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             R.H. PHILLIPS, INC.

            1995 STOCK OPTION PLAN
                  AS AMENDED


1.  PURPOSE

     The purpose of this R.H. Phillips, Inc. 1995 Stock Option
Plan ("Plan") is to offer strong incentives to key employees, directors
and consultants of R.H. Phillips, Inc. (the "Company") who are
primarily responsible for the management and growth of the
Company's business and to encourage those persons to continue in
the Company's service, thereby advancing the interests of the
Company and its shareholders. 

     The word "affiliate" shall mean any corporation in an
unbroken chain of corporations beginning or ending with the
Company of which each corporation, other than the last in that chain,
directly or indirectly beneficially owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain. 

2.  OPTIONS

     Options granted under this Plan shall be either: (i) incentive
stock options, as that term is defined in SECTION 422 of the Internal Revenue
Code of 1986, as amended (the "Code"); or (ii) nonstatutory stock
options, which consist of options which are not incentive stock
options.  To the extent that the aggregate fair market value of the
shares exercisable for the first time during a calendar year under all
incentive stock options held by an optionee exceeds $100,000, those
options shall be treated as nonstatutory stock options to the extent of
such excess.

3.  ADMINISTRATION

     This Plan shall be administered by the Board of Directors of
the Company (the "Board").  The Board may designate a committee
of for the purpose of administering the Plan, composed of not less
than two (2) members of the Board (the "Committee").  If the
Committee is appointed, the Committee will have all powers
described in this Plan as belonging to the Board in administering the
Plan and the Board shall not in any way administer the Plan.  The
foregoing sentence notwithstanding, if any options are proposed to be
granted to members of the Committee, such a grant shall require the
approval of the full Board without including the vote of the members
of the Committee.

      Subject to the express terms and conditions of this Plan, the
Board shall have full power to construe this Plan and the terms of any
option granted under this Plan, to prescribe, amend and rescind rules
and regulations relating to this Plan or such options and to make all
other determinations necessary or advisable for this Plan's
administration.  All determinations by the Board with respect to these
matters shall be final and binding upon any persons having an interest
in this Plan or any options granted thereunder.

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4.  ELIGIBILITY

     The persons eligible to receive nonstatutory options under this
Plan shall be the directors, employees and consultants of the
Company or its affiliates.  Only employees of the Company shall be
eligible to receive incentive stock options.

5.  THE SHARES

     The Company may issue a maximum of 815,000 shares of its
Common Stock upon the exercise of options under this Plan.  The
number and kind of shares of stock or other securities issuable upon
the exercise of options shall be subject to adjustment as provided in
Section 7 of this Plan.  If any outstanding option which has not been
exercised in full terminates or expires, all unissued shares thereunder
shall become available for the grant of further options under this
Plan. 

6.  GRANT, TERMS AND CONDITIONS OF OPTIONS

     Options granted pursuant to this Plan shall be subject to the
following terms and conditions: 

     a.  Option Price.  The exercise price under each option shall
be determined by the Board, subject to the following limitations:

          i.  The exercise price of a nonstatutory stock option
shall not be less than eighty-five percent (85%) of the fair market
value of the shares subject thereto on the date the option is granted
(the "date of grant").

          ii.  The exercise price of an incentive stock option
shall not be less than one hundred percent (100%) of the fair market
value of the shares subject thereto on the date of grant.

          iii.  Any option granted to a person who beneficially
owns securities with more than ten (10%) of the voting power of the
Company or its affiliates shall have an exercise price equal to one
hundred ten percent (110%) of the fair market value of the shares
subject thereto on the date of grant.

     b.  Determination of Fair Market Value.  The fair market
value of the shares shall be determined by the Board in accordance
with the following procedures:

          i.  If the Common Stock of the Company is listed on
any national stock exchange, the Nasdaq National Market System or
the Nasdaq SmallCap Market, the fair market value of the stock shall
be the closing sales price for the stock (or the mean between the
closing bid and ask prices if no sales were reported), as quoted on
that system or exchange for the last trading day prior to the time of
determination) as reported in the Wall Street Journal or such other
source as the Board deems reliable.

          ii.  If there is no established market for the Common
Stock of the Company, the fair market value shall be determined by
the Board in accordance with any reasonable valuation method
selected by the Board, including those described in Treasury
Regulation SECTION 20.2031-2. 

     c.  Duration and Vesting of Options.  The duration of each
option shall be determined by the Board; provided, however, that no
option may be exercisable after one hundred twenty (120) months
following its date of grant and provided that no incentive stock
option granted to any person described in subsection 6.a.iii above 

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may be exercisable after sixty (60) months after its date of grant. 
Each option shall vest in a manner that the Board shall determine;
provided, however, that if compliance with the terms of SEC Rule
16b-3, as promulgated under the Exchange Act, otherwise requires,
no option may vest prior to six (6) months after the date of grant.  In
addition, in no event shall an option vest at a rate of less than twenty
percent (20%) per year during the first five (5) years following the
date of grant.

     d.  Exercise of Options.  Optionees may exercise their options
by delivering payment in the form of cash, certified or cashier's
check, personal bank check, or the equivalent thereof acceptable to
the Board, together with written notice to the Secretary of the
Company identifying the option being exercised and specifying the
number of shares being purchased.  In addition, the Board may allow
the optionee to use the following forms of payment of the purchase
price, under terms which the Board deems to be acceptable:

          i.  The surrender of shares of the Company's stock
owned by the optionee having a value, as determined by the Board,
equal to the exercise price, provided that if the optionee is subject to
short-swing profit liability under SECTION 16 of the Exchange Act, the timing
of the exercise must satisfy the requirements of Rule 16b-3 of the
SEC;

          ii.  The optionee's recourse promissory note, provided
that the promissory note shall be due and payable not more than four
(4) years after the option is exercised and that interest shall be
payable at least annually at a rate not less than that necessary to avoid
assessment of imputed interest under the Code; or

          iii.  The assignment of the proceeds of the sale of
some or all of the shares being acquired upon exercise of the option.

          iv.  Any other method of payment to the extent
permitted by applicable laws.

     No method of exercising an option shall be permitted if that
method would result in the violation of any applicable law, the
Company's articles of incorporation or bylaws or any agreement
restricting the redemption or repurchase of the Company's stock.  

     e.  Termination of Status.  Unless the Board allows the
optionee (or the optionee's personal representative or estate, as the
case may be) more time to exercise an option, an optionee's rights to
exercise an option shall be limited as follows upon the termination
of his status as an employee, director or consultant of the Company:
 
          i.  Death or Disability.  If an optionee's status is
terminated by death or disability, the optionee, the optionee's
qualified representative (in the event of the optionee's mental
disability) or the optionee's estate (in the event of optionee's death)
shall have the right for a period of six (6) months (or twelve (12)
months in the case of an incentive stock option) following the date
of such death or disability to exercise the option to the extent the
optionee was entitled to do so on the date of the optionee died or
became disabled; provided the date of exercise is in no event after
the expiration of the term of the option.  An optionee's "estate" shall
mean the optionee's legal representative or any person who acquires
the right to exercise an option by reason of the optionee's death.

          ii.  Other Reasons.  If an optionee's status is
terminated for any reason other than those mentioned above under
"Death or Disability", the optionee may within thirty (30) days (or
three (3) months in the case of an incentive stock option) following
the effective date of his termination exercise the option to 

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the extent the option was exercisable by the optionee on the effective
date of termination; provided the date of exercise is in no event after
the expiration of the term of the option.

     f.  Transferability of Option.  Each option shall be
transferrable only by will or the laws of descent and distribution.  To
the extent permitted by the rules of the California Commissioner of
Corporations, options may be assigned pursuant to a qualified
domestic relations order as defined in Title I of the Employee
Retirement Income Security Act or the rules promulgated under that
Act.  All other transfers or purported transfers of an option or any
interest therein shall be void.  Only the optionee may exercise an
option during the optionee's lifetime.

     g.  Rights as a Shareholder.  The optionee shall have no rights
as a shareholder by virtue of possessing an option and no such rights
with respect to any shares of stock issuable upon exercise of the
option until the date the optionee is issued a stock certificate
evidencing the optionee's ownership of the shares.  No adjustment
shall be made for dividends or other rights for which the record date
is prior to the date of such issuance, except as provided in Section 7
hereof. 

     h.  Written Agreement.  The terms and conditions of each
option granted under this Plan shall be contained in written
agreements between the Company and the optionee.  Except to the
extent that the Board otherwise determines, incentive stock options
granted under this Plan shall be subject to the terms and conditions
of the standard form of Incentive Stock Option Agreement attached
to this Plan as Exhibit A and nonstatutory stock options so granted
shall be subject to the terms and conditions set forth in the standard
form of agreement attached to this Plan as Exhibit B.  The Board may
vary or amend the terms of any individual option agreement or the
standard form agreements, provided that all variations and
amendments must be in accordance with this Plan.  No option shall
be deemed granted until the Board approves the grant and the
Company and optionee execute a written agreement with respect to
that option.

7.  ADJUSTMENT OF, AND CHANGES IN, THE SHARES

     a.   Adjustments.  If the shares of the Company's Common
Stock are changed into a different number of shares by reason of
reorganization, recapitalization, combination of shares, stock split,
reverse stock split or reclassification, or if the Company declares and
pays a stock dividend on the Common Stock, the Board shall add to
the shares issuable under this Plan the appropriate number of shares
to which each share of Common Stock is entitled.  If the Company's
Common Stock is changed into or exchanged for a different type of
security due to any reorganization, recapitalization, reclassification
or similar event, the Board shall substitute an appropriate number of
those securities for issuance under this Plan into which or for which
the Common Stock has been changed or exchanged.  The Board shall
make appropriate adjustments in the number of shares or kind of
securities which may be purchased upon exercise of any outstanding
option so that the optionee's proportionate shareholding interest in
the Company represented by the unexercised portion shall be
maintained as before the event.  Adjustments in outstanding options
shall be made without change to the total price of the unexercised
portion of the option and with a corresponding adjustment in the
option price per share.

     b.  Termination.  Except as provided in this subsection 7.b, all
options shall terminate immediately, notwithstanding the fact that the
options could otherwise be exercised, no later than two business days
prior to the occurrence of any of the following events:

          i.  The merger or consolidation of the Company,
whether or not the Company is the surviving corporation, if the
beneficial owners of the Company's securities immediately prior to
the merger or 

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consolidation as a group are the beneficial owners of less than 50%
of the surviving entity's outstanding voting securities immediately
after the merger or consolidation;

          ii.  The sale or exchange of all or substantially all of
the outstanding voting securities of the Company;

          iii.  The sale, exchange or transfer of all or
substantially all of the assets of the Company other than in the
ordinary course of business; or

          iv.  The dissolution or liquidation of the Company.

The Board may attempt to arrange with the surviving, continuing,
successor or acquiring corporation or entity, as the case may be, (the
"Acquiror") for the Acquiror to assume the obligations of the
Company with respect to any outstanding options or to provide
substitute options, provided that the Board shall be under no
obligation to do so and that, unless the Acquiror agrees otherwise, the
Acquiror shall not be required to assume these obligations or to
provide substitute options.  There shall be no cancellation of options
under this subsection 7.b if the Acquiror was an affiliate of the
Company immediately prior to the event described in (i), (ii) or (iii)
above or is a person, group or other entity which beneficially owned
over 10% of the Company's outstanding voting stock immediately
prior to the event.

     c.  No Other Adjustments.  Except for any issuance described
in subsection 7.a, no issuance by the Company of shares of stock of
any class or securities convertible into shares of any class of stock,
or the conversion of such securities into shares of any class of stock,
shall affect the number or price of shares of Common Stock subject
to the option, and no adjustment by reason thereof shall be made.
 
     d.  No Limitation on Company's Rights.  Nothing in this Plan
shall affect the right or power of the Company to adjust, reclassify,
reorganize or change its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets. 

8.  LEGAL COMPLIANCE: LISTING OR QUALIFICATION OF
SHARES

     The grant of any option under this Plan and the exercise
thereof shall be conditioned upon the prior registration and/or
qualification of the options and underlying shares under applicable
federal and state securities laws, or the availability of exemptions
therefrom.  If at any time the Board shall determine that the listing or
qualification of shares subject to any option on any securities
exchange or under any applicable law, or the consent or approval of
any governmental regulatory body, is necessary or desirable, the
option may not be exercised in whole or in part unless that listing,
qualification, consent or approval shall have been effected or
obtained, free of any condition not acceptable to the Board. 

9.  AMENDMENT AND TERMINATION

     The Board shall have complete power and authority to
terminate or amend this Plan; provided, however, that the Board shall
not, without the approval of the shareholders of the Company, amend
this Plan in a manner that requires shareholder approval for
continued compliance with, if applicable to this Plan or the
Company, the rules of the California Commissioner of Corporations,
Rule 16b-3 of the SEC, SECTIOIN 422 of the Code or any successor law or
regulation.  Except as provided in Section 7, no termination,
modification or amendment of this Plan shall affect any option
outstanding as of the date of that termination or amendment without
the consent of the optionee.  Unless sooner terminated, this Plan shall
terminate on the date which 

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is ten (10) years after the Board adopted this Plan.  No option may be
granted under this Plan after this Plan is terminated. 

10.  EFFECTIVENESS

     This Plan shall become effective immediately following the
adoption of this Plan by the Board of Directors, provided that this
Plan shall terminate if it is not approved by the shareholders of the
Company within twelve (12) months of its adoption by the Board of
Directors.  Options granted under this Plan shall terminate and not be
exercisable unless the shareholders of the Company approve this Plan
within that twelve (12) month period.
  
11.  INFORMATION TO OPTIONEES

     The Company shall provide the optionees with copies of all
annual reports and other information given to the Company's
shareholders.  In addition, the Company shall provide the optionees
with that information which it is required to give them by law or
pursuant to the rules of the California Commissioner of Corporations.

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