  the  maximum  award of
Options  permitted to be granted  pursuant to subsection  5(d) of the Plan.  The
repricing of an Option under this subsection  9(e),  resulting in a reduction of
the exercise price,  shall be deemed to be a cancellation of the original Option
and the grant of a substitute  Option; in the event of such repricing,  both the
original and the substituted Options shall be counted against the maximum awards
of Options  permitted to be granted pursuant to subsection 5(d) of the Plan. The
provisions  of this  subsection  9(e)  shall be  applicable  only to the  extent
required by Section 162(m) of the Code.


10.  ADJUSTMENTS UPON CHANGES IN STOCK.

                  (a) If any change is made in the stock subject to the Plan, or
subject  to  any  Option   (through   merger,   consolidation,   reorganization,
recapitalization,  stock dividend,  dividend in property other than cash,  stock
split,  liquidating dividend,  combination of shares, exchange of shares, change
in  corporate  structure  or other  transaction  not  involving  the  receipt of
consideration by the Company),  the Plan will be  appropriately  adjusted in the
class(es)  and  maximum  number  of  shares  subject  to the  Plan  pursuant  to
subsection  4(a) and the maximum 

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number of  shares  subject  to award to any  person  during  any  calendar  year
pursuant to subsection  5(d), and the outstanding  Options will be appropriately
adjusted  in the  class(es)  and  number of shares  and price per share of stock
subject to such outstanding Options. Such adjustments shall be made by the Board
or Committee, the determination of which shall be final, binding and conclusive.
(The  conversion  of any  convertible  securities  of the  Company  shall not be
treated as a  "transaction  not  involving the receipt of  consideration  by the
Company.")

                  (b) In the event of: (1) a dissolution,  liquidation,  or sale
of all or  substantially  all of the  assets  of the  Company;  (2) a merger  or
consolidation  in which the  Company  is not the  surviving  corporation;  (3) a
reverse merger in which the Company is the surviving  corporation but the shares
of the Company's common stock outstanding  immediately  preceding the merger are
converted  by virtue of the merger into other  property,  whether in the form of
securities,  cash or otherwise;  or (4) the acquisition by any person, entity or
group within the meaning of Section  13(d) or 14(d) of the Exchange  Act, or any
comparable successor provisions (excluding any employee benefit plan, or related
trust,  sponsored or  maintained by the Company or any Affiliate of the Company)
of the beneficial  ownership (within the meaning of Rule 13d-3 promulgated under
the Act, or comparable successor rule) of securities of the Company representing
at least fifty  percent (50%) of the combined  voting power  entitled to vote in
the election of directors,  then to the extent  permitted by applicable law and,
with respect to Options held by persons then  performing  services as Employees,
Directors  or  Consultants,  the time during which such Options may be exercised
shall be  accelerated  prior to such  event and the  Options  terminated  if not
exercised after such  acceleration and at or prior to such event.


                                      17.
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11. AMENDMENT OF THE PLAN AND OPTIONS.

                  (a) The  Board at any time,  and from time to time,  may amend
the Plan. However, except as provided in Section 10 relating to adjustments upon
changes  in stock,  no  amendment  shall be  effective  unless  approved  by the
stockholders  of the  Company  within  twelve  (12)  months  before or after the
adoption of the amendment, where the amendment will:

                           (1)  Increase  the  number  of  shares  reserved  for
Options under the Plan;

                           (2) Modify the  requirements  as to  eligibility  for
participation in the Plan (to the extent such modification  requires stockholder
approval in order for the Plan to satisfy the requirements of Section 422 of the
Code); or

                           (3)  Modify  the  Plan  in  any  other  way  if  such
modification  requires stockholder approval in order for the Plan to satisfy the
requirements  of Section 422 of the Code or to comply with the  requirements  of
Rule 16b-3.

                  (b) The  Board  may in its sole  discretion  submit  any other
amendment to the Plan for stockholder approval,  including,  but not limited to,
amendments to the Plan intended to satisfy the requirements of Section 162(m) of
the Code and the regulations  promulgated  thereunder regarding the exclusion of
performance-based  compensation  from the limit on  corporate  deductibility  of
compensation paid to certain executive officers.

                  (c) It is expressly  contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide  Optionees
with the maximum benefits provided or to be provided under the provisions of the
Code and the  regulations  promulgated  thereunder  relating to Incentive  Stock
Options and/or to bring the Plan and/or Incentive Stock Options granted under it
into compliance therewith.

                                      18.
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                  (d) Rights and  obligations  under any Option  granted  before
amendment of the Plan shall not be impaired by any  amendment of the Plan unless
(i) the  Company  requests  the  consent  of the  person to whom the  Option was
granted and (ii) such person consents in writing.

                  (e) The  Board at any time,  and from time to time,  may amend
the terms of any one or more  Options;  provided,  however,  that the rights and
obligations  under any Option shall not be impaired by any such amendment unless
(i) the  Company  requests  the  consent  of the  person to whom the  Option was
granted  and (ii) such  person  consents  in  writing. 

12. TERMINATION OR SUSPENSION OF THE PLAN.

                  (a) The Board may suspend or  terminate  the Plan at any time.
Unless sooner terminated, the Plan shall terminate on July 18, 2005, which shall
be  within  ten (10)  years  from the date the Plan is  adopted  by the Board or
approved by the  stockholders of the Company,  whichever is earlier.  No Options
may be  granted  under  the  Plan  while  the Plan is  suspended  or after it is
terminated.

                  (b) Rights and obligations  under any Option granted while the
Plan is in effect  shall not be impaired by  suspension  or  termination  of the
Plan,  except  with the  written  consent  of the  person to whom the Option was
granted.

13.  EFFECTIVE DATE OF PLAN.

         The Plan shall become  effective  as  determined  by the Board,  but no
Options granted under the Plan shall be exercised  unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be within
twelve (12) months before or after the date the Plan is adopted by the Board.


                                      19.