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                                                                   EXHIBIT 10.20

                           AMARILLO BIOSCIENCES, INC.
                         1996 EMPLOYEE STOCK OPTION PLAN

                           AMENDED AND RESTATED AS OF
                                  MAY 11, 1999

                              ARTICLE I -- GENERAL

1.01. PURPOSES.

         The purposes of this 1996 Employee Stock Option Plan (the "Plan") are
to: (1) closely associate the interests of the management of AMARILLO
BIOSCIENCES, INC. ("ABI") and its Subsidiaries and Affiliates (collectively
referred to as the "Company") with the shareholders by reinforcing the
relationship between participants' rewards and shareholder gains; (2) provide
management with an equity ownership in the Company commensurate with Company
performance, as reflected in increased shareholder value; (3) maintain
competitive compensation levels; and (4) provide an incentive to management for
continuous employment with the Company.

1.02. ADMINISTRATION.

         (a) The Plan shall be administered by a committee of directors
appointed by the Board of Directors of ABI (the "Committee"), as constituted
from time to time. The Committee shall consist of at least two members of the
Board. Notwithstanding anything in this Section 1.02 to the contrary, so long as
any equity security of the Company is registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or any successor
statute, all authority to exercise discretion with respect to participation in
the Plan by persons who are (i) "officers" within the meaning of the applicable
Securities and Exchange Commission rules and regulations relating to Section 16
of the 1934 Act, or any successor statute, (ii) directors of the Company and/or
(iii) beneficial owners of more than ten percent (10%) of any class of equity
securities of the Company who are otherwise eligible to participate in the Plan,
and the timing, pricing, amounts and other terms and conditions of awards
granted under the Plan to such officers, directors and beneficial owners, shall
be vested in the Committee, if all of the members of the Committee are
disinterested persons within the meaning ascribed to such term in Rule 16b-3
promulgated under the 1934 Act, or within any successor definition or under any
successor rule ("disinterested persons").

         (b) The Committee shall have the authority, in its sole discretion and
from time to time to:

             (i)   designate the employees or classes of employees eligible to
                   participate in the Plan;

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             (ii)   grant awards provided in the Plan in such form and amount,
                    and subject to such vesting, as the Committee shall
                    determine, provided that in no event shall the period for
                    vesting be longer than that set forth in Section 2.04,
                    below.

             (iii)  impose such limitations, restrictions and conditions upon
                    any such awards as the Committee shall deem appropriate; and

             (iv)   interpret the Plan, adopt, amend and rescind rules and
                    regulations relating to the Plan, and make all other
                    determinations and take all other action necessary or
                    advisable for the implementation and administration of the
                    Plan.

         (c) Decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be conclusive. No
member of the Committee shall be liable for any action taken or decision made in
good faith relating to the Plan or any award thereunder.

         (d) With respect to persons subject to Section 16 of the Securities
Exchange act of 1934 (the "1934 Act"), transactions under the Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successor under
the 1934 Act. To the extent any provision of the Plan or action by the Board of
Directors or the Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Board of Directors or
the Committee, as applicable.

         (e) All usual and reasonable expenses of the Committee shall be paid by
the Company, and no member shall receive compensation with respect to his
services for the Committee except as may be authorized by the Board of
Directors. The Board of Directors and the Committee may employ attorneys,
consultants, accountants or other persons, and the Board of Directors, the
Committee, the Company and its officers and directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the Board of Directors or
the Committee in good faith shall be final and binding upon all Employees who
have received awards, and upon the Company and all other interested persons. No
member of Board of Directors or the Committee shall be personally liable for any
action, determination, or interpretation taken or made in good faith with
respect to the Plan or awards made thereunder, and the Company shall indemnify
and hold harmless each member of the Board of Directors or the Committee against
all loss, cost, expenses or damages, occasioned by any act or omission to act in
connection with any such action, determination or interpretation under or of the
Plan, consistent with the Company's certificate of incorporation and bylaws.

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1.03. ELIGIBILITY FOR PARTICIPATION.

         Participants in the Plan shall be selected by the Committee from among
the employees of the Company. In making this selection and in determining the
form and amount of awards, the Committee shall consider any factors deemed
relevant, including the individual's functions, responsibilities, value of
services to the Company and past and potential contributions to the Company's
profitability and sound growth.

1.04. TYPES OF AWARDS UNDER PLAN.

         Awards under the Plan will be in the form of Incentive Stock Options,
as described in Article II; provided, however, that Limited Rights, as described
in Article III, may be awarded with respect to Options concurrently or
previously awarded.

1.05. AGGREGATE LIMITATION ON AWARDS.

         (a) Shares of stock which may be issued under the Plan shall be
authorized and unissued or treasury shares of Common Stock of ABI ("Common
Stock"). The maximum number of shares of Common Stock which may be issued under
the Plan shall be five hundred ninety thousand (590,000) shares. The maximum
number of shares of Common Stock with respect to which Incentive Stock Options
may be granted in any one year to any employee shall not exceed one hundred
fifty thousand (150,000).

         (b) In addition to shares of Common Stock actually issued pursuant to
the exercise of Incentive Stock Options, there shall be deemed to have been
issued a number of shares equal to the number of shares of Common Stock in
respect of which Limited Rights (as described in Article III) shall have been
exercised.

         (c) Any shares of Common Stock subject to an Incentive Stock Option
which for any reason is terminated unexercised or expires shall again be
available for issuance under the Plan, but shares subject to an Incentive Stock
Option which are not issued as a result of the exercise of Limited Rights shall
not again be available for issuance under the Plan.

1.06. EFFECTIVE DATE AND TERM OF PLAN.

         (a) The Plan shall become effective on the date approved by the holders
of a majority of the shares of Common Stock present in person or by proxy and
entitled to vote at the 1996 Annual Meeting of Shareholders of ABI.

         (b) No awards shall be made under the Plan after the last day of the
Company's 2001 fiscal year provided, however, that the Plan and all awards made
under the Plan prior to such

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date shall remain in effect until such awards have been satisfied or terminated
in accordance with the Plan and the terms of such awards.

                      ARTICLE II -- INCENTIVE STOCK OPTIONS

2.01. AWARD OF INCENTIVE STOCK OPTIONS.

         The Committee may, from time to time and subject to the provisions of
the Plan and such other terms and conditions as the Committee may prescribe,
grant to any participant in the Plan one or more "Incentive Stock Options,"
intended to qualify as such under the provisions of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") ("Incentive Stock Options") to
purchase for cash the number of shares of Common Stock allotted by the
Committee. The date an Incentive Stock Option is granted shall mean the date
selected by the Committee as of which the Committee allots a specific number of
shares to a participant pursuant to the Plan.

2.02. INCENTIVE STOCK OPTION AGREEMENTS.

         The grant of an Incentive Stock Option shall be evidenced by a written
Incentive Stock Option Agreement, executed by the Company and the holder of an
Incentive Stock Option (the "Optionee"), stating the number of shares of Common
Stock subject to the Incentive Stock Option evidenced thereby, and in such form
as the Committee may from time to time determine.

2.03. INCENTIVE STOCK OPTION PRICE.

         The Option Price per share of Common Stock deliverable upon the
exercise of an Incentive Stock Option shall be 100% of the Fair Market Value of
a share of Common Stock on the date the Incentive Stock Option is granted;
provided, however, that with respect to any Optionee who owns stock possessing
more than 10% of the total combined voting power of all classes of stock of ABI
or of its parent or Subsidiary corporation (with such ownership determined in
view of the attribution provisions of Section 424(d) of the Code), the Option
Price per share of Common Stock deliverable upon the exercise of an Incentive
Stock Option shall be 110% of the Fair Market Value of a share of Common Stock
on the date the Incentive Stock Option is granted. The Committee shall determine
the date on which an option is granted, provided that such date is consistent
with the Code and any applicable rules or regulations thereunder; in the absence
of such determination, the date on which the Committee adopts a resolution
granting an option shall be considered the date on which such option is granted,
provided the Employee to whom the option is granted is promptly notified of the
grant and a written option agreement is duly executed as of the date of the
resolution.

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2.04. TERM AND EXERCISE.

         Each Incentive Stock Option for employees who are not 10% owners is
exercisable during a period of ten years from the date of grant thereof (the
"Option Term"), subject to the Vesting Schedule for Employees who are not 10%
Owners, set forth below. With respect to any Optionee who at the time the Option
is granted owns stock possessing more than 10% of the total combined voting
power of all classes of stock of ABI or of its parent or Subsidiary corporation
(with such ownership determined pursuant to the attribution rules set forth in
Section 424(d) of the Code), each Incentive Stock Option is exercisable during a
period of five years from the date of grant thereof, subject to the Vesting
Schedule for Employees who are 10% Owners, set forth below. No Incentive Stock
Option shall be exercisable after the expiration of its Option Term. The
Committee may also in its sole discretion accelerate the exerciseability or
vesting of any option or installment thereof at any time.

         VESTING SCHEDULE FOR EMPLOYEES WHO ARE NOT 10% OWNERS. Options awarded
shall be exercisable, subject to the other terms and conditions of the Plan,
only upon the expiration of the designated number of years of active employment
with the Company from date of award, as provided below:

                         20% of Options awarded - 1 year
                         40% of Options awarded - 2 years
                         60% of Options awarded - 3 years
                         80% of Options awarded - 4 years
                        100% of Options awarded - 5 years

         VESTING SCHEDULE FOR EMPLOYEES WHO ARE 10% OWNERS.

                         25% of Options awarded - 1 year
                         50% of Options awarded - 2 years
                         75% of Options awarded - 3 years
                        100% of Options awarded - 4 years

         Except as provided in Sections 2.06, 2.07 and 2.08 hereof, no Incentive
Stock Option shall be exercised at any time unless the holder thereof is then a
regular full-time employee of the Company or one of its subsidiaries.

2.05. MAXIMUM AMOUNT OF INCENTIVE STOCK OPTION GRANT.

         In no event shall the aggregate Fair Market Value of all Common Stock
(determined at the time the option is granted) with respect to which Incentive
Stock Options are exercisable for the first time by an individual during any
calendar year (under all plans of the Company and its subsidiaries) exceed
$100,000.

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2.06. DEATH OF OPTIONEE.

         (a) Upon the death of the Optionee, any Incentive Stock Option
exercisable on the date of death may be exercised by the Optionee's estate or by
a person who acquires the right to exercise such Incentive Stock Option by
bequest or inheritance or by reason of the death of the Optionee, provided that
such exercise occurs within both the remaining Option Term of the Incentive
Stock Option and one year after the Optionee's death.

         (b) The provisions of this Section shall apply notwithstanding the fact
that the Optionee's employment may have terminated prior to death, but only to
the extent of any Incentive Stock Options exercisable on the date of death.

2.07. RETIREMENT OR DISABILITY.

         Upon the termination of the Optionee's employment by reason of
permanent disability (as defined herein) or retirement (as determined by the
Committee), the Optionee may, within 36 months from the date of such termination
of employment, exercise any Incentive Stock Options to the extent such Incentive
Stock Options were exercisable at the date of such termination of employment.
Notwithstanding the foregoing, the tax treatment available pursuant to Section
422 of the Code upon the exercise of an Incentive Stock Option will not be
available to an Optionee who exercises any Incentive Stock Options more than (i)
12 months after the date of termination of employment due to permanent
disability or (ii) three months after the date of termination of employment due
to retirement. For purposes hereof, "permanent disability" shall have the
meaning set forth in Section 22(e)(3) of the Code or any successor provision
thereto.

2.08. TERMINATION FOR OTHER REASONS.

         Except as provided in Sections 2.06 and 2.07 or except as otherwise
determined by the Committee, all Incentive Stock Options shall terminate upon
the termination of the Optionee's employment; provided, however, that if the
Optionee's employment was involuntarily terminated (with or without cause),
Optionee may exercise, during a 90-day period commencing with date of
termination, all Options theretofore vested, or which vest during said 90-day
period, under the Vesting Schedules set forth in Paragraph 2.04, above. At the
end of the 90-day period, all rights of such Optionee under any then outstanding
option or right shall terminate and shall be forfeited immediately as to any
unexercised portion thereof.

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2.09. MANNER OF PAYMENT.

         Each Stock Option Agreement shall set forth the procedure governing the
exercise of the Stock Option granted thereunder, and shall provide that, upon
such exercise in respect of any shares of Common Stock subject thereto, the
Optionee shall pay to the Company, in full, the Option Price for such shares
with cash or in shares of the Common Stock, valued at the Fair Market Value per
Share on the date of exercise.

2.10. ISSUANCE OF SHARES.

         As soon as practicable after receipt of payment, the Company shall
deliver to the Optionee a certificate or certificates for such shares of Common
Stock. The Optionee shall become a shareholder of the Company with respect to
Common Stock represented by share certificates so issued and as such shall be
fully entitled to receive dividends, to vote and to exercise all other rights of
a shareholder.

2.11. EFFECT OF EXERCISE.

         The exercise of any Stock Option shall cancel that number of related
Limited Rights, if any, which is equal to the number of shares of Common Stock
purchased pursuant to said Option.

2.12. RULE 16b-3 EXEMPTION.

         Options granted under the Plan shall comply with the applicable
provisions of Rule 16b-3 promulgated under the 1934 Act, or any successor, and
shall contain such additional conditions or restrictions as may be required
thereunder to qualify for the maximum exemption from Section 16 of the 1934 Act
with respect to Plan transactions.

                          ARTICLE III -- LIMITED RIGHTS

3.01. AWARD OF LIMITED RIGHTS.

         Concurrently with or subsequent to the award of any Incentive Stock
Option, the Committee may, subject to the provisions of the Plan and such other
terms and conditions as the Committee may prescribe, award to the Optionee with
respect to each Option, a related limited right permitting the Optionee, during
a specified limited time period, to be paid the appreciation on the Common Stock
in lieu of exercising the Option ("Limited Right").

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3.02. LIMITED RIGHTS AGREEMENT.

         Limited Rights granted under the Plan shall be evidenced by written
agreements in such form as the Committee may from time to time determine.

3.03. EXERCISE PERIOD.

         Limited Rights shall (and must) be exercised immediately preceding or
simultaneous with the date of a Change in Control of ABI (the "Exercise
Period"), and all Limited Rights held by the Optionee shall be exercised during
such Exercise Period, without regard to the Vesting Schedules set forth in
Paragraph 2.04; provided, however, that if a Change in Control shall have
occurred without notice or opportunity for exercise of Limited Rights, then the
Limited Rights shall be exercised as soon as practicable after a determination
has been made that a "Change in Control" has occurred, or has been deemed to
have occurred.

         As used in the Plan, a "Change in Control" shall be deemed to have
occurred if

         (a) individuals who were directors of ABI, immediately prior to a
Control Transaction shall cease, within one year of such Control Transaction, to
constitute a majority of the Board of Directors of ABI (or of the Board of
Directors of any successor to ABI or to all or substantially all of its
assets), or

         (b) any entity, person or Group other than ABI or a Subsidiary of ABI
or Hayashibara Biochemical Laboratories, Inc. or an Affiliate thereof acquires
shares of ABI in a transaction or series of transactions that result in such
entity, person or Group directly or indirectly owning beneficially fifty-one
percent (51%) or more of the outstanding shares.

         As used herein, "Control Transaction" shall be

             (i)    any tender offer for or acquisition of capital stock of ABI,

             (ii)   any merger, consolidation, or sale of all or substantially
                    all of the assets of ABI which has been approved by the
                    shareholders,

             (iii)  any contested election of directors of ABI, or

             (iv)   any combination of the foregoing;

which results in a change in voting power sufficient to elect a majority of the
Board of Directors of ABI. As used herein, "Group" shall mean persons who act in
concert as described in Sections 13(d)(3) and/or 14(d)(2) of the Securities
Exchange Act of 1934, as amended.

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3.04. AMOUNT OF PAYMENT.

         The amount of payment to which an Optionee shall be entitled upon the
exercise of each Limited Right shall be equal to 100% of the amount, if any,
which is equal to the difference between the Fair Market Value per share of
Common Stock covered by the related Option on the date the Option was granted
and the Market Price of a share of such Common Stock. Market Price is defined to
be the greater of (i) the highest price per share of the Company's Common Stock
paid in connection with any Change in Control and (ii) the highest price per
share of the Company's Common Stock paid pursuant to an unsolicited brokerage
transaction during the 60-day period prior to the Change in Control.

3.05. FORM OF PAYMENT.

         Payment of the amount to which an Optionee is entitled upon the
exercise of Limited Rights, as determined pursuant to Section 3.04, shall be
made solely in cash.

3.06. EFFECT OF EXERCISE.

         If Limited Rights are exercised, the Stock Options related to such
Limited Rights cease to be exercisable to the extent of the number of shares
with respect to which the Limited Rights were exercised. Upon the exercise or
termination of the Options related to such Limited Rights, the Limited Rights
granted with respect thereto terminate to the extent of the number of shares as
to which the related Options were exercised or terminated.

3.07. RETIREMENT OR DISABILITY.

         Upon termination of the Optionee's employment with the Company by
reason of permanent disability or retirement (as each is determined by the
Committee), the Optionee may, within 36 months from the date of termination,
exercise any Limited Right to the extent such Limited Right is otherwise
exercisable during such 36-month period.

3.08. DEATH OF OPTIONEE OR TERMINATION FOR OTHER REASONS.

         Except as provided in Section 3.07, or except as otherwise determined
by the Committee, all Limited Rights granted under the Plan shall terminate upon
the termination of the Optionee's employment with the Company, or upon the death
of the Optionee.

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                           ARTICLE IV -- MISCELLANEOUS

4.01. GENERAL RESTRICTION.

         Each award under the Plan shall be subject to the requirement that, if
at any time the Committee shall determine that (i) the listing, registration or
qualification of the shares of Common Stock subject or related thereto upon any
securities exchange or under any state or federal law, or (ii) the consent or
approval of any government regulatory body, or (iii) an agreement by the grantee
of an award with respect to the disposition of shares of Common Stock, is
necessary or desirable as a condition of, or in connection with, the granting of
such award or the issue or purchase of shares of Common Stock thereunder, such
award may not be consummated in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.

4.02. NON-ASSIGNABILITY.

         No award under the Plan shall be assignable or transferable by the
recipient thereof, except by will or by the laws of descent and distribution.
During the life of the recipient, such award shall be exercisable only by such
person or by such person's guardian or legal representative.

4.03. RIGHT TO TERMINATE EMPLOYMENT.

         Nothing in the Plan or in any agreement entered into pursuant to the
Plan shall confer upon any participant the right to continue in the employment
of the Company or affect any right which the Company may have to terminate the
employment of such participant.

4.04. NON-UNIFORM DETERMINATIONS.

         The Committee's determinations under the Plan (including without
limitation determinations of the persons to receive awards, the form, amount and
timing of such awards, the terms and provisions of such awards and the
agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under
the Plan, whether or not such persons are similarly situated.

4.05. RIGHTS AS A SHAREHOLDER.

         The recipient of any award under the Plan shall have no rights as a
shareholder with respect thereto unless and until certificates for shares of
Common Stock are issued to him.

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4.06. DEFINITIONS.

         In this Plan the following definitions (along with other definitions
set forth elsewhere in the Plan) shall apply:

         (a) "Affiliate" means any person or entity which directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with ABI.

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

             (i)    If the Common 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, the Fair Market Value of a Share of
                    Common Stock shall be the closing sales price for such stock
                    (or the closing bid, if no sales were reported) as quoted on
                    such system or exchange (or the exchange with the greatest
                    volume of trading in Common Stock) on the date of grant, as
                    reported in The Wall Street Journal or such other source as
                    the Board deems reliable;

             (ii)   If the Common Stock is quoted on the NASDAQ System (but not
                    on the National Market System thereof) or regularly quoted
                    by a recognized securities dealer but selling prices are not
                    reported, the Fair Market Value of a Share of Common Stock
                    shall be the mean between the bid and asked prices for the
                    Common Stock on the last market trading day prior to the day
                    of determination, as reported in The Wall Street Journal or
                    such other source as the Board deems reliable; or

             (iii)  In the absence of an established market for the Common
                    Stock, the Fair Market Value thereof shall be determined in
                    good faith by the Committee.

         (c) "Option" means Incentive Stock Option.

         (d) "Option Price" means the purchase price per share of Common Stock
deliverable upon the exercise of an Incentive Stock Option.

         (e) "Subsidiary" means any corporation of which, at the time more than
50% of the shares entitled to vote generally in an election of directors are
owned directly or indirectly by ABI or any Subsidiary thereof.

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4.07. LEAVES OF ABSENCE.

         The Committee shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan in respect of any leave of
absence taken by the recipient of any award. Without limiting the generality of
the foregoing, the Committee shall be entitled to determine (i) whether or not
any such leave of absence shall constitute a termination of employment within
the meaning of the Plan and (ii) the impact, if any, of any such leave of
absence on awards under the Plan theretofore made to any recipient who takes
such leave of absence.

4.08. NEWLY ELIGIBLE EMPLOYEES.

         The Committee shall be entitled to make such rules, regulations,
determinations and awards as it deems appropriate in respect of any employee who
becomes eligible to participate in the Plan or any portion thereof after the
commencement of an award or incentive period.

4.09. ADJUSTMENTS.

         In the event of any change in the outstanding Common Stock by reason of
a stock dividend or distribution, recapitalization, merger, consolidation,
split-up, combination, exchange of shares or the like, the Committee shall
appropriately adjust the number of shares of Common Stock which may be issued
under the Plan, the number of shares of Common Stock subject to Options
theretofore granted under the Plan, the Option Price of Options theretofore
granted under the Plan, the amount and terms of any Limited Rights theretofore
awarded under the Plan, and any and all other matters deemed appropriate by the
Committee.

4.10. AMENDMENT OF THE PLAN.

         (a) The Committee may, without further action by the shareholders and
without receiving further consideration from the participants, amend this Plan
or condition or modify awards under this Plan in response to changes in
securities or other laws or rules, regulations or regulatory interpretations
thereof applicable to this Plan or to comply with stock exchange rules or
requirements.

         (b) The Committee may at any time and from time to time terminate or
modify or amend the Plan in any respect, except that without shareholder
approval the Committee may not (i) increase the maximum number of shares of
Common Stock which may be issued under the Plan (other than increases pursuant
to Section 4.10), (ii) extend the period during which any award may be granted
or exercised, or (iii) extend the term of the Plan. The termination or any
modification or amendment of the Plan, except as provided in subsection (a),
shall not without the consent of a participant, affect his or her rights under
an award previously granted to him or her.

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4.11. DISPOSITION OF OPTION SHARES; WITHHOLDING TAXES.

         Upon the disposition (within the meaning of Code Section 424(c)) of
shares of Common Stock acquired pursuant to the exercise of an Incentive Stock
Option prior to the expiration of the holding period requirements of Code
Section 422(a)(1), the Optionee shall be required to give notice to the Company
of such disposition and the Company shall have the right to require the Optionee
to pay to the Company the amount of any taxes that are required by law to be
withheld with respect to such disposition.

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