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                                                                     Exhibit 4.2

                      SECURED DIVERSIFIED INVESTMENT, LTD.

                2003 NON-EMPLOYEE DIRECTORS STOCK INCENTIVE PLAN

                           As Adopted August 16, 2003

         1. Purpose. This 2003 Non-Employee Directors Stock Incentive Plan (this
"Plan") is established to provide equity incentives for certain non-employee
members of the Board of Directors of Secured Diversified Investment, Ltd. (the
"Corporation"), who are described in Section 6.1 below, by granting such persons
(i) options to purchase shares of stock of the Corporation and (ii) awards of
stock of the Corporation.

         2. Adoption and Stockholder Approval. After this Plan is adopted by the
Board of Directors of the Corporation (the "Board"), this Plan will become
effective on the time and date (the "Effective Date") on which the registration
statement filed by the Corporation with the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended (the "Securities Act"), to
register the initial public offering of the Corporation's Common Stock is
declared effective by the SEC. This Plan shall be approved by the stockholders
of the Corporation, consistent with applicable laws, within twelve (12) months
after the date this Plan is adopted by the Board.

         3. Types of Options, Awards and Shares. Options granted under this Plan
shall be non-qualified stock options ("NQSOs"). Awards may consist of grants and
stock purchase rights (each an "Award"). The shares of stock that may be
purchased upon exercise of Options granted under this Plan (the "Shares") are
shares of the Common Stock of the Corporation.

         4. Number of Shares. The maximum number of Shares that may be issued
pursuant to Options granted under this Plan (the "Maximum Number") is 5,000,000
Shares, subject to adjustment as provided in this Plan. If any Option is
terminated for any reason without being exercised in whole or in part, the
Shares thereby released from such Option shall be available for purchase under
other Options subsequently granted under this Plan. At all times during the term
of this Plan, the Corporation shall reserve and keep available such number of
Shares as shall be required to satisfy the requirements of outstanding Options
granted under this Plan; provided, however that if the aggregate number of
Shares subject to outstanding Options granted under this Plan plus the aggregate
number of Shares previously issued by the Corporation pursuant to Awards or
pursuant to the exercise of Options granted under this Plan equals or exceeds
the Maximum Number, then notwithstanding anything herein to the contrary, no
further Options or Awards may be granted under this Plan until the Maximum
Number is increased or the aggregate number of Shares subject to outstanding
Options granted under this Plan plus the aggregate number of Shares previously
issued by the Corporation pursuant to Awards or pursuant to the exercise of
Options granted under this Plan is less than the Maximum Number.

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         5. Administration. This Plan shall be administered by the Board or by a
committee of not less than two members of the Board appointed to administer this
Plan (the "Committee"). As used in this Plan, references to the Committee shall
mean either such Committee or the Board if no Committee has been established.
The interpretation by the Committee of any of the provisions of this Plan or any
Option or Award granted under this Plan shall be final and binding upon the
Corporation and all persons having an interest in any Option or Award or any
Shares purchased pursuant to an Option or issued pursuant to an Award.

         6. Eligibility and Award Formula.

                  6.1 Eligibility. Options and Awards shall be granted only to
         directors of the Corporation who are not employees of the Corporation
         or any Parent, Subsidiary or Affiliate of the Corporation, as those
         terms are defined in Section 18 below (each such person referred to as
         a "Recipient").

                  6.2 Initial Award. Each non-employee Director, when he or she
         first becomes a member of the Board, will automatically be granted an
         Award for 100,000 Shares (an "Initial Award") on the date such
         Recipient becomes a member of the Board.

                  6.3 Initial Option Grant. Each non-employee Director, when he
         or she first becomes a member of the Board of Directors, will
         automatically be granted an Option to purchase 500,000 shares (the
         "Initial Grant") on the date such Director becomes a member of the
         Board. Such options shall vest as set forth below.

                  6.4 Succeeding Grants. If a Director remains in continual
         service on the Board of Directors for a period in excess of three
         years, then on each annual anniversary of a Recipient's Initial Grant
         commencing in the fourth year the Recipient will automatically be
         granted an Option for 125,000 Shares (a "Succeeding Grant").

         7. Terms and Conditions of Awards. Subject to the following and to
Section 6 above:

                  7.1 Form of Awards. Awards in the form of stock grants shall
         be evidenced by a written Stock Grant Agreement in such form as the
         Board or the Committee may approve. Awards in the form of stock
         purchase rights shall be evidenced by a written Stock Purchase
         Agreement in such form as the Board may approve. Awards may vest
         immediately or may be subject to the same vesting provisions applicable
         to Options granted under this Plan as set forth in Section 8 below.
         Stock Purchase Rights shall be issued to Recipients at a price equal to
         or in excess of Fair Market Value, as defined in Section 18 below.

         8. Terms and Conditions of Options. Subject to the following and to
Section 6 above:

                  8.1 Form of Option Grant. Each Option granted under this Plan
         shall be evidenced by a written Stock Option Grant ("Grant") in such
         form (which need not be the same for each Recipient) as the Committee
         shall from time to time approve, which Grant shall comply with and be
         subject to the terms and conditions of this Plan.

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                  8.2 Vesting. The date a Recipient receives an Initial Grant or
         a Succeeding Grant is referred to in this Plan as the "Start Date" for
         such Option.

                           (a) Initial Grants. Each Initial Grant will vest as
                  to twenty-five percent (25%) of the Shares on Start Date of
                  the Initial Grant, and the remainder will vest in three equal
                  annual installments of twenty-five percent each on each annual
                  anniversary of the Start Date for such Initial Grant, so long
                  as the Recipient continuously remains a director or, as
                  determined by the Board in the Initial Grant or the Succeeding
                  Grant, a consultant of the Corporation.

                           (b) Succeeding Grants. Each Succeeding Grant will
                  vest in full on the first annual anniversary date of the Start
                  Date for such Succeeding Grant, so long as the Recipient
                  continuously remains a director or, as determined by the Board
                  in the Initial Grant or the Succeeding Grant, a consultant of
                  the Corporation.

                  8.3 Exercise Price. The exercise price of an Option shall be
         the Fair Market Value (as defined in Section 18.4) of the Shares, at
         the time that the Option is granted.

                  8.4 Termination of Option. Except as provided below in this
         Section, each Option shall expire ten (10) years after its Start Date
         (the "Expiration Date"). The Option shall cease to vest when the
         Recipient ceases to be a member of the Board or, as determined by the
         Board in the Initial Grant or the Succeeding Grant, a consultant of the
         Corporation. The date on which the Recipient ceases to be a member of
         the Board or, as determined by the Board in the Initial Grant or the
         Succeeding Grant, a consultant of the Corporation shall be referred to
         as the "Termination Date". An Option may be exercised after the
         Termination Date only as set forth below:

                           (a) Termination Generally. If the Recipient ceases to
                  be a member of the Board or, as determined by the Board in the
                  Initial Grant or the Succeeding Grant, a consultant of the
                  Corporation for any reason except death of the Recipient or
                  disability of the Recipient (whether temporary or permanent,
                  partial or total, as determined by the Committee), then each
                  Option then held by such Recipient, to the extent (and only to
                  the extent) that it would have been exercisable by the
                  Recipient on the Termination Date, may be exercised by the
                  Recipient no later than six (6) months after the Termination
                  Date, but in no event later than the Expiration Date.

                           (b) Death or Disability. If the Recipient ceases to
                  be a member of the Board or, as determined by the Board in the
                  Initial Grant or the Succeeding Grant, a consultant of the
                  Corporation because of the death of the Recipient or the
                  disability of the Recipient (whether temporary or permanent,
                  partial or total, as determined by the Committee), then each
                  Option then held by such Recipient to the extent (and only to
                  the extent) that it would have been exercisable by the
                  Recipient on the Termination Date, may be exercised by the
                  Recipient (or the Recipient's legal representative) no later
                  than twelve (12) months after the Termination Date, but in no
                  event later than the Expiration Date.

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         9. Exercise of Options.

                  9.1 Exercise Period. Subject to the provisions of Section 9.5
         below, Options shall be exercisable as they vest.

                  9.2 Notice. Options may be exercised only by delivery to the
         Corporation of an exercise agreement in a form approved by the
         Committee stating the number of Shares being purchased, the
         restrictions imposed on the Shares and such representations and
         agreements regarding the Recipient's investment intent and access to
         information as may be required by the Corporation to comply with
         applicable securities laws, together with payment in full of the
         exercise price for the number of Shares being purchased.

                  9.3 Payment. Payment for the Shares purchased upon exercise of
         an Option may be made (a) in cash or by check; (b) by surrender of
         shares of Common Stock of the Corporation that have been owned by the
         Recipient for more than six (6) months (and which have been paid for
         within the meaning of SEC Rule 144 and, if such shares were purchased
         from the Corporation by use of a promissory note, such note has been
         fully paid with respect to such shares) or were obtained by the
         Recipient in the open public market, having a Fair Market Value equal
         to the exercise price of the Option; (c) by waiver of compensation due
         or accrued to the Recipient for services rendered; (d) provided that a
         public market for the Corporation's stock exists, through a "same day
         sale" commitment from the Recipient and a broker-dealer that is a
         member of the National Association of Securities Dealers (an "NASD
         Dealer") whereby the Recipient irrevocably elects to exercise the
         Option and to sell a portion of the Shares so purchased to pay for the
         exercise price and whereby the NASD Dealer irrevocably commits upon
         receipt of such Shares to forward the exercise price directly to the
         Corporation; (e) provided that a public market for the Corporation's
         stock exists, through a "margin" commitment from the Recipient and an
         NASD Dealer whereby the Recipient irrevocably elects to exercise the
         Option and to pledge the Shares so purchased to the NASD Dealer in a
         margin account as security for a loan from the NASD Dealer in the
         amount of the exercise price, and whereby the NASD Dealer irrevocably
         commits upon receipt of such Shares to forward the exercise price
         directly to the Corporation; or (f) by any combination of the
         foregoing.

                  9.4 Withholding Taxes. Prior to issuance of the Shares upon
         exercise of an Option, the Recipient shall pay or make adequate
         provision for any federal or state withholding obligations of the
         Corporation, if applicable.

                  9.5 Limitations on Exercise. Notwithstanding the exercise
         periods set forth in the Grant, exercise of an Option shall always be
         subject to the following limitations:

                           (a) An Option shall not be exercisable unless such
                  exercise is in compliance with the Securities Act and all
                  applicable state securities laws, as they are in effect on the
                  date of exercise.

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                           (b) The Committee may specify a reasonable minimum
                  number of Shares that may be purchased upon any exercise of an
                  Option, provided that such minimum number will not prevent the
                  Recipient from exercising the full number of Shares as to
                  which the Option is then exercisable.

         10. Nontransferability of Options. During the lifetime of the
Recipient, an Option shall be exercisable only by the Recipient or by the
Recipient's guardian or legal representative, unless otherwise determined by the
Committee. No Option may be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent and
distribution, unless otherwise determined by the Committee.

         11. Privileges of Stock Ownership. Recipients of Awards shall have all
rights of a stockholder with respect to any Shares granted outright. No
Recipient shall have any of the rights of a stockholder with respect to any
Shares subject to an Option until the Option has been validly exercised. No
adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to the date of exercise, except as provided in
this Plan. The Corporation shall provide to each Recipient a copy of the annual
financial statements of the Corporation at such time after the close of each
fiscal year of the Corporation as they are released by the Corporation to its
stockholders.

         12. Adjustment of Shares. In the event that the number of outstanding
shares of Common Stock of the Corporation is changed by a stock dividend, stock
split, reverse stock split, combination, reclassification or similar change in
the capital structure of the Corporation without consideration, the number of
Shares available under this Plan and the number of Shares subject to outstanding
Options and Awards and the exercise price per share of such outstanding Options
shall be proportionately adjusted, subject to any required action by the Board
or stockholders of the Corporation and compliance with applicable securities
laws; provided, however, that no fractional shares shall be issued upon exercise
of any Option and any resulting fractions of a Share shall be rounded up to the
nearest whole Share.

         13. No Obligation to Continue as Director. Nothing in this Plan or any
Option granted under this Plan shall confer on any Recipient any right to
continue as a Director of the Corporation.

         14. Compliance With Laws. The grant of Options and Awards and the
issuance of Shares pursuant to an Awards or upon exercise of any Options shall
be subject to and conditioned upon compliance with all applicable requirements
of law, including without limitation compliance with the Securities Act,
compliance with all other applicable state securities laws and compliance with
the requirements of any stock exchange or national market system on which the
Shares may be listed. The Corporation shall be under no obligation to register
the Shares with the SEC or to effect compliance with the registration or
qualification requirement of any state securities laws, stock exchange or
national market system.

         15. Acceleration of Awards and Options on Certain Corporate
Transactions. In the event of (a) a dissolution or liquidation of the
Corporation, (b) a merger or consolidation in which the Corporation is not the
surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Corporation in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of


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the Corporation or their relative stock holdings and the Options and Awards
granted under this Plan are assumed, converted or replaced by the successor
corporation, which assumption, conversion or replacement will be binding on all
Recipients), (c) a merger in which the Corporation is the surviving corporation
but after which the stockholders of the Corporation (other than any stockholder
which merges (or which owns or controls another corporation which merges) with
the Corporation in such merger) cease to own their shares or other equity
interests in the Corporation, (d) the sale of substantially all of the assets of
the Corporation, or (e) the acquisition, sale or transfer of more than 50% of
the outstanding shares of the Corporation by tender offer or similar
transaction, the vesting of all options granted pursuant to this Plan will
accelerate and the options will become exercisable in full prior to the
consummation of such event at such times and on such conditions as the Committee
determines, and must be exercised, if at all, within six months of the
consummation of said event. Any Options not exercised within such six-month
period shall expire.

         16. Amendment or Termination of Plan. The Board may at any time
terminate or amend this Plan or any outstanding option, provided that the Board
may not terminate or amend the terms of any outstanding Option or Award without
the consent of the Recipient. In any case, no amendment of this Plan may
adversely affect any then outstanding Options or Awards or any unexercised
portions thereof without the written consent of the Recipient.

         17. Term of Plan. Options and Awards may be granted pursuant to this
Plan from time to time within a period of ten (10) years from the Effective
Date.

         17. Certain Definitions. As used in this Plan, the following terms
shall have the following meanings:

                  18.1 "Parent" means any corporation (other than the
         Corporation) in an unbroken chain of corporations ending with the
         Corporation if each of such corporations other than the Corporation
         owns stock possessing 50% or more of the total combined voting power of
         all classes of stock in one of the other corporations in such chain.

                  18.2 "Subsidiary" means any corporation (other than the
         Corporation) in an unbroken chain of corporations beginning with the
         Corporation if each of the corporations other than the last corporation
         in the unbroken chain owns stock possessing 50% or more of the total
         combined voting power of all classes of stock in one of the other
         corporations in such chain.

                  18.3 "Affiliate" means any corporation that directly, or
         indirectly through one or more intermediaries, controls or is
         controlled by, or is under common control with, another corporation,
         where "control" (including the terms "controlled by" and "under common
         control with") means the possession, direct or indirect, of the power
         to cause the direction of the management and policies of the
         corporation, whether through the ownership of voting securities, by
         contract or otherwise.

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                  18.4 "Fair Market Value" means, as of any date, the value of a
         share of the Corporation's Common Stock determined as follows:

                           (a) if such Common Stock is then quoted on the Nasdaq
                  National Market, its closing price on the Nasdaq National
                  Market on the date of determination as reported in The Wall
                  Street Journal;

                           (b) if such Common Stock is publicly traded and is
                  then listed on a national securities exchange, its closing
                  price on the date of determination on the principal national
                  securities exchange on which the Common Stock is listed or
                  admitted to trading as reported in The Wall Street Journal;

                           (c) if such Common Stock is publicly traded but is
                  not quoted on the Nasdaq National Market nor listed or
                  admitted to trading on a national securities exchange, the
                  average of the closing bid and asked prices on the date of
                  determination as reported in The Wall Street Journal the OTC
                  Electronic Bulleting Board or the Pink Sheets;

                           (d) in the case of an Option granted on the Effective
                  Date, the price per share at which shares of the Corporation's
                  Common Stock are initially offered for sale to the public by
                  the Corporation's underwriters in the initial public offering
                  of the Corporation's Common Stock pursuant to a registration
                  statement filed with the SEC under the Securities Act;

                           (e) if none of the foregoing is applicable, by the
                  Committee in good faith.


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