Exhibit 10.14



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                     IMPERIAL PETROLEUM RECOVERY CORPORATION

                      2002 STOCK OPTION AND INCENTIVE PLAN

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                                TABLE OF CONTENTS
                                                                                                    Page

<S>   <C>                                                                                           <C>
1.    PURPOSE........................................................................................1
2.    DEFINITIONS....................................................................................1
3.    ADMINISTRATION OF THE PLAN.....................................................................6
      3.1.     Board.................................................................................6
      3.2.     Committee.............................................................................6
      3.3.     Terms of Awards.......................................................................6
      3.4.     No Liability..........................................................................7
4.    STOCK SUBJECT TO THE PLAN......................................................................7
5.    EFFECTIVE DATE AND TERM OF THE PLAN............................................................8
      5.1.     Effective Date........................................................................8
      5.2.     Term..................................................................................8
6.    AWARD ELIGIBILITY..............................................................................9
      6.1.     Company or Subsidiary Employees; Service Providers; Other Persons.....................9
      6.2.     Successive Awards.....................................................................9
7.    LIMITATIONS ON GRANTS..........................................................................9
      7.1.     Limitation on Shares of Stock Subject to Awards and Cash Awards.......................9
      7.2.     Limitations on Incentive Stock Options................................................9
8.    AWARD AGREEMENT................................................................................10
9.    OPTION PRICE...................................................................................10
10.   VESTING, TERM AND EXERCISE OF OPTIONS..........................................................10
      10.1.    Vesting...............................................................................10
      10.2.    Term..................................................................................11
      10.3.    Acceleration..........................................................................11
      10.4.    Termination of Service................................................................11
      10.5.    Limitations on Exercise of Option.....................................................11
      10.6.    Method of Exercise....................................................................11
      10.7.    Form of Payment.......................................................................12
      10.8.    Rights of Holders of Options..........................................................12
      10.9.    Delivery of Stock Certificates........................................................12
      10.10.   Reload Options........................................................................12
11.   TRANSFERABILITY OF OPTIONS.....................................................................13
      11.1.    Transferability of Options............................................................13
      11.2.    Family Transfers......................................................................13
12.   STOCK APPRECIATION RIGHTS......................................................................13
      12.1.    Right to Payment......................................................................14
      12.2.    Other Terms...........................................................................14
13.   RESTRICTED STOCK...............................................................................14
      13.1.    Grant of Restricted Stock or Restricted Stock Units...................................14
      13.2.    Restrictions..........................................................................14
      13.3.    Restricted Stock Certificates.........................................................15
      13.4.    Rights of Holders of Restricted Stock.................................................15
      13.5.    Rights of Holders of Restricted Stock Units...........................................15
      13.6.    Termination of Service................................................................15
      13.7.    Delivery of Stock and Payment Therefor................................................16
14.   DEFERRED STOCK AWARDS..........................................................................16
      14.1.    Nature of Deferred Stock Awards.......................................................16
      14.2.    Election to Receive Deferred Stock Awards in Lieu of Compensation.....................16
      14.3.    Rights as a Stockholder...............................................................16
      14.4.    Restrictions on Transfer..............................................................17
      14.5.    Termination...........................................................................17

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<S>   <C>                                                                                           <C>
15.   UNRESTRICTED STOCK AWARDS......................................................................17
16.   PERFORMANCE STOCK AWARDS.......................................................................17
      16.1.    Nature of Performance Stock Awards....................................................17
      16.2.    Rights as a Stockholder...............................................................18
      16.3.    Termination of Service................................................................18
17.   DIVIDEND EQUIVALENT RIGHTS.....................................................................18
      17.1.    Dividend Equivalent Rights............................................................18
      17.2.    Interest Equivalents..................................................................19
      17.3.    Termination of Service................................................................19
18.   CERTAIN PROVISIONS APPLICABLE TO AWARDS........................................................19
      18.1.    Stand-Alone, Additional, Tandem, and Substitute Awards................................19
      18.2.    Form and Timing of Payment Under Awards; Deferrals....................................19
      18.3.    Performance and Annual Incentive Awards...............................................20
               18.3.1. Performance Conditions........................................................20
               18.3.2. Performance or Annual Incentive Awards Granted to
                       Designated Covered Employees..................................................20
               18.3.3. Written Determinations........................................................22
               18.3.4. Status of Section  18.3.2 Awards  Under Code  Section 162(m)..................22
19.   PARACHUTE LIMITATIONS..........................................................................23
20.   REQUIREMENTS OF LAW............................................................................23
      20.1.    General...............................................................................23
      20.2.    Rule 16b-3............................................................................24
      20.3.    Limitation Following a Hardship Distribution..........................................24
21.   AMENDMENT AND TERMINATION OF THE PLAN..........................................................25
22.   EFFECT OF CHANGES IN CAPITALIZATION............................................................25
      22.1.     Changes in Stock.....................................................................25
      22.2.     Reorganization  in Which the Company Is the Surviving Entity and in
                Which No Change in Control Occurs....................................................26
      22.3.     Reorganization, Sale of Assets or Sale of Stock Which Involves a Change in
                Control..............................................................................26
      22.4.     Adjustments..........................................................................27
      22.5.     No Limitations on Company............................................................27
23.   POOLING........................................................................................27
24.   DISCLAIMER OF RIGHTS...........................................................................27
25.   NONEXCLUSIVITY OF THE PLAN.....................................................................28
26.   WITHHOLDING TAXES..............................................................................28
27.   CAPTIONS.......................................................................................29
28.   OTHER PROVISIONS...............................................................................29
29.   NUMBER AND GENDER..............................................................................29
30.   SEVERABILITY...................................................................................29
31.   GOVERNING LAW..................................................................................29

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                     IMPERIAL PETROLEUM RECOVERY CORPORATION

                      2002 STOCK OPTION AND INCENTIVE PLAN


         Imperial  Petroleum  Recovery  Corporation,  a Nevada  corporation (the
"Company"),  sets forth herein the terms of the Company's  2002 Stock Option and
Incentive Plan (the "Plan").

 1.       PURPOSE

     The  purpose of the Plan is to enhance  the  Company's  ability to attract,
retain,  and compensate  highly  qualified  officers,  key employees,  and other
persons,  and to motivate such  officers,  key  employees,  and other persons to
serve the Company and its Affiliates  (as defined  herein) and to expend maximum
effort to improve the business results and earnings of the Company, by providing
to such  officers,  key employees and other persons an opportunity to acquire or
increase a direct  proprietary  interest in the operations and future success of
the Company and with other financial incentives.  To this end, the Plan provides
for the grant of stock options,  stock  appreciation  rights,  restricted stock,
restricted  stock units,  deferred  stock  awards,  unrestricted  stock  awards,
performance stock awards,  dividend  equivalent  rights,  performance awards and
annual  incentive  awards in  accordance  with the terms  hereof.  Stock options
granted under the Plan may be  non-qualified  stock  options or incentive  stock
options, as provided herein.

2.       DEFINITIONS

        For purposes of interpreting the Plan and related  documents  (including
Award Agreements), the following definitions shall apply:

     2.1 "Affiliate"  means,  with respect to the Company,  any company or other
trade or business that  controls,  is  controlled by or is under common  control
with the  Company  within  the  meaning  of Rule 405 of  Regulation  C under the
Securities Act, including, without limitation, any Subsidiary.

     2.2 "Annual Incentive Award" means a conditional right granted to a Grantee
under Section  18.3.2  hereof to receive a cash  payment,  Stock or other Award,
unless  otherwise  determined  by the  Committee,  after the end of a  specified
fiscal year.

     2.3  "Award"  means  a  grant  of  an  Option,  Stock  Appreciation  Right,
Restricted Stock,  Restricted Stock Unit,  Deferred Stock,  Unrestricted  Stock,
Performance Stock,  Dividend Equivalent Rights,  Performance or Annual Incentive
Awards under the Plan.


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     2.4 "Award Agreement" means the written agreement between the Company and a
Grantee that evidences and sets out the terms and conditions of an Award.

     2.5  "Benefit  Arrangement"  shall have the meaning set forth in Section 19
hereof.

     2.6 "Board" means the Board of Directors of the Company.

     2.7 "Cause" means, as determined by the Board and unless otherwise provided
in an applicable  employment  agreement  with the Company or an  Affiliate,  (i)
gross  negligence or willful  misconduct in connection  with the  performance of
duties;  (ii)  conviction  of a  criminal  offense  (other  than  minor  traffic
offenses); or (iii) material breach of any term of any employment, consulting or
other  services,  confidentiality,   intellectual  property  or  non-competition
agreements,  if any, between the Service Provider or employee and the Company or
an Affiliate.

     2.8 "Change in Control" means a merger, consolidation, or reorganization of
the  Company  with one or more other  entities  in which the  Company is not the
surviving  entity, a sale of  substantially  all of the assets of the Company to
another entity, or any transaction (including,  without limitation,  a merger or
reorganization  in which the Company is the  surviving  entity)  approved by the
Board that  results in any person or entity (or person or  entities  acting as a
group  or  otherwise  in  concert)  owning  fifty  percent  (50%) or more of the
combined voting power of all classes of securities of the Company.

     2.9 "Code" means the Internal  Revenue Code of 1986, as now in effect or as
hereafter amended.

     2.10 "Committee"  means a committee of, and designated from time to time by
resolution  of, the Board,  which shall  consist of no fewer than two members of
the Board,  none of whom shall be an officer or other  salaried  employee of the
Company or any Affiliate.

     2.11 "Company" means Imperial Petroleum Recovery Corporation.

     2.12 "Covered  Employee"  means a Grantee who is a Covered  Employee within
the meaning of Section 162(m)(3) of the Code.

     2.13 "Deferred Stock" means a right,  granted to a Grantee under Section 14
hereof,  to  receive  Stock,  cash  or a  combination  thereof  at the  end of a
specified deferral period.

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     2.7  "Disability"  means  the  Grantee  is unable  to  perform  each of the
essential   duties  of  such  Grantee's   position  by  reason  of  a  medically
determinable  physical or mental  impairment  which is potentially  permanent in
character or which can be expected to last for a  continuous  period of not less
than 12  months;  provided,  however,  that,  with  respect  to rules  regarding
expiration of an Incentive Stock Option  following  termination of the Grantee's
Service,  Disability  shall  mean  the  Grantee  is  unable  to  engage  in  any
substantial gainful activity by reason of a medically  determinable  physical or
mental  impairment  which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.

     2.14  "Dividend  Equivalent"  means a right,  granted  to a  Grantee  under
Section 17 hereof, to receive cash, Stock,  other Awards or other property equal
in value to  dividends  paid with  respect  to a  specified  number of shares of
Stock, or other periodic payments.

     2.15 "Effective Date" means November 1, 2002.

     2.16 "Exchange  Act" means the  Securities  Exchange Act of 1934, as now in
effect or as hereafter amended.

     2.17 "Fair Market Value" means the value of a share of Stock, determined as
follows: if on the Grant Date or other determination date the Stock is listed on
an established national or regional stock exchange, admitted to quotation on The
Nasdaq Stock Market, or publicly traded on an established securities market, the
Fair Market Value of a share of Stock shall be the closing price of the Stock on
such  exchange  or in such  market (if there is more than one such  exchange  or
market the Board  shall  determine  the  appropriate  exchange or market) on the
Grant  Date or such  other  determination  date (or if there is no such  closing
price reported,  the Fair Market Value shall be the mean between the highest bid
and lowest  asked prices or between the high and low sale prices on such trading
day) or,  if no sale of Stock is  reported  for such  trading  day,  on the next
preceding  day on which any sale shall have been  reported.  If the Stock is not
listed on such an exchange,  quoted on the Nasdaq Stock Market or traded on such
a market, Fair Market Value shall be the value of the Stock as determined by the
Board in good faith.

     2.18  "Family  Member"  means a person who is a spouse,  child,  stepchild,
grandchild,   parent,   stepparent,   grandparent,   sibling,   niece,   nephew,
mother-in-law,  father-in-law,  son-in-law, daughter-in-law,  brother-in-law, or
sister-in-law,  including  adoptive  relationships,  of the Grantee,  any person
sharing the Grantee's  household  (other than a tenant or employee),  a trust in
which these persons have more than fifty percent of the beneficial  interest,  a
foundation  in which these  persons (or the Grantee)  control the  management of
assets,  and any other  entity in which these  persons (or the Grantee) own more
than  fifty  percent  of the voting  interests.  2.19  "Grant  Date"  means,  as
determined by the Board or authorized Committee,  the latest to occur of (i) the
date as of which  the  Board  approves  an  Award,  (ii)  the date on which  the
recipient of an Award first becomes eligible to receive an Award under Section 6
hereof, or (iii) such other date as may be specified by the Board.

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     2.20  "Grantee"  means a person who  receives  or holds an Award  under the
Plan.

     2.21 "Incentive  Stock Option" means an "incentive stock option" within the
meaning  of  Section  422 of the Code,  or the  corresponding  provision  of any
subsequently enacted tax statute, as amended from time to time.

     2.22 "Non-qualified  Stock Option" means an Option that is not an Incentive
Stock Option.

     2.23  "Option"  means an option  to  purchase  one or more  shares of Stock
pursuant to the Plan.

     2.24  "Option  Price"  means the  purchase  price  for each  share of Stock
subject to an Option.

     2.25  "Other  Agreement"  shall  have the  meaning  set forth in Section 19
hereof.

     2.26 "Outside  Director"  means a member of the Board who is not an officer
or employee of the Company.

     2.27  "Performance  Award" means a  conditional  right granted to a Grantee
under  Section  18.3  hereof to receive a cash  payment,  Stock or other  Award,
unless otherwise determined by the Committee, after the end of a period of up to
10 years.

     2.28 "Performance Stock Award" means Awards granted pursuant to Section 16.

     2.29 "Plan" means this Imperial Petroleum  Recovery  Corporation 2002 Stock
Option and Incentive Plan.

     2.30  "Reporting  Person"  means a person who is required  to file  reports
under Section 16(a) of the Exchange Act.

     2.31 "Restricted  Period" means the period during which Restricted Stock or
Restricted  Stock Units are subject to  restrictions  or conditions  pursuant to
Section 13.2 hereof.

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     2.32  "Restricted  Stock"  means  shares  of  Stock,  awarded  to a Grantee
pursuant to Section 13 hereof, that are subject to restrictions and to a risk of
forfeiture.

     2.33 "Restricted  Stock Unit" means a unit awarded to a Grantee pursuant to
Section 13 hereof,  which  represents a conditional  right to receive a share of
Stock in the  future,  and which is  subject  to  restrictions  and to a risk of
forfeiture.

     2.34 "Securities Act" means the Securities Act of 1933, as now in effect or
as hereafter amended.

     2.35  "Service"  means service as an employee,  officer,  director or other
Service Provider of the Company or an Affiliate.  Unless otherwise stated in the
applicable Award  Agreement,  a Grantee's change in position or duties shall not
result in interrupted or terminated  Service,  so long as such Grantee continues
to be an employee, officer, director or other Service Provider of the Company or
an  Affiliate.  Subject to the  preceding  sentence,  whether a  termination  of
Service  shall have occurred for purposes of the Plan shall be determined by the
Board, which determination shall be final, binding and conclusive.

     2.36 "Service  Provider"  means a consultant  or adviser to the Company,  a
manager  of the  Company's  properties  or  affairs,  or other  similar  service
provider or Affiliate,  and employees of any of the  foregoing,  as such persons
may be designated from time to time by the Board pursuant to Section 6 hereof.

     2.37  "Stock"  means the common  stock,  par value $.001 per share,  of the
Company.

     2.38 "Stock Appreciation Right" or "SAR" means a right granted to a Grantee
under Section 12 hereof.

     2.39 "Subsidiary" means any "subsidiary  corporation" of the Company within
the meaning of Section 424(f) of the Code.

     2.40 "Termination Date" means the date upon which an Option shall terminate
or expire, as set forth in Section 10.2 hereof.

     2.41 "Unrestricted  Stock Award" means an Award granted pursuant to Section
15 hereof.


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3. ADMINISTRATION OF THE PLAN

     3.1. Board

     The  Board  shall  have  such  powers  and   authorities   related  to  the
administration  of the Plan as are  consistent  with the  Company's  articles of
incorporation  and by-laws and  applicable  law. The Board shall have full power
and  authority  to take all actions and to make all  determinations  required or
provided for under the Plan,  any Award or any Award  Agreement,  and shall have
full power and  authority to take all such other actions and make all such other
determinations  not  inconsistent  with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate  to the  administration
of  the  Plan,  any  Award  or  any  Award  Agreement.   All  such  actions  and
determinations  shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous  consent of the Board executed in
writing in accordance with the Company's  articles of incorporation  and by-laws
and applicable  law. The  interpretation  and  construction  by the Board of any
provision  of the  Plan,  any Award or any  Award  Agreement  shall be final and
conclusive. To the extent permitted by law, the Board may delegate its authority
under  the  Plan to a member  of the  Board or to an  executive  officer  of the
Company who is a member of the Board.

     3.2. Committee.

     The Board from time to time may  delegate  to a  Committee  such powers and
authorities related to the administration and implementation of the Plan, as set
forth in  Section  3.1 above and in other  applicable  provisions,  as the Board
shall determine,  consistent with the articles of  incorporation  and by-laws of
the Company  and  applicable  law. In the event that the Plan,  any Award or any
Award Agreement entered into hereunder provides for any action to be taken by or
determination  to be  made  by the  Board,  such  action  may be  taken  or such
determination  may be made by the  Committee if the power and authority to do so
has  been  delegated  to the  Committee  by the  Board as  provided  for in this
Section.  Unless otherwise expressly determined by the Board, any such action or
determination  by the Committee shall be final,  binding and conclusive.  To the
extent permitted by law, the Committee may delegate its authority under the Plan
to a member of the Board or an executive  officer of the Company who is a member
of the Board.

     3.3. Terms of Awards.

     Subject to the other terms and conditions of the Plan, the Board shall have
full and final authority:

         (i) to designate Grantees,

         (ii) to determine the type or types of Awards to be made to a Grantee,


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         (iii) to  determine  the  number of shares of Stock to be subject to an
Award,

         (iv) to establish the terms and  conditions  of each Award  (including,
but not limited to, the exercise price of any Option, the nature and duration of
any  restriction or condition (or provision for lapse  thereof)  relating to the
vesting,  exercise,  transfer,  or forfeiture of an Award or the shares of Stock
subject  thereto,  and any terms or conditions  that may be necessary to qualify
Options as Incentive Stock Options),

         (v) to prescribe the form of each Award Agreement evidencing an Award,

         (vi) to amend,  modify,  or  supplement  the  terms of any  outstanding
Award, and

         (vii) in order  to  effectuate  the  purposes  of the Plan but  without
amending  the Plan,  to modify  Awards to eligible  individuals  who are foreign
nationals  or are  individuals  who are  employed  outside the United  States to
recognize differences in local law, tax policy, or custom.

     As a condition to any subsequent  Award, the Board shall have the right, at
its discretion,  to require Grantees to return to the Company Awards  previously
made under the Plan.  Subject to the terms and  conditions of the Plan, any such
new Award shall be upon such terms and  conditions as are specified by the Board
at the time the new  Award is made.  The  Board  shall  have the  right,  in its
discretion, to make Awards in substitution or exchange for any other award under
another  plan of the  Company,  any  Affiliate,  or any  business  entity  to be
acquired by the Company or an Affiliate.  The Company may retain the right in an
Award  Agreement  to cause a  forfeiture  of the gain  realized  by a Grantee on
account of actions taken by the Grantee in violation or breach of or in conflict
with any non-competition  agreement,  any agreement prohibiting  solicitation of
employees  or  clients  of  the  Company  or  any   Affiliate   thereof  or  any
confidentiality  obligation with respect to the Company or any Affiliate thereof
or otherwise in competition  with the Company or any Affiliate  thereof,  to the
extent specified in such Award Agreement applicable to the Grantee. Furthermore,
the  Company  may annul an Award if the Grantee is an employee of the Company or
an Affiliate  thereof and is terminated  for Cause as defined in the  applicable
Award Agreement or the Plan, as applicable.

3.4. No Liability.

     No member of the Board or of the  Committee  shall be liable for any action
or  determination  made in good faith  with  respect to the Plan or any Award or
Award Agreement.

4. STOCK SUBJECT TO THE PLAN

     Subject to  adjustment  as  provided  in  Section 22 hereof,  the number of
shares of Stock  available  for issuance  under the Plan shall be the greater of
6,250,000 or 20% of outstanding  shares of stock  commencing as of the effective
date of the  plan.  Stock  issued  or to be  issued  under  the  Plan  shall  be
authorized  but  unissued  shares.  If any  shares  covered  by an Award are not
purchased or are forfeited, or if an Award otherwise terminates without delivery
of any Stock subject thereto, then the number of shares of Stock counted against
the  aggregate  number of shares  available  under the Plan with respect to such
Award  shall,  to the extent of any such  forfeiture  or  termination,  again be
available for making Awards under the Plan. If the exercise  price of any Option
granted under the Plan is satisfied by tendering  shares of Stock to the Company
(by either  actual  delivery  or by  attestation),  only the number of shares of
Stock issued net of the shares of Stock tendered  shall be deemed  delivered for
purposes of  determining  the maximum  number of shares of Stock  available  for
delivery under the Plan.


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5. EFFECTIVE DATE AND TERM OF THE PLAN

     5.1. Effective Date.

     The Plan shall be effective as of the Effective  Date,  subject to approval
of the Plan by the Company's stockholders within one year of the Effective Date.
Upon approval of the Plan by the stockholders of the Company as set forth above,
all  Awards  made under the Plan on or after the  Effective  Date shall be fully
effective  as if the  stockholders  of the Company had  approved the Plan on the
Effective  Date.  If the  stockholders  fail to approve the Plan within one year
after the Effective  Date, any Awards made hereunder  shall be null and void and
of no effect.

     5.2. Term.

     The Plan shall terminate automatically ten (10) years after its adoption by
the Board and may be  terminated  on any earlier date as provided in Section 21.


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<PAGE>

6. AWARD ELIGIBILITY

     6.1. Company or Subsidiary Employees; Service Providers; Other Persons

     Subject  to  Section  7,  Awards  may be made  under  the Plan to:  (i) any
employee  of,  or a  Service  Provider  to,  the  Company  or of any  Affiliate,
including any such employee or Service Provider who is an officer or director of
the Company,  or of any  affiliate,  as the Board shall  determine and designate
from time to time;  such  individual  must have twelve (12) months of continuous
satisfactory  employment  in  order to be  eligible  for  participation  in this
program;  (ii) any  Outside  Director,  and  (iii) any  other  individual  whose
participation  in the  Plan is  determined  to be in the best  interests  of the
Company by the Board. 6.2. Successive Awards.

     An  eligible  person  may  receive  more than one  Award,  subject  to such
restrictions as are provided herein.

7. LIMITATIONS ON GRANTS

     7.1. Limitation on Shares of Stock Subject to Awards and Cash Awards.

     During any time when the Company has a class of equity security  registered
under  Section 12 of the  Exchange  Act,  the maximum  number of shares of Stock
subject to Options that can be awarded under the Plan to any person eligible for
an Award under  Section 6 hereof is five hundred  thousand  (500,000)  per year.
During any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, the maximum number of shares that can be awarded
under the Plan,  other than pursuant to an Option to any person  eligible for an
Award under Section 6 hereof is five hundred  thousand  (500,000) per year.  The
preceding  limitations in this Section 7.1 are subject to adjustment as provided
in  Section  22  hereof.  The  maximum  amount  that may be  earned as an Annual
Incentive  Award or other cash Award in any fiscal year by any one Grantee shall
be [$100,000] and the maximum  amount that may be earned as a Performance  Award
or other cash Award in respect of a performance  period by any one Grantee shall
be [$100,000].

     7.2. Limitations on Incentive Stock Options.

     An Option  shall  constitute  an  Incentive  Stock  Option  only (i) if the
Grantee of such Option is an employee  of the Company or any  Subsidiary  of the
Company;  (ii)  to  the  extent  specifically  provided  in  the  related  Award
Agreement;  and  (iii)  to the  extent  that the  aggregate  Fair  Market  Value
(determined  at the time the  Option is  granted)  of the  shares of Stock  with
respect  to which  all  Incentive  Stock  Options  held by such  Grantee  become
exercisable  for the first time during any calendar year (under the Plan and all
other  plans of the  Grantee's  employer  and its  Affiliates)  does not  exceed
$100,000. This limitation shall be applied by taking Options into account in the
order in which they were granted.


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<PAGE>

8. AWARD AGREEMENT

     Each Award  granted  pursuant  to the Plan shall be  evidenced  by an Award
Agreement,  to be executed by the  Company and by the  Grantee,  in such form or
forms as the Board shall from time to time determine.  Award Agreements  granted
from time to time or at the same time need not contain  similar  provisions  but
shall be consistent with the terms of the Plan. Each Award Agreement  evidencing
an Award of Options  shall  specify  whether  such  Options  are  intended to be
Non-qualified  Stock Options or Incentive  Stock Options,  and in the absence of
such specification such options shall be deemed  Non-qualified Stock Options.

9. OPTION PRICE

     The Option  Price of each Option  shall be fixed by the Board and stated in
the Award Agreement  evidencing such Option.  The Option Price shall be at least
the aggregate Fair Market Value on the Grant Date of the shares of Stock subject
to the  Option;  provided,  however,  that in the  event  that a  Grantee  would
otherwise be  ineligible  to receive an Incentive  Stock Option by reason of the
provisions of Sections  422(b)(6) and 424(d) of the Code  (relating to ownership
of more than ten percent of the Company's  outstanding  Stock), the Option Price
of an Option  granted to such Grantee that is intended to be an Incentive  Stock
Option  shall be not less than the  greater of the par value of a share of Stock
or 110 percent of the Fair  Market  Value of a share of Stock on the Grant Date.
In no case shall the Option  Price of any Option be less than the par value of a
share of Stock.

10. VESTING, TERM AND EXERCISE OF OPTIONS

     10.1. Vesting.

     Subject to Sections  10.2 and 22.3 hereof,  each Option  granted  under the
Plan shall become  exercisable at such times and under such  conditions as shall
be  determined by the Board and stated in the Award  Agreement.  For purposes of
this Section  10.1,  fractional  numbers of shares of Stock subject to an Option
shall be rounded down to the next nearest whole  number.  The Board may provide,
for example,  in the Award Agreement for (i) accelerated  exercisability  of the
Option  in the event the  Grantee's  Service  terminates  on  account  of death,
Disability or another event,  (ii) expiration of the Option prior to its term in
the  event  of  the  termination  of  the  Grantee's  Service,  (iii)  immediate
forfeiture  of the Option in the event the Grantee's  Service is terminated  for
Cause or (iv) unvested Options to be exercised subject to the Company's right of
repurchase with respect to unvested shares of Stock.

                                       10
<PAGE>

     10.2. Term.

     Each  Option  granted  under the Plan  shall  terminate,  and all rights to
purchase  shares of Stock  thereunder  shall cease,  upon the  expiration of ten
years from the date such Option is granted,  or under such  circumstances and on
such date  prior  thereto  as is set forth in the Plan or as may be fixed by the
Board  and  stated  in  the  Award  Agreement   relating  to  such  Option  (the
"Termination Date"); provided, however, that in the event that the Grantee would
otherwise be  ineligible  to receive an Incentive  Stock Option by reason of the
provisions of Sections  422(b)(6) and 424(d) of the Code  (relating to ownership
of more than ten percent of the  outstanding  Stock),  an Option granted to such
Grantee  that  is  intended  to  be an  Incentive  Stock  Option  shall  not  be
exercisable  after the  expiration  of five  years  from its Grant  Date.

     10.3. Acceleration.

     Any  limitation  on the  exercise  of an  Option  contained  in  any  Award
Agreement  may be  rescinded,  modified  or  waived  by the  Board,  in its sole
discretion,  at any time and from  time to time  after  the  Grant  Date of such
Option,  so as to  accelerate  the time at which the  Option  may be  exercised.
Notwithstanding  any other provision of the Plan, no Option shall be exercisable
in whole or in part prior to the date the Plan is approved  by the  stockholders
of the Company as provided in Section 5.1 hereof.

     10.4. Termination of Service.

     Each Award  Agreement shall set forth the extent to which the Grantee shall
have the right to exercise the Option  following  termination  of the  Grantee's
Service.  Such  provisions  shall be  determined  in the sole  discretion of the
Board,  need not be uniform among all Options  issued  pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of Service.

     10.5. Limitations on Exercise of Option.

     Notwithstanding any other provision of the Plan, in no event may any Option
be exercised, in whole or in part, prior to the date the Plan is approved by the
stockholders of the Company as provided herein, or after ten years following the
Grant Date, or after the occurrence of an event referred to in Section 22 hereof
which results in termination of the Option.

     10.6. Method of Exercise.

     An Option that is exercisable may be exercised by the Grantee's delivery to
the Company of written  notice of exercise on any business day, at the Company's
principal  office,  addressed to the  attention of the Board.  Such notice shall
specify the number of shares of Stock with  respect to which the Option is being
exercised and shall be accompanied by payment in full of the Option Price of the
shares for which the Option is being exercised.  The minimum number of shares of
Stock with respect to which an Option may be exercised,  in whole or in part, at
any time shall be the lesser of (i) 100 shares or such  lesser  number set forth
in the  applicable  Award  Agreement  and  (ii) the  maximum  number  of  shares
available for purchase under the Option at the time of exercise.



                                       11
<PAGE>

     10.7. Form of Payment

     Payment  of the  Option  Price for the  shares  purchased  pursuant  to the
exercise  of an  Option  shall  be  made  (i) in  cash  or in  cash  equivalents
acceptable  to the Company;  (ii) through the tender to the Company of shares of
Stock,  which shares, if acquired from the Company,  shall have been held for at
least six months and which  shall be valued,  for  purposes of  determining  the
extent to which the Option  Price has been paid  thereby,  at their Fair  Market
Value  on the  date of  exercise;  or  (iii)  by a  combination  of the  methods
described  in (i) and (ii).  Unless the Board  provides  otherwise  in the Award
Agreement,  payment in full of the Option Price need not  accompany  the written
notice of  exercise  provided  that the  notice  of  exercise  directs  that the
certificate  or  certificates  for the  shares of Stock for which the  Option is
exercised  be delivered to a licensed  broker  acceptable  to the Company as the
agent for the individual exercising the Option and, at the time such certificate
or certificates  are delivered,  the broker tenders to the Company cash (or cash
equivalents  acceptable to the Company) equal to the Option Price for the shares
of Stock  purchased  pursuant to the  exercise of the Option plus the amount (if
any) of federal  and/or  other taxes which the Company may in its  judgment,  be
required to withhold  with respect to the exercise of the Option.  An attempt to
exercise  any Option  granted  hereunder  other than as set forth above shall be
invalid and of no force and effect.

     10.8. Rights of Holders of Options

     Unless otherwise  stated in the applicable  Award Agreement,  an individual
holding or  exercising  an Option shall have none of the rights of a shareholder
(for example,  the right to receive cash or dividend  payments or  distributions
attributable  to the  subject  shares  of Stock or to direct  the  voting of the
subject  shares of Stock ) until the shares of Stock  covered  thereby are fully
paid and issued to him.  Except as provided in Section 22 hereof,  no adjustment
shall be made for dividends,  distributions or other rights for which the record
date  is  prior  to  the  date  of  such  issuance.

     10.9. Delivery of Stock Certificates.

     Promptly  after the  exercise  of an Option by a Grantee and the payment in
full of the Option  Price,  such Grantee  shall be entitled to the issuance of a
stock certificate or certificates  evidencing his or her ownership of the shares
of Stock subject to the Option.

     10.10. Reload Options.

     At the discretion of the Board and subject to such restrictions,  terms and
conditions  as the  Board  may  establish,  Options  granted  under the Plan may
include a "reload" feature  pursuant to which a Grantee  exercising an Option by
the  delivery of a number of shares of Stock in  accordance  with  Section  10.6
hereof would  automatically  be granted an  additional  Option (with an exercise
price  equal to the Fair  Market  Value of the Stock on the date the  additional
Option is  granted  and with such  other  terms as the  Board  may  provide)  to
purchase  that  number of  shares  of Stock  equal to the  number  delivered  to
exercise the original  Option with an Option term equal to the  remainder of the
original Option term unless the Board  otherwise  determines in the Option Award
Agreement for the original grant.

                                       12
<PAGE>

11. TRANSFERABILITY OF OPTIONS

     11.1. Transferability of Options

     Except as provided in Section 11.2, during the lifetime of a Grantee,  only
the Grantee (or, in the event of legal incapacity or incompetency, the Grantee's
guardian or legal  representative) may exercise an Option. Except as provided in
Section 11.2, no Option shall be  assignable or  transferable  by the Grantee to
whom it is granted,  other than by will or the laws of descent and distribution.

     11.2. Family Transfers.

     If authorized in the applicable  Award  Agreement,  a Grantee may transfer,
not for value,  all or part of an Option which is not an Incentive  Stock Option
to any Family  Member.  For the purpose of this Section  11.2, a "not for value"
transfer  is a transfer  which is (i) a gift,  (ii) a transfer  under a domestic
relations order in settlement of marital property rights; or (iii) a transfer to
an entity in which more than fifty percent of the voting  interests are owned by
Family  Members (or the  Grantee) in  exchange  for an interest in that  entity.
Following a transfer  under this Section 11.2, any such Option shall continue to
be subject to the same terms and conditions as were applicable immediately prior
to transfer.  Subsequent  transfers of transferred Options are prohibited except
to Family Members of the original  Grantee in accordance  with this Section 11.2
or by will or the laws of descent and distribution. The events of termination of
Service of Section 10.4 hereof shall  continue to be applied with respect to the
original  Grantee,  following  which  the  Option  shall be  exercisable  by the
transferee only to the extent, and for the periods specified in Section 10.4.

     12. STOCK APPRECIATION RIGHTS

     The Board each is  authorized  to grant SARs to Grantees  on the  following
terms and conditions:


                                       13
<PAGE>

     12.1. Right to Payment.

     A SAR shall confer on the Grantee to whom it is granted a right to receive,
upon exercise  thereof,  the excess of (A) the Fair Market Value of one share of
Stock on the date of exercise  over (B) the grant price of the SAR as determined
by the Board.  The grant  price of an SAR shall not be less than the Fair Market
Value of a share of Stock on the date of grant  except as  provided  in  Section
18.1. 12.2. Other Terms.

     The Board shall  determine at the date of grant or thereafter,  the time or
times at which and the circumstances under which a SAR may be exercised in whole
or in part  (including  based on achievement of performance  goals and/or future
service  requirements),  the time or times at which  SARs  shall  cease to be or
become  exercisable  following  termination of Service or upon other conditions,
the method of exercise,  method of settlement,  form of consideration payable in
settlement,  method by or forms in which Stock will be delivered or deemed to be
delivered to Grantees, whether or not a SAR shall be in tandem or in combination
with any other Award, and any other terms and conditions of any SAR. SARs may be
either freestanding or in tandem with other Awards. 13. RESTRICTED STOCK

     13.1. Grant of Restricted Stock or Restricted Stock Units.

     The Board may from time to time grant  Restricted Stock or Restricted Stock
Units to persons  eligible to receive Awards under Section 6 hereof,  subject to
such restrictions,  conditions and other terms as the Board may determine.

     13.2. Restrictions.

     At the time a grant of Restricted  Stock or Restricted Stock Units is made,
the Board shall establish a period of time (the "Restricted  Period") applicable
to such  Restricted  Stock or Restricted  Stock Units.  Each Award of Restricted
Stock or Restricted Stock Units may be subject to a different Restricted Period.
The Board may, in its sole  discretion,  at the time a grant of Restricted Stock
or  Restricted  Stock Units is made,  prescribe  restrictions  in addition to or
other than the expiration of the Restricted  Period,  including the satisfaction
of corporate or individual  performance  objectives,  which may be applicable to
all or any  portion  of the  Restricted  Stock  or  Restricted  Stock  Units  in
accordance  with  Section  18.3.1  and  18.3.2.  Neither  Restricted  Stock  nor
Restricted Stock Units may be sold, transferred,  assigned, pledged or otherwise
encumbered  or  disposed  of  during  the  Restricted  Period  or  prior  to the
satisfaction of any other  restrictions  prescribed by the Board with respect to
such  Restricted  Stock  or  Restricted  Stock  Units.

                                       14
<PAGE>

     13.3. Restricted Stock Certificates.

     The Company  shall issue,  in the name of each  Grantee to whom  Restricted
Stock has been  granted,  stock  certificates  representing  the total number of
shares  of  Restricted  Stock  granted  to the  Grantee,  as soon as  reasonably
practicable  after the Grant Date.  The Board may provide in an Award  Agreement
that either (i) the  Secretary of the Company shall hold such  certificates  for
the Grantee's  benefit until such time as the  Restricted  Stock is forfeited to
the  Company  or the  restrictions  lapse,  or (ii) such  certificates  shall be
delivered to the Grantee, provided, however, that such certificates shall bear a
legend  or  legends  that  complies  with  the  applicable  securities  laws and
regulations and makes  appropriate  reference to the restrictions  imposed under
the Plan and the Award Agreement.

     13.4. Rights of Holders of Restricted Stock.

     Unless  the Board  otherwise  provides  in an Award  Agreement,  holders of
Restricted  Stock  shall  have the  right to vote  such  Stock  and the right to
receive any dividends declared or paid with respect to such Stock. The Board may
provide that any dividends paid on Restricted Stock must be reinvested in shares
of Stock,  which may or may not be subject to the same  vesting  conditions  and
restrictions  applicable to such Restricted  Stock. All  distributions,  if any,
received by a Grantee with respect to Restricted  Stock as a result of any stock
split, stock dividend, combination of shares, or other similar transaction shall
be subject to the restrictions applicable to the original Grant. 13.5. Rights of
Holders of Restricted Stock Units.

     Unless  the Board  otherwise  provides  in an Award  Agreement,  holders of
Restricted Stock Units shall have no rights as stockholders of the Company.  The
Board may provide in an Award Agreement  evidencing a grant of Restricted  Stock
Units  that the holder of such  Restricted  Stock  Units  shall be  entitled  to
receive, upon the Company's payment of a cash dividend on its outstanding Stock,
a cash  payment  for each  Restricted  Stock  Unit held  equal to the  per-share
dividend paid on the Stock. Such Award Agreement may also provide that such cash
payment will be deemed  reinvested  in  additional  Restricted  Stock Units at a
price per unit  equal to the Fair  Market  Value of a share of Stock on the date
that such dividend is paid.

     13.6. Termination of Service.

     Unless the Board  otherwise  provides in an Award  Agreement  or in writing
after the  Award  Agreement  is  issued,  upon the  termination  of a  Grantee's
Service,  any  Restricted  Stock or Restricted  Stock Units held by such Grantee
that has not vested,  or with respect to which all applicable  restrictions  and
conditions  have  not  lapsed,  shall  immediately  be  deemed  forfeited.  Upon
forfeiture of Restricted Stock or Restricted Stock Units, the Grantee shall have
no further  rights with respect to such Award,  including but not limited to any
right to vote Restricted Stock or any right to receive dividends with respect to
shares of Restricted Stock or Restricted Stock Units.


                                       15
<PAGE>

     13.7. Delivery of Stock and Payment Therefor.

     Upon  the  expiration  or  termination  of the  Restricted  Period  and the
satisfaction of any other  conditions  prescribed by the Board, the restrictions
applicable to shares of Restricted  Stock or Restricted Stock Units shall lapse,
and,  unless  otherwise  provided in the Award  Agreement,  upon  payment by the
Grantee to the Company,  in cash or by check,  of the aggregate par value of the
shares of Stock  represented by such Restricted  Stock or Restricted Stock Units
(or  such  other  higher  purchase  price  determined  by the  Board),  a  stock
certificate for such shares shall be delivered,  free of all such  restrictions,
to the Grantee or the Grantee's  beneficiary or estate,  as the case may be. 14.
DEFERRED STOCK AWARDS

     14.1. Nature of Deferred Stock Awards.

     A Deferred  Stock  Award is an Award of phantom  stock  units to a Grantee,
subject to restrictions and conditions as the Board may determine at the time of
grant.  Conditions  may be based on continuing  Service  and/or  achievement  of
pre-established  performance goals and objectives. The grant of a Deferred Stock
Award is contingent on the Grantee executing the Deferred Stock Award Agreement.
The terms and  conditions  of each such  agreement  shall be  determined  by the
Board,  and such terms and  conditions  may differ among  individual  Awards and
Grantees.  At the end of the deferral  period,  the Deferred Stock Award, to the
extent vested, shall be paid to the Grantee in the form of shares of Stock.

     14.2. Election to Receive Deferred Stock Awards in Lieu of Compensation.

     The Board may, in its sole discretion, permit a Grantee to elect to receive
a portion of the cash  compensation  or Restricted  Stock Award otherwise due to
such Grantee in the form of a Deferred  Stock Award.  Any such election shall be
made in writing  and shall be  delivered  to the  Company no later than the date
specified by the Board and in accordance  with rules and procedures  established
by the Board. The Board shall have the sole right to determine whether and under
what  circumstances  to permit such elections and to impose such limitations and
other terms and conditions thereon as the Board deems appropriate.

     14.3. Rights as a Stockholder.

     During  the  deferral   period,  a  Grantee  shall  have  no  rights  as  a
Stockholder;  provided,  however, that the Grantee may be credited with Dividend
Equivalent  Rights  with  respect to the  phantom  stock  units  underlying  his
Deferred  Stock  Award,  subject to such terms and  conditions  as the Board may
determine.


                                       16
<PAGE>

     14.4. Restrictions on Transfer.

     A Deferred Stock Award may not be sold, assigned,  transferred,  pledged or
otherwise encumbered or disposed of during the deferral period.

     14.5. Termination.

     Except  as may  otherwise  be  provided  by the  Board  either in the Award
Agreement or, in writing after the Award Agreement is issued,  a Grantee's right
in all Deferred Stock Awards that have not vested shall automatically  terminate
upon the Grantee's termination of Service for any reason.

15. UNRESTRICTED STOCK AWARDS

     The Board may, in its sole discretion,  grant (or sell at par value or such
other higher purchase price determined by the Board) an Unrestricted Stock Award
to any Grantee  pursuant to which such Grantee may receive  shares of Stock free
of any restrictions  ("Unrestricted  Stock") under the Plan.  Unrestricted Stock
Awards may be granted or sold as described in the preceding  sentence in respect
of  past  services  or  other  valid  consideration,  or in  lieu  of  any  cash
compensation due to such Grantee.

16. PERFORMANCE STOCK AWARDS

     16.1. Nature of Performance Stock Awards.

     A  Performance  Stock Award is an Award  entitling the recipient to acquire
shares of Stock upon the attainment of specified  performance  goals.  The Board
may make  Performance  Stock Awards  independent  of or in  connection  with the
granting  of any other Award  under the Plan.  The Board in its sole  discretion
shall determine  whether and to whom Performance Stock Awards shall be made, the
performance  goals  applicable  under each such Award,  the periods during which
performance  is to  be  measured,  and  all  other  limitations  and  conditions
applicable to the awarded Performance Stock;  provided,  however, that the Board
may rely on the  performance  goals  and  other  standards  applicable  to other
performance  unit plans of the Company in setting the standards for  Performance
Stock Awards under the Plan. At any time prior to the Grantee's  termination  of
Service by the Company and its Affiliates,  the Board may in its sole discretion
accelerate,  waive or amend any or all of the goals,  restrictions or conditions
imposed under any Performance Stock Award.


                                       17
<PAGE>

     16.2. Rights as a Stockholder.

     A Grantee  receiving a  Performance  Stock Award shall have the rights of a
Stockholder  only as to shares  actually  received by the Grantee under the Plan
and not with respect to shares subject to the Award but not actually received by
the  Grantee.  A  Grantee  shall be  entitled  to  receive  a Stock  certificate
evidencing the  acquisition  of Stock under a Performance  Stock Award only upon
satisfaction of all conditions  specified in the written  instrument  evidencing
the Performance Stock Award (or in a performance plan adopted by the Board).

     16.3. Termination of Service.

     Except  as may  otherwise  be  provided  by the  Board  either in the Award
Agreement or in writing after the Award Agreement is issued,  a Grantee's rights
in all Performance Stock Awards shall automatically terminate upon the Grantee's
termination of Service for any reason.

17. DIVIDEND EQUIVALENT RIGHTS

     17.1. Dividend Equivalent Rights.

     A Dividend  Equivalent Right is an Award entitling the recipient to receive
credits based on cash  distributions  that would have been paid on the shares of
Stock  specified  in the Dividend  Equivalent  Right (or other award to which it
relates) if such shares had been issued to and held by the recipient. A Dividend
Equivalent  Right may be granted  hereunder  to any  Grantee as a  component  of
another Award or as a freestanding  award.  The terms and conditions of Dividend
Equivalent Rights shall be specified in the grant. Dividend Equivalents credited
to the holder of a Dividend  Equivalent  Right may be paid  currently  or may be
deemed to be  reinvested  in additional  shares of Stock,  which may  thereafter
accrue additional  equivalents.  Any such  reinvestment  shall be at Fair Market
Value on the date of reinvestment.  Dividend Equivalent Rights may be settled in
cash or Stock or a combination thereof, in a single installment or installments,
all determined in the sole discretion of the Board. A Dividend  Equivalent Right
granted  as a  component  of  another  Award  may  provide  that  such  Dividend
Equivalent Right shall be settled upon exercise,  settlement,  or payment of, or
lapse of restrictions  on, such other award,  and that such Dividend  Equivalent
Right shall expire or be forfeited or annulled under the same conditions as such
other award. A Dividend Equivalent Right granted as a component of another Award
may also contain terms and conditions different from such other award.



                                       18
<PAGE>

     17.2. Interest Equivalents.

     Any Award  under this Plan that is settled in whole or in part in cash on a
deferred basis may provide in the grant for interest  equivalents to be credited
with respect to such cash payment.  Interest  equivalents  may be compounded and
shall be paid upon such terms and conditions as may be specified by the grant.

     17.3. Termination of Service.

     Except  as may  otherwise  be  provided  by the  Board  either in the Award
Agreement or in writing after the Award Agreement is issued,  a Grantee's rights
in all Dividend  Equivalent Rights or interest  equivalents shall  automatically
terminate upon the Grantee's termination of Service for any reason.

18. CERTAIN PROVISIONS APPLICABLE TO AWARDS

     18.1.    Stand-Alone, Additional, Tandem, and Substitute Awards

     Awards  granted  under the Plan may,  in the  discretion  of the Board,  be
granted  either alone or in addition to, in tandem with, or in  substitution  or
exchange  for, any other Award or any award  granted  under  another plan of the
Company, any Affiliate,  or any business entity to be acquired by the Company or
an  Affiliate,  or any other  right of a Grantee  to  receive  payment  from the
Company or any Affiliate.  Such additional,  tandem,  and substitute or exchange
Awards  may be granted at any time.  If an Award is granted in  substitution  or
exchange for another Award,  the Board shall require the surrender of such other
Award in consideration  for the grant of the new Award. In addition,  Awards may
be  granted  in lieu of cash  compensation,  including  in lieu of cash  amounts
payable under other plans of the Company or any Affiliate, in which the value of
Stock subject to the Award is equivalent in value to the cash  compensation (for
example,  Deferred Stock or Restricted  Stock),  or in which the exercise price,
grant price or purchase  price of the Award in the nature of a right that may be
exercised  is equal to the Fair Market Value of the  underlying  Stock minus the
value of the cash compensation surrendered (for example, Options granted with an
exercise price "discounted" by the amount of the cash compensation surrendered).

     18.2. Form and Timing of Payment Under Awards; Deferrals

     Subject  to the  terms  of the  Plan and any  applicable  Award  Agreement,
payments  to be made by the  Company or an  Affiliate  upon the  exercise  of an
Option or other Award or settlement of an Award may be made in such forms as the
Board shall determine,  including, without limitation, cash, Stock, other Awards
or  other  property,  and  may be made  in a  single  payment  or  transfer,  in
installments,  or on a  deferred  basis.  The  settlement  of any  Award  may be
accelerated,  and cash paid in lieu of Stock in connection with such settlement,
in the  discretion  of the  Board or upon  occurrence  of one or more  specified
events.  Installment  or  deferred  payments  may be  required  by the  Board or
permitted at the election of the Grantee on terms and conditions  established by
the Board. Payments may include, without limitation,  provisions for the payment
or crediting of a reasonable  interest rate on installment or deferred  payments
or the grant or crediting of Dividend Equivalents or other amounts in respect of
installment or deferred payments denominated in Stock.

                                       19
<PAGE>

     18.3.    Performance and Annual Incentive Awards

           18.3.1.  Performance Conditions

           The right of a Grantee to exercise or receive  a grant or  settlement
of any  Award,  and the  timing  thereof,  may be  subject  to such  performance
conditions  as may be  specified by the Board.  The Board may use such  business
criteria  and  other  measures  of  performance  as it may deem  appropriate  in
establishing  any  performance  conditions,  and may exercise its  discretion to
reduce the amounts  payable under any Award subject to  performance  conditions,
except as limited  under  Sections  18.3.2  hereof in the case of a  Performance
Award or Annual  Incentive  Award intended to qualify under Code Section 162(m).
If and to the extent required under Code Section 162(m),  any power or authority
relating to a Performance  Award or Annual  Incentive  Award intended to qualify
under Code  Section  162(m),  shall be exercised  by the  Committee  and not the
Board.

           18.3.2.  Performance or Annual  Incentive  Awards Granted to
     Designated  Covered Employees

           If and to the extent that the Committee determines that a Performance
or Annual  Incentive  Award to be granted to a Grantee who is  designated by the
Committee   as   likely   to  be  a   Covered   Employee   should   qualify   as
"performance-based compensation" for purposes of Code Section 162(m), the grant,
exercise and/or  settlement of such  Performance or Annual Incentive Award shall
be contingent upon  achievement of  preestablished  performance  goals and other
terms set forth in this Section 18.3.2.

                                    (i)   Performance   Goals   Generally.   The
                  performance  goals for such  Performance  or Annual  Incentive
                  Awards shall  consist of one or more  business  criteria and a
                  targeted level or levels of  performance  with respect to each
                  of such  criteria,  as specified by the  Committee  consistent
                  with this Section 18.3.2. Performance goals shall be objective
                  and shall  otherwise  meet the  requirements  of Code  Section
                  162(m) and  regulations  thereunder  including the requirement
                  that the  level  or  levels  of  performance  targeted  by the
                  Committee result in the achievement of performance goals being
                  "substantially  uncertain."  The Committee may determine  that
                  such  Performance or Annual Incentive Awards shall be granted,
                  exercised   and/or   settled  upon   achievement  of  any  one
                  performance goal or that two or more of the performance  goals
                  must be  achieved  as a condition  to grant,  exercise  and/or
                  settlement of such  Performance  or Annual  Incentive  Awards.
                  Performance   goals  may  differ  for  Performance  or  Annual
                  Incentive  Awards  granted to any one Grantee or to  different
                  Grantees.

                                       20
<PAGE>

                                    (ii) Business  Criteria.  One or more of the
                  following business criteria for the Company, on a consolidated
                  basis, and/or specified  subsidiaries or business units of the
                  Company (except with respect to the total  stockholder  return
                  and earnings per share criteria), shall be used exclusively by
                  the  Committee  in  establishing  performance  goals  for such
                  Performance or Annual Incentive Awards:  (1) total stockholder
                  return; (2) such total stockholder return as compared to total
                  return (on a comparable  basis) of a publicly  available index
                  such as, but not limited  to, the  Standard & Poor's 500 Stock
                  Index;  (3) net  income;  (4) pretax  earnings;  (5)  earnings
                  before interest expense, taxes, depreciation and amortization;
                  (6) pretax  operating  earnings  after  interest  expense  and
                  before  bonuses,  service fees, and  extraordinary  or special
                  items;  (7)  operating  margin;  (8) earnings  per share;  (9)
                  return on  equity;  (10)  return on  capital;  (11)  return on
                  investment;  (12) operating  earnings;  (13) working  capital;
                  (14) ratio of debt to stockholders' equity and (15) revenue.

                                    (iii)   Performance   Period;   Timing   For
                  Establishing  Performance  Goals.  Achievement  of performance
                  goals in respect of Performance  Awards shall be measured over
                  a  performance  period of up to ten years and  achievement  of
                  performance  goals in respect of Annual Incentive Awards shall
                  be measured  over a  performance  period of up to one year, as
                  specified  by  the  Committee.   Performance  goals  shall  be
                  established  not later than 90 days after the beginning of any
                  performance  period  applicable to such  Performance or Annual
                  Incentive  Awards, or at such other date as may be required or
                  permitted  for  "performance-based  compensation"  under  Code
                  Section 162(m).

                                    (iv)  Performance or Annual  Incentive Award
                  Pool.  The Committee  may  establish a  Performance  or Annual
                  Incentive  Award pool,  which shall be an unfunded  pool,  for
                  purposes of measuring  Company  performance in connection with
                  Performance or Annual Incentive Awards.

                                    (v)  Settlement  of  Performance  or  Annual
                  Incentive Awards; Other Terms.  Settlement of such Performance
                  or Annual  Incentive  Awards  shall be in cash,  Stock,  other
                  Awards or other property,  in the discretion of the Committee.
                  The Committee may, in its  discretion,  reduce the amount of a
                  settlement  otherwise  to be  made  in  connection  with  such
                  Performance or Annual  Incentive  Awards.  The Committee shall
                  specify the  circumstances in which such Performance or Annual
                  Incentive  Awards  shall be paid or  forfeited in the event of
                  termination  of Service by the  Grantee  prior to the end of a
                  performance period or settlement of Performance Awards.

                                       21
<PAGE>

           18.3.3. Written Determinations.

           All  determinations  by the  Committee  as  to  the  establishment of
performance  goals,  the  amount  of any  Performance  Award  pool or  potential
individual  Performance  Awards and as to the  achievement of performance  goals
relating to Performance  Awards,  and the amount of any Annual  Incentive  Award
pool or potential  individual  Annual  Incentive  Awards and the amount of final
Annual  Incentive  Awards,  shall be made in  writing  in the case of any  Award
intended to qualify under Code Section 162(m).  To the extent required to comply
with Code Section 162(m), the Committee may delegate any responsibility relating
to such Performance Awards or Annual Incentive Awards.

           18.3.4. Status of Section 18.3.2 Awards Under Code Section 162(m)

           It is the intent of the Company  that  Performance  Awards and Annual
Incentive  Awards  under  Section  18.3.2  hereof  granted  to  persons  who are
designated by the Committee as likely to be Covered Employees within the meaning
of Code Section 162(m) and regulations thereunder shall, if so designated by the
Committee,  constitute  "qualified  performance-based  compensation"  within the
meaning of Code Section  162(m) and  regulations  thereunder.  Accordingly,  the
terms of Section 18.3.2, including the definitions of Covered Employee and other
terms  used  therein,  shall be  interpreted  in a manner  consistent  with Code
Section  162(m)  and  regulations  thereunder.  The  foregoing  notwithstanding,
because the Committee  cannot  determine with certainty  whether a given Grantee
will be a Covered  Employee  with respect to a fiscal year that has not yet been
completed,  the term  Covered  Employee as used herein  shall mean only a person
designated by the Committee,  at the time of grant of  Performance  Awards or an
Annual  Incentive Award, as likely to be a Covered Employee with respect to that
fiscal  year.  If any  provision of the Plan or any  agreement  relating to such
Performance Awards or Annual Incentive Awards does not comply or is inconsistent
with the  requirements  of Code Section 162(m) or regulations  thereunder,  such
provision  shall be  construed  or deemed  amended  to the extent  necessary  to
conform to such requirements.

                                       22
<PAGE>

19. PARACHUTE LIMITATIONS

     Notwithstanding any other provision of this Plan or of any other agreement,
contract,  or  understanding  heretofore or hereafter  entered into by a Grantee
with  the  Company  or  any  Affiliate,   except  an  agreement,   contract,  or
understanding  hereafter  entered  into  that  expressly  modifies  or  excludes
application of this paragraph (an "Other  Agreement"),  and  notwithstanding any
formal  or  informal  plan or  other  arrangement  for the  direct  or  indirect
provision  of  compensation  to the  Grantee  (including  groups or  classes  of
Grantees or beneficiaries of which the Grantee is a member), whether or not such
compensation  is deferred,  is in cash, or is in the form of a benefit to or for
the  Grantee  (a  "Benefit  Arrangement"),  if the  Grantee  is a  "disqualified
individual," as defined in Section  280G(c) of the Code, any Option,  Restricted
Stock or Restricted Stock Unit held by that Grantee and any right to receive any
payment or other benefit under this Plan shall not become  exercisable or vested
(i) to the extent that such right to  exercise,  vesting,  payment,  or benefit,
taking  into  account  all other  rights,  payments,  or  benefits to or for the
Grantee under this Plan,  all Other  Agreements,  and all Benefit  Arrangements,
would  cause  any  payment  or  benefit  to the  Grantee  under  this Plan to be
considered a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code as then in  effect  (a  "Parachute  Payment")  and (ii) if,  as a result of
receiving a Parachute Payment,  the aggregate  after-tax amounts received by the
Grantee from the Company under this Plan, all Other Agreements,  and all Benefit
Arrangements  would be less than the  maximum  after-tax  amount  that  could be
received  by the  Grantee  without  causing  any such  payment  or benefit to be
considered a Parachute Payment.  In the event that the receipt of any such right
to exercise,  vesting,  payment, or benefit under this Plan, in conjunction with
all other  rights,  payments,  or benefits to or for the Grantee under any Other
Agreement or any Benefit Arrangement would cause the Grantee to be considered to
have received a Parachute  Payment under this Plan that would have the effect of
decreasing the after-tax  amount  received by the Grantee as described in clause
(ii) of the preceding  sentence,  then the Grantee shall have the right,  in the
Grantee's sole  discretion,  to designate  those rights,  payments,  or benefits
under this Plan, any Other Agreements,  and any Benefit Arrangements that should
be reduced or  eliminated  so as to avoid  having the  payment or benefit to the
Grantee under this Plan be deemed to be a Parachute Payment. 20. REQUIREMENTS OF
LAW

20.1. General.

     The  Company  shall not be  required  to sell or issue any  shares of Stock
under  any Award if the sale or  issuance  of such  shares  would  constitute  a
violation by the Grantee,  any other  individual  exercising  an Option,  or the
Company of any provision of any law or regulation of any governmental authority,
including   without   limitation  any  federal  or  state   securities  laws  or
regulations. If at any time the Company shall determine, in its discretion, that
the listing,  registration  or  qualification  of any shares subject to an Award
upon any  securities  exchange  or under  any  governmental  regulatory  body is
necessary or desirable as a condition of, or in connection with, the issuance or
purchase  of shares  hereunder,  no shares of Stock may be issued or sold to the
Grantee or any other  individual  exercising  an Option  pursuant  to such Award
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any  conditions not acceptable to the Company,
and any delay caused  thereby shall in no way affect the date of  termination of
the  Award.  Specifically,  in  connection  with the  Securities  Act,  upon the
exercise  of any Option or the  delivery  of any shares of Stock  underlying  an
Award, unless a registration  statement under such Act is in effect with respect
to the shares of Stock covered by such Award,  the Company shall not be required
to sell or issue such shares unless the Board has received evidence satisfactory
to it that the Grantee or any other individual  exercising an Option may acquire
such shares pursuant to an exemption from registration under the Securities Act.
Any determination in this connection by the Board shall be final,  binding,  and
conclusive. The Company may, but shall in no event be obligated to, register any
securities  covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the exercise of an
Option or the  issuance  of shares of Stock  pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly  imposes the requirement that an Option shall not be exercisable until
the shares of Stock  covered by such  Option are  registered  or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction  apply) shall be deemed  conditioned upon the effectiveness
of such registration or the availability of such an exemption.

                                       23
<PAGE>

     20.2. Rule 16b-3.

     During any time when the Company has a class of equity security  registered
under  Section 12 of the  Exchange  Act,  it is the intent of the  Company  that
Awards pursuant to the Plan and the exercise of Options  granted  hereunder will
qualify for the exemption  provided by Rule 16b-3 under the Exchange Act. To the
extent  that any  provision  of the Plan or action by the Board  does not comply
with the  requirements  of Rule  16b-3,  it shall be deemed  inoperative  to the
extent  permitted by law and deemed advisable by the Board, and shall not affect
the  validity of the Plan.  In the event that Rule 16b-3 is revised or replaced,
the  Board may  exercise  its  discretion  to  modify  this Plan in any  respect
necessary to satisfy the  requirements  of, or to take advantage of any features
of, the revised  exemption  or its  replacement.

     20.3.  Limitation  Following a Hardship Distribution.

     To   the   extent    required   to   comply   with   Treasury    Regulation
ss.1.401(k)-1(d)(2)(iv)(B)(4),   or  any  amendment  or  successor   thereto,  a
Grantee's  "elective  and  employee  contributions"  (within the meaning of such
Treasury  Regulation)  under the Plan shall be suspended  for a period of twelve
months  following  such  Grantee's  receipt of a hardship  distribution  made in
reliance on such Treasury Regulation from any plan containing a cash or deferred
arrangement  under  Section  401(k) of the Code  maintained  by the Company or a
related  party within the  provisions  of  subsections  (b),  (c), (m) or (o) of
Section 414 of the Code.

                                       24
<PAGE>

21. AMENDMENT AND TERMINATION OF THE PLAN

     The  Board  may,  at any time and from  time to time,  amend,  suspend,  or
terminate  the Plan as to any shares of Stock as to which  Awards  have not been
made;  provided,  however,  that the Board  shall not,  without  approval of the
Company's  shareholders,  amend the Plan such that it does not  comply  with the
Code.  The  Company  may  retain  the  right  in an Award  Agreement  to cause a
forfeiture  of the gain  realized by a Grantee on account of the Grantee  taking
actions in  "competition  with the Company," as defined in the applicable  Award
Agreement.  Furthermore,  the  Company  may annul an Award if the  Grantee is an
employee of the Company or an Affiliate and is terminated "for cause" as defined
in the applicable Award Agreement.  Except as permitted under this Section 21 or
Section 22 hereof, no amendment,  suspension,  or termination of the Plan shall,
without the consent of the Grantee,  alter or impair rights or obligations under
any Award  theretofore  awarded  under  the  Plan.  22.  EFFECT  OF  CHANGES  IN
CAPITALIZATION

     22.1. Changes in Stock.

     If the number of  outstanding  shares of Stock is increased or decreased or
the shares of Stock are changed into or exchanged for a different number or kind
of shares or other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares,  stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by
the Company  occurring  after the Effective Date, the number and kinds of shares
for which grants of Options and other Awards may be made under the Plan shall be
adjusted proportionately and accordingly by the Company. In addition, the number
and  kind  of  shares  for  which  Awards  are  outstanding  shall  be  adjusted
proportionately  and  accordingly  so that  the  proportionate  interest  of the
Grantee immediately  following such event shall, to the extent  practicable,  be
the same as immediately  before such event.  Any such  adjustment in outstanding
Options  shall not change the  aggregate  Option  Price  payable with respect to
shares that are subject to the unexercised  portion of an Option outstanding but
shall include a corresponding  proportionate  adjustment in the Option Price per
share. The conversion of any convertible  securities of the Company shall not be
treated as an  increase in shares  effected  without  receipt of  consideration.
Notwithstanding  the  foregoing,  in the event of a spin-off  that results in no
change in the number of outstanding shares of Stock of the Company,  the Company
may, in such manner as the Company deems appropriate,  adjust (i) the number and
kind of shares subject to  outstanding  Awards and/or (ii) the exercise price of
outstanding Options and Stock Appreciation Rights.

                                       25
<PAGE>

     22.2.  Reorganization in Which the Company Is the Surviving Entity and
in Which No Change in Control Occurs.

     Subject to Section  22.3  hereof,  if the  Company  shall be the  surviving
entity in any  reorganization,  merger, or consolidation of the Company with one
or more  other  entities  in which no  Change  in  Control  Occurs,  any  Option
theretofore  granted  pursuant  to the Plan  shall  pertain  to and apply to the
securities  to which a holder of the  number of shares of Stock  subject to such
Option  would have been  entitled  immediately  following  such  reorganization,
merger, or consolidation,  with a corresponding  proportionate adjustment of the
Option Price per share so that the aggregate  Option Price  thereafter  shall be
the same as the aggregate  Option Price of the shares  remaining  subject to the
Option  immediately  prior to such  reorganization,  merger,  or  consolidation.
Subject to any contrary language in an Award Agreement  evidencing an Award, any
restrictions  applicable  to such Award shall  apply as well to any  replacement
shares  received  by the  Grantee as a result of the  reorganization,  merger or
consolidation.

     22.3.  Reorganization,  Sale of  Assets  or Sale of Stock  Which
Involves a Change in Control.

          (a) Subject to Section 22.3(b), upon the dissolution or liquidation of
the Company or upon any transaction that results in a Change in Control, (i) all
outstanding  shares  subject to Awards shall be deemed to have  vested,  and all
restrictions and conditions applicable to such shares subject to Awards shall be
deemed to have lapsed,  immediately  prior to the occurrence of such event,  and
(ii) all Options outstanding hereunder shall become immediately  exercisable for
a period of fifteen days immediately prior to the scheduled  consummation of the
event.  Any  exercise  of an Option  during  such  fifteen-day  period  shall be
conditioned  upon the  consummation  of the event and  shall be  effective  only
immediately  before the consummation of the event. Upon consummation of any such
event, the Plan and all outstanding but unexercised Options shall terminate. The
Board  shall  send  written  notice  of an  event  that  will  result  in such a
termination to all individuals who hold Options not later than the time at which
the Company gives notice thereof to its shareholders.

          (b) Section 22.3(a) shall not apply to the extent provision is made in
writing in connection  with a transaction  described in Section  22.3(a) for the
assumption of such Options theretofore granted, or for the substitution for such
Options of new options covering the stock of a successor  entity, or a parent or
subsidiary thereof,  with appropriate  adjustments as to the number and kinds of
shares  or units  and  exercise  prices,  in which  event  the Plan and  Options
theretofore  granted  shall  continue  in the  manner  and  under  the  terms so
provided. 22.4. Adjustments.

                                       26
<PAGE>

     22.4. Adjustments.

     Adjustments  under this Section 22 related to shares of Stock or securities
of the Company shall be made by the Board,  whose  determination in that respect
shall be final, binding and conclusive. No fractional shares or other securities
shall be issued  pursuant to any such  adjustment,  and any fractions  resulting
from any such adjustment  shall be eliminated in each case by rounding  downward
to the nearest whole share.

     22.5. No Limitations on Company.

     The making of Awards  pursuant to the Plan shall not affect or limit in any
way the right or power of the  Company to make  adjustments,  reclassifications,
reorganizations,  or changes of its capital or business  structure  or to merge,
consolidate,  dissolve, or liquidate,  or to sell or transfer all or any part of
its business or assets.

     23. POOLING

     In the event any provision of the Plan or the Award Agreement would prevent
the use of pooling of interests accounting in a corporate  transaction involving
the  Company  and such  transaction  is  contingent  upon  pooling of  interests
accounting, then that provision shall be deemed amended or revoked to the extent
required to preserve  such pooling of  interests.  The Company may require in an
Award Agreement that a Grantee who receives an Award under the Plan shall,  upon
advice from the  Company,  take (or refrain  from taking,  as  appropriate)  all
actions necessary or desirable to ensure that pooling of interests accounting is
available.

24. DISCLAIMER OF RIGHTS

     No  provision  in the  Plan or in any  Award or  Award  Agreement  shall be
construed  to confer  upon any  individual  the right to remain in the employ or
service of the Company or any  Affiliate,  or to  interfere  in any way with any
contractual  or other right or  authority  of the Company  either to increase or
decrease the compensation or other payments to any individual at any time, or to
terminate any  employment or other  relationship  between any individual and the
Company.  In  addition,  notwithstanding  anything  contained in the Plan to the
contrary,  unless otherwise  stated in the applicable Award Agreement,  no Award
granted  under the Plan shall be affected by any change of duties or position of
the  Grantee,  so long as such  Grantee  continues  to be a  director,  officer,
consultant  or employee of the Company or an  Affiliate.  The  obligation of the
Company to pay any  benefits  pursuant  to this Plan shall be  interpreted  as a
contractual obligation to pay only those amounts described herein, in the manner
and  under  the  conditions  prescribed  herein.  The  Plan  shall  in no way be
interpreted  to require  the  Company to  transfer  any amounts to a third party
trustee or  otherwise  hold any  amounts  in trust or escrow for  payment to any
Grantee or beneficiary under the terms of the Plan. No Grantee shall have any of
the rights of a  shareholder  with respect to the shares of Stock  subject to an
Option except to the extent the certificates for such shares of Stock shall have
been issued upon the exercise of the Option.


                                       27
<PAGE>

25. NONEXCLUSIVITY OF THE PLAN

     Neither  the  adoption  of the Plan nor the  submission  of the Plan to the
shareholders  of the Company for  approval  shall be  construed  as creating any
limitations  upon the  right and  authority  of the  Board to adopt  such  other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or  specifically  to a particular
individual or particular  individuals) as the Board in its discretion determines
desirable,   including,  without  limitation,  the  granting  of  stock  options
otherwise than under the Plan.

26. WITHHOLDING TAXES

     The Company or an  Affiliate,  as the case may be,  shall have the right to
deduct from payments of any kind otherwise due to a Grantee any Federal,  state,
or local taxes of any kind  required by law to be withheld  with  respect to the
vesting of or other  lapse of  restrictions  applicable  to an Award or upon the
issuance of any shares of Stock upon the exercise of an Option or pursuant to an
Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay to
the Company or the Affiliate, as the case may be, any amount that the Company or
the  Affiliate  may  reasonably  determine  to  be  necessary  to  satisfy  such
withholding  obligation.  Subject to the prior  approval  of the  Company or the
Affiliate,  which may be withheld by the Company or the  Affiliate,  as the case
may  be,  in its  sole  discretion,  the  Grantee  may  elect  to  satisfy  such
obligations, in whole or in part, (i) by causing the Company or the Affiliate to
withhold shares of Stock otherwise issuable to the Grantee or (ii) by delivering
to the Company or the  Affiliate  shares of Stock  already owned by the Grantee.
The shares of Stock so delivered or withheld shall have an aggregate Fair Market
Value equal to such withholding obligations. The Fair Market Value of the shares
of Stock used to satisfy such withholding  obligation shall be determined by the
Company or the Affiliate as of the date that the amount of tax to be withheld is
to be determined. A Grantee who has made an election pursuant to this Section 26
may satisfy his or her withholding obligation only with shares of Stock that are
not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.

                                       28
<PAGE>


27. CAPTIONS

     The  use of  captions  in  this  Plan  or any  Award  Agreement  is for the
convenience  of reference only and shall not affect the meaning of any provision
of the Plan or such Award Agreement.

28. OTHER PROVISIONS

     Each  Award  granted  under  the Plan may  contain  such  other  terms  and
conditions not inconsistent  with the Plan as may be determined by the Board, in
its sole discretion.

29. NUMBER AND GENDER

     With respect to words used in this Plan,  the singular  form shall  include
the plural form, the masculine gender shall include the feminine  gender,  etc.,
as the context requires.

30. SEVERABILITY

     If any provision of the Plan or any Award  Agreement shall be determined to
be  illegal  or  unenforceable  by any  court  of law in any  jurisdiction,  the
remaining  provisions  hereof and thereof shall be severable and  enforceable in
accordance with their terms, and all provisions shall remain  enforceable in any
other jurisdiction.

31. GOVERNING LAW

     The validity and  construction of this Plan and the instruments  evidencing
the  Grants  awarded  hereunder  shall be  governed  by the laws of the State of
Nevada other than any  conflicts  or choice of law rule or principle  that might
otherwise refer  construction or interpretation of this Plan and the instruments
evidencing the Awards  awarded  hereunder to the  substantive  laws of any other
jurisdiction.


                                      * * *


     To record  adoption of the Plan by the Board as of  November  1, 2002,  and
approval of the Plan by the stockholders on __________ __, 2003, the Company has
caused its authorized officer to execute the Plan.




                     IMPERIAL PETROLEUM RECOVERY CORPORATION

                                    By: Henry H. Kartchner
                                    ---------------------------
                                   (Signature)
                                    Name: Henry H. Kartchner
                                    Title: Chairman
                                    Date: November 1, 2002


                                       29