<PAGE>

                                                                    EXHIBIT 99.1

                          LEISUREWAYS MARKETING LTD.

                           1998 STOCK INCENTIVE PLAN

     1.   Purposes of the Plan. The purposes of this Stock Incentive Plan are to
          --------------------
attract and retain the best available personnel, to provide additional incentive
to Employees, Directors and Consultants and to promote the success of the
Company's business.

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

          (a)  "Administrator" means the Board or any of the Committees
                -------------
appointed to administer the Plan.

          (b)  "Affiliate" and "Associate" shall have the respective meanings
                --------        ---------
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

          (c)  "Applicable Laws" means the legal requirements relating to the
                ---------------
administration of stock incentive plans, if any, under applicable provisions of
federal securities laws, state corporate and securities laws, the Code, the
rules of any applicable stock exchange or national market system, and the rules
of any foreign jurisdiction applicable to Awards granted to residents therein.

          (d)  "Award" means the grant of an Option, SAR, Dividend Equivalent
                -----
Right, Restricted Stock, Performance Unit, Performance Share, or other right or
benefit under the Plan.

          (e)  "Award Agreement" means the written agreement evidencing the
                ---------------
grant of an Award executed by the Company and the Grantee, including any
amendments thereto.

          (f)  "Board" means the Board of Directors of the Company.
                -----

          (g)  "Cause" means, with respect to the termination by the Company or
                -----
a Related Entity of the Grantee's Continuous Service, that such termination is
for "Cause" as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in the
absence of such then-effective written agreement and definition, is based on, in
the determination of the Administrator, the Grantee's: (i) refusal or failure to
act in accordance with any specific, lawful direction or order of the Company or
a Related Entity; (ii) unfitness or unavailability for service or unsatisfactory
performance (other than as a result of Disability); (iii) performance of any act
or failure to perform any act in bad faith and to the detriment of the Company
or a Related Entity; (iv) dishonesty, intentional misconduct or material breach
of any agreement with the Company or a Related Entity; or (v) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person. At least 30 days prior to the termination of the Grantee's
Continuous Service pursuant to (i) or (ii) above, the Administrator shall
provide the Grantee with notice of the Company's or such Related Entity's intent
to terminate, the reason therefor, and an opportunity
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                                       2



for the Grantee to cure such defects in his or her service to the Company's or
such Related Entity's satisfaction. During this 30 day (or longer) period, no
Award issued to the Grantee under the Plan may be exercised or purchased.

          (h)  "Change in Control" means a change in ownership or control of the
                -------------------
Company effected through either of the following transactions:

               (i)  the direct or indirect acquisition by any person or related
group of persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities pursuant to
a tender or exchange offer made directly to the Company's stockholders which a
majority of the Continuing Directors who are not Affiliates or Associates of the
offeror do not recommend such stockholders accept, or

               (ii) a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are
Continuing Directors.

          (i)  "Code" means the U.S. Internal Revenue Code of 1986, as amended.
                ----

          (j)  "Committee" means any committee appointed by the Board to
                ---------
administer the Plan.

          (k)  "Common Stock" means the common stock of the Company.
                ------------

          (l)  "Company" means Leisureways Marketing Ltd., a Yukon corporation.
                -------

          (m)  "Consultant" means any person (other than an Employee or, solely
                ----------
with respect to rendering services in such person's capacity as a Director) who
is engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.

          (n)  "Continuing Directors" means members of the Board who either (i)
                --------------------
have been Board members continuously for a period of at least thirty-six (36)
months or (ii) have been Board members for less than thirty-six (36) months and
were elected or nominated for election as Board members by at least a majority
of the Board members described in clause (i) who were still in office at the
time such election or nomination was approved by the Board.

          (o)  "Continuous Service" means that the provision of services to the
                ------------------
Company or a Related Entity in any capacity of Employee, Director or Consultant,
is not interrupted or terminated. Continuous Service shall not be considered
interrupted in the case of
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                                       3

(i) any approved leave of absence, (ii) transfers between locations of the
Company or among the Company, any Related Entity, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in status as
long as the individual remains in the service of the Company or a Related Entity
in any capacity of Employee, Director or Consultant (except as otherwise
provided in the Award Agreement). An approved leave of absence shall include
sick leave, military leave, or any other authorized personal leave. For purposes
of Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.

          (p)  "Corporate Transaction" means any of the following transactions:
                ---------------------

               (i)   a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the jurisdiction in which the Company is organized;

               (ii)  the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company; or

               (iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.

          (q)  "Covered Employee" means an Employee who is a "covered employee"
                -----------------
under Section 162(m)(3) of the Code.

          (r)  "Director" means a member of the Board or the board of directors
                --------
of any Related Entity.

          (s)  "Disability" means that a Grantee is permanently unable to carry
                ----------
out the responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.

          (t)  "Dividend Equivalent Right" means a right entitling the Grantee
                -------------------------
to compensation measured by dividends paid with respect to Common Stock.

          (u)  "Employee" means any person, including an Officer or Director,
                --------
who is an employee of the Company or any Related Entity. The payment of a
director's fee by the Company or a Related Entity shall not be sufficient to
constitute "employment" by the Company.

          (v)  "Exchange Act" means the U.S. Securities Exchange Act of 1934, as
                ------------
amended.
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                                       4

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

               (i)  Where there exists a public market for the Common Stock, the
Fair Market Value shall be (A) the closing price for a Share for the last market
trading day prior to the time of the determination (or, if no closing price was
reported on that date, on the last trading date on which a closing price was
reported) on the stock exchange determined by the Administrator to be the
primary market for the Common Stock or the Nasdaq National Market, whichever is
applicable or (B) if the Common Stock is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
Share on the Nasdaq Small Cap Market for the day prior to the time of the
determination (or, if no such prices were reported on that date, on the last
date on which such prices were reported), in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or

               (ii) In the absence of an established market for the Common Stock
of the type described in (i), above, the Fair Market Value thereof shall be
determined by the Administrator in good faith.

          (x)  "Grantee" means an Employee, Director or Consultant who receives
                -------
an Award pursuant to an Award Agreement under the Plan.

          (y)  "Incentive Stock Option" means an Option intended to qualify as
                ----------------------
an incentive stock option within the meaning of Section 422 of the Code.

          (z)  "Non-Qualified Stock Option" means an Option not intended to
                --------------------------
qualify as an Incentive Stock Option.

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

          (bb) "Option" means an option to purchase Shares pursuant to an Award
                ------
Agreement granted under the Plan.

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

          (dd) "Performance - Based Compensation" means compensation qualifying
                --------------------------------
as "performance-based compensation" under Section 162(m) of the Code.

          (ee) "Performance Shares" means Shares or an Award denominated in
                ------------------
Shares which may be earned in whole or in part upon attainment of performance
criteria established by the Administrator.

          (ff) "Performance Units" means an Award which may be earned in whole
                -----------------
or in part upon attainment of performance criteria established by the
Administrator and which
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                                       5

may be settled for cash, Shares or other securities or a combination of cash,
Shares or other securities as established by the Administrator.

          (gg) "Plan" means this 1998 Stock Incentive Plan.
                ----

          (hh) "Related Entity" means any Parent, Subsidiary and any business,
                --------------
corporation, partnership, limited liability company or other entity in which the
Company, a Parent or a Subsidiary holds a substantial ownership interest,
directly or indirectly.

          (ii) "Restricted Stock" means Shares issued under the Plan to the
                ----------------
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.

          (jj) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange Act
                ----------
or any successor thereto.

          (kk) "SAR" means a stock appreciation right entitling the Grantee to
                ---
Shares or cash compensation, as established by the Administrator, measured by
appreciation in the value of Common Stock.

          (ll) "Share" means a share of the Common Stock.
                -----

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

          (nn) "Related Entity Disposition" means the sale, distribution or
                --------------------------
other disposition by the Company of all or substantially all of the Company's
interests in any Related Entity effected by a sale, merger or consolidation or
other transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related Entity.

     3.   Stock Subject to the Plan.
          -------------------------

          (a)  Subject to the provisions of Section 10, below, the maximum
aggregate number of Shares which may be issued pursuant to all Awards (including
Incentive Stock Options) is 1,000,000 Shares. The Shares to be issued pursuant
to Awards may be authorized, but unissued, or reacquired Common Stock.

          (b)  Any Shares covered by an Award (or portion of an Award) which is
forfeited or canceled, expires or is settled in cash, shall be deemed not to
have been issued for purposes of determining the maximum aggregate number of
Shares which may be issued under the Plan. If any unissued Shares are retained
by the Company upon exercise of an Award in order to satisfy the exercise price
for such Award or any withholding taxes due with respect to such Award, such
retained Shares subject to such Award shall become available for future issuance
under the Plan (unless the Plan has terminated). Shares that actually have been
issued under the Plan pursuant to an Award shall not be returned to the Plan and
shall not become
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                                       6

available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at their original purchase price, such
Shares shall become available for future grant under the Plan.

     4.   Administration of the Plan.
          --------------------------

          (a)     Plan Administrator.
                  ------------------

               (i)   Administration with Respect to Directors and Officers. With
                     -----------------------------------------------------
respect to grants of Awards to Directors or Employees who are also Officers or
Directors of the Company, the Plan shall be administered by (A) the Board or (B)
a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3, if applicable. Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board.

               (ii)  Administration With Respect to Consultants and Other
                     ----------------------------------------------------
Employees. With respect to grants of Awards to Employees or Consultants who are
---------
neither Directors nor Officers of the Company, the Plan shall be administered by
(A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. The Board may authorize one or more
Officers to grant such Awards and may limit such authority as the Board
determines from time to time.

               (iii) Administration With Respect to Covered Employees.
                     ------------------------------------------------
Notwithstanding the foregoing, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee
(or subcommittee of a Committee) which is comprised solely of two or more
Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered
Employees, references to the "Administrator" or to a "Committee" shall be deemed
to be references to such Committee or subcommittee.

               (iv)  Administration Errors. In the event an Award is granted in
                     ---------------------
a manner inconsistent with the provisions of this subsection (a), such Award
shall be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

          (b)     Powers of the Administrator. Subject to Applicable Laws and
                  ---------------------------
the provisions of the Plan (including any other powers given to the
Administrator hereunder), and except as otherwise provided by the Board, the
Administrator shall have the authority, in its discretion:

               (i)   to select the Employees, Directors and Consultants to whom
Awards may be granted from time to time hereunder;

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                                       7

               (ii)   to determine whether and to what extent Awards are granted
hereunder;

               (iii)  to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;

               (iv)   to approve forms of Award Agreements for use under the
Plan;

               (v)    to determine the terms and conditions of any Award granted
hereunder;

               (vi)   to amend the terms of any outstanding Award granted under
the Plan, including a reduction in the exercise price (or base amount on which
appreciation is measured) of any Award to reflect a reduction in the Fair Market
Value of the Common Stock since the grant date of the Award, provided that any
amendment that would adversely affect the Grantee's rights under an outstanding
Award shall not be made without the Grantee's written consent;

               (vii)  the Administrator shall have the right to suspend the
right of a holder to exercise all or part of a stock option for any reason that
the Administrator considers in the best interest of the Corporation;

               (viii) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable foreign jurisdictions
and to afford Grantees favorable treatment under such laws; provided, however,
that no Award shall be granted under any such additional terms, conditions,
rules or procedures with terms or conditions which are inconsistent with the
provisions of the Plan; and

               (ix)   to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.

          (c)     Effect of Administrator's Decision. All decisions,
                  ----------------------------------
determinations and interpretations of the Administrator shall be conclusive and
binding on all persons.

     5.   Eligibility. Awards other than Incentive Stock Options may be granted
          -----------
to Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees, Directors
or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.

     6.   Terms and Conditions of Awards.
          ------------------------------

          (a)     Type of Awards. The Administrator is authorized under the Plan
                  --------------
to award any type of arrangement to an Employee, Director or Consultant that is
not inconsistent with the provisions of the Plan and that by its terms involves
or might involve the issuance of (i)
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                                       8

Shares, (ii) an Option, a SAR or similar right with a fixed or variable price
related to the Fair Market Value of the Shares and with an exercise or
conversion privilege related to the passage of time, the occurrence of one or
more events, or the satisfaction of performance criteria or other conditions, or
(iii) any other security with the value derived from the value of the Shares.
Such awards include, without limitation, Options, SARs, sales or bonuses of
Restricted Stock, Dividend Equivalent Rights, Performance Units or Performance
Shares, and an Award may consist of one such security or benefit, or two (2) or
more of them in any combination or alternative.

          (b)     Designation of Award. Each Award shall be designated in the
                  --------------------
Award Agreement. In the case of an Option, the Option shall be designated as
either an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Qualified Stock Options. For
this purpose, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the date the Option with respect to such Shares is granted.

          (c)     Conditions of Award. Subject to the terms of the Plan, the
                  -------------------
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total stockholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measures of performance selected by the Administrator.
Partial achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.

          (d)     Acquisitions and Other Transactions. The Administrator may
                  -----------------------------------
issue Awards under the Plan in settlement, assumption or substitution for,
outstanding awards or obligations to grant future awards in connection with the
Company or a Related Entity acquiring another entity, an interest in another
entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.

          (e)     Deferral of Award Payment. The Administrator may establish one
                  -------------------------
or more programs under the Plan to permit selected Grantees the opportunity to
elect to defer receipt of consideration upon exercise of an Award, satisfaction
of performance criteria, or other event that absent the election would entitle
the Grantee to payment or receipt of Shares or other consideration under an
Award. The Administrator may establish the election procedures, the timing of
such elections, the mechanisms for payments of, and accrual of interest or other
<PAGE>

                                       9


earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.

          (f)  Award Exchange Programs. The Administrator may establish one or
               -----------------------
more programs under the Plan to permit selected Grantees to exchange an Award
under the Plan for one or more other types of Awards under the Plan on such
terms and conditions as determined by the Administrator from time to time.

          (g)  Separate Programs. The Administrator may establish one or more
               -----------------
separate programs under the Plan for the purpose of issuing particular forms of
Awards to one or more classes of Grantees on such terms and conditions as
determined by the Administrator from time to time.

          (h)  Individual Option and SAR Limit. The maximum number of Shares
               -------------------------------
with respect to which Options and SARs may be granted to any Employee in any
fiscal year of the Company shall be 500,000 Shares. The foregoing limitation
shall be adjusted proportionately in connection with any change in the Company's
capitalization pursuant to Section 10, below. To the extent required by Section
162(m) of the Code or the regulations thereunder, in applying the foregoing
limitation with respect to an Employee, if any Option or SAR is canceled, the
canceled Option or SAR shall continue to count against the maximum number of
Shares with respect to which Options and SARs may be granted to the Employee.
For this purpose, the repricing of an Option (or in the case of a SAR, the base
amount on which the stock appreciation is calculated is reduced to reflect a
reduction in the Fair Market Value of the Common Stock) shall be treated as the
cancellation of the existing Option or SAR and the grant of a new Option or SAR.

          (i)  Early Exercise. The Award Agreement may, but need not, include a
               --------------
provision whereby the Grantee may elect at any time while an Employee, Director
or Consultant to exercise any part or all of the Award prior to full vesting of
the Award. Any unvested Shares received pursuant to such exercise may be subject
to a repurchase right in favor of the Company or a Related Entity or to any
other restriction the Administrator determines to be appropriate.

          (j)  Term of Award. The term of each Award shall be the term stated in
               -------------
the Award Agreement, provided, however, that the term of an Incentive Stock
Option shall be no more than ten (10) years from the date of grant thereof.
However, in the case of an Incentive Stock Option granted to a Grantee who, at
the time the Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option shall be five (5) years
from the date of grant thereof or such shorter term as may be provided in the
Award Agreement.

          (k)  Transferability of Awards. Incentive Stock Options may not be
               -------------------------
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Grantee,
<PAGE>

                                       10

only by the Grantee; provided, however, that the Grantee may designate a
beneficiary of the Grantee's Incentive Stock Option in the event of the
Grantee's death on a beneficiary designation form provided by the Administrator.
Other Awards shall be transferable to the extent provided in the Award
Agreement.

          (l)  Time of Granting Awards. The date of grant of an Award shall for
               -----------------------
all purposes be the date on which the Administrator makes the determination to
grant such Award, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.

     7.   Award Exercise or Purchase Price, Consideration, Taxes and Reload
          -----------------------------------------------------------------
Options.
-------

          (a)  Exercise or Purchase Price. The exercise or purchase price, if
               --------------------------
any, for an Award shall be as follows:

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

                    (A)  granted to an Employee who, at the time of the grant of
such Incentive Stock Option owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be not less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant; or

                    (B)  granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.

               (ii)   In the case of a Non-Qualified Stock Option, the per Share
exercise price shall be not less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant unless otherwise determined by the
Administrator.

               (iii)  In the case of Awards intended to qualify as Performance-
Based Compensation, the exercise or purchase price, if any, shall be not less
than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant.

               (iv)   In the case of other Awards, such price as is determined
by the Administrator.

               (v)    Notwithstanding the foregoing provisions of this Section
7(a), in the case of an Award issued pursuant to Section 6(d), above, the
exercise or purchase price for the Award shall be determined in accordance with
the principles of Section 424(a) of the Code.

          (b)  Consideration. Subject to Applicable Laws, the consideration to
               -------------
be paid for the Shares to be issued upon exercise or purchase of an Award
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock
<PAGE>

                                       11

Option, shall be determined at the time of grant). In addition to any other
types of consideration the Administrator may determine, the Administrator is
authorized to accept as consideration for Shares issued under the Plan the
following:

               (i)    cash;

               (ii)   check;

               (iii)  surrender of Shares or delivery of a properly executed
form of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of the
Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall
be exercised (but only to the extent that such exercise of the Award would not
result in an accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the Administrator); or

               (iv)   any combination of the foregoing methods of payment.

          (c)  Taxes. No Shares shall be delivered under the Plan to any Grantee
               -----
or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock
Option. Upon exercise of an Award, the Company shall withhold or collect from
Grantee an amount sufficient to satisfy such tax obligations.

          (d)  Reload Options. In the event the exercise price or tax
               --------------
withholding of an Option is satisfied by the Company or the Grantee's employer
withholding Shares otherwise deliverable to the Grantee, the Administrator may
issue the Grantee an additional Option, with terms identical to the Award
Agreement under which the Option was exercised, but at an exercise price as
determined by the Administrator in accordance with the Plan.

     8.   Exercise of Award.
          -----------------

          (a)  Procedure for Exercise; Rights as a Stockholder.
               -----------------------------------------------

               (i)    Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement.

               (ii)   An Award shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Award by the person entitled to exercise the Award and full payment
for the Shares with respect to which the Award is exercised. Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
<PAGE>

                                       12

stockholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. The Company shall
issue (or cause to be issued) such stock certificate promptly upon exercise of
the Award. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued, except as
provided in the Award Agreement or Section 10, below.

          (b)  Exercise of Award Following Termination of Continuous Service.
               -------------------------------------------------------------

               (i)    An Award may not be exercised after the termination date
of such Award set forth in the Award Agreement and may be exercised following
the termination of a Grantee's Continuous Service only to the extent provided in
the Award Agreement.

               (ii)   Where the Award Agreement permits a Grantee to exercise an
Award following the termination of the Grantee's Continuous Service for a
specified period, the Award shall terminate to the extent not exercised on the
last day of the specified period or the last day of the original term of the
Award, whichever occurs first.

               (iii)  Any Award designated as an Incentive Stock Option to the
extent not exercised within the time permitted by law for the exercise of
Incentive Stock Options following the termination of a Grantee's Continuous
Service shall convert automatically to a Non-Qualified Stock Option and
thereafter shall be exercisable as such to the extent exercisable by its terms
for the period specified in the Award Agreement.

          (c)  Buyout Provisions. The Administrator may at any time offer to buy
               -----------------
out for a payment in cash or Shares, an Award previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Grantee at the time that such offer is made.

     9.   Conditions Upon Issuance of Shares.
          ----------------------------------

          (a)  Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares
pursuant thereto shall comply with all Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

          (b)  As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
Applicable Laws.

     10.  Adjustments Upon Changes in Capitalization. Subject to any required
          ------------------------------------------
action by the shareholders of the Company, the number of Shares covered by each
outstanding Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, as well as any other terms that the Administrator
<PAGE>

                                       13

determines require adjustment shall be proportionately adjusted for (i) any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, (ii) any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with
respect to Common Stock to which Section 424(a) of the Code applies; provided,
however that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Administrator and its determination shall be
final, binding and conclusive. Except as the Administrator determines, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason hereof shall be made with respect to, the number or price of Shares
subject to an Award.

     11.  Corporate Transactions/Changes in Control/Related Entity Dispositions.
          ----------------------------------------------------------------------
Except as may be provided in an Award Agreement:

          (a)  The Administrator shall have the authority, exercisable either in
advance of any actual or anticipated Corporate Transaction, Change in Control or
Related Entity Disposition or at the time of an actual Corporate Transaction,
Change in Control or Related Entity Disposition and exercisable at the time of
the grant of an Award under the Plan or any time while an Award remains
outstanding, to provide for the full automatic vesting and exercisability of one
or more outstanding unvested Awards under the Plan and the release from
restrictions on transfer and repurchase or forfeiture rights of such Awards in
connection with a Corporate Transaction, Change in Control or Related Entity
Disposition, on such terms and conditions as the Administrator may specify. The
Administrator also shall have the authority to condition any such Award vesting
and exercisability or release from such limitations upon the subsequent
termination of the Continuous Service of the Grantee within a specified period
following the effective date of the Corporate Transaction, Change in Control or
Related Entity Disposition. The Administrator may provide that any Awards so
vested or released from such limitations in connection with a Change in Control
or Related Entity Disposition, shall remain fully exercisable until the
expiration or sooner termination of the Award. Effective upon the consummation
of a Corporate Transaction, all outstanding Awards under the Plan shall
terminate unless assumed by the successor company or its parent.

          (b)  The portion of any Incentive Stock Option accelerated under this
Section 11 in connection with a Corporate Transaction, Change in Control or
Related Entity Disposition shall remain exercisable as an Incentive Stock Option
under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated excess portion of such Option shall be exercisable as
a Non-Qualified Stock Option.

     12.  Effective Date and Term of Plan. The Plan shall become effective upon
          -------------------------------
the earlier to occur of its adoption by the Board or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 17, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
<PAGE>

                                       14

     13.  Amendment, Suspension or Termination of the Plan.
          ------------------------------------------------

          (a)  The Board may at any time amend, suspend or terminate the Plan.
To the extent necessary to comply with Applicable Laws, the Company shall obtain
stockholder approval of any Plan amendment in such a manner and to such a degree
as required.

          (b)  No Award may be granted during any suspension of the Plan or
after termination of the Plan.

          (c)  Any amendment, suspension or termination of the Plan (including
termination of the Plan under Section 13(a), above) shall not affect Awards
already granted, and such Awards shall remain in full force and effect as if the
Plan had not been amended, suspended or terminated, unless mutually agreed
otherwise between the Grantee and the Administrator, which agreement must be in
writing and signed by the Grantee and the Company.

     14.  Reservation of Shares.
          ---------------------

          (a)  The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

          (b)  The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.

     15.  No Effect on Terms of Employment/Consulting Relationship. The Plan
          --------------------------------------------------------
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without cause.

     16.  No Effect on Retirement and Other Benefit Plans. Except as
          -----------------------------------------------
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a "Retirement-Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.

     17.  Stockholder Approval. The Plan shall be subject to the Plan's approval
          --------------------
by the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted by the Company's Board of Directors. Such stockholder
approval shall be obtained in the degree and manner required under Applicable
Laws. The Administrator may grant Awards under the Plan prior to approval by the
stockholders, but until such approval is obtained, no such Aware shall be
exercisable. In the event that stockholder approval is not obtained within the
<PAGE>

                                       15

twelve (12) month period provided above, all Awards previously granted under the
Plan shall be cancelled and of no force or effect.
<PAGE>
                             LML PAYMENT SYSTEMS INC


                     AMENDMENT TO 1998 STOCK INCENTIVE PLAN
                      (Amended as at September 18, 2000)

The 1998 Stock Incentive Plan (the "Plan") of LML Payment Systems Inc, (formerly
Leisureways Marketing Ltd.) (the "Company") is hereby amended to reflect the
increase in the number of shares subject to the Plan. Accordingly, paragraph
3(a) of the Plan is amended to read as follows:

 3.      Stock Subject to the Plan
         -------------------------

        (a)  Subject to the provisions of Section 10, below, the maximum
             aggregate number of Shares which may be issued pursuant to all
             Awards (including Incentive Stock Options) is 3,000,000 Shares. The
             Shares to be issued pursuant to Awards may be authorized, but
             unissued, or reacquired Common Stock.

In all other respects the Plan shall remain the same.