Document:

EXHIBIT 10.1

                            REGENCY AFFILIATES, INC.

                            2003 STOCK INCENTIVE PLAN
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                            REGENCY AFFILIATES, INC.
                            2003 STOCK INCENTIVE PLAN

1. ESTABLISHMENT AND PURPOSE.

The Regency Affiliates, Inc. 2003 Stock Incentive Plan (the "Plan") is
established by Regency Affiliates, Inc., a Delaware corporation (the "Company"),
to attract and retain persons eligible to participate in the Plan; motivate
Grantees to achieve long-term Company goals; and further align Grantees'
interests with those of the Company's other stockholders. The Plan is adopted as
of March 17, 2003. Unless the Plan is discontinued earlier by the Board as
provided herein, no Stock Option or Stock Award shall be granted hereunder on or
after the date 10 years after the Effective Date.

In addition to terms elsewhere defined herein, certain terms used herein are
defined as set forth in Section 8.

2. ADMINISTRATION; ELIGIBILITY.

The Plan shall be administered by a Committee; provided, however, that, if at
any time no Committee shall be in office, the Plan shall be administered by the
Board. The Plan may be administered by different Committees with respect to
different groups of Eligible Individuals. As used herein, the term
"Administrator" means the Board or any of its Committees as may be designated to
administer the Plan.

The Administrator shall have plenary authority to grant Stock Options and Stock
Awards pursuant to the terms of the Plan to Eligible Individuals. Participation
shall be limited to such persons as are selected by the Administrator. Stock
Options and Stock Awards may be granted as alternatives to, in exchange or
substitution for, or replacement of, other awards outstanding under the Plan or
any other plan or arrangement of the Company or a Subsidiary (including a plan
or arrangement of a business or entity, all or a portion of which is acquired by
the Company or a Subsidiary). The provisions of Stock Options need not be the
same with respect to each Grantee.

Among other things, the Administrator shall have the authority, subject to the
terms of the Plan:

      (a) to select the Eligible Individuals to whom Stock Options may from time
      to time be granted;

      (b) to determine whether and to what extent Stock Options are to be
      granted hereunder;

      (c) to determine the number of shares of Stock to be covered by each Stock
      Option granted hereunder;

      (d) to approve forms of agreement for use under the Plan;
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      (e) to determine the terms and conditions, not inconsistent with the terms
      of this Plan, of any Stock Option or Stock Award granted hereunder
      (including, but not limited to, the option price, any vesting restriction
      or limitation, any vesting acceleration or forfeiture waiver and any right
      of repurchase, right of first refusal or other transfer restriction
      regarding any Stock Option or Stock Award and the shares of Stock relating
      thereto, based on such factors or criteria as the Administrator shall
      determine);

      (f) subject to Section 7(a), to modify, amend or adjust the terms and
      conditions of any Stock Option, at any time or from time to time,
      including, but not limited to, with respect to (i) performance goals and
      targets applicable to performance-based Stock Options pursuant to the
      terms of the Plan and (ii) extension of the post-termination
      exercisability period of Stock Options;

      (g) to determine to what extent and under what circumstances Stock and
      other amounts payable with respect to a Stock Option shall be deferred;
      and

      (h) to determine the Fair Market Value.

The Administrator shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Stock Option or Stock Award issued under the Plan (and any
agreement relating thereto) and to otherwise supervise the administration of the
Plan.

Except to the extent prohibited by applicable law, the Administrator may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any portion of its responsibilities
and powers to any other person or persons selected by it. Any such allocation or
delegation may be revoked by the Administrator at any time. The Administrator
may authorize any one or more of its members or any officer of the Company to
execute and deliver documents on behalf of the Administrator.

Any determination made by the Administrator or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Stock Option or Stock
Award shall be made in the sole discretion of the Administrator or such delegate
at the time of the grant of the Stock Option or Stock Award or, unless in
contravention of any express term of the Plan, at any time thereafter. All
decisions made by the Administrator or any appropriately delegated officer
pursuant to the provisions of the Plan shall be final and binding on all
persons, including the Company and Grantees.

No member of the Administrator, and no officer of the Company, shall be liable
for any action taken or omitted to be taken by such individual or by any other
member of the Administrator or officer of the Company in connection with the
performance of duties under this Plan, except for such individual's own willful
misconduct or as expressly provided by law.

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3. STOCK SUBJECT TO PLAN.

Subject to adjustment as provided in this Section 3, the aggregate number of
shares of Stock which may be delivered under the Plan shall not exceed 100,000
shares.

To the extent any shares of Stock covered by a Stock Option are not delivered to
a Grantee or beneficiary thereof because the Stock Option expires, is forfeited,
canceled or otherwise terminated, or the shares of Stock are not delivered
because the Stock Option is settled in cash or used to satisfy any applicable
tax or other withholding obligation, such shares shall not be deemed to have
been delivered for purposes of determining the maximum number of shares of Stock
available for delivery under the Plan.

In the event of any Company stock dividend, stock split, combination or exchange
of shares, recapitalization or other change in the capital structure of the
Company, corporate separation or division of the Company (including, but not
limited to, a split-up, spin-off, split-off or distribution to Company
stockholders other than a normal cash dividend), sale by the Company of all or a
substantial portion of its assets (measured on either a stand-alone or
consolidated basis), reorganization, rights offering, partial or complete
liquidation, or any other corporate transaction, Company share offering or other
event involving the Company and having an effect similar to any of the
foregoing, the Administrator may make such substitution or adjustments in the
(A) number and kind of shares that may be delivered under the Plan, (B)
additional maximums imposed in the immediately preceding paragraph, (C) number
and kind of shares subject to outstanding Stock Options, (D) exercise price of
outstanding Stock Options, (E) other characteristics or terms of the Stock
Options as it may determine appropriate in its sole discretion to equitably
reflect such corporate transaction, share offering or other event and (F) number
of shares of Stock to be granted pursuant to each Stock Award made under Section
5; provided, however, that the number of shares subject to any Stock Option or
to be granted pursuant to each Stock Award shall always be a whole number.

4. STOCK OPTIONS.

Stock Options granted under the Plan are Non-Qualified Stock Options. The
Administrator shall have the authority to grant Non-Qualified Stock Options.
Stock Options shall be evidenced by option agreements, each in a form approved
by the Administrator. An option agreement shall indicate on its face that it is
intended to be an agreement for a Non-Qualified Stock Option. The grant of a
Stock Option shall occur as of the date the Administrator determines.

Stock Options granted under this Section 4 shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Administrator shall deem desirable:

      (a) Exercise Price. The exercise price per share of Stock purchasable
      under a Stock Option shall be determined by the Administrator.

      (b) Option Term. No Stock Option shall be exercisable more than 10 years
      after the date the Stock Option is granted.

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      (c) Exercisability. Except as otherwise provided herein, Stock Options
      shall be exercisable at such time or times, and subject to such terms and
      conditions, as shall be determined by the Administrator. If the
      Administrator provides that any Stock Option is exercisable only in
      installments, the Administrator may at any time waive such installment
      exercise provisions, in whole or in part, based on such factors as the
      Administrator may determine. In addition, the Administrator may at any
      time, in whole or in part, accelerate the exercisability of any Stock
      Option.

      (d) Method of Exercise. Subject to the provisions of this Section 4, Stock
      Options may be exercised, in whole or in part, at any time during the
      option term by giving written notice of exercise to the Company specifying
      the number of shares of Stock subject to the Stock Option to be purchased.

      The option price of any Stock Option shall be paid in full in cash (by
      certified or bank check or such other instrument as the Company may
      accept) or, unless otherwise provided in the applicable option agreement,
      by one or more of the following: (i) in the form of unrestricted Stock
      already owned by the Grantee based in any such instance on the Fair Market
      Value of the Stock on the date the Stock Option is exercised; (ii) by
      certifying ownership of sufficient shares of Stock owned by the Grantee to
      the satisfaction of the Administrator for later delivery to the Company
      (at such time and in such manner as is specified by the Company); (iii)
      provided that the Stock has been the subject of a Public Offering, to the
      extent both the Company and the Grantee are permitted by law, by
      irrevocably authorizing a third party to sell shares of Stock (or a
      sufficient portion of the shares) acquired upon exercise of the Stock
      Option and remit to the Company a sufficient portion of the sale proceeds
      to pay the entire exercise price and any tax withholding resulting from
      such exercise; or (iv) by any combination of cash and/or any one or more
      of the methods specified in clauses (i), (ii) and (iii). Notwithstanding
      the foregoing, a form of payment shall not be permitted to the extent it
      would cause the Company to recognize a compensation expense (or additional
      compensation expense) with respect to the Stock Option for financial
      reporting purposes.

      No shares of Stock shall be issued upon exercise of a Stock Option until
      full payment therefor has been made. Upon exercise of a Stock Option (or a
      portion thereof), the Company shall have a reasonable time to issue the
      Stock for which the Stock Option has been exercised, and the Grantee shall
      not be treated as a stockholder for any purposes whatsoever prior to such
      issuance. No adjustment shall be made for cash dividends or other rights
      for which the record date is prior to the date such Stock is recorded as
      issued and transferred in the Company's official stockholder records,
      except as otherwise provided herein or in the applicable option agreement.

      (e) Transferability of Stock Options. Except as otherwise provided in the
      applicable option agreement, a Stock Option (i) shall be transferable by
      the Grantee to a Family Member of the Grantee, provided that (A) any such
      transfer shall be by gift with no consideration and (B) no subsequent
      transfer of such Stock Option shall be permitted other than by will or the
      laws of descent and distribution, and (ii) shall not otherwise be

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      transferable except by will or the laws of descent and distribution. A
      Stock Option shall be exercisable, during the Grantee's lifetime, only by
      the Grantee or by the guardian or legal representative of the Grantee, it
      being understood that the terms "holder" and "Grantee" include the
      guardian and legal representative of the Grantee named in the applicable
      option agreement and any person to whom the Stock Option is transferred
      (X) pursuant to the first sentence of this Section 4(e) or pursuant to the
      applicable option agreement or (Y) by will or the laws of descent and
      distribution. Notwithstanding the foregoing, references herein to the
      termination of a Grantee's employment or provision of services shall mean
      the termination of employment or provision of services of the person to
      whom the Stock Option was originally granted.

      (f) Termination by Death or Disability. Unless otherwise provided in the
      applicable option agreement, if a Grantee's employment or provision of
      services terminates by reason of death or Disability, any Stock Option
      held by such Grantee may thereafter be exercised, to the extent then
      exercisable, or on such accelerated basis as the Administrator may
      determine, for a period of one year from the date of such death or
      Disability or until the expiration of the stated term of such Stock
      Option, whichever period is shorter.

      (g) Other Termination. Unless otherwise provided in the applicable option
      agreement, if a Grantee's employment or provision of services terminates
      for any reason other than death or Disability, any Stock Option held by
      such Grantee shall thereupon terminate; provided, however, that, if such
      termination of employment or provision of services is involuntary on the
      part of the Grantee and without Cause, such Stock Option, to the extent
      then exercisable, or on such accelerated basis as the Administrator may
      determine, may be exercised for the lesser of 90 days from the date of
      such termination of employment or provision of services or the remainder
      of such Stock Option's term, and provided, further, that if the Grantee
      dies within such period, any unexercised Stock Option held by such Grantee
      shall, notwithstanding the expiration of such period, continue to be
      exercisable to the extent to which it was exercisable at the time of death
      for a period of 12 months from the date of such death or until the
      expiration of the stated term of such Stock Option, whichever period is
      shorter.

      (h) Exception to Termination. Notwithstanding anything in this Plan to the
      contrary, if a Grantee's employment by, or provision of services to, the
      Company or an Affiliate ceases as a result of a transfer of such Grantee
      from the Company to an Affiliate, or from an Affiliate to the Company,
      such transfer will not be a termination of employment or provision of
      services for purposes of this Plan, unless expressly determined otherwise
      by the Administrator. A termination of employment or provision of services
      shall occur for a Grantee who is employed by, or provides services to, an
      Affiliate of the Company if the Affiliate shall cease to be an Affiliate
      and the Grantee shall not immediately thereafter be employed by, or
      provide services to, the Company or an Affiliate.

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5. STOCK AWARDS.

Each non-employee director of the Company shall be granted 250 shares of Stock
at the end of each calendar quarter for which he has served as a director of the
Company for such entire calendar quarter (each such grant a "Stock Award")
without further action by the Board or the Committee. Shares representing a
Stock Award shall be evidenced in such manner as the Administrator may deem
appropriate, including book-entry registration or issuance of one or more
certificates (which may bear appropriate legends referring to the terms,
conditions and restrictions applicable to such Stock Award). The first grant
pursuant to this Section 5 shall be for the calendar quarter ended March 31,
2003.

6. CHANGE IN CONTROL PROVISIONS.

      (a) Impact of Event. Notwithstanding any other provision of the Plan to
      the contrary, except to the extent otherwise provided in an agreement
      granting a Stock Option, in the event of a Change in Control:

            (i) If the Grantee's employment by, or provision of services to, the
            Company or a successor entity terminates for reasons other than
            Cause or voluntary resignation by the Grantee within six (6) months
            of the date such Change in Control is determined to have occurred,
            one hundred percent (100%) of any Stock Options outstanding as of
            such date and not then exercisable and vested shall become fully
            exercisable and vested to the full extent of the original grant on
            the date of such termination of employment or provision of services;
            and

            (ii) Outstanding Stock Options shall be subject to any agreement of
            merger or reorganization that effects such Change in Control, which
            agreement shall provide for:

                  (A)   The continuation of the outstanding Stock Options by the
                        Company, if the Company is a surviving corporation;

                  (B)   The assumption of the outstanding Stock Options by the
                        surviving corporation or its parent or subsidiary;

                  (C)   The substitution by the surviving corporation or its
                        parent or subsidiary of equivalent awards for the
                        outstanding Stock Options; or

                  (D)   Settlement of each share of Stock subject to an
                        outstanding Stock Option for the Change in Control Price
                        (less, to the extent applicable, the per share exercise
                        price) or, if the per share exercise price equals or
                        exceeds the Change in Control Price, the outstanding
                        Stock Option shall terminate and be canceled.

            (iii) In the absence of any agreement of merger or reorganization
            effecting such Change in Control, each share of Stock subject to an
            outstanding Stock

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            Option shall be settled for the Change in Control Price (less, to
            the extent applicable, the per share exercise price), or, if the per
            share exercise price equals or exceeds the Change in Control Price,
            the outstanding Stock Option shall terminate and be canceled.

      (b) Definition of Change in Control. For purposes of the Plan, a "Change
      in Control" shall mean (i) a merger, consolidation, or sale of shares of
      capital stock of the Company to any Independent Third Party or affiliated
      group of Independent Third Parties pursuant to which the holders of the
      voting securities of the Company immediately before the transaction own
      immediately after the transaction less than a majority of the outstanding
      voting securities of the surviving entity (or its parent) or the
      purchasing entity (or its parent), as the case may be, or (ii) the sale or
      conveyance of all or substantially all of the Company's assets (considered
      on a consolidated basis).

      (c) Change in Control Price. For purposes of the Plan, "Change in Control
      Price" means the Fair Market Value of a share of Stock upon the Change in
      Control. To the extent that the consideration paid in any such Change in
      Control transaction consists all or in part of securities or other
      non-cash consideration, the value of such securities or other non-cash
      consideration shall be determined in the sole discretion of the Board.

7. MISCELLANEOUS.

      (a) Amendment. The Board may amend, alter, or discontinue the Plan, but,
      except as otherwise permitted pursuant to the agreement under which a
      Stock Option is granted, no amendment, alteration or discontinuation shall
      be made which would adversely affect the rights of a Grantee under a Stock
      Option theretofore granted without the Grantee's consent, except such an
      amendment (i) made to avoid an expense charge to the Company or an
      Affiliate, or (ii) made to permit the Company or an Affiliate a deduction
      under the Code. No such amendment shall be made without the approval of
      the Company's stockholders to the extent such approval is required by law,
      agreement or the rules of any stock exchange or market on which the Stock
      is listed.

      The Administrator may amend the terms of any Stock Option theretofore
      granted, prospectively or retroactively, but no such amendment shall
      adversely affect the rights of the holder thereof without the holder's
      consent (except as otherwise permitted pursuant to the agreement under
      which a Stock Option is granted).

      (b) Unfunded Status of Plan. It is intended that this Plan be an
      "unfunded" plan for incentive compensation. The Administrator may
      authorize the creation of trusts or other arrangements to meet the
      obligations created under this Plan to deliver Stock or make payments,
      provided that, unless the Administrator otherwise determines, the
      existence of such trusts or other arrangements is consistent with the
      "unfunded" status of this Plan.

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      (c) General Provisions.

            (i) The Administrator may require each person purchasing or
            receiving shares pursuant to a Stock Option or a Stock Award to
            represent to and agree with the Company in writing that such person
            is acquiring the shares without a view to the distribution thereof.
            The certificates for such shares may include any legend which the
            Administrator deems appropriate to reflect any restrictions on
            transfer.

                  All certificates for shares of Stock or other securities
            delivered under the Plan shall be subject to such stock transfer
            orders and other restrictions as the Administrator may deem
            advisable under the rules, regulations and other requirements of the
            Commission, any stock exchange or market on which the Stock is then
            listed and any applicable Federal or state securities law, and the
            Administrator may cause a legend or legends to be put on any such
            certificates to make appropriate reference to such restrictions.

            (ii) Nothing contained in the Plan shall prevent the Company or any
            Affiliate from adopting other or additional compensation
            arrangements for its employees.

            (iii) The adoption of the Plan shall not confer upon any employee,
            director, consultant or advisor any right to continued employment,
            directorship or service, nor shall it interfere in any way with the
            right of the Company or any Subsidiary or Affiliate to terminate the
            employment or service of any employee, consultant or advisor at any
            time.

            (iv) No later than the date as of which an amount first becomes
            includible in the gross income of the Grantee for Federal income tax
            purposes with respect to any Stock Option or Stock Award under the
            Plan, the Grantee shall pay to the Company, or make arrangements
            satisfactory to the Company regarding the payment of, any Federal,
            state, local or foreign taxes of any kind required by law to be
            withheld with respect to such amount. Unless otherwise determined by
            the Administrator, withholding obligations may be settled with
            Stock, including Stock that is part of the Stock Option or Stock
            Award that gives rise to the withholding requirement. The
            obligations of the Company under the Plan shall be conditional on
            such payment or arrangements, and the Company, its Subsidiaries and
            its Affiliates shall, to the extent permitted by law, have the right
            to deduct any such taxes from any payment otherwise due to the
            Grantee. The Administrator may establish such procedures as it deems
            appropriate for the settlement of withholding obligations with
            Stock.

            (v) The Administrator shall establish such procedures as it deems
            appropriate for a Grantee to designate a beneficiary to whom any
            amounts payable in the event of the Grantee's death are to be paid.

            (vi) Any amounts owed to the Company or an Affiliate by the Grantee
            of whatever nature may be offset by the Company from the value of
            any shares of Stock, cash or other thing of value under this Plan or
            an agreement to be

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            transferred to the Grantee, and no shares of Stock, cash or other
            thing of value under this Plan or an agreement shall be transferred
            unless and until all disputes between the Company or any Affiliate
            and the Grantee have been fully and finally resolved and the Grantee
            has waived all claims to such against the Company or an Affiliate.

            (vii) The grant of a Stock Option or a Stock Award shall in no way
            affect the right of the Company to adjust, reclassify, reorganize or
            otherwise change its capital or business structure or to merge,
            consolidate, dissolve, liquidate or sell or transfer all or any part
            of its business or assets.

            (viii) To the extent that the Administrator determines that the
            restrictions imposed by the Plan preclude the achievement of the
            material purposes of the Stock Options and Stock Awards in
            jurisdictions outside the United States, the Administrator in its
            discretion may modify those restrictions as it determines to be
            necessary or appropriate to conform to applicable requirements or
            practices of jurisdictions outside the United States.

            (ix) The headings contained in the Plan are for reference purposes
            only and shall not affect the meaning or interpretation of the Plan.

            (x) If any provision of the Plan shall for any reason be held to be
            invalid or unenforceable, such invalidity or unenforceability shall
            not affect any other provision hereby, and the Plan shall be
            construed as if such invalid or unenforceable provision were
            omitted.

            (xi) The Plan shall inure to the benefit of and be binding upon each
            successor and assign of the Company. All obligations imposed upon a
            Grantee, and all rights granted to the Company hereunder, shall be
            binding upon the Grantee's heirs, legal representatives and
            successors.

            (xii) The Plan and each agreement granting a Stock Option or Stock
            Award constitute the entire agreement with respect to the subject
            matter hereof and thereof, provided that in the event of any
            inconsistency between the Plan and such agreement, the terms and
            conditions of the Plan shall control.

            (xiii) In the event there is an effective registration statement
            under the Securities Act of 1933, as amended, pursuant to which
            shares of Stock shall be offered for sale in an underwritten
            offering, a Grantee shall not, during the period requested by the
            underwriters managing the registered public offering, effect any
            public sale or distribution of shares of Stock received, directly or
            indirectly, pursuant to the exercise or settlement of a Stock Option
            or pursuant to a Stock Award.

            (xiv) None of the Company, an Affiliate or the Administrator shall
            have any duty or obligation to disclose affirmatively to a record or
            beneficial holder of

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            Stock or a Stock Option, and such holder shall have no right to be
            advised of, any material information regarding the Company or any
            Affiliate at any time prior to, upon or in connection with receipt
            or the exercise of a Stock Option, receipt of a Stock Award or the
            Company's purchase of Stock or a Stock Option from such holder in
            accordance with the terms hereof.

            (xv) The Plan, and all Stock Options, Stock Awards, agreements and
            actions hereunder, shall be governed by, and construed in accordance
            with, the laws of the State of Delaware (other than its law
            respecting choice of law).

8. DEFINITIONS.

For purposes of this Plan, the following terms are defined as set forth below:

      (a) "Affiliate" means a corporation or other entity directly or indirectly
      controlling, controlled by, or under common control with the Company and
      designated by the Administrator as such.

      (b) "Board" means the Board of Directors of the Company.

      (c) "Cause" means (i) the conviction of the Grantee for committing a
      felony under Federal law or the law of the state in which such action
      occurred, (ii) dishonesty in the course of fulfilling the Grantee's duties
      as an employee or director of, or consultant or advisor to, the Company or
      (iii) willful and deliberate failure on the part of the Grantee to perform
      such duties in any material respect. Notwithstanding the foregoing, if the
      Grantee and the Company or the Affiliate have entered into an employment
      or services agreement which defines the term "Cause" (or a similar term),
      such definition shall govern for purposes of determining whether such
      Grantee has been terminated for Cause for purposes of this Plan. The
      determination of Cause shall be made by the Administrator, in its sole
      discretion.

      (d) "Code" means the Internal Revenue Code of 1986, as amended from time
      to time, and any successor thereto.

      (e) "Commission" means the Securities and Exchange Commission or any
      successor agency.

      (f) "Committee" means one or more committees of Directors appointed by the
      Board to administer this Plan. With respect to Stock Options granted at
      the time the Company is publicly held, if any, insofar as the Committee is
      responsible for granting Stock Options to Grantees hereunder, it shall
      consist solely of two or more directors, each of whom is a "Non-Employee
      Director" within the meaning of Rule 16b-3 promulgated under the Exchange
      Act.

      (g) "Company" means Regency Affiliates, Inc., a Delaware corporation.

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      (h) "Director" means a member of the Company's Board of Directors.

      (i) "Disability" means mental or physical illness that entitles the
      Grantee to receive benefits under the long-term disability plan of the
      Company or an Affiliate, or if the Grantee is not covered by such a plan
      or the Grantee is not an employee of the Company or an Affiliate, a mental
      or physical illness that renders a Grantee totally and permanently
      incapable of performing the Grantee's duties for the Company or an
      Affiliate; provided, however, that a Disability shall not qualify under
      this Plan if it is the result of (i) a willfully self-inflicted injury or
      willfully self-induced sickness; or (ii) an injury or disease contracted,
      suffered or incurred while participating in a criminal offense.
      Notwithstanding the foregoing, if the Grantee and the Company or an
      Affiliate have entered into an employment or services agreement which
      defines the term "Disability" (or a similar term), such definition shall
      govern for purposes of determining whether such Grantee suffers a
      Disability for purposes of this Plan. The determination of Disability
      shall be made by the Administrator, in its sole discretion. The
      determination of Disability for purposes of this Plan shall not be
      construed to be an admission of disability for any other purpose.

      (j) "Effective Date" means March 17, 2003.

      (k) "Eligible Individual" means any officer, employee or director of the
      Company or a Subsidiary or Affiliate, or any consultant or advisor
      providing services to the Company or a Subsidiary or Affiliate.

      (l) "Exchange Act" means the Securities Exchange Act of 1934, as amended
      from time to time, and any successor thereto.

      (m) "Fair Market Value" means, as of any given date, the fair market value
      of the Stock as determined by the Administrator or under procedures
      established by the Administrator.

      (n) "Family Member" means any child, stepchild, grandchild, parent,
      stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
      mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law
      or sister-in-law of a Grantee (including adoptive relationships); any
      person sharing the Grantee's household (other than a tenant or employee);
      any trust in which the Grantee and any of these persons have all of the
      beneficial interest; any foundation in which the Grantee and any of these
      persons control the management of the assets; any corporation,
      partnership, limited liability company or other entity in which the
      Grantee and any of these other persons are the direct and beneficial
      owners of all of the equity interests (provided the Grantee and these
      other persons agree in writing to remain the direct and beneficial owners
      of all such equity interests); and any personal representative of the
      Grantee upon the Grantee's death for purposes of administration of the
      Grantee's estate or upon the Grantee's incompetency for purposes of the
      protection and management of the assets of the Grantee.

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      (o) "Grantee" means a person who holds a Stock Option or who has been or
      is to be issued shares of Stock issued pursuant to a Stock Award.

      (p) "Independent Third Party" means any individual, partnership, limited
      liability company, corporation, joint venture, trust, business trust,
      foreign business organization, or any other form of domestic or foreign
      entity who does not directly or indirectly own in excess of 10% of the
      voting securities of the Company, who is not controlling, controlled by or
      under common control with any such 10% owner of the voting securities of
      the Company and who is not the spouse or descendent (by birth or adoption)
      of any such 10% owner of the voting securities of the Company.

      (q) "Non-Qualified Stock Option" means any Stock Option that is not
      intended to be and not designated as an "incentive stock option" within
      the meaning of Section 422 of the Code.

      (r) "Public Offering" means the sale of shares of Stock for cash by the
      Company or by one or more stockholders in an underwritten public offering
      registered under the Securities Act of 1933, as amended, following the
      Effective Date.

      (s) "Representative" means (i) the person or entity acting as the executor
      or administrator of a Grantee's estate pursuant to the last will and
      testament of a Grantee or pursuant to the laws of the jurisdiction in
      which the Grantee had his or her primary residence at the date of the
      Grantee's death; (ii) the person or entity acting as the guardian or
      temporary guardian of a Grantee; (iii) the person or entity that is the
      beneficiary of the Grantee upon or following the Grantee's death; or (iv)
      any person to whom a Stock Option has been transferred with the permission
      of the Administrator or by operation of law; provided that only one of the
      foregoing shall be the Representative at any point in time as determined
      under applicable law and recognized by the Administrator.

      (t) "Stock" means Common Stock, par value $0.01 per share, of the Company.

      (u) "Stock Award" means a grant of stock pursuant to Section 5.

      (v) "Stock Option" means an option granted under Section 4.

      (w) "Subsidiary" means any company during any period in which it is a
      "subsidiary corporation" (as such term is defined in Section 424(f) of the
      Code) with respect to the Company.

                                       12EXHIBIT 10.2

                            REGENCY AFFILIATES, INC.

                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT (this "Agreement") dated as of April 1, 2003
(the "Grant Date"), is between Regency Affiliates, Inc., a Delaware corporation
(the "Company"), and Stanley Fleishman (the "Participant"), relating to options
to purchase shares of Stock, which options are granted under the Regency
Affiliates, Inc. 2003 Stock Incentive Plan, as amended (the "Plan"). Capitalized
terms used, but not otherwise defined, in this Agreement shall have the meanings
ascribed to such terms in the Plan.

1. Grant of Stock Option, Option Price and Term.

      (a) The Company grants to the Participant a Non-Qualified Stock Option to
purchase 15,000 shares of Stock of the Company ("Option Shares") at a price of
$2.40 per share ("Option Price"), subject to the provisions of the Plan and the
terms and conditions herein.

      (b) The term of this Stock Option shall be a period of 10 years from the
Grant Date unless earlier terminated as provided herein and in the Plan (the
"Option Period"). During the Option Period, subject to the provisions contained
herein and in the Plan, the Stock Option shall become exercisable as follows:
one third (1/3) of the Option Shares shall become exercisable on each of
December 31, 2003, December 31, 2004 and December 31, 2005.

      Notwithstanding the foregoing, in the event the Participant incurs a
termination of the provision of services for any reason whatsoever as a director
of the Company, the provisions of Section 4 of the Plan relating to the
expiration of the Stock Option upon a termination of the provision of services
shall apply.

      (c) The Stock Option granted hereunder is designated as a nonqualified
stock option which is not transferable by the Participant except to a Family
Member, as provided in Section 4 of the Plan, or by will or the laws of descent
and distribution.

2. Exercise.

      The Stock Option shall be exercisable during the Participant's lifetime
only by the Participant (or his or her Representative), and after the
Participant's death only by a Representative. The Stock Option may only be
exercised by the delivery to the Company of a properly completed written notice,
in form satisfactory to the Committee, which notice shall specify the number of
Option Shares to be purchased and the aggregate Option Price for such shares,
together with payment in full of such aggregate Option Price. Payment shall only
be made as specified in the Plan. If any part of the payment of the Option Price
is made in shares of Stock, such shares shall be valued by using their Fair
Market Value as of the date of exercise of the Stock Option.
<PAGE>

      The Stock Option may not be exercised unless there has been compliance
with all the preceding provisions of this Section 2, and, for all purposes of
this Agreement, the date of the exercise of the Stock Option shall be the date
upon which there is compliance with all such requirements. The Committee may
deny any method of exercise permitted hereunder if such method would result in
liability under Federal or state securities law to the Participant or the
Company, result in an expense charge to the Company or prevent the use of
pooling of interest accounting.

3. Payment of Withholding Taxes.

      If the Company is obligated to withhold an amount on account of any tax
imposed as a result of the exercise of the Stock Option, the Participant shall
be required to pay such amount to the Company, as provided in the Plan. The
Participant acknowledges and agrees that he or she is responsible for the tax
consequences associated with the grant of the Stock Option and its exercise.

4. Changes in Company's Capital Structure.

      The existence of this Stock Option will not affect in any way the right or
authority of the Company or its stockholders to make or authorize (a) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (b) any merger or consolidation of
the Company's capital structure or its business; (c) any merger or consolidation
of the Company; (d) any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Stock or the rights thereof; (e) the
dissolution or liquidation of the Company; (f) any sale or transfer of all or
any part of its assets or business; or (g) any other corporate act or
proceeding, whether of a similar character or otherwise.

      In the event of a Change in Control or other corporate restructuring
provided for in the Plan, the Participant shall have such rights, and the
Committee shall take such actions, as are provided for in the Plan.

5. Plan.

      The Stock Option is granted pursuant to the Plan, and the Stock Option and
this Agreement are in all respects governed by the Plan and subject to all of
the terms and provisions thereof, whether such terms and provisions are
incorporated in this Agreement by reference or are expressly cited.

6. Employment Rights.

      No provision of this Agreement or of the Stock Option granted hereunder
shall give the Participant any right to continue as a director of the Company or
any Affiliates, create any inference as to the length of directorship of the
Participant, affect the right of the Company or any Affiliates to terminate the
provision of services of the Participant, with or without Cause, or give the
Participant any right to participate in any welfare or benefit plan or other
program (other than the Plan) of the Company or any Affiliate.

                                       2
<PAGE>

7. Governing Law.

      This Agreement and the Stock Option granted hereunder shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Delaware (other than its laws respecting choice of law), except to the extent
Federal laws would be mandatorily applicable.

8. Waiver; Cumulative Rights.

      The failure or delay of either party to require performance by the other
party of any provision hereof shall not affect its right to require performance
of such provision unless and until such performance has been waived in writing.
Each and every right hereunder is cumulative and may be exercised in part or in
whole from time to time.

9. Notices.

      Any notice which either party hereto may be required or permitted to give
the other shall be in writing and may be delivered personally or by mail,
postage prepaid, addressed to the Secretary of the Company, at its then
corporate headquarters, and the Participant at his or her address as shown on
the Company's records, or to such other address as the Participant, by notice to
the Company, may designate in writing from time to time.

            IN WITNESS WHEREOF, the Company has caused this Stock Option
Agreement to be duly executed by an officer thereunto duly authorized, and the
Participant has hereunto set his hand, all as of the day and year first above
written.

REGENCY AFFILIATES, INC.

/s/ Laurence S. Levy                           /s/ Stanley Fleishman
------------------------------------           ---------------------------------
Name:  Laurence S. Levy                               Stanley Fleishman
       -----------------------------
Title: Chief Executive Officer
       -----------------------------

                                       3

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