WORLD CALLNET, INC.
                         AMENDED 1998 STOCK OPTION PLAN

1.  Purposes of the Plan.  The  purposes  of this 1998 Stock  Option Plan are to
attract and retain the best  available  personnel for  positions of  substantial
responsibility,  to provide additional incentive to Employees and Consultants of
the Company  and its  Subsidiaries  and to promote the success of the  Company's
business.  Options  granted  under this Plan may be incentive  stock options (as
defined  under  Section  422 of the  Code) or  nonqualified  stock  options,  as
determined by the Option Committee at the time of grant of an option and subject
to the  applicable  provisions of Section 422 of the Code,  as amended,  and the
regulations promulgated thereunder.

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

         2.1 "Option  Committee"  means the Board or any of its  committees,  as
         applicable, that is administering the Plan pursuant to Section 4 of the
         Plan.

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

         2.3 "Code" means the Internal Revenue Code of 1986, as amended.

         2.4 "Company" means WORLD CALLNET, INC., a Delaware corporation.

         2.5 "Consultant"  means any consultant or advisor to the Company or any
         Parent  or  Subsidiary   and  any  director  of  the  Company   whether
         compensated for such services or not, but not including any Employee.

         2.6  "Continuous  Status  as an  Employee"  means  the  absence  of any
         interruption  or  termination  of the  employment  relationship  by the
         Company or any Subsidiary.  Continuous  Status as an Employee shall not
         be  considered  interrupted  in the case of:  (i) any leave of  absence
         approved by the Board,  including sick leave,  military  leave,  or any
         other personal leave; provided, however, that for purposes of Incentive
         Stock  Options,  such  leave is for a period  of not more than 90 days,
         unless  reemployment upon the expiration of such leave is guaranteed by
         contract or statute,  or unless provided  otherwise pursuant to Company
         policy  adopted  from  time to time;  or (ii) in the case of  transfers
         between   locations  of  the  Company  or  between  the  Company,   its
         Subsidiaries or its successors.

         2.7  "Employee"  means any person,  including  officers and  directors,
         employed by the Company or any Parent or Subsidiary of the Company. The
         payment of a director's  fee by the Company  shall not be sufficient to
         constitute "employment" by the Company.

         2.8 "Exchange Act" means the Securities  Exchange Act of 1934, as
         amended.

         2.9 "Fair  Market  Value"  means,  as of any  date,  the value of Stock
         determined as follows:

                  2.9.1 If the Stock is listed on any established stock exchange
                  or a national market system including  without  limitation the
                  National   Market  System  of  the  National   Association  of
                  Securities  Dealers,   Inc.  Automated  Quotation   ("Nasdaq")
                  System, its Fair Market Value shall be the closing sales price
                  for such stock (or the closing bid, if no sales were reported,

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                  as quoted on such system or exchange or the exchange  with the
                  greatest  volume  of  trading  in Stock  for the  last  market
                  trading day prior to the time of determination) as reported in
                  the Wall  Street  Journal or such  other  source as the Option
                  Committee deems reliable;

                  2.9.2 If the Stock is quoted  on Nasdaq  SmallCap  (but not on
                  the  National   Market  System)  or  regularly   quoted  by  a
                  recognized  securities  dealer  but  selling  prices  are  not
                  reported,  its Fair Market Value shall be the mean between the
                  high and low asked prices for the Stock; or

                  2.9.3 In the absence of an  established  market for the Stock,
                  the Fair Market  Value  thereof  shall be  determined  in good
                  faith by the Option Committee.

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

         2.11  "Nonqualified  Stock  Option"  means an Option  not  intended  to
         qualify as an Incentive Stock Option.

         2.12 "Option" means a stock option granted pursuant to the Plan.

         2.13 "Optioned Stock" means the Stock subject to an Option.

         2.14 "Optionee" means an Employee or Consultant who receives an
         Option.

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

         2.16 "Plan" means this 1998 Stock Option Plan, as amended.

         2.17 "Share" means a share of the Stock, as adjusted in accordance with
         Section 13 of the Plan.

         2.18 "Stock" means the Common Stock,  par value $.001 per share, of the
         Company.

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

3. Stock  Subject to the Plan.  Subject to the  provisions  of Section 13 of the
Plan, the maximum number of shares of Stock which may be optioned and sold under
the Plan is 3,000,000  shares.  The shares may be authorized,  but unissued,  or
reacquired  Stock.  If an Option should expire or become  unexercisable  for any
reason without having been exercised in full, the unpurchased Shares, which were
subject  thereto,  shall,  unless the Plan shall  have been  terminated,  become
available for future grant under the Plan.

4. Administration of the Plan.

         4.1   Administration   By  Board  or  Committee.   The  Plan  shall  be
         administered  by (a) the  Board or (b) a  committee  designated  by the
         Board to administer the Plan,  which  committee shall be constituted in
         such a  manner  as to  permit  the  Plan  to  comply  with  Rule  16b-3

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         promulgated  under the Exchange  Act or any  successor  thereto  ("Rule
         16b-3")  with  respect to a plan  intended to qualify  thereunder  as a
         discretionary  plan. Once  appointed,  such committee shall continue to
         serve in its designated capacity until otherwise directed by the Board.
         From time to time the Board may increase the size of the  committee and
         appoint  additional  members  thereof,  remove members (with or without
         cause)  and  appoint  new  members  in  substitution  therefore,   fill
         vacancies,  however caused, and remove all members of the committee and
         thereafter directly administer the Plan, all to the extent permitted by
         Rule 16b-3 with respect to a plan  intended to qualify  thereunder as a
         discretionary plan.

         4.2  Limitation  on  Administration  by  Board.   Notwithstanding   the
         foregoing,  the Plan shall not be  administered by the Board if (a) the
         Company  and  its  officers  and  directors  are  then  subject  to the
         requirements  of Section  16 of the  Exchange  Act and (b) the  Board's
         administration  of the Plan would prevent the Plan from  complying with
         Rule 16b-3.

         4.3 Multiple  Administrative  Bodies.  If permitted by Rule 16b-3,  the
         Plan may be administered by different bodies with respect to directors,
         non-director  officers  and  Employees  who are neither  directors  nor
         officers.

         4.4 Powers of the Option  Committee.  Subject to the  provisions of the
         Plan and in, the case of a committee,  the specific duties delegated by
         the  Board to such  committee,  the  Option  Committee  shall  have the
         authority, in its discretion:

                  4.4.1 to determine whether and to what extent Options shall be
                  granted hereunder;

                  4.4.2 to select the  officers,  Consultants  and  Employees to
                  whom Options may from time to time be granted hereunder;

                  4.4.3 to determine the number of shares of Stock to be covered
                  by each such award granted hereunder;

                  4.4.4 to  determine  the Fair  Market  Value of the Stock,  in
                  accordance with Section 2.9 of the Plan;

                  4.4.5 to approve forms of agreement for use under the Plan;

                  4.4.6 to determine the terms and conditions,  not inconsistent
                  with the terms of the Plan,  of any  award  granted  hereunder
                  (including,  but not limited to, the per share  exercise price
                  for the Shares to be issued  pursuant  to the  exercise  of an
                  Option and any  restriction  or  limitation,  or any  vesting,
                  acceleration  or waiver of forfeiture  restrictions  regarding
                  any Option or other award and/or the shares of Stock  relating
                  thereto,  based in each  case on such  factors  as the  Option
                  Committee shall determine, in its sole discretion);

                  4.4.7 to  determine  whether and under what  circumstances  an
                  Option may be bought-out for cash under subsection 10.4;

                  4.4.8 to  determine  whether,  to what  extent  and under what
                  circumstances  Stock and other amounts payable with respect to
                  an  award   under   this  Plan   shall  be   deferred   either
                  automatically or at the election of the participant (including

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                  providing  for and  determining  the  amount,  if any,  of any
                  deemed  earnings on any  deferred  amount  during any deferral
                  period); and

                  4.4.9 to reduce the  exercise  price of any Option to the then
                  current  Fair  Market  Value if the Fair  Market  Value of the
                  Stock  covered by such Option  shall have  declined  since the
                  date the Option was granted.

         4.5   Effect   of   Option   Committee's   Decision.   All   decisions,
         determinations  and  interpretations  of the Option  Committee shall be
         final  and  binding  on all  Optionees  and any  other  holders  of any
         Options. Neither the Board, the Committee, nor any member thereof shall
         be  liable  for any  act,  omission,  interpretation,  construction  or
         determination  made in connection with the Plan in good faith,  and the
         members  of the  Board  and of  the  Committee  shall  be  entitled  to
         indemnification  and  reimbursement  by the  Company  in respect of any
         claim,  loss,  damage  or  expense  (including  counsel  fees)  arising
         therefrom to the full extent permitted by law.

5. Eligibility.

         5.1  Nonqualified  Stock  Options  may  be  granted  to  Employees  and
         Consultants.  Incentive Stock Options may be granted only to Employees.
         An Employee or Consultant  who has been granted an Option may, if he is
         otherwise eligible, be granted an additional Option or Options.

         5.2 Each Option shall be designated in the written option  agreement as
         either an  Incentive  Stock  Option  or a  Nonqualified  Stock  Option.
         However,  notwithstanding  such  designations  to the  extent  that the
         aggregate  Fair  Market  Value of the  Shares,  with  respect  to which
         Options  designated as Incentive  Stock Options are exercisable for the
         first time by any Optionee during any calendar year (under all plans of
         the Company or any Parent or Subsidiary), exceeds $100,000, such excess
         Options  shall be  treated  as  Nonqualified  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 time the Option with respect to
         such Shares is granted.

         5.3 The Plan shall not confer upon any  Optionee any right with respect
         to  continuation  of  employment or  consulting  relationship  with the
         Company,  nor  shall it  interfere  in any way  with  his  right or the
         Company's right to terminate his employment or consulting  relationship
         at any time, with or without cause,  unless otherwise agreed in writing
         by the Company and such Optionee.

6. Term of Plan. The Plan shall become  effective upon its adoption by the Board
of  Directors  subject  only to  approval  by the  holders of a majority  of the
outstanding  Shares  within 12 months  after such  date.  Should the Plan not be
approved by a vote of shareholders as specified  above, the Plan shall terminate
12 months after the effective date, all options issued prior to that termination
date shall  continue in effect but without the benefits  that would accrue under
the Code or the Act from such shareholder approval. Otherwise, it shall continue
in effect until ten years from the effective date,  unless extended by the Board
or sooner  terminated under Section 15 of the Plan. No grants of Options will be
made pursuant to the Plan after termination of the Plan.

7.  Term of  Option.  The term of each  Option  shall be the term  stated in the
Option  Agreement;  provided,  however,  that in the case of an Incentive  Stock
Option,  the terms shall be no more than 10 years from the date of grant thereof

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or such shorter term as may be provided in the Option Agreement. However, in the
case of an Option granted to an Optionee who, at the time the Option is granted,
owns  Stock  representing  more than 10% of the voting  power of all  classes of
stock of the Company or any Parent or  Subsidiary,  the term of the Option shall
be five years  from the date of grant  thereof  or such  shorter  term as may be
provided in the Option Agreement.

8. Option Exercise Price and Consideration.

         8.1 The per share exercise  price for the Shares to be issued  pursuant
         to exercise of an Option  shall be such price as is  determined  by the
         Option Committee; provided, however, that as to an Incentive Option:

                  8.1.1  granted to an Employee who, at the time of the grant of
                  such Incentive Stock Option, owns stock representing more than
                  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 no less than 110% of the Fair Market  Value per Share
                  on the date of grant.

                  8.1.2 granted to any other  Employee,  the per Share  exercise
                  price shall be no less than 100% of the Fair Market  Value per
                  Share on the date of grant.

         8.2 The  consideration  to be paid for the  Shares  to be  issued  upon
         exercise of an Option may be paid by certified or cashier's  check.  In
         the  discretion  of the  Option  Committee  as set forth in the  Option
         Agreement or, except for Incentive  Options,  determined at the time of
         exercise, payment may also be made by any or all of the following:

                  8.2.1 check,

                  8.2.2 promissory note,

                  8.2.3 other shares of the Company's  capital stock which a) in
                  the case of shares of the  Company's  capital  stock  acquired
                  upon  exercise  of an Option  either  have  been  owned by the
                  Optionee  for more than six months on the date of surrender or
                  were not acquired,  directly or indirectly,  from the Company,
                  and (b) have a Fair  Market  Value  on the  date of  surrender
                  equal to the aggregate  exercise  price of the Shares to which
                  said Option shall be exercised,

                  8.2.4  authorization  for the Company to retain from the total
                  number  of Shares as to which  the  Option is  exercised  that
                  number of  Shares  having a Fair  Market  Value on the date of
                  exercise  equal to the exercise  price for the total number of
                  Shares as to which the Option is exercised,

                  8.2.5 delivery of a properly executed exercise notice together
                  with irrevocable  instructions to a broker to promptly deliver
                  to the Company the amount of sale or loan proceeds required to
                  pay the exercise price, or

                  8.2.6 such other  consideration  and method of payment for the
                  issuance of Shares to the extent  permitted  under  applicable
                  laws.


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9.  Limitation  on Exercise.  The following  limitations  on exercise of Options
shall apply to all  Incentive  Options and,  except to the extent  waived by the
Option Committee and stated in the Option Agreement, to all other Options.

         9.1.  Termination  of  Employment.  In the event of  termination  of an
         Optionee's relationship as a Consultant (unless such termination is for
         purposes of becoming an Employee of the Company) or on  termination  of
         an Optionee's Continuous Status as an Employee with the Company (as the
         case may be),  such  Optionee  may,  but only within 90 days (or, as to
         Options other than Incentive Options,  such longer period of time as is
         determined by the Option Committee) after the date of such termination,
         but in no  event  later  than the  expiration  date of the term of such
         Option as set forth in the Option Agreement, exercise his Option to the
         extent that  Optionee  was  entitled to exercise it at the date of such
         termination.  To the extent that  Optionee was not entitled to exercise
         the Option at the date of such  termination,  or if  Optionee  does not
         exercise  such  Option  to the  extent  so  entitled  within  the  time
         specified herein, the Option shall terminate.

         9.2 Disability of Optionee.  Notwithstanding  the provisions of Section
         9.1 above, in the event of termination of an Optionee's relationship as
         a  Consultant  or  Continuous  Status as an Employee as a result of his
         total and permanent  disability (as defined in Section  22(e)(3) of the
         Code),  Optionee  may,  but only within 12 months from the date of such
         termination  and in no event later than the expiration date of the term
         of such  Option  as set forth in the  Option  Agreement,  exercise  the
         Option to the extent  otherwise  entitled to exercise it at the date of
         such  termination.  To the extent  that  Optionee  was not  entitled to
         exercise the Option at the date of termination, or if Optionee does not
         exercise  such  Option  to the  extent  so  entitled  within  the  time
         specified herein, the Option shall terminate.

         9.3 Death of Optionee.  In the event of the death of an  Optionee,  the
         Option may be  exercised,  at any time within 12 months  following  the
         date of death (but in no event  later than the  expiration  date of the
         term of such  Option  as set  forth in the  Option  Agreement),  by the
         Optionee's estate or by a person who acquired the right to exercise the
         Option by bequest or  inheritance,  but only to the extent the Optionee
         was entitled to exercise the Option at the date of death. To the extent
         that the  Optionee  was not entitled to exercise the Option at the date
         of termination,  or if the Optionee's  estate (or such other person who
         acquired  the right to exercise  the  Option)  does not  exercise  such
         Option to the extent so entitled within the time specified herein,  the
         Option shall terminate.

10. Exercise of Option.

         10.1 Procedure for Exercise;  Rights as a Stockholder.  An Option shall
         be deemed to be exercised,  and the Optionee deemed to be a stockholder
         of the Shares being  purchased  upon  exercise,  when written notice of
         such  exercise  has been given to the  Company in  accordance  with the
         terms of the Option by the person  entitled to exercise  the Option and
         full  payment  for the  Shares  with  respect  to which  the  Option is
         exercised  has been  received  by the  Company.  Full  payment  may, as
         authorized  by the Board,  consist of any  consideration  and method of
         payment  allowable  under Section 8.2 of the Plan. An Option may not be
         exercised for a fraction of a Share.

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         10.2  Effect on Number of Shares.  Exercise  of an Option in any manner
         shall  result in a decrease in the number of shares,  which  thereafter
         may be available,  both for purposes of the Plan and for sale under the
         Option, by the number of Shares as to which the Option is exercised.

         10.3 Rule 16b-3. Options granted to persons subject to Section 16(b) of
         the Exchange Act must comply with the Rule 16b-3 and shall contain such
         additional  conditions or restrictions as may be required thereunder to
         qualify for the maximum  exemption  from Section 16 of the Exchange Act
         with respect to Plan transactions.

         10.4 Buyout  Provisions.  The Option Committee may at any time offer to
         buy out for a payment in cash or Shares, an Option previously  granted,
         based on such  terms  and  conditions  as the  Option  Committee  shall
         establish and  communicate  to the Optionee at the time that such offer
         is made.

11.  Non-Transferability  of  Options.  The  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 Optionee, only by the Optionee.

12. Stock Withholding to Satisfy Withholding Tax Obligations.

         12.1 At the discretion of the Option  Committee,  Optionees may satisfy
         withholding  tax  obligations  as provided in this  paragraph.  When an
         Optionee incurs tax liability in connection  with an Option,  which tax
         liability is subject to tax withholding  under applicable tax laws, and
         the Optionee is  obligated to pay the Company an amount  required to be
         withheld  under  applicable  tax laws,  the  Optionee  may  satisfy the
         withholding  tax  obligation  by electing to have the Company  withhold
         from the Shares to be issued upon  exercise of the Option,  that number
         of Shares having a Fair Market Value equal to the amount required to be
         withheld.  The Fair Market Value of the Shares to be withheld  shall be
         determined  on the date that the amount of tax to be  withheld is to be
         determined (the "Tax Date").

         12.2 All  elections  by an Optionee to have  Shares  withheld  for this
         purpose  shall be made in  writing in a form  acceptable  to the Option
         Committee and shall be subject to the following restrictions:

                  12.2.1 the election must be made on or prior to the applicable
                  Tax Date;

                  12.2.2 once made,  the election shall be irrevocable as to the
                  particular  Shares of the Option as to which the  election  is
                  made;

                  12.2.3  all  elections  shall be  subject  to the  consent  or
                  disapproval of the Option Committee; and

                  12.2.4 if the Optionee is subject to Rule 16b-3,  the election
                  must comply with the  applicable  provisions of Rule 16b-3 and
                  shall be subject to such additional conditions or restrictions
                  as may be  required  thereunder  to  qualify  for the  maximum
                  exemption  from Section 16 of the Exchange Act with respect to
                  Plan transactions.

         12.3 In the event the  election to have  Shares  withheld is made by an
         Optionee,  the Tax Date is deferred under Section 83 of the Code and no
         election is filed under Section 83(b) of the Code,  the Optionee  shall
         receive the full  number of Shares with  respect to which the Option is

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         exercised  but such  Optionee  shall be  unconditionally  obligated  to
         tender back to the Company the proper number of Shares on the Tax Date.

13.  Changes in the Company's  Capital  Structure.  The existence of outstanding
Options  shall not  affect in any way the right or power of the  Company  or its
stockholders  to make or authorize  any or all  adjustments,  recapitalizations,
reorganizations  or other  changes in the  Company's  capital  structure  or its
business,  or any merger or consolidation of the Company,  or any issue of bond,
debentures,  preferred or prior preference stock ahead of or affecting the Stock
or the rights thereof,  or the dissolution or liquidation of the Company, or any
sale or  transfer  of all or any part of its  assets or  business,  or any other
corporate  act or  proceeding,  whether  of a similar  character  or  otherwise;
subject to the following:

         13.1 If the Company  shall effect a  subdivision  or  consolidation  of
         shares or other capital readjustment,  the payment of a stock dividend,
         or other  increase  or  reduction  of the number of shares of the Stock
         outstanding,   without  receiving   compensation  therefore  in  money,
         services or property,  then (a) the number,  class, and per share price
         of shares of Stock subject to outstanding  Options  hereunder  shall be
         appropriately  adjusted  in such a manner as to entitle an  Optionee to
         receive  upon  exercise  of an  Option,  for the  same  aggregate  cash
         consideration,  the same  total  number and class of shares as he would
         have received had he exercised his Option;  (b) the number and class of
         shares of Stock  then  reserved  for  issuance  under the Plan shall be
         adjusted by  substituting  for the total  number and class of shares of
         Stock then reserved that number and class of shares of stock that would
         have  been  received  by the owner of an equal  number  of  outstanding
         shares of each class of Stock as the result of the event  requiring the
         adjustment.

         13.2 Unless otherwise expressly provided in an Option Agreement, upon a
         Corporate Change (as defined below),  notwithstanding any other term of
         this  Plan,  any and all  outstanding  Options  not  fully  vested  and
         exercisable shall vest in full and be immediately exercisable,  and any
         other  restrictions  on such  Options  including,  without  limitation,
         requirements   concerning  the  achievement  of  specific  goals  shall
         terminate.  The  foregoing  shall apply to  Incentive  Options,  unless
         stated to the contrary in the Option Agreement,  even though the effect
         may be to convert part of the Option to a Nonqualified Option.

         13.3 As used in this Plan, a "Corporate Change" shall be deemed to have
         occurred  upon, and shall mean (a) the  acquisition by any  individual,
         entity or group (within the meaning of Section  13(d)(3) or 14(d)(2) of
         the Exchange Act) (a "Person"),  of  beneficial  ownership  (within the
         meaning of Rule 13d-3  promulgated  under the  Exchange  Act) of 80% or
         more of either (i) the then outstanding  shares of Stock of the Company
         (the  "Outstanding  Company Common Stock") or (ii) the combined  voting
         power of the then outstanding voting securities of the Company entitled
         to vote  generally  in the  election  of  directors  (the  "Outstanding
         Company  Voting  Securities");  provided,  however,  that the following
         transactions   shall  not  constitute  a  Corporate  Change:   (u)  any
         acquisition  by  virtue of the  conversion  of  preferred  stock of the
         Company  outstanding  on  the  effective  date  hereof;  (v)  customary
         transactions  with and between  underwriters  and selling group members
         with  respect to a bona fide  public  offering of  securities,  (w) any
         acquisition  directly  from the Company  (excluding an  acquisition  by

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         virtue of the exercise of a conversion privilege),  (x) any acquisition
         by the Company, (y) any acquisition by any employee benefit plan(s) (or
         related  trust(s))  sponsored  or  maintained  by  the  Company  or any
         corporation  controlled  by the Company or (z) any  acquisition  by any
         entity  pursuant  to a  reorganization,  merger or  consolidation,  if,
         immediately following such reorganization,  merger or consolidation the
         conditions  described in clauses  (i),  (ii) and (iii) of clause (b) of
         this paragraph are satisfied;  or (b) the approval by the  stockholders
         of the Company of a reorganization,  merger or  consolidation,  in each
         case,  unless  immediately  following  such  reorganization,  merger or
         consolidation (i) more than 60% of, respectively,  the then outstanding
         shares of common stock (or other  equivalent  securities) of the entity
         resulting from such  reorganization,  merger or  consolidation  and the
         combined voting power of the then outstanding voting securities of such
         entity  entitled to vote  generally in the  election of  directors  (or
         other similar governing body) is then beneficially  owned,  directly or
         indirectly, by all or substantially all of the individuals and entities
         who were the  beneficial  owners,  respectively,  of the Company Common
         Stock and Outstanding  Company Voting  Securities  immediately prior to
         such reorganization,  merger or consolidation in substantially the same
         proportions   as   their   ownership,   immediately   prior   to   such
         reorganization,  merger or  consolidation  of the  Outstanding  Company
         Common Stock and Outstanding Company Voting Securities, as the case may
         be, (ii) no Person (excluding the Company, any employee benefit plan(s)
         (or related  trust(s)) of the Company and/or its  subsidiaries  or such
         entity resulting from such reorganization,  merger or consolidation and
         any   Person   beneficially   owning,   immediately   prior   to   such
         reorganization, merger or consolidation, directly or indirectly, 80% or
         more of the  Outstanding  Company Common Stock or  Outstanding  Company
         Voting Securities,  as the case may be) beneficially owns,  directly or
         indirectly,  80% or more of, respectively,  the then outstanding shares
         of  common  stock  (or  other  equivalent  securities)  of  the  entity
         resulting  from such  reorganization,  merger or  consolidation  or the
         combined voting power of the then outstanding voting securities of such
         entity  entitled to vote  generally in the  election of  directors  (or
         other  similar  governing  body) and (iii) at least a  majority  of the
         members of the board of directors (or other similar  governing body) of
         the entity resulting from such reorganization,  merger or consolidation
         were members of the Incumbent  Board (as defined  below) at the time of
         the   execution   of  the   initial   agreement   providing   for  such
         reorganization,  merger on  consolidation.  The "Incumbent Board" shall
         mean  individuals  who as of the effective  date hereof  constitute the
         Company's Board of Directors;  provided,  however,  that any individual
         becoming  a  director  subsequent  to  such  date  whose  election,  or
         nomination for election by the Company's stockholders,  was approved by
         a vote of at least a majority  of the  directors  then  comprising  the
         Incumbent  Board shall be considered as though such  individual  were a
         member of the Incumbent  Board,  but excluding,  for this purpose,  any
         such individual  whose initial  assumption of office occurs as a result
         of either (i) an actual or threatened  election  contest (as such terms
         are  used in Rule  14a-11  of  Regulation  14A  promulgated  under  the
         Exchange  Act), or an actual or threatened  solicitation  of proxies or
         consents by or on behalf of a Person other than the Company's  Board of
         Directors  or (ii) a plan or  agreement  to replace a  majority  of the
         members of the Board of Directors then comprising the Incumbent Board.

         13.4 The  Company  intends  that this  Section  shall  comply  with the
         requirements  of  Rule  16b-3  and  any  future  rules  promulgated  in
         substitution  therefore  under the  Exchange Act during the term of the
         Plan.  Should any  provision of this Section not be necessary to comply
         with the requirements of Rule 16b-3 or should any additional provisions

<PAGE>

         be necessary for this Section to comply with the  requirements  of Rule
         16b-3,  the Board of  Directors  may amend the Plan to add to or modify
         the provisions of the Plan accordingly.

         13.5  Except  as  hereinbefore  expressly  provided,  the  issue by the
         Company of shares of stock of any class, or securities convertible into
         shares of stock of any  class,  for cash or  property,  or for labor or
         services  either  upon  direct  sale or upon the  exercise of rights or
         warrants  to  subscribe  therefor,  or upon  conversion  of  shares  or
         obligations  of the  Company  convertible  into  such  shares  or other
         securities, shall not affect, and no adjustment by reason thereof shall
         be made with respect to, the number, class, or price of shares of Stock
         then subject to outstanding Options.

14.  Time of  Granting  Options.  The date of grant of an Option  shall,  or all
purposes,  be the date on which the  Option  Committee  makes the  determination
granting  such  Option,  or such  other  date  as is  determined  by the  Option
Committee.  Notice  of the  determination  shall be given  to each  Employee  or
Consultant  to whom an Option is so granted  within a reasonable  time after the
date of such grant.

15. Amendment and Termination of the Plan.

         15.1 Amendment and Termination. The Board may at any time amend, alter,
         suspend  or  discontinue  the  Plan,  but  no  amendment,   alteration,
         suspension  or  discontinuation  shall be made which  would  impair the
         rights of any Optionee under any grant theretofore made, without his or
         her consent.  In addition,  to the extent  necessary  and  desirable to
         comply with Rule 16b-3 under the  Exchange  Act or with  Section 422 of
         the Code (or any other  applicable  law or  regulation,  including  the
         applicable  requirements of the NASD or an established stock exchange),
         the Company shall obtain stockholder  approval of any Plan amendment in
         such a manner and to such a degree as required.

         15.2  Effect  of  Amendment  or  Termination.  Any  such  amendment  or
         termination  of the Plan shall not affect Options  already  granted and
         such Options  shall remain in full force and effect as if this Plan had
         not been  amended  or  terminated,  unless  mutually  agreed  otherwise
         between the Optionee and the Board,  which agreement must be in writing
         and signed by the Optionee and the Company.

16. Conditions Upon Issuance of Shares.

         16.1 Shares  shall not be issued  pursuant to the exercise of an Option
         unless the  exercise of such Option and the  issuance  and  delivery of
         such Shares pursuant thereto shall comply with all relevant  provisions
         of law,  including without  limitation,  the Securities Act of 1933, as
         amended,  the  Exchange  Act,  the  rules and  regulations  promulgated
         thereunder,  and the  requirements of any stock exchange upon which the
         Shares may then be listed, and shall be further subject to the approval
         of counsel for the Company with respect to such compliance.

         16.2 As a  condition  to the  exercise  of an Option,  the  Company may
         require the person  exercising  such Option 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

<PAGE>

         such  Shares  if, in the  opinion of counsel  for the  Company,  such a
         representation  is  required  by  any of  the  aforementioned  relevant
         provisions of law.

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

18. Information to Optionees. The Company shall provide to each Optionee, during
the period for which such Optionee has one or more Options  outstanding,  copies
of all annual reports and other information, which are generally provided to all
stockholders  of the Company.  The Company shall not be required to provide such
information to persons whose duties in connection with the Company assures their
access to equivalent information.

19. Governing Law; Construction. All rights and obligations under the Plan shall
be governed by, and the Plan shall be construed in accordance  with, the laws of
the State of Oklahoma  without  regard to the  principals  of conflicts of laws.
Titles and headings to Sections  herein are for purposes of reference  only, and
shall in no way limit,  define or otherwise affect the meaning or interpretation
of any provisions of the Plan.

         ADOPTED by the Directors on November 16, 1998.

         APPROVED by the Shareholders on January 5, 1999.

         AMENDED by the Shareholders on February 24, 2000.