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<SEC-DOCUMENT>0001015402-02-003041.txt : 20020830
<SEC-HEADER>0001015402-02-003041.hdr.sgml : 20020830
<ACCEPTANCE-DATETIME>20020830120742
ACCESSION NUMBER:		0001015402-02-003041
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20020920
FILED AS OF DATE:		20020830

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			YP NET INC
		CENTRAL INDEX KEY:			0001045742
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				850206668
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24217
		FILM NUMBER:		02753785

	BUSINESS ADDRESS:	
		STREET 1:		4840 E JASMINE ST
		STREET 2:		STE 110
		CITY:			MESA
		STATE:			AZ
		ZIP:			85020
		BUSINESS PHONE:		4806549646

	MAIL ADDRESS:	
		STREET 1:		4840 EAST JASMINE STREET
		STREET 2:		SUITE 105
		CITY:			MESA
		STATE:			AZ
		ZIP:			85020

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RENAISSANCE INTERNATIONAL GROUP LTD
		DATE OF NAME CHANGE:	19980115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	RIGL CORP
		DATE OF NAME CHANGE:	19980707
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>
                            SCHEDULE 14A INFORMATION

           PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

Filed  by  the  Registrant  [X]

Filed  by  a  Party  other  than  the  Registrant  [ ]

Check  the  appropriate  box:  [ ]

     [ ]     Preliminary  Proxy  Statement       [ ]   Confidential,  for  Use
                                                       of  the  Commission
                                                       Only  (as  permitted  by
                                                       Rule  14a-6(e)(2))

     [X]     Definitive  Proxy  Statement

     [ ]     Definitive  Additional  Materials

     [ ]     Soliciting  Material Pursuant to Rule  14a-11(c)  or  Rule  14a-12

                                  YP.NET, INC.
- --------------------------------------------------------------------------------
              (Name of the Registrant as Specified in its Charter)

Payment  of  Filing  Fee  (Check  the  appropriate  box):

     [X]    No  fee  required.

     [ ]    Fee  computed  on  table  below per Exchange Act Rules 14a-6(i)(4)
            and  0-11.

            1.  Title of each class of securities to which transaction applies:

            2.  Aggregate number of securities to which transaction applies:

            3.  Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

            4.  Proposed maximum aggregate value of transaction:

            5.  Total fee paid:

     [ ]    Fee  paid  previously  with  preliminary  materials.

     [ ]    Check box if any part of the fee is offset as provided by Exchange
Act Rule 0- 11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

     1.  Amount Previously Paid:

     2.  Forms, Schedule or Registration Statement No.:

     3.  Filing Party:

     4.  Date Filed:


<PAGE>
                                  YP.NET, INC.


August  30,  2002


Dear  Shareholder:

You are cordially invited to the annual meeting of shareholders of YP.Net, Inc.,
which  will  be  held  at  the  Chaparral  Suites,  5001  North Scottsdale Road,
Scottsdale,  Arizona  85250, on September 20, 2002, at 10:00 a.m. local time.  I
look  forward  to  greeting  as  many  of  our shareholders present as possible.

Details of the business to be conducted at the meeting are given in the attached
Notice  of  Annual  Meeting  and  Proxy  Statement.

It is important that your shares be voted at our meeting.  If you do not plan to
attend  the  annual meeting, please complete, sign, date and return the enclosed
Proxy  promptly in the accompanying reply envelope.  If you decide to attend the
meeting,  you  will  of  course  be  able  to  vote  in person, even if you have
previously  submitted  your  Proxy.

On  behalf  of  the Board of Directors, I would like to express our appreciation
for  your  continued  interest  in  and  support  of  YP.Net.

Sincerely,

/s/Angelo  Tullo

Angelo  Tullo
Chairman


                                        1
<PAGE>
                                  YP.NET, INC.
                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                               SEPTEMBER 20, 2002



To  the  Shareholders:

     The annual meeting of the shareholders of YP.Net, Inc. (the "Company") will
be held at the Chaparral Suites, 5001 North Scottsdale Road, Scottsdale, Arizona
85250,  on  September  20,  2002,  at  10:00  a.m.  local time for the following
purposes:

     1.     To  elect  five  directors  to  the  Company's  Board  of Directors.

     2.     To  ratify  the YP.Net, Inc. Employees', Officers & Directors' Stock
Option  Plan  and to reserve up to 3,000,000 shares of common stock for issuance
thereunder.

     3.     To  ratify  the selection of Epstein, Weber & Conover, PLC (formerly
Weber  &  Company,  P.C.)  as the Company's independent auditor for  the  fiscal
year  ended  September  30,  2002.

     4.     To  transact  such  other  business  as may properly come before the
meeting.

     Only  shareholders  of  record at the close of business on August 16, 2002,
are  entitled  to  notice  of,  and  to  vote  at,  this  meeting.

                                             By Order of the Board of Directors,



                                             Angelo  Tullo,  Chairman


Mesa,  Arizona
August  30,  2002


                                    IMPORTANT

WHETHER  OR  NOT  YOU  EXPECT  TO  ATTEND  THE MEETING IN PERSON, WE URGE YOU TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. THIS WILL
ENSURE  THE  PRESENCE  OF  A  QUORUM  AT  THE  MEETING.  A PREADDRESSED ENVELOPE
IS  ENCLOSED  FOR  YOUR CONVENIENCE. SENDING IN YOUR PROXY WILL NOT PREVENT  YOU
FROM  VOTING  YOUR SHARES AT THE MEETING IF YOU DESIRE TO DO SO, AS  YOUR  PROXY
IS  REVOCABLE  AT  YOUR  OPTION.


                                        2
<PAGE>
                                  YP.NET, INC.
                            4840 EAST JASMINE STREET
                                    SUITE 105
                               MESA, ARIZONA 85205

            PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE
                            HELD SEPTEMBER 20, 2002

     This  Proxy  Statement, which was first mailed to shareholders after August
30,  2002,  and  furnished in connection with the solicitation of proxies by the
Board  of  Directors  of  YP.Net,  Inc.  (the  "Company"  or "YP.Net"), a Nevada
corporation,  to  be  voted  at  the Annual Meeting of Shareholders (the "Annual
Meeting"), which will  be  held  at 10:00 a.m. local time on September 20, 2002,
at  the Chaparral Suites, 5001 North Scottsdale Road, Scottsdale, Arizona 85250,
for the purposes set  forth  in  this  Proxy  Statement  for this Annual Meeting
of  Shareholders.

                                VOTING PROCEDURES

     YOUR  VOTE  IS VERY IMPORTANT.  Your shares can only be voted at the Annual
Meeting  if you are present or represented by proxy.  Whether or not you plan to
attend the Annual Meeting, we encourage you to vote by proxy to assure that your
shares  will be represented.  You may revoke your proxy at any time before it is
voted,  by delivering written notice to the Company's Secretary, by submitting a
proxy  bearing  a  later date, or by appearing in person and casting a ballot at
the  Annual  Meeting.  Properly  executed  proxies  that are received before the
Annual  Meeting's  adjournment  will  be voted in accordance with the directions
provided.  If  you  do  not  indicate how your shares are to be voted, the Proxy
holders nominated by the Board of Directors will vote your shares as recommended
by  the  Board  of Directors.  If you wish to give a proxy to someone other than
the  Proxy holders named on the proxy card, you should cross out those names and
insert  the  name(s)  of  the  person(s)  to  whom  you wish to give your proxy.

     WHO  CAN  VOTE?  Shareholders  as  of  the  close of business on August 16,
2002  are  entitled  to  vote.  On  that day, approximately 43,810,933 shares of
common  stock  were outstanding and eligible to vote.  Each share is entitled to
one vote on each matter presented at the Annual Meeting.  A list of shareholders
eligible  to  vote  will  be  available at the Company's Corporate Headquarters,
beginning  on August 16, 2002.  Shareholders may examine this list during normal
business  hours  for  any  purpose  relating  to  the  Annual  Meeting.

     HOW  DO I VOTE?  You may attend the Annual Meeting and vote in person.  Or,
as a registered shareholder, you may vote your shares by proxy by mail.  To vote
by  mail,  simply  mark,  sign  and  date  your  proxy card and return it in the
envelope  provided.  If  you  hold  your  shares through a broker, bank or other
nominee,  that  institution  will  send you separate instructions describing the
procedure  for  voting  your  shares.

     WHAT  SHARES  ARE REPRESENTED BY THE PROXY CARD?  The proxy card represents
all  the  shares  registered  in  your  name.

     HOW  ARE  VOTES  COUNTED?  The proxies will be tabulated by an Inspector of
Elections.  If  you return a signed and dated proxy card but do not indicate how
the  shares are to be voted, those shares represented by your proxy card will be
voted  as  recommended  by the Board of Directors.  A valid proxy also gives the
individuals  named  as proxy's authority to vote in their discretion when voting
the  shares  on  any other matters that are properly presented for action at the


                                        3
<PAGE>
Annual  Meeting.  A  properly  executed  proxy card marked "abstain" will not be
voted.  However,  it  may  be  counted  to  determine  whether there is a quorum
present.  Abstentions  are not counted in determining the number of shares voted
for  or against any nominee for Director, the ratification of the appointment of
the  Company's  independent  auditor  or  any  other  management  or shareholder
proposal.

     Shares  represented  by  "broker non-votes" will be counted for purposes of
determining  whether  a  quorum  has  been reached.  Broker non-votes occur when
nominees, such as brokers who hold shares on behalf of beneficial owners, do not
receive  voting  instructions  from  the  beneficial  owners  before  the Annual
Meeting.  The  nominees  may  then vote those shares only on matters such as the
election  of  Directors,  the  approval  of  the  employee stock option plan and
ratification  of  the  appointment of the Company's independent auditor.  If the
nominees do not receive instructions on how to vote on  non-routine matters, the
nominees  cannot  vote  and  there  is  a  broker  non-vote  on  those  matters.

     WHAT VOTE IS REQUIRED?  In order to have a quorum, a majority of the shares
of  YP.Net  common stock that are outstanding and entitled to vote at the Annual
Meeting  must be represented in person or by proxy.  If a quorum is not present,
a  majority  of  shares  that are represented may adjourn or postpone the Annual
Meeting.

     Generally,  proposals  must  be  approved  by a majority of the votes cast.
Accordingly, broker non-votes and abstentions will have no effect on the outcome
of  those proposals.  However, since Directors are elected by a plurality of the
votes  cast,  votes  withheld  from nominees for a director could have an effect
on  the  outcome  of  the  election.

     Following  are  descriptions  of  the four (4) items being submitted to the
shareholders  for approval.  THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
APPROVE  EACH  ITEM.


                                        4
<PAGE>
                              ELECTION OF DIRECTORS

                            ITEM 1 ON THE PROXY CARD

     Five  directors  are to be elected at the Meeting to serve on the Company's
Board of Directors and hold office until the next annual meeting of shareholders
or  until  their  successors  are elected and qualified.  The proxy holders will
vote  in  favor  of  the nominees listed below, unless the shareholder otherwise
directs  on  the  Proxy.

     The election of each of the Company's directors requires a plurality of the
votes cast in person or by proxy at the Meeting.  All nominees have consented to
serve  as  a  director  for  the  term  indicated.

     Management  expects  that  each  of  the  nominees  will  be  available for
election,  but  if  any  of  them is unable or declines to serve at the time the
election  occurs,  it is intended that such Proxy will be voted for the election
of  another  nominee  to  be  designated  by  the  Board  of  Directors.

     THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES LISTED BELOW BE ELECTED
TO  SERVE  AS  DIRECTORS  OF  THE  COMPANY  UNTIL  THE  NEXT  ANNUAL  MEETING OF
SHAREHOLDERS  OR  UNTIL  THEIR  SUCCESSORS  ARE  ELECTED  AND  QUALIFIED.

NOMINEES

     The  following  information  with  respect  to  the principal occupation or
employment  of  each  nominee  for  director,  the  principal  business  of  the
corporation  or  other  organization  in  which such occupation or employment is
carried  on,  and such nominee's business experience during the past five years,
has  been  furnished  to  the  Company  by  the  respective  director  nominees:

     ANGELO  TULLO.  Mr.  Tullo  has  served  as  the  Chairman  of the Board of
YP.Net since February  2000.  Mr. Tullo was hired as Chief Executive Officer and
President  on  September  10,  2000.  Mr.  Tullo  is  the  president  of Sunbelt
Financial  Solutions,  Inc.,  an  investment  banking  and  consultant  firm  in
Scottsdale,  Arizona.  For  over  twenty  years,  Mr. Tullo has been active as a
business  consultant.  Mr.  Tullo has actively  worked with commercial financing
and  factoring  for the past ten years.  He  has  owned  and  operated factoring
companies,  leasing  companies,  consulting  companies,  wholesale  companies,
professional  employment  organizations,  insurance  agencies,  heating  and
air-conditioning  contractors, retail oil companies, real estate  companies  and
restaurants.  He  is  a former member of the CEO Club in New York, and current a
member  of  the  Presidential  Business  Roundtable  Committee.

     In  February  2000,  American  Business  Funding Corp. filed for protection
under  Chapter  11  of  the  Bankruptcy  Code  in  the Federal District Court of
Arizona.  Mr.  Tullo  had previously been a director, officer and shareholder of
American  Business  Funding  prior  to  the  time  of  its  bankruptcy  filing.

     GREGORY  B. CRANE.  Mr. Crane has been a director of YP.Net since February,
2000  and  also  served  as  its  Director  of  Operations from February 2000 to
September  2000.  From  September  1998  to June 1999, Mr. Crane was the General
Manager  of Telco Billing, Inc. ("Telco").  Mr. Crane owned and operated several


                                        5
<PAGE>
businesses,  including  residential  and  commercial  builders, multi-state mail
order,  and  document-preparation  companies,  and  was  also the creator of the
Yellow-Page.Net  concept.  Mr.  Crane  is  a  former  member  of  the  Young
Entrepreneur's  Organization  ("YEO").

     In connection with providing homestead declaration document preparation and
filing  services, Mr. Crane and certain of these businesses have been subject to
injunctive  actions  brought  by  the  states  of  Arizona,  Florida,  Texas and
Washington.  These  actions  generally  raised legal questions concerning mailer
solicitations  for  document preparation services.  Mr. Crane and various of the
state  plaintiffs  have  entered  into  consent  orders in connection with these
actions  that  required  the  modification  of  mailers and the payment of civil
penalties,  restitution,  and attorneys' fees.  The use of the mail solicitation
for  document  preparation  services  was prohibited in the State of Washington.
Mr.  Crane  voluntarily  entered  into an agreement with the State of Florida in
connection  with  these  matters  and  due  to an error in type size made by the
printing company; Mr. Crane technically violated that order.  In connection with
that  violation  of the Florida order, Mr. Crane is subject to a judgment in the
amount  of  approximately  $1.4  million,  plus  accrued interest.  Mr. Crane is
attempting  to  resolve  the  Florida  judgment.

     Mr.  Crane  was  also  named  in  the  action  filed  by  the Federal Trade
Commission  ("FTC")  against  us  and  has  been  included  in  the  stipulated
preliminary  order  entered into by the FTC and us and approved by the FTC.  The
Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable
Relief  by  and  between  the FTC, Mr. Crane, Telco, us and others (the "Order")
places  certain  restrictions  on  the  way mail solicitations will appear.  The
Order  has  been  approved  by  the  U.S. District Court Judge and the matter is
closed  with no findings of wrong doing on the part of the company, its officers
and  directors  or  Mr.  Crane.

     DANIEL  L.  COURY.  Mr.  Coury  has  served  as  a director of YP.Net since
February  2000.  For  the  last twelve years, Mr. Coury's principal business has
been Mesa Cold Storage, Inc., which owns  and  operates the largest cold storage
facilities  in  Arizona.  He  is also involved in the ownership and operation of
various  real  estate  interests  and  business  ventures.

     DEVAL  JOHNSON.  Mr.  Johnson  has served as a director since October 1999.
Mr.  Johnson  was  the  graphics  designer  and  director  of Telco Billing from
September  1998  until  June 1999 when the Company acquired it.  Mr. Johnson was
responsible  for  the  design of the in-house sales presentation and creation of
the  corporate  logo and image for YP. Net.  From 1995 through 1998, Mr. Johnson
was  a  graphics  designer  for Print Pro, Inc. Mr. Johnson is actively involved
with  Website  promotion,  interactive  design  and  Internet  advertising.  Mr.
Johnson  also  serves  as  an  officer and board member of Simple.Net a national
Internet  service  provider.

     PETER  BERGMANN. Mr. Bergmann has served as a director of the Company since
May  2002.  Since  January  1999,  Mr.  Bergmann  has served as the President of
Perfect  Timing  Media,  Inc.  ("Perfect  Timing"), a television development and
production  company which he founded. Perfect Timing focuses primarily on family
fare programming.  From 1994 to1999, Mr. Bergmann was a member of the faculty at
Fairleigh  Dickinson  University  where he inaugurated the Electronic Filmmaking
and  Digital  Video  Design  program which is a distinctive program in video and
computer-generated  graphics  technologies  offering  students an opportunity to
study  commerce  and  art.  In  1988,  Mr.  Bergmann  joined Major Arts, Inc., a
division  of  Paramount  Communications,  Inc.,  as  the  head of its television
division  where  he  was  responsible  for  developing  projects  for television


                                        6
<PAGE>
production.  In  1987,  Mr.  Bergmann  served  as  the  President  of  Odyssey
Entertainment, Inc. where he engineered the purchase of Coast Productions, Inc.,
which subsequently became Odyssey Filmmakers, Inc. where he served as President.
From  1984  through  1987,  Mr. Bergmann served as President of The Film Company
where he had directorial and production responsibilities for theatrical releases
and  projects  for  television.  During the 14 years prior to 1984, Mr. Bergmann
was  employed in various capacities by the American Broadcasting Company.  These
positions  included  line  producer,  division head, assistant to the President,
Executive  Vice  President  and  Special Assistant to the Chairman of the Board.
Mr.  Bergmann  received  his  PhD  from  New  York  University.


            INFORMATION  REGARDING  BOARD  MEETINGS  AND  COMMITTEES

     The  Company's  Board  of  Directors  has  one  standing  committee,  a
Compensation  Committee.  Outside  Director  Mr  Coury  currently comprises  and
serves  on  the  Compensation  Committee,  which  reviews  the  compensation  of
the  executive  and  other  officers  of  the  Company,  reviews executive bonus
plan  allocations,  and approves stock grants and stock options to officers  and
employees  of  the  Company  under  the  Company's Stock Option Plan.  To insure
fiscal  responsibility,  the  Board  has  hired the services of Jerold M. Pierce
formerly  employed  by  the  Internal  Revenue Service to perform compliance and
forensic  auditing  each quarter and to report his findings directly to the full
board.  Mr.  Pierce  will  also  meet  with  financial  management  and  the
independent  auditors  to review internal accounting  controls  and  accounting,
auditing  and  financial  reporting  matters.


     During  the  fiscal  year  ended September 30, 2002, the Board of Directors
held  10  meetings;  the  Compensation  Committee  held 2 meetings and the Audit
Committee  held  3  meetings.  All  Board  members  who  are  being  nominated
attended  75%  or  more  of the Board  meetings  and  all  of  the  meetings  of
the  Audit  Committee  and  the Compensation  Committee  on  which  they  serve.


                                        7
<PAGE>
INFORMATION  REGARDING  BENEFICIAL  OWNERSHIP  OF  PRINCIPAL  SHAREHOLDERS,
DIRECTORS  AND  MANAGEMENT

     The  following  table  sets  forth, as of August 30, 2002, the ownership of
each person  known  by the Company to be the beneficial owner of five percent or
more  of  the  Company's  Common  Stock, each officer and director individually,
and  all  officers  and  directors  as  a  group.  The  Company has been advised
that  each  person  has  sole voting and investment power over the shares listed
below  unless  otherwise  indicated.

NAME AND ADDRESS                      AMOUNT AND NATURE    PERCENT
OF BENEFICIAL OWNER                     OF OWNERSHIP     OF CLASS(1)
- ------------------------------------  -----------------  -----------

Angelo Tullo                                    300,000         .74%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Gregory B. Crane                                 75,500         .18%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Daniel L. Coury, Sr.                            180,000         .44%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Peter Bergmann                                   50,000         .11%
4840 E. Jasmine # 105
Mesa, Arizona 85205

DeVal Johnson                                   125,000         .31%
4840 East Jasmine Street
Suite 105
Mesa, AZ  85205

Matthew & Markson Ltd. (2)                   11,600,000       26.47%
Woods Centre, Frair's Road
P.O. Box 1407
St. John's
Antigua, West Indies

Morris & Miller Ltd.                          9,325,000       23.00%
Woods Centre, Frair's Road
P.O. Box 1407
St. John's
Antigua, West Indies

All Directors as a Group (5 persons)            730,500        1.67%


                                        8
<PAGE>
(1)  Based  on  43,810,933  shares  outstanding  as  of August 16th, 2002.  This
amount excludes  litigation  & collateral shares as well as returned shares held
by  the  treasury.  Collateral  shares  had  been  issued  as  collateral  for
obligations  of YP.Net  under  two promissory notes.  Upon payment of the notes,
the  shares  will  be  returned  to  YP.Net.

(2)  The  number  of  shares  held by Matthew & Markson, Ltd. excludes 2,000,000
shares  issued  as collateral for a note payable issued by YP.Net.  See footnote
1  above.  These  shares  will  be  returned  to  YP.Net  upon  payment  of  the
note.

INFORMATION  REGARDING  MANAGEMENT,  EXECUTIVE  AND  DIRECTOR  COMPENSATION
DIRECTORS  AND  EXECUTIVE  OFFICERS


The  directors  and  executive  officers of YP.Net, their ages and positions are
as  follows:

Name                               Age  Positions Held(1)
- ----                               ---  -----------------

Angelo Tullo                        45  Chairman of the Board, Director, Chief
                                        Executive Officer and President

DeVal Johnson                       36  Director, Secretary

Gregory B. Crane                    38  Director

Daniel L. Coury, Sr.                48  Director

Peter Bergmann                      53  Director

David Iannini                       43  Chief Financial Officer

(1)  All  current  directors serve until the next annual shareholders meeting or
their  earlier  resignation  or  removal.



OFFICER  COMPENSATION

     The following table reflects all forms of compensation for the fiscal years
ended September 30, 2002, 2001 and 2000 for the Chief Executive Officer and  the
other  most  highly  compensated  executive  officers  of YP.Net, whose salaries
exceed  $100,000  annually,  for  the  years  stated.


                                        9
<PAGE>
                      SUMMARY  COMPENSATION  TABLE

                                           Annual  Compensation
                                         ------------------------
                                  Fiscal            Other Annual
Name and Principal Position        Year   Salary    Compensation
- ---------------------------        ----   ------    ------------
Angelo Tullo                       2002  $240,000  $          --
Chairman, Chief Executive Officer  2001  $210,000  $   44,000 (1)
and President                      2000        --  $   21,000 (2)

DeVal Johnson                      2002            $     138,000
Secretary

Donald Reese                       2002  $157,000             --
Director of Operations             2001  $120,000             --
                                   2000        --             --

(1)     Includes  a  bonus  of 200,000 shares of YP.Net stock valued at $.22 per
        share.
(2)     Includes  100,000  shares  of  YP.Net  stock  valued  at $.21 per share.
(3)     Includes  75,000  shares  of  YP.Net  stock  valued  at  $.22 per share.

COMPENSATION  PURSUANT  TO  STOCK  OPTIONS

     No  options were granted to executive officers during the fiscal year ended
September  30,  2001,  and  through  the  ten-month period ended August 30, 2002

DIRECTOR  COMPENSATION

     Upon  appointment  to  the  Board,  Mr. Tullo was awarded 100,000 shares of
YP.Net  common  stock.  All  other  directors  were  awarded 50,000 shares.  The
350,000  shares  of  common  stock  paid to the directors  as  compensation  for
their  services  were  valued  at  $.22 per share  for a total value of $77,000.
Additionally,  the  directors  receive  $2,000  per  meeting  or per quarter for
their  service  on  the  Board  and  may  receive  $250 per  hour  for  services
related  to  any  Board  Committee on which they serve. Mr. Bergmann, joined the
Board  in  April  2002  and  received  his 50,000 shares in July 2002. They were
valued  at  $.09  per  share,  or  $4,500.

1998  STOCK  OPTION  PLAN

     YP.Net's  Board  of  Directors  adopted,  and  its shareholders approved in
June,  1998,  the  1998 Stock Option Plan (the "Plan").  The purpose of the Plan
was  to  provide  incentives  to  employees,  directors and service providers to
promote  the  success  of  YP.Net.  The  Plan  provided  for  the  grant of both
qualified  and  non-qualified  options to purchase up to 1,500,000 shares of its
common  stock  at  prices determined but, in the case of incentive options, at a
price not less than the fair market value of the stock on the date of the grant.
The  Plan  is administered by the Board of Directors or by a committee appointed
by  the  Board.  As  of  August 30,  2002,  all  outstanding options to purchase
YP.Net  stock have expired  and  no  options  are  currently  outstanding  under
the  Plan.


                                       10
<PAGE>
     On  April  10th, 2002 the Board of directors approved the 2002 Stock Option
Plan.  No  options  have been granted under the 2002 plan which is on the ballot
for  shareholder  approval  at  this  meeting.

SECTION  16(A)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE

     Based  solely  on  review  of reports under Section 16(a) of the Securities
Exchange  Act  of  1934,  as  amended, that were filed by executive officers and
directors  and  beneficial owners of 10% or more of YP.Net's common stock during
the  fiscal  year  ended September 2000, to the best of the Company's knowledge,
all  16(a)  filing  requirements  have  been  made through the fiscal year ended
September  30,  2001.  This  information  is  based on a review of Section 16(a)
reports  furnished  to  YP.Net  and  other  information.

TRANSACTION  WITH  DIRECTORS,  OFFICERS  AND  OTHERS

     Acquisition  of  Telco.  In June 1999, YP.Net's predecessor acquired all of
     ----------------------
the  outstanding  stock of Telco Billing, Inc. in exchange for 17,000,000 shares
of YP.Net.'s common stock.  Matthew & Markson, Ltd. and Morrison & Miller, Ltd.,
as  the  shareholders  of  Telco,  were  issued  7,650,000 and 9,350,000 shares,
respectively.  As  to  these shares, the original acquisition agreement provided
for certain Put rights that were later terminated.  In exchange for cancellation
of the Put rights, YP.Net agreed to provide the former Telco shareholders with a
$5,000,000  credit  facility.  Any  loans  made to these shareholders under this
facility are to be secured by a pledge of YP.Net stock.  Interest for borrowings
under  this  facility  is  to  be  at  least  0.25% higher than YP.Net's average
borrowing  costs.  No  advances  in  excess of $1,000,000 may be made at any one
time  and  no  advances in excess of $1,000,000 are to be made unless YP.Net has
available  at  least 30 days operating capital plus other reserves.  No advances
are  permitted  to  be  made  if YP.Net is in default with respect to any of its
lender  obligations.  As  of  June 30, 2002, $227,296 had been lent to Matthew &
Markson,  Ltd.  pursuant  to  the  foregoing  agreement.

     Gregory B. Crane and DeVal Johnson were employees of and primarily involved
in  the  start-up of Telco.  Mr. Crane continues to serve as one of the Liaisons
for  Matthew  &  Markson,  Ltd.  and  Morris  &  Miller, Ltd. and negotiated the
acquisition  of  Telco  by  YP.Net's  predecessor  on behalf of the former Telco
shareholders.

     License  of  URL.  In  connection  with  the acquisition of Telco, YP.Net's
     ----------------
predecessor  also  agreed  to  pay  Matthew  &  Markson,  Ltd.  $5,000,000  as a
discounted  accelerated  royalty  payment  for  a  20-year  license  of  the URL
Yellow-Page.Net.  The  accelerated  payment  was  made  under  the  terms  of an
Exclusive  Licensing  Agreement  dated  September  21,  1998,  between Telco and
Matthew  & Markson, Ltd.  The payment was originally to be paid in full upon the
acquisition  of  Telco.  The Company paid $3,000,000 as a down payment; however,
the  Company  defaulted on payment of the $2,000,000 balance on August 15, 1999.
To  extend the payment obligations, YP.Net agreed to provide, for the benefit of
Mathew  & Markson, $250,000 in tenant improvements for approximately one-half of
its Mesa facility.  The premises were leased to Matthew & Markson's designee for
$1.00  per year throughout the term of the 5-year lease.  The annual fair rental
value  of  the  lease  premises  is  $4,500  per  month.  A  one million dollars
($1,000,000.00)  extension  fee  may  also be due.  On November 15, 1999, YP.Net
paid  an  extension  fee  of  $200,000.  The  $200,000 extension fee was applied
against  the $5,000,000 accelerated royalty payment and an additional $2,000,000
was  paid  on  the  royalty  payment in July 1999.  Matthew & Markson, Ltd. also
agreed  to  take  a  $2,000,000  note  for  the balance due that remains due and
outstanding.


                                       11
<PAGE>
     After  we  defaulted  on  the November 1999 extension agreement, on January
15,  2000,  the  note  was  renegotiated  to  a  demand  note  with  monthly
installments  of  $100,000  per  month.  The  payments  may  be  suspended  if
YP.Net  does  not  have certain  cash  reserves or is otherwise in default under
other  obligations.  The  note  is  secured by 2,000,000 shares of YP.Net common
stock  held  in  escrow,  to  be  returned  upon  payment  of  the  note.

     On  September 25, 2001, we agreed in settlement of the Company's breach and
noncompliance  with  the  original acquisition agreement and extension agreement
with Telco dated June 16, 1999 to pay Matthew Markson, Ltd., $550,000 and issued
4,000,000 shares of our common stock at $0.09, and the value is considered based
upon  the  average bid and ask price as of September 25, 2001 and is in reliance
on  the  exemption  from registration provided by Section 4(2) of the Securities
Act.

     The  $550,000  will  be paid over a thirty-six month term at a 10.5% annual
interest  rate.  Matthew  Markson Ltd. has agreed and waived any future payments
for  the original default of the and extension fee for the acquisition of Telco.
Matthew  Markson  Ltd  will  continue  its  security interest in the Company and
collateral shares held by Matthew Markson. Ltd.  The outstanding balance on this
note  as  of  June  30,  2002,  was  $119,586.

Simple.  Net.  ("SN")
- ---------------------

     The  Company  has  entered  into mutual service agreements with Simple. Net
("SN").  Mr.  DeVal Johnson, a director of YP.Net, Inc., is the beneficial owner
of  SN.  SN  is  a national internet service provider that has from time to time
sold  those  services  to  the  Company  at  below  market  rate  prices.

     On May 1, 2002, the Company assigned its Level 3 contract to SN in exchange
for a new contract from SN that would provide dial-up services for the Company's
customers  at  a  reduced  rate  of  $2.50  per  user,  per  month.  The Company
determined  that  it did not have a sufficient amount of internet service dialup
customers to benefit from its Level 3 contract, while SN, as an internet service
provider,  had  a  sufficient  number  of  customers to support the base payment
structure  agreed  to  in the Level 3 contract.  As a result, during this period
the  Company paid $19,218 to SN instead of the $50,000 that would have been paid
to  Level  3  under  the  old  arrangement.  If  the  Company's internet dial-up
customers  should  increase, the Level 3 contract would be less expensive for us
than  our agreement with SN.  The Level 3 contract is not assignable without the
consent  of  Level 3, which the Company has not yet obtained.  Consequently, the
Company  is  still  liable  to  Level 3 under the terms of the contract.  SN has
agreed  to  assume  and  perform  the  terms of the Level 3 contract.  Since The
Company  provides  billing  services  to  SN  it  would have the right of offset
against  SN  in  the  event  that SN does not perform under the arrangement with
Level  3  that  SN  has  agreed  to  accept  assignment  from  the Company.  The
assignment  of  the Level 3 contract to SN resulted in savings to the Company of
approximately  $30,782.  In  addition,  SN  has  contracts  with  other National
providers  such  as  Broadwing Communications and through the Company's contract
with  SN.  The Company has obtained access numbers under those contracts as well
for  the  benefit  of  the  Company's  customers.

     By  being  able  to  provide  Internet  access to its customers the Company
benefits  two ways. First it has an additional product to sell to its customers,
which  enhances  their  retention. And second it has allowed the Company to bill
customers  on  their  phone  bill (LEC Bill) for both services and is especially
beneficial  to  the  Company in areas where the Company can not LEC bill for the
Company's  core  product


                                       12
<PAGE>
     SN  pays  a  monthly  fee  to the Company  to provide technical support and
provide  quality  customer  service  while  utilizing the Company's own customer
service  personnel  as well as management and accounting services according to a
pricing  formula  based  on  a  price  per  customers  as  follows:

     Customer  Service  &  Management Agreement fees are calculated by number of
customer  records  of  SN  multiplied  by  a  base  cost  of  $1.02.

     Technical  Support  fees are calculated by number of customer records of SN
multiplied  by  a  base  cost  of  60  cents.

     Previously  the  Company's  staff performed the accounting functions for SN
since  SN  utilizes  a  compatible  accounting and billing process.  SN paid  us
$2,500  a  month for these accounting services.  As of July 1, 2002, the Company
no  longer  provides  accounting  services  to  SN  as this arrangement has been
canceled.

Commercial  Finance  Services  d/b/a/  HR  Management  ("CFS")
- --------------------------------------------------------------

     The  Company  has  entered  into  an  employee  leasing  arrangement  with
Commercial  Finance  Services,  Inc. d/b/a HR Management, Inc. ("CFS").  See the
Company's  Form  10-KSB  for  the  fiscal  year  ended  September 30, 2001.  CFS
provides  factoring  and  financing  as  well  as the services of a professional
employer  organization  ("PEO")  for small to mid-sized companies.  CFS does not
provide  any  services  to  the  Company,  other  than those of a PEO through HR
Management,  Inc.  The  Company  pays  CFS  a  monthly  amount  of approximately
$128,000.  This amount includes employee wages, payroll taxes, employee benefits
and  a  below  market  administration  fee  of 2.5% per month.  This arrangement
allows  the  Company  to  offer  additional benefits to its employees by sharing
those  costs  with  other clients of CFS.  The Company pays CFS fees for payroll
and  benefit  administration of approximately $2,800 per month, which represents
the  cost  of  a  payroll  clerk

     Central  Account  Services, Inc. is the majority owner of CFS, holding over
85%  of  the  stock. Central Account Services, Inc. is unrelated to the Company.
Mr.  Joseph  McDaniel,  who  owns  3%  of CFS and also serves as counsel for the
Company,  and  Matthew  &  Markson  which  has  provided  funding  to CFS in the
principal  amount of $1,525,821, are the only related parties. Matthew & Markson
is  not a part of management or on the Board of Directors of the Company or CFS.

Business  Executive  Services,  Inc.
- ------------------------------------

     Business Executive Services, Inc. ("BESI"), as the nominal rent sub-lessee,
leases  portions  of  the Company's Mesa facility to other businesses associated
with  other  third  parties  (provides  executive  suites).

     In addition to providing Executive Suites to a variety of companies, BESI's
personnel  have  expertise  in  the processing and managing of large direct mail
marketing  campaigns.  Because  of  this  expertise,  the Company has decided to
outsource  its  direct  mail  marketing  services  to  BESI.


                                       13
<PAGE>
     Pursuant  to  an agreement the Company has with BESI, BESI processes all of
the  direct  mail  solicitation pieces, welcome letters and other communications
with  customers  and  prospective  customers.

     We  pay  a  base fee of $10,000.00 per month and then a monthly fee to BESI
based  on  a  price  of  $.015 cents per mail piece, based on the number of mail
pieces  prepared  and  sent, and not less than a floor of $15,000 per month. The
floor  amount  is  reviewed  for  possible  adjustment  quarterly.

     Mr.  Crane,  a  director of the Company, is employed by BESI and receives a
salary  of  approximately  $2,000  per  month  from  BESI  and  bonuses  in  an
undetermined  amount.  BESI  has  no  related  party  ownership  in the Company.

Advertising Management & Consulting Services, Inc.
- --------------------------------------------------

     Advertising Management & Consulting Services, Inc. ("AMCS"), is a marketing
and  advertising  company that rents executive suites from BESI.  AMCS' staff is
experienced  in  designing  direct  marketing  pieces,  insuring compliance with
regulatory  authorities  for those pieces and designing new products that can be
mass  marketed through the mail.  The Company out sources the design and testing
of  its  many direct mail pieces to AMCS for a fee of $20,000 per month. AMCS is
also responsible for the new products that have been added to our website and is
working  on  new  mass-  market  products  to  offer our customers. Mr. Crane, a
Director  of  the  Company,  is  also  the  President  of  AMCS.

Related  Party  Transaction  Policy.
- ------------------------------------

     The Company's general policy requires adherence  to  Nevada  corporate  law
regarding  transactions  between  YP.Net,  a  Nevada  corporation,  and  a
director,  officer  or  affiliate  of  the corporation.  Transactions  in  which
such  persons have a financial interest are not void or voidable if the interest
is  disclosed and approved by disinterested directors or shareholders  or if the
transaction  is  otherwise  fair  to the corporation.  It is the  policy  of the
Company that transactions with related parties are conducted on  terms  no  less
favorable  to  the  Company  than if they were conducted with unaffiliated third
parties.  During  fiscal year ended September 30, 2001, through August 30, 2002,
there  have  been  no  related  party  transactions  except  as  shown  above.


              EMPLOYEES', OFFICERS & DIRECTORS' STOCK OPTION PLAN:

                            ITEM 2 ON THE PROXY CARD

     At  the  Annual  Meeting,  the  Company's  stockholders  are being asked to
approve  the  2002  Employees',  Officers  and Directors' Stock Option Plan (the
"2002  Option  Plan")  and  to  authorize  3,000,000  shares of Common Stock for
issuance  thereunder.  The  following  is a summary of principal features of the
2002  Option  Plan.  The  summary,  however,  does  not purport to be a complete
description of all the provisions of the 2002 Option Plan. Attached as Exhibit A
and  incorporated  herein  by  reference  is  the  text of the 2002 Option Plan.

     Ratification  of  the 2002 Employees', Officers and Directors' Stock Option
Plan requires an affirmative vote of the majority of the shares entitled to vote
at  the  meeting,  in  person or by proxy.  It is intended that the accompanying
Proxy will be voted in favor of the ratification of the 2002 Employees', Officer
and  Directors'  Stock  Option  Plan.


                                       14
<PAGE>
     THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2002 EMPLOYEES', OFFICERS &
DIRECTORS'  STOCK  OPTION  PLAN.

General

     The  2002  Option Plan was adopted by the Board of Directors on April 10th,
2002,  and  provided  for the issuance of up to 3,000,000 options.  The Board of
Directors  has  reserved 3,000,000 shares of Common Stock for issuance under the
2002  Option  Plan.

     Over  the  period  from  April  10th  2002,  to the date of this Proxy, the
Company has granted no options to purchase shares of Common Stock under the 2002
Option  Plan,  including  options  to  purchase a total of zero shares of Common
Stock issued to officers and directors of the Company.  The following table sets
forth  the  number  of  options  granted to the Company's officers and directors
under  the  2002  Option  Plan:

     Under  the  Plan,  options  may be granted which are intended to qualify as
Incentive  Stock Options ("ISOs") under Section 422 of the Internal Revenue Code
of  1986  (the  "Code")  or  which  are  not ("Non-ISOs") intended to qualify as
Incentive  Stock  Options  thereunder.  The  2002  Option  Plan and the right of
participants  to  make  purchases  thereunder  are  intended  to  qualify  as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986,  as amended (the "Code"). The 2002 Option Plan is not a qualified deferred
compensation  plan  under Section 401(a) of the Internal Revenue Code and is not
subject to the provisions of the Employee Retirement Income Security Act of 1974
("ERISA").

PURPOSE

     The  primary  purpose  of the 2002 Option Plan is to attract and retain the
best  available personnel for the Company in order to promote the success of the
Company's  business  and  to  facilitate the ownership of the Company's stock by
employees.  The  ability  of  a company to offer a generous stock option program
has now become a standard feature in the industry in which the company operates.
In  the  event  that  the  2002  Option Plan is not adopted the Company may have
considerable  difficulty  in  attracting  and  retaining  qualified  personnel,
officers,  directors  and  consultants.

ADMINISTRATION

     The  2002 Option Plan, is administered by the Company's Board of Directors,
as  the  Board of Directors may be composed from time to time.  All questions of
interpretation  of  the  2002  Option  Plan are determined by the Board, and its
decisions  are  final and binding upon all participants.  Any determination by a
majority  of the members of the Board of Directors at any meeting, or by written
consent  in  lieu  of  a meeting, shall be deemed to have been made by the whole
Board  of  Directors.

     Notwithstanding  the  foregoing, the Board of Directors may at any time, or
from time to time, appoint a committee (the "Committee") of at least two members
of  the  Board  of Directors, and delegate to the Committee the authority of the
Board  of  Directors  to  administer  the  Plan.  Upon  such  appointment  and


                                       15
<PAGE>
delegation,  the  Committee  shall have all the powers, privileges and duties of
the  Board of Directors, and shall be substituted for the Board of Directors, in
the  administration  of  the  Plan,  subject  to  certain  limitations.

     Members  of the Board of Directors who are eligible employees are permitted
to  participate  in the 2002 Option Plan, provided that any such eligible member
may  not vote on any matter affecting the administration of the 2002 Option Plan
or  the grant of any option pursuant to it, or serve on a committee appointed to
administer  the  2002 Option Plan.  In the event that any member of the Board of
Directors  is  at  any  time  not  a  "disinterested person", as defined in Rule
16b-3(c)(3)(i)  promulgated pursuant to the Securities Exchange Act of 1934, the
Plan  shall  not  be  administered  by  the  Board of Directors, and may only by
administered by a Committee, all the members of which are disinterested persons,
as  so  defined.

ELIGIBILITY

     Under  the  2002  Option  Plan,  options  may  be granted to key employees,
officers,  directors  or  consultants  of  the  Company, as provided in the 2002
Option  Plan.

TERMS  OF  OPTIONS

     The  term  of  each  Option  granted under the Plan shall be contained in a
stock option agreement between the Optionee and the Company and such terms shall
be  determined  by  the Board of Directors consistent with the provisions of the
Plan,  including  the  following:

     (a)  PURCHASE  PRICE.  The  purchase  price of the Common Shares subject to
          each  ISO shall not be less than the fair market value, or in the case
          of  the grant of an ISO to a Principal Stockholder, not less that 110%
          of  fair market value of such Common Shares at the time such Option is
          granted.  The  purchase  price  of  the  Common Shares subject to each
          Non-ISO shall be determined at the time such Option is granted, but in
          no  case  less than 85% of the fair market value of such Common Shares
          at  the  time  such  Option  is  granted.

     (b)  VESTING.  The dates on which each Option (or portion thereof) shall be
          exercisable  and  the  conditions  precedent to such exercise, if any,
          shall  be  fixed  by the Board of Directors, in its discretion, at the
          time  such  Option  is  granted.

     (c)  EXPIRATION.  The expiration of each Option shall be fixed by the Board
          of  Directors,  in its discretion, at the time such Option is granted;
          however,  unless otherwise determined by the Board of Directors at the
          time  such  Option  is granted, an Option shall be exercisable for ten
          (10)  years after the date on which it was granted (the "Grant Date").
          Each  Option  shall  be  subject  to  earlier termination as expressly
          provided  in  the  2002  Option  Plan or as determined by the Board of
          Directors,  in  its  discretion,  at  the time such Option is granted.

     (d)  TRANSFERABILITY.  No  Option  shall be transferable, except by will or
          the  laws of descent and distribution, and any Option may be exercised
          during  the  lifetime  of  the Optionee only by him. No Option granted
          under  the  Plan  shall  be  subject to execution, attachment or other
          process.

     (e)  OPTION  ADJUSTMENTS.  The  aggregate  number and class of shares as to
          which  Options  may  be  granted  under the Plan, the number and class
          shares  covered  by each outstanding Option and the exercise price per
          share  thereof  (but not the total price), and all such Options, shall
          each  be  proportionately  adjusted  for  any increase decrease in the
          number  of  issued  Common  Shares resulting from split-up spin-off or
          consolidation  of shares or any like Capital adjustment or the payment
          of  any  stock  dividend.


                                       16
<PAGE>
          Except  as  otherwise  provided  in  the  2002 Option Plan, any Option
          granted  hereunder  shall  terminate  in  the  event  of  a  merger,
          consolidation,  acquisition  of  property  or  stock,  separation,
          reorganization  or  liquidation  of the Company. However, the Optionee
          shall  have  the  right  immediately  prior to any such transaction to
          exercise  his Option in whole or in part notwithstanding any otherwise
          applicable  vesting  requirements.

     (f)  TERMINATION, MODIFICATION AND AMENDMENT. The 2002 Option Plan (but not
          Options  previously  granted  under the Plan) shall terminate ten (10)
          years  from  the  earlier  of the date of its adoption by the Board of
          Directors or the date on which the Plan is approved by the affirmative
          vote of the holders of a majority of the outstanding shares of capital
          stock  of the Company entitled to vote thereon, and no Option shall be
          granted  after  termination  of  the  Plan.  Subject  to  certain
          restrictions,  the Plan may at any time be terminated and from time to
          time  be modified or amended by the affirmative vote of the holders of
          a  majority  of  the  outstanding  shares  of the capital stock of the
          Company  present,  or  represented,  and entitled to vote at a meeting
          duly  held  in  accordance  with  the  applicable laws of the State of
          Nevada.

FEDERAL  INCOME  TAX  ASPECTS  OF  THE  2002  OPTION  PLAN

     THE  FOLLOWING  IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON  THE  PARTICIPANTS  AND  THE COMPANY WITH RESPECT TO THE PURCHASE OF SHARES
UNDER  THE  2002  OPTION  PLAN. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE AND
DOES  NOT  ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH SPECIAL
TAX  STATUS.  IN  ADDITION,  THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE
INCOME  TAX  LAWS  OF  ANY  MUNICIPALITY,  STATE OR FOREIGN COUNTRY IN WHICH THE
PARTICIPANT  MAY  RESIDE,  AND  DOES  NOT  DISCUSS  ESTATE,  GIFT  OR  OTHER TAX
CONSEQUENCES  OTHER  THAN  INCOME  TAX  CONSEQUENCES.  THE  COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF  PARTICIPATION  IN  THE  2002  OPTION  PLAN  AND  FOR REFERENCE TO APPLICABLE
PROVISIONS  OF  THE  CODE.

     The  2002  Option  Plan  and  the  right  of participants to make purchases
thereunder are intended to qualify under the provisions of Sections 421, 422 and
423  of  the  Code.  Under  these  provisions, no income will be recognized by a
participant  prior to disposition of shares acquired under the 2002 Option Plan.

      If the shares are sold or otherwise disposed of (including by way of gift)
more  than  two  years  after  the first day of the offering period during which
shares  were  purchased  (the  "Offering Date"), a participant will recognize as
ordinary  income at the time of such disposition the lesser of (a) the excess of
the  fair  market  value  of the shares at the time of such disposition over the
purchase  price  of the shares or (b) 15% of the fair market value of the shares
on  the  first  day  of  the offering period. Any further gain or loss upon such
disposition will be treated as long-term capital gain or loss. If the shares are
sold  for a sale price less than the purchase price, there is no ordinary income
and  the  participant  has  a  capital  loss  for  the  difference.

      If the shares are sold or otherwise disposed of (including by way of gift)
before the expiration of the two-year holding period described above, the excess
of  the  fair  market value of the shares on the purchase date over the purchase
price  will  be  treated as ordinary income to the participant. This excess will


                                       17
<PAGE>
constitute  ordinary  income in the year of sale or other disposition even if no
gain is realized on the sale or a gift of the shares is made. The balance of any
gain  or  loss  will  be  treated as capital gain or loss and will be treated as
long-term  capital gain or loss if the shares have been held more than one year.

     In  the  case  of  a  participant  who  is  subject to Section 16(b) of the
Exchange  Act,  the purchase date for purposes of calculating such participant's
compensation  income  and  beginning  of  the capital gain holding period may be
deferred  for  up  to  six  months under certain circumstances. Such individuals
should  consult  with  their  personal  tax  advisors prior to buying or selling
shares  under  the  2002  Option  Plan.

      The ordinary income reported under the rules described above, added to the
actual  purchase price of the shares, determines the tax basis of the shares for
the  purpose  of  determining  capital gain or loss on a sale or exchange of the
shares.

     The Company is entitled to a deduction for amounts taxed as ordinary income
to  a  participant only to the extent that ordinary income must be reported upon
disposition  of  shares by the participant before the expiration of the two-year
holding  period  described  above.

RESTRICTIONS  ON  RESALE

     Certain  officers  and  directors  of  the  Company  may  be  deemed  to be
"affiliates"  of  the  Company as that term is defined under the Securities Act.
The  Common  Stock  acquired  under  the 2002 Option Plan by an affiliate may be
reoffered  or  resold  only  pursuant  to an effective registration statement or
pursuant  to  Rule  144  under  the Securities Act or another exemption from the
registration  requirements  of  the  Securities  Act.

     THE  BOARD  RECOMMENDS  A  VOTE  FOR APPROVAL OF THE EMPLOYEES', OFFICERS &
DIRECTORS'  STOCK  OPTION  PLAN.



                              INDEPENDENT AUDITORS

                            ITEM 3 ON THE PROXY CARD

INDEPENDENT  AUDITORS

     For  the fiscal year ended September 30, 2002, the Company engaged Epstein,
Weber  &  Conover,  PLC  ("Weber")  formerly  Weber  & Company, P.C. of Phoenix,
Arizona, to audit its  financial statements.  The Board of Directors proposes to
retain  Weber  as  the  independent  public  auditor  for  the  current  fiscal
year.  Representatives  of  Weber  will  be  present  at  the  Annual Meeting of
Shareholders, will have an opportunity to make a statement and will be available
to  respond  to  appropriate  questions.

     During  the fiscal year ended September 30, 2002, Weber billed an aggregate
of $24,375 for professional services rendered to the Company.  Substantially all
of this amount related to the audit of our fiscal year 2001 financial statements
and  review  of  the quarterly financial statements included in our Forms 10-QSB
for  that fiscal year.  Weber did not provide any related services and have only
provided  audit  services  to  the  Company.


                                       18
<PAGE>
     Ratification  of  the  retention  of  YP.Net's  independent  public auditor
requires an affirmative vote of a majority of the shares entitled to vote at the
Meeting, in person or by proxy.  It is intended that the accompanying Proxy will
be  voted  in  favor  of  ratification  of  the  retention  of Weber, unless the
shareholders'  Proxy  indicates  to  the  contrary.

     THE  BOARD  OF  DIRECTORS  RECOMMENDS  THAT SHAREHOLDERS VOTE TO RATIFY THE
RETENTION  OF  EPSTEIN, WEBER & CONOVER, PLC AS THE COMPANY'S INDEPENDENT PUBLIC
AUDITOR.

CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND FINANCIAL
DISCLOSURE

     In November, 1999, the Company replaced Singer Lewak Greenbaum & Goldstein,
LLP  ("Singer  Lewak")  as the Company's independent public accountants.  Singer
Lewak  had  been the Company's principal independent accountant for the audit of
its  1998  and  1997  fiscal  year  financial  statements.  Except  for a "going
concern"  qualification,  Singer  Lewak's  reports  on  the  Company's financial
statements  contained  no  adverse opinion or disclaimer of opinion.  Neither of
the  Company's  reports  on the Company's financial statements were qualified or
modified as to uncertainty, audit scope, or accounting principles.  The decision
to  replace Singer Lewak was recommended and approved by our Board of Directors,
as  Singer  Lewak  maintains  no  presence  in  Arizona, and use of the firm was
impracticable  for  the  Company.  During  the  two  past  fiscal  years and the
subsequent  interim  periods, the Company had no disagreements with Singer Lewak
regarding  any matter of accounting principles or practices, financial statement
disclosure,  or  auditing  scope  or  procedure.

     On  March  14,  1999,  the  Company  reported that it replaced McGladry and
Pullen  LLP  as its principal certified public accountants.  McGladry and Pullen
LLP  had  been  engaged as the independent auditors to replace Singer Lewak, but
had  not  issued  any  audited  reports.

     On March 30, 2000, the Company appointed King, Weber & Associates, P.C., as
its  independent auditors to conduct the audit of the September 30, 1999, fiscal
year financial statements.  On December 31, 2000, King, Weber & Associates, P.C.
changed  its corporate  name  to  Weber  &  Company,  PC. In late 2001 Weber and
Company,  P.C.  changed  its  name  to  Epstein,  Weber  and  Connover,  P.C.

                                  OTHER MATTERS

                            ITEM 4 ON THE PROXY CARD

     The  Board  of Directors does not intend to bring any other business before
the  Meeting  and, as far as is known to the Board, no matters are to be brought
before  the  Meeting  except  as  specified in the accompanying Notice of Annual
Meeting  of  Shareholders.  In  addition to the scheduled items of business, the
Meeting may consider other matters that properly come before the Meeting.  As to
any  other  business  that  may properly come before the Meeting, it is intended
that  Proxies,  in  the  form  enclosed,  will  be  voted  in respect thereof in
accordance  with  the  judgment  of  the  person(s)  voting  such  Proxies.

                              SHAREHOLDER PROPOSALS

     Shareholders  may  submit proposals to be considered for shareholder action
at  the  Company's  2003  annual  meeting  of  shareholders and inclusion in the


                                       19
<PAGE>
Company's  Proxy  Statement  and  Proxy  if  they  do  so in accordance with the
appropriate  regulations  of  the  Securities and Exchange Commission.  For such
proposals  to  be  considered  for inclusion in the Proxy Statement for the next
annual  meeting,  the  Company  must  receive  proposals  no  later than June 1,
2003.  Such  proposals  should  be  directed  to YP.Net, Inc., 4840 East Jasmine
Street,  Suite  105,  Mesa,  Arizona  85205,  Attention:  Chairman.  The Company
received  no  shareholder  proposals  for  this  year's  Meeting.

                             SOLICITATION OF PROXIES

     The  Proxy  accompanying  this Proxy Statement is solicited by the Board of
Directors  of  the  Company.  Officers,  directors  and  regular supervisory and
executive  employees  of  the  Company, none of whom will receive any additional
compensation for their services, may solicit proxies.  Such solicitations may be
made  personally  or  by mail, facsimile, telephone, telegraph, messenger or via
the  Internet.  The  Company  will  pay  all  costs  of solicitation of proxies.

                                VOTING PROCEDURES

     Votes  cast  by  proxy  or in person at the Meeting will be tabulated by an
Inspector  of  Elections.  A shareholder that abstains from voting on any or all
proposals  will be included in the number of shareholders present at the Meeting
for  purposes  of  determining the presence of a quorum.  Abstentions and broker
non-votes  will not be counted either in favor of or against the election of the
nominees  or  other  proposals.  See  "Voting  Procedures,"  above.

     A  copy  of  the Company's Annual Report on Form 10-KSB for the fiscal year
ended  September,  2001,  which  has been filed with the Securities and Exchange
Commission  on  December  31, 2001 can be obtained at no charge by any person to
whom  this  Proxy  Statement is delivered upon request to the Company.  You also
may obtain a copy  of  the  Form  10-KSB and the Company's other SEC filings via
the  Internet  at  www.sec.gov.

Dated:  August  30,  2002
Mesa,  Arizona

                                             By Order of the Board of Directors,

                                             /s/Angelo  Tullo
                                             Angelo  Tullo,  Chairman


                                       20
<PAGE>
                                  YP.NET, INC.
                            4840 EAST JASMINE STREET
                                    SUITE 105
                                 MESA, AZ  85205

                                      PROXY

THIS  PROXY  IS  SOLICITED  ON  BEHALF  OF  YP.NET'S  BOARD  OF  DIRECTORS.  THE
FOLLOWING  PROSALS  ARE  PROPOSED  BY  THE  BOARD  OF  DIRECTORS.

     The  undersigned  shareholder  of  YP.Net,  Inc., a Nevada corporation (the
"Company"),  hereby  appoints  Angelo  Tullo and Daniel L. Coury, Sr., or either
of them, as proxies, each with the power to appoint his substitute, to represent
and to vote all the shares of common stock of the Company, which the undersigned
would be entitled to vote, at the Annual Meeting of Shareholders of the Company,
to  be  held  on  September  20,  2002,  at  10:00  a.m.  local  time  (the
"Meeting"),  at  the  Chaparral  Suites, 5001 North Scottsdale Road, Scottsdale,
Arizona  85250  and  at  any  adjournment thereof, and there to vote any and all
shares of common stock of the Company standing in the name of the undersigned as
indicated  below.

- --------------------------------------------------------------------------------
THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE  "FOR"  EACH  OF  THE  FOLLOWING
PROPOSALS  AND  DIRECTORS.  THIS  PROXY  WILL  BE  VOTED  AS DIRECTED, PROVIDED,
HOWEVER,  THAT  IF  YOU  SIGN  AND  RETURN  THIS  PROXY  WITHOUT INDICATING YOUR
DIRECTIONS,  IT  WILL  BE  VOTED  IN  THE  DISCRETION  OF  THE  PROXYHOLDER(S).
- --------------------------------------------------------------------------------


                                    PROPOSALS


1.     Regarding  the  reelection  of  the following individuals as Directors of
the  Company,  to  serve for the term referenced next to their name or until the
next  annual  meeting  of  shareholders  if no term is indicated and until their
successors  are  elected  and  qualified:

Angelo  Tullo,  Gregory  B.  Crane,  Daniel  L.  Coury,  Peter  Bergmann,  DeVal
Johnson

     [ ]  For  All  Nominees        [ ]  Withhold

(Instructions to withhold authority to vote for an individual nominee strike the
nominees  name  in  the  above  list)

     For  all  nominees  listed  above  (check  box  to  approve).

2.     The  ratification  of  the  2002 Employees', Officers and Directors Stock
Option  Plan  and  the reservation of up to 3,000,000 shares of common stock for
issuance  thereunder.

     [ ]  For        [ ]  Against       [ ]  Abstain


                                       21
<PAGE>
3.     The  ratification  of the retention of Epstein, Weber & Connover, PLC, as
the  Company's  independent  public  auditor for the fiscal year ended September
30,  2002.

     [ ]  For        [ ]  Against       [ ]  Abstain

4.     In accordance with their best judgment, the Proxy Holder(s) may vote upon
such  business  as  may  properly  come  before  such  meeting  or  adjournments
thereof.

     [ ]  For        [ ]  Withhold  Authority

     The  undersigned  hereby ratifies and confirms all that each named proxy or
his,  her  or  their  substitutes  may lawfully do or cause to be done by virtue
hereof,  represents  and  warrants that he has full power to execute this proxy,
and  agrees  that  this  proxy shall be specifically enforceable in any court of
competent  jurisdiction.  If  any  provision  of this proxy is unenforceable, it
shall  be  severed  and  the  remaining  provisions  shall  be  effective.

     Please  sign  exactly  as your name appears on your stock certificates.  If
shares  are  held  by  more  than  one  owner, each owner must sign.  Executors,
administrators,  trustees,  guardians  and  others  signing  in a representative
capacity  should  give their full titles.  A corporation should sign in its name
by  an  officer  or  any  other  person  duly  authorized  to  do  so.

WHETHER  OR  NOT  YOU  EXPECT  TO  ATTEND  THE MEETING IN PERSON, WE URGE YOU TO
SIGN,  DATE  AND  RETURN  THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE.  THIS
WILL ENSURE THE PRESENCE OF A QUORUM AT THE MEETING.  A PREADDRESSED ENVELOPE IS
ENCLOSED  FOR YOUR CONVENIENCE.  SENDING IN YOUR PROXY WILL NOT PREVENT YOU FROM
VOTING  YOUR  SHARES  AT  THE  MEETING  IF YOU DESIRE TO DO SO, AS YOUR PROXY IS
REVOCABLE  AT  YOUR  OPTION.


                                        ________________________________________
                                        Authorized  Signature

                                        ________________________________________
                                        Title  (if  applicable)

                                        ________________________________________
                                        Date


                                       22
<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>doc2.txt
<TEXT>
                                  YPNET, INC.
              EMPLOYEES', OFFICERS & DIRECTORS' STOCK OPTION PLAN
                                TABLE OF CONTENTS

         Table of Contents                                              1,2
         Purpose
2        Definitions                                                      3
2.1      Accrued Installment                                              3
2.2      Affiliate                                                        3
2.3      Board                                                            3
2.4      Code                                                             3
2.5      Company                                                          3
2.6      Common Stock                                                     3
2.7      Compensation Committee                                           3
2.8      Disabled or Disability                                           3
2.9      Eligible Recipient                                               4
2.10     Fair Market Value                                                4
2.11     Family Member                                                    4
2.12     Incentive Stock Option                                           4
2.13     Nonqualified Stock Option                                        4
2.14     Optionee                                                         4
2.15     Option Price                                                     4
2.16     Participant                                                      4
2.17     Plan                                                             5
2.18     Plan Administrators                                              5
2.19     Restricted Stock                                                 5
2.20     Stock Option                                                     5
3.       Stock Options Under the Plan                                     5
4.       Effective Date of Plan                                           5
5.       Term of Plan                                                     5
6.       Administration                                                   5
7.       Eligibility                                                      7
8.       Shares Subject to the Plan                                       7
8.1      Available Shares                                                 7
8.2      Capital Structure Adjustments                                    8
9.       Terms and Conditions of Stock Options                            8
9.1      Number of Shares Subject to Stock Option                         8
9.2      Stock Option Price                                               8
9.3      Notice and Payment                                               9
9.4      Non-Transferability of Options                                  10
9.5      Exercise of Stock Option                                        10
9.6      Term of Stock Option                                            11
9.7      Limit on Incentive Stock Options                                12
9.8      No Fractional Shares                                            12
9.9      Exercisable in the Event of Death                               12
9.10     Modification, Extension, and Renewal of Stock Options           13
9.11     Loans                                                           13
9.12     Cash Payments                                                   13
10.      Restricted Stock                                                14
10.1     General                                                         14
10.2     Awards and Certificates                                         14
10.3     Restrictions and Conditions                                     15


                                      -1-
<PAGE>
11.      Termination or Amendment of the Plan                            15
11.1     Amendment to Plan                                               15
11.2     Effect of Termination of Plan on Outstanding Stock Options or
         Restricted Stock                                                16
11.3     Stockholder Approval for Amendment to Plan                      16
12.      Indemnification                                                 16
13.      Withholding                                                     16
13.1     Irrevocable Election                                            17
13.2     Approval by Plan Administrators                                 17
13.3     Timing of Election                                              17
13.4     Timing of Delivery                                              17
13.5     Terms in Agreement                                              17
14.      General Provisions                                              18
14.1     Transfer of Common Stock                                        18
14.2     Reservation of Shares of Common Stock                           18
14.3     Restrictions on Issuance of Shares                              18
14.4     Notices                                                         18
14.5     Representations and Warranties                                  19
14.6     No Enlargement of Employee Rights                               19
14.7     Restrictions on Issuance of Shares, Options & Awards            19
14.8     Legends on Stock Certificates                                   20
14.9     Remedies                                                        20
14.10    Invalid Provisions                                              20
14.11    Applicable Law                                                  21
14.12    Successors and Assigns                                          21
14.13    Rights as a Stockholder or Employee                             21
         Attestation                                                     21


                                       -2-
<PAGE>
                                  YP.NET, INC.
              EMPLOYEES', OFFICERS' & DIRECTORS' STOCK OPTION PLAN
                                 APRIL 10, 2002

1.   Purpose. The purpose of this YP.Net, Inc. (the "Company") Employees',
     Officers' and Directors' Stock Option Agreement (the "Plan") is to
     strengthen YP.Net and to further the growth and development of the Company
     by providing additional means of attracting and retaining competent
     managerial personnel, exclusively as an incentive, to directors, officers,
     and employees of the Company who are in a position to contribute materially
     to the prosperity of the Company, to participate in the long-term growth of
     the Company by receiving the opportunity to acquire shares of the Common
     Stock of the Company, and to provide for additional compensation based on
     appreciation in the Company's shares. The Plan provides a means to increase
     such persons' interests in the Company's welfare, to encourage them to
     continue their services to the Company or its subsidiaries, and to attract
     individuals of outstanding ability to enter the employment of the Company
     or its subsidiaries.

2.   Definitions. The following definitions are applicable to the Plan:

2.1  Accrued Installment. Any exercisable portion of a Stock Option granted
     under the Plan.

2.2  Affiliate. Any subsidiary corporation of the Company, as such term is
     defined in Sections 424(e) and (f), respectively, of the Code.

2.3  Board. The Board of Directors of the Company.

2.4  Code. The Internal Revenue Code of 1986, as amended from time to time.

2.5  Company. YP.Net, a Nevada corporation.

2.6  Common Stock. The shares of the $.001 par value common stock of YP.Net.

2.7  Compensation Committee. A Committee selected by the Board that shall
     administer the Plan pursuant to the terms hereof.

2.8  Disabled or Disability. A Participant shall be deemed to be Disabled if he
     or she is unable to engage in any substantial gainful activity by reason of
     any medically determinable physical or mental impairment that can be
     expected to result in death or that has lasted or can be expected to last
     for a continuous period of not less than thirty (30) consecutive days. The
     determination of whether an individual is Disabled or has a Disability
     shall be determined under procedures established by the Plan
     Administrators.


                                       -3-
<PAGE>
2.9  Eligible Recipient. Shall have the meaning assigned to it in Section 7
     hereof.

2.10 Fair Market Value. For purposes of the Plan, the Fair Market Value of any
     share of Common Stock of the Company at any date shall be determined based
     on the following: (a) if the Common Stock is listed on an established stock
     exchange or exchanges or reported by NASDAQ, the last reported sale price
     per share on the last trading day immediately preceding such date on the
     principal exchange on which it is traded, or if no sale was made on such
     day on such principal exchange, at the closing reported bid price on such
     day on such exchange, or (b) if the Common Stock is not then listed on an
     exchange, the last reported sale price per share on the last trading day
     immediately preceding such date reported by NASDAQ, or if sales are not
     reported by NASDAQ or no sale was made on such date, the average of the
     closing bid and asked price per share for the Common Stock in the
     over-the-counter market as quoted by NASDAQ on the day prior to such date,
     or (c) if the Common Stock is not publicly traded at the time and a Stock
     Option or Restricted Stock Option is granted under the Plan, Fair Market
     Value shall be deemed to be the fair value of the Common Stock as
     determined by the Plan Administrators after taking into consideration all
     factors that it deems appropriate, including, without limitation, recent
     sale and offer prices of the Common Stock in private transactions
     negotiated at arm's-length.

2.11 Family Member. For purposes of the Plan, Family Member means a
     Participant's spouse, stepchildren, in-laws, ancestors and lineal
     ascendants and descendants. In addition, a Family Member shall be deemed to
     include a corporation, partnership, limited liability company, or trust
     whose only stockholders, partners, members or beneficiaries are the
     specified person and/or the specified person's spouse, stepchildren,
     in-laws, ancestors and lineal ascendants and/or descendants.

2.12 Incentive Stock Option. 'Any Stock Option intended to be and designated as
     an "incentive stock option" within the meaning of Section 422 of the Code.

2.13 Nonqualified Stock Option. Any Stock Option that is not an Incentive Stock
     Option.

2.14 Optionee. The recipient of a Stock Option.

2.15 Option Price. The exercise or purchase price for any Stock Option awarded
     under the Plan.

2.16 Participant. Any Eligible Recipient selected by the Plan Administrators,
     pursuant to the Plan Administrator's authority in Section 7 herein, or by
     the Board, to receive grants of Stock Options, Restricted Stock awards or
     any combination of the foregoing.


                                       -4-
<PAGE>
2.17 Plan. The YP.Net, Inc. Employees' Stock Option Plan, as amended from time
     to time.

2.18 Plan Administrators. The Company's Compensation Committee, as designated
     pursuant to Section 6 hereof, who is authorized to administer, construe and
     interpret the terms of the Plan.

2.19 Restricted Stock. Any option granted pursuant to Section 10 hereof of
     shares of Common Stock subject to certain restrictions.

2.20 Stock Option. Any option to purchase shares of Common Stock pursuant to
     Section

3.   Stock Options Under the Plan. Two types of Stock Options (referred to
     herein as Stock Options', without distinction between such two types) may
     be granted under the Plan: Provided, Stock Options intended to qualify
     shall be either Incentive Stock Options or Nonqualified Stock Options.

4.   Effective Date of Plan. The Plan shall be adopted and become effective on
     the date of execution specified below (the "Effective Date").

5.   Term of Plan. Unless sooner terminated by the Board in its sole discretion,
     the Plan will expire and no Stock Options or Restricted Stock awards may be
     granted hereunder on and after ten (10) years from the Effective Date (the
     Plan Termination Date").

6.   Administration. 1. The Plan shall be administered by a majority of the
     Compensation Committee, who shall be known as the "Plan Administrators."
     The Actions of the Plan Administrators shall be subject to and under review
     by the Company's Board of Directors. The Compensation Committee shall
     consist of not fewer than two (2) members of the Board, all of whom shall
     be persons who, in the opinion of counsel to the Company, are outside
     directors and 'non-employee directors" within the meaning of Rule
     16b-3(b)(3)(i) promulgated pursuant to the Securities Exchange Act of 1934,
     as amended. from time to time. The Board may increase or decrease (to not
     less than two members) the size of the Compensation Committee, and add
     additional members to, or remove members from, the Compensation Committee.
     The Compensation Committee shall act pursuant to a majority vote or the
     unanimous written consent of its members and minutes shall be kept of all
     of its meetings and copies thereof shall be provided to the Board upon
     request of the Board. Subject to the provisions of the Plan as of the date,
     hereof as adopted by the Board, the Compensation Committee may establish
     and follow such rules and regulations for the conduct of its business as it
     may deem advisable.


                                       -5-
<PAGE>
     No member of the Compensation Committee shall be liable for any action or
     determination undertaken or made in good faith with respect to the Plan or
     any agreement executed pursuant to the Plan. Subject to the provisions of
     the Plan, the Plan Administrators shall have the sole authority and
     discretion:

     (a) to select those Eligible Recipients who shall be Participants, who may
     be nominated by the President, Chairman, or Chief Financial Officer.

     (b) to determine under what terms and whether and to what extent Stock
     Options, whether of Restricted or Registered Stock, or a combination of the
     foregoing, are to be granted hereunder to Participants;

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

     (d) in determining the number of shares of Common Stock to be optioned
     pursuant to the granting of Stock Options, in addition to the formulaic
     grants described hereinafter in Section 6.1(c), the Plan Administrators
     shall take into account as to any Eligible Recipient whose performance
     merits it, those factors including, without limitation, the Eligible
     Recipient's tenure with the Company, responsibility level, performance,
     potential and cash compensation level.

     (e) to determine the terms and conditions, not inconsistent with the terms
     of the Plan, of any option granted hereunder (including, but not limited to
     the restrictions applicable to Restricted Stock awards and the conditions
     under which restrictions applicable to such Restricted Stock shall lapse);

     (f) to determine the terms and conditions, not inconsistent with the terms
     of the Plan, that shall govern all written instruments evidencing the Stock
     Options, Restricted Stock or any combination of the foregoing granted
     hereunder to Participants; and

     (g) to reduce the exercise price of any Stock Option to the then current
     Fair Market Value, but to not less than $1.00, if the Fair Market Value of
     the Common Stock covered by such Stock Option has declined since the date
     such Stock Option was granted.

2.   The Plan Administrators shall have the authority, in their sole discretion,
     to adopt, alter and repeal such administrative rules, guidelines and
     practices governing the Plan as they shall from time to time deem
     advisable; to interpret the terms and provisions of the Plan and any option
     issued under the Plan (and any agreements relating thereto); and to
     otherwise supervise the administration of the Plan.


                                       -6-
<PAGE>
3.   All decisions made by the Plan Administrators pursuant to the provisions of
     the Plan shall be final, conclusive and binding on all persons, including
     the Company and the Participants.

7.   Eligibility. Any of the following individuals shall be eligible to receive
     Stock Options of Restricted or Registered Stock under the Plan (each, an
     "Eligible Recipient"): (i) any employee, officer or member of the Board of
     Directors of the Company or an Affiliate and (ii) any consultant or
     professional employed by the Company or an Affiliate; provided, however,
     that no person who owns stock possessing more than 10% of the total
     combined voting power of alt classes of stock of the Company or any of its
     parent or subsidiary corporations shall be eligible to receive an Incentive
     Stock Option under the Plan unless at the lime such Stock Option is granted
     the Option Price (determined in the manner provided in Section 9.2 hereof)
     is at least 110% of the Fair Market Value of the shares subject to the
     Stock Option and such Stock Option by its terms is not exercisable after
     the expiration of live (5) years from the date such Stock Option is
     granted. Any Participant may receive more than one Stock Option or
     Restricted Stock Option under the Plan.

8.   Shares Subject to the Plan.

8.1  Available Shares. The shares received and available for issuance tinder the
     Plan shall be shares of the Company's authorized but unissued. or
     reacquired. Common Stock. Subject to adjustment as provided in Section 8.2
     hereof, the aggregate number of shares that may be issued under the Plan
     shall not exceed a total of Three Million (3,000,000) shares of the
     Company's Common Stock. In the event that (i) the grant of any Stock Option
     under the Plan for any reason expires, is terminated or surrendered without
     being exercised in full or is exercised or surrendered without the
     distribution of shares or (ii) any shares of Common Stock subject to any
     Restricted Stock Option granted hereunder are forfeited, such shares of
     Common Stock allocable to the unexerciscd portion of the Stock Option or
     the Restricted Stock award shall again be available for issuance in
     connection with future awards tinder the Plan. if any shares of Common
     Stock have been pledged as collateral for indebtedness incurred by a
     Participant in connection with the exercise of a Stock Option and such
     shares are returned to the Company in satisfaction of such indebtedness,
     such shares shall again be available for issuance in connection with future
     options under the Plan. In the event any portion of a Stock' Option is
     exercised pursuant to a "stock-for-stock exercise" as provided in
     Subsection 9.3(h), the shares of Common Stock surrendered thereby shall
     again be available for grant and distribution under the Plan as if no Stock
     Option had been granted with respect to such shares. The maximum number of
     shares of Common Stock that shall be issuable upon the exercise dl' any and
     all Options granted to any one individual pursuant to this Plan shall not
     exceed 30% of the total number of shares eligible to be issued.


                                       -7-
<PAGE>
8.2  Capital Structure Adjustments. Except as otherwise provided herein, in the
     event of a stock dividend (but only on Common Stock), stock split, reverse
     stock split, recapitalization, reorganization, merger, consolidation,
     separation, or like change in the corporate or capital structure of the
     Company affecting the stock or securities of the Company, appropriate and
     proportionate capital structure adjustments shall be made in (i) the
     aggregate number of shares of Common Stock reserved for issuance under the
     Plan, (ii) the kind, number and Option Price of shares subject to
     outstanding Stock Options granted under the Plan, and (iii) the kind,
     number and purchase price of shares issuable pursuant to awards of
     Restricted Stock. The foregoing adjustments shall be made by the Plan
     Administrators, in their sole discretion, the determination of which in
     that respect shall be final, binding, and conclusive; provided that each
     Incentive Stock Option granted pursuant to the Plan shall not be adjusted
     in a manner that causes it to fail to continue to qualify as an Incentive
     Stock Option. In the event of a liquidation, a merger, reorganization, or
     consolidation of the Company with any other corporation in which the
     Company is not the surviving corporation or the Company becomes a
     wholly-owned subsidiary of another corporation, any unexercised Stock
     Option rights theretofore granted under the Plan shall be (i) assumed by
     any surviving corporation or similar stock options shall be substituted
     therefore, or (ii) such Stock Options shall continue in full force and
     effect.

9.   Terms and Conditions of Stock Options. Stock Options granted under the Plan
     shall be evidenced by agreements (which need not be identical and which may
     include the agreement of the Optionee to be responsible for the Optionee's
     assumption and payment of any tax assessment and/or liability) in such form
     and containing such provisions that are consistent with the Plan as the
     Plan Administrators shall from time to time approve. Such agreements may
     incorporate all or any of the terms hereof by reference and shall comply
     with and be subject to the following terms and conditions:

9.1  Number of Shares Subject to Stock Option. Each Stock Option agreement shall
     specify the number of shares subject to the Stock Option.

9.2  Stock Option Price. The Option Price for the shares subject to any Stock
     Option shall be such amount as is determined by the Plan Administrators.
     Anything to the contrary contained herein notwithstanding, the Option Price
     for the shares subject to any Nonqualified Stock Option or any Incentive
     Stock Option shall not be less than $1.00 or 100% of the Fair Market Value
     of the shares of Common Stock of the Company on the date the Stock Option
     is granted, whichever is greater. In the case of an Incentive Stock Option


                                       -8-
<PAGE>
     granted to an employee who owns stock possessing more than 10% of the total
     combined voting power of all classes of stock of the Company or any of its
     parent or subsidiary corporations, the Option Price shall not be less than
     $1 .10 or 110% of the Fair Market Value of the shares of Common Stock of
     the Company on the date the Stock Option is granted, which ever is greater.

9.3  Notice and Payment. Any exercisable portion of a Stock Option may be
     exercised only by:

     (a) delivery of a written notice to the Company, prior to the time when
     such Stock Option becomes unexercisable under Section 9.6 hereof, stating
     the number of shares being purchased and complying with all applicable
     rules established by the Plan Administrators;

     (b) payment in full of the Option Price of such Option by, as applicable;
     (i) cash or check for an amount equal to the aggregate Option Price for the
     number of shares being purchased; (ii) in the discretion of the Plan
     Administrators, upon such terms as the Plan Administrators shall approve, a
     copy of instructions to a broker directing such broker to sell the Common
     Stock for which such Stock Option is exercised, and to remit to the Company
     the aggregate Option Price of such Stock Option (a "cashless exercise");
     (iii) in the discretion of the Plan Administrators, upon such terms as the
     Plan Administrators shall approve, the Optionee may pay all or a portion of
     the Option Price for the number of shares being purchased by tendering
     shares of the Company's Common Stock owned by the Optionee, duly endorsed
     for transfer to the Company, with a Fair Market Value on the date of
     delivery equal to the aggregate Option Price of the shares with respect to
     which such Stock Option or portion is thereby exercised (a "stock-for-stock
     exercise"); or (iv) in any other form of legal consideration that may be
     acceptable to the Plan Administrators ("other legal consideration");

     (c) payment of the amount of tax required to be withheld (if any) by the
     Company or any parent or subsidiary corporation as a result of the exercise
     of a Stock Option. At the discretion of the Plan Administrators, upon such
     terms as the Plan Administrators shall approve, the Optionee may pay all or
     a portion of the tax withholding by; (i) cash or check payable to the
     Company; (ii) cashless exercise; (iii) stock-for-stock exercise; (iv) other
     legal consideration; or (v) a combination of (i), (ii), (iii) and (iv); and

     (d) delivery of a written notice to the Company requesting that the Company
     direct the transfer agent to issue to the Optionee (or to his designee) a
     certificate for the number of shares of Common Stock for which the Stock
     Option was exercised or, in the case of a cashless exercise, for any shares
     that were not sold in the cashless exercise.


                                       -9-
<PAGE>
     Notwithstanding the foregoing, the Company, subject to the provisions of
     Section 9.11 hereof, may extend and maintain, or arrange for the extension
     and maintenance of, credit to any Optionee to finance the Optionee's
     payment of the Option Price upon the exercise of any Stock Option, on such
     terms as may be approved by the Plan Administrators, subject to applicable
     regulations of the Federal Reserve Board and any other laws or regulations
     in effect at the time such credit is extended. The Plan Administrators may,
     at any time and in their discretion, authorize a cash payment, determined
     in accordance with Section 9.12, which shall not exceed the amount required
     to pay in full the federal, state and local tax consequences of an exercise
     of any Stock Option granted under the Plan.

9.4  Non-Transferability of Options.

     (a) Generally. No Stock Option granted under this Plan shall be assignable
     or transferable, directly or indirectly, by an Optionee other than by will
     or the laws of descent and distribution, and such Stock Option may be
     exercised during the Optionee's lifetime only by the Optionee, or in the
     event of death or Disability, by the Optionee's legal representative or
     personal representative.

     (b) Exceptions. Notwithstanding Section 9.4(a), a Nonqualified Stock Option
     may be transferred to a Family Member of the Optionee. In the case of a
     transfer pursuant to this Section, the remaining provisions of this Plan
     and the terms of any Stock Option agreement under this Plan shall continue
     to apply as if the Optionee retained ownership of the Stock Option.

9.5  Exercise of Stock Option. The Plan Administrators shall have the power to
     set the time or times within which each Stock Option shall be exercisable
     and to accelerate the time or times of exercise. To the extent that an
     Optionee has the right to exercise a Stock Option and purchase shares
     pursuant thereto, the Stock Option may be exercised from time to time as
     provided in this Section 9.5. Subject to the actions, conditions and/or
     limitations set forth in this Plan and/or any applicable Stock Option
     agreement entered into hereunder, Stock Options granted under this Plan
     shall be exercisable in accordance with the following rules:

     (a) Subject in all cases to the provisions of Sections 8 and 9.6 hereof,
     Stock Options shall vest and become exercisable as determined by the Plan
     Administrators; provided, however that by a resolution adopted after a
     Stock Option is granted the Plan Administrators, may, on such terms and
     conditions as the Plan Administrators may determine to be appropriate,
     accelerate the time at which such Stock Option or installment thereof may
     be exercised.


                                      -10-
<PAGE>
     (b) Subject to the provisions of Sections 8 and 9.6 hereof, a Stock Option
     may be exercised when and to the extent such Stock Option becomes an
     Accrued Installment as provided in the terms under which such Stock Option
     was granted and at any time thereafter during the term of such Stock
     Option; provided, however, that in no event shall any Stock Option be
     granted after the Plan Termination Date.

9.6  Term of Stock Option. Any unexercised Accrued Installment of any Stock
     Option granted hereunder shall expire and become unexercisable and no Stock
     Option shall be exercisable after the earliest of:

     (a) ten (10) years from the date of grant; or

     (b) the expiration date of the Stock Option established by the Plan
     Administrators at the time of grant of any Stock Option; or

     (c) thirty (30) days following the effective date of the termination of
     employment or directorship (if such individual is not then an officer or
     employee of the Company) with the Company or any Affiliate, as the case may
     be, of an Optionee for any reason other than death or Disability (the
     "Termination Date"). The Plan Administrators, in their sole discretion, may
     extend such thirty (30) day period for a period following the Termination
     Date, but in no event beyond ten years from the date of grant. Any
     installments under Stock Options that have not accrued (become vested) as
     of said Termination Date shall expire and become unexercisable as of said
     Termination Date. The Plan Administrators, in their sole discretion, may
     vest any installments under Stock Options. Unless otherwise determined by
     the Plan Administrators in their sole discretion, any portion of a Stock
     Option that expires hereunder shall remain unexercisable and be of no
     effect whatsoever after such expiration notwithstanding that such Optionee
     may be reemployed by, or again become a director of, the Company or a
     subsidiary thereof, as the case may be; or

     (d) notwithstanding the foregoing provisions of this Section 9.6, in the
     event of the death of an Optionee while an employee, consultant, officer or
     director of the Company or any Affiliate, as the case may be, or in the
     event of the termination of employment, directorship or a contract to
     render services to the Company by reason of the Optionee's Disability, any
     unexercised Accrued Installment of the Stock Option granted hereunder to
     such Optionee shall expire and become unexercisable as of the earlier of:
     (i) the expiration date of the Stock Option established by the Plan
     Administrators at the time of grant of any Stock Option; (ii) ten (10)
     years from the date of grant;


                                      -11-
<PAGE>
     or (iii) eighteen (18) months after the date of death of such Optionee (if
     applicable) and one (1) year after the date of the termination of
     employment or directorship by reason of Disability (if applicable). Any
     installments under a deceased Optionee's Option that have not become
     exercisable as of the date of his or her death shall expire and become
     unexercisable as of said date of termination of employment as a result of
     death or Disability. For purposes of this Subsection 9.6(d), an Optionee
     shall be deemed employed by the Company or any of its subsidiaries, as the
     case may be, during any period of leave of absence from active employment
     as authorized by the Company or any of its subsidiaries, as the case may
     be; or

     (e) in the case of an Incentive Stock Option granted to an employee who
     owns stock possessing more than 10% of the total combined voting power of
     all classes of stock of the Company or any of its parent or subsidiary
     corporations, the term set forth in Subsection 9.6(a), above, shall not be
     more than five years after the date the Stock Option is granted.


9.7  Limit on Incentive Stock Options. The aggregate Fair Market Value
     (determined at the time the Incentive Stock Option is granted) of the
     Common Stock with respect to which Incentive Stock Options granted under
     this Plan are exercisable for the first time by an Optionee during any
     calendar year shall not exceed $300,000. To the extent that the aggregate
     Fair Market Value (determined at the time the Stock Option is granted) of
     the Common Stock with respect to which Incentive Stock Options are
     exercisable for the first time by an Optionee during any calendar year
     (under all Incentive Stock Option plans of the Company and any parent or
     subsidiary corporations) exceeds $300,000, such Stock Options shall be
     treated as Nonqualified Stock Options. The determination of which Stock
     Options shall be treated as Nonqualified Stock Options shall be made by
     taking Stock Options into account in the order in which they were granted.

9.8  No Fractional Shares. In no event shall the Company be required to issue
     fractional shares upon the exercise of a Stock Option.

9.9  Exercisable in the Event of Death. In the event of the death of the
     Optionee, any such Accrued Installment of a deceased Optionee may be
     exercised prior to its expiration pursuant to Section 9.6 by (and only by)
     the Optionee's personal representatives, heirs, or legatees or other person
     or persons to whom the Optionee's rights shall pass by will or by the laws
     of the descent and distribution, if applicable, subject, however, to all of
     the terms and conditions of this Plan and the applicable Stock Option
     agreement governing the exercise of Stock Options granted hereunder.


                                      -12-
<PAGE>
9.10 Modification, Extension, and Renewal of Stock Options. Subject to the terms
     and conditions and within the limitations of the Plan, the Plan
     Administrators may modify, extend, or renew outstanding Stock Options
     granted under the Plan, accept the surrender of outstanding Stock Options
     (to the extent not theretofore exercised) and authorize the granting of new
     Stock Options in substitution therefore (to the extent not theretofore
     exercised). The Plan Administrators may modify any outstanding Stock
     Options so as to specify a lower Option Price. The Plan Administrators
     shall not, however, without the consent of the Optionee, modify any
     outstanding Incentive Stock Option in any manner that would cause the Stock
     Option not to qualify as an Incentive Stock Option. Notwithstanding the
     foregoing, no modification of a Stock Option shall, without the consent of
     the Optionee, alter or impair any rights of the Optionee under the Stock
     Option.

9.11 Loans. The Company may extend and maintain, or arrange for the extension
     and maintenance of, credit to any Optionee to finance the Optionee's
     purchase of shares pursuant to the exercise of any Stock Option, on such
     terms as may be approved by the Plan Administrators, subject to applicable
     regulations of the Federal Reserve Board and any other laws or regulations
     in effect at the time such credit is extended, either on or after the date
     of grant of such Stock Option. Such loans may be either in connection with
     the grant or exercise of any Stock Option, or in connection with the
     payment of any federal, state and local income taxes in respect of income
     recognized upon exercise of a Stock Option. The Plan Administrators shall
     have full authority to decide whether to make a loan hereunder and to
     determine the amount, term, and provisions of any such loan, including the
     interest rate (which must be not less that the Company would pay) charged
     in respect of any such loan, whether the loan is to be secured or
     unsecured, the terms on which the loan is to be repaid and the conditions,
     if any, under which it may be forgiven. However, no loan hereunder shall
     have a term (including extensions) exceeding three years in duration or be
     an amount exceeding the total Option Price paid by the borrower under a
     Stock Option or for related Common Stock under the Plan plus an amount
     equal to the cash payment permitted in Section 9.12 below.

9.12 Cash Payments. The Plan Administrators may, at any time and in their
     discretion, authorize a cash payment in respect of the grant or exercise of
     a Stock Option under the Plan or the lapse or waiver of restrictions under


                                      -13-
<PAGE>
     a Stock Option, which shall not exceed the amount that would be required
     in- order to pay in full the federal, state and local income taxes due as a
     result of income recognized by the recipient as a consequence of: (i) the
     receipt of a Stock Option or the exercise of rights there under, and (ii)
     the receipt of such cash payment. The Plan Administrators shall have
     complete authority to decide whether to make such cash payments in any
     case, to make provisions for such payments either simultaneously with or
     after the grant of the associated Stock Option, and to determine the amount
     of any such payment.


10.  Restricted Stock.


10.1 General. Restricted Stock may be issued either alone or in addition to
     Stock Options granted under the Plan. The Plan Administrators shall
     determine the Eligible Recipients to whom, and the time or times at which,
     grants of Restricted Stock shall be made; the number of shares to be
     awarded; the price, if any, to be paid by the recipient of Restricted
     Stock; the Restricted Period, as defined in Section 10.3 hereof, applicable
     to Restricted Stock; the date or dates on which restrictions applicable to
     Restricted Stock awards shall lapse during the Restricted Period; and all
     other conditions of the Restricted Stock awards. Subject to the
     requirements of Section 162(m) of the Code, as applicable, the Plan
     Administrators may also condition the grant of Restricted Stock upon the
     exercise of Stock Options, or upon such other criteria as the Plan
     Administrators may determine, in their sole discretion. The provisions of
     Restricted Stock awards need not be the same with respect to each
     recipient. In the sole discretion of the Plan Administrators, loans may be
     made to Participants in connection with the purchase of Restricted Stock
     under substantially the same terms and conditions as provided in Section
     9.11 hereof with respect to the exercise of Stock Options.

10.2 Awards and Certificates. The prospective recipient of an Option to receive
     Restricted Stock shall not have any rights with respect to such Option,
     unless and until such recipient has executed an agreement evidencing the
     Option (a "Restricted Stock Option Agreement") and delivered a fully
     executed copy thereof to the Company, within a period of sixty days (or
     such other period as the Plan Administrators may specify) after the
     granting date. Except as otherwise provided below in this Section 10.2, (i)
     each Participant who exercises his Option for Restricted Stock shall be
     issued a stock certificate in respect of such shares of Restricted Stock;
     and (ii) such certificate shall be registered in the name of the
     Participant, and shall bear an appropriate legend referring to the terms,
     conditions and restrictions applicable to such Stock.


                                      -14-
<PAGE>
     The Plan Administrators may require that the stock certificate(s)
     evidencing the issuance of Restricted Stock hereunder be held in the
     custody of the Company until the restrictions thereon shall have lapsed,
     and that, as a condition of any Restricted Stock so issued, the Participant
     shall have delivered a stock power, endorsed in blank, relating to the
     Common Stock covered by such Option.


10.3 Restrictions and Conditions. The Restricted Stock Options granted pursuant
     to this Section 10 shall be subject to the following restrictions and
     conditions:

     (a) Subject to the provisions of the Plan and the Restricted Stock Option
     Agreement, as a appropriate, governing such Option, during such period as
     may be set by the Plan Administrators commencing on the grant date (the
     "Restricted Period"), the Participant shall not be permitted to sell,
     transfer, pledge or assign shares of Restricted Stock issued under the
     Plan; provided, however, that the Plan Administrators may, in their sole
     discretion, provide for the lapse of such restrictions in installments and
     may accelerate or waive such restrictions in whole or in part based on such
     factors and such circumstances as the Plan Administrators may determine, in
     their sole discretion, including, but not limited to, the attainment of
     certain performance related goals, the Participant's termination of
     employment or service, death or Disability.

     (b) Except as provided in Section 10.3(a), the Participant shall generally
     have, with respect to shares of Restricted Stock, all of the rights of a
     stockholder with respect to such stock during the Restricted Period.
     Certificates for shares of unrestricted Common Stock shall be delivered to
     the Participant promptly after, and only after, the Restricted Period shall
     expire without forfeiture in respect of such shares of Restricted Stock,
     except as the Plan Administrators, in their sole discretion, shall
     otherwise determine.

     (c) The rights of holders of Restricted Stock Options upon termination of
     employment or service for any reason during the Restricted Period shall be
     set forth in the Restricted Stock Option Agreement governing such awards.

11.  Termination or Amendment of the Plan. The Board may at any time terminate
     or amend the Plan in accordance with the following provisions:

11.1 Amendment to Plan. Except as provided in Section 11.3 hereof, the Board may
     amend this Plan from time to time in such respect as the Board


                                      -15-
<PAGE>
     may deem advisable, provided, however, that no such amendment shall operate
     to affect adversely a Participant's rights under this Plan with respect to
     any Stock Option or Restricted Stock Option granted hereunder prior to the
     adoption of such amendment, except as may be necessary, in the judgment of
     counsel to the Company, to comply with any applicable law.


11.2.1.1 Effect of Termination of Plan on Outstanding Stock Options or
     Restricted Stock. Except as set forth in Section 8.2 hereof, no termination
     of the Plan prior to the Plan Termination Date shall, without the written
     consent of the Participant, alter the terms of Stock Options or Restricted
     Stock already granted and such Stock Options or Restricted Stock shall
     remain in full force and effect as if this Plan had not been terminated.

11.3 Stockholder Approval for Amendment to Plan. Any amendment to the Plan that
     would result in any of the following changes (except by operation of
     Section 8.2) must be approved by the stockholders of the Company: (I) an
     increase in the total number of shares of Common Stock covered by the Plan;
     (ii) a change in the class of persons deemed to be Eligible Recipients
     under the Plan; and (iii) an extension of the term of the Plan beyond ten
     (10) years from the Effective Date.

12.  Indemnification. In addition to such other rights of indemnification as
     they may have as members of the Board, the Compensation Committee, and each
     member individually, and the Plan Administrators shall be indemnified by
     the Company against reasonable expense, including reasonable attorney's
     fees, actually and necessarily incurred in connection with the defense of
     any action, suit, or proceeding, or in connection with any appeal therein,
     to which they or any of them may be a party by reason of any action taken
     or failure to act under or in connection with the Plan or any grant there
     under, and against all amounts paid by them in settlement thereof (provided
     such settlement is approved by independent legal counsel selected by the
     Company) or paid by them in satisfaction of a judgment in any action, suit,
     or proceeding, except in relation to matters as to which it shall be
     adjudged in such action, suit, or proceeding that any of them is liable for
     gross negligence or misconduct in the performance of their duties, provided
     that within sixty (60) days after institution of any such action, suit, or
     proceeding, they shall offer in writing to the Company the opportunity, at
     their own expense, to handle and defend the same.

13.  Withholding. Whenever the Company proposes or is required to issue or
     transfer shares under the Plan, the Company shall have the right to require
     the recipient to remit to the Company an amount sufficient to satisfy any
     federal, state and local withholding tax requirements prior to the delivery
     of any certificate or certificates for such shares of Common Stock. If an
     Optionee surrenders shares acquired pursuant to the exercise of an


                                      -16-
<PAGE>
     Incentive Stock Option in Incentive Stock Option in payment of the Option
     Price and such surrender constitutes a disqualifying disposition for
     purposes of obtaining Incentive Stock Option treatment under the Code, the
     Company shall have the right to require the Optionee to remit to the
     Company an amount sufficient to satisfy any federal, state and local
     withholding tax requirements prior to the delivery of any certificate or
     certificates for such shares. Whenever under the Plan payments are to be
     made in cash, such payments shall be net of an amount sufficient to satisfy
     any federal, state and local withholding tax requirements. An Optionee may
     elect with respect to any Stock Option that is paid in whole or in part in
     shares of Common Stock, to surrender previously acquired shares of Common
     Stock or authorize the Company to withhold shares (valued at Fair Market
     Value on the date of surrender Or withholding of the shares) in
     satisfaction of all such withholding requirements (the "Share Surrender
     Withholding Election") in accordance with the following:

13.1 Irrevocable Election. Any Share Surrender Withholding Election shall be
     made by written notice to the Company and thereafter shall be irrevocable
     by the Optionee.

13.2 Approval by Plan Administrators. Any Share Surrender Withholding Election
     shall be subject to the consent or disapproval of the Plan Administrators
     in accordance with rules established from time to time by the Plan
     Administrators.

13.3 Timing of Election. Any Share Surrender Withholding Election must be made
     prior to the date on which the Optionee recognizes taxable income with
     respect to the receipt of such shares (the "Tax Date").

13.4 Timing of Delivery. When the Tax Date falls after the exercise of a Stock
     Option and the Optionee makes a Share Surrender Withholding Election, the
     full number of shares subject to the Stock Option being exercised will be
     issued, but the Optionee will be unconditionally obligated to deliver to
     the Company on the Tax Date the number of shares having a value on the Tax
     Date equal to the Optionee's federal, state and local withholding tax
     requirements.

13.5 Terms in Agreement. For purposes of this Section 13.5, the Plan
     Administrators shall have the discretion to provide (by general rule or a
     provision in the specific Stock Option agreement) at the election of the
     Optionee, "federal, state and local withholding tax requirements" that
     shall be deemed to be any amount designated by the Optionee that does not
     exceed his estimated federal, state and local tax obligations associated
     with the transaction, including FICA taxes to the extent applicable.


                                      -17-
<PAGE>
14.  General Provisions.


14.1 Transfer of Common Stock. Common Stock issued pursuant to the exercise of a
     Stock Option or the grant of a Restricted Stock Option granted under this
     Plan or any interest in such Common Stock, may be sold, assigned, gifted,
     pledged, hypothecated, encumbered or otherwise transferred or alienated in
     any manner by the holder(s) thereof, subject, however, to any restrictions
     contained in the Company's Restated Articles of Incorporation, to the
     provisions of this Plan, including any representations or warranties
     requested under Section 14.5 hereof, and also subject to compliance with
     any applicable federal, state, local or other law, regulation or rule
     governing the sale or transfer of stock or securities.


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


14.3 Restrictions on Issuance of Shares. The Company, during the term of this
     Plan, will use commercially reasonable efforts to seek to obtain from the
     appropriate regulatory agencies any requisite authorization in order to
     issue and sell such number of shares of its Common Stock as shall be
     sufficient to satisfy the requirements of the Plan. The inability of the
     Company to obtain from any such regulatory agency having jurisdiction
     thereof the authorization deemed by the Company's counsel to be necessary
     to the lawful issuance and sale of any shares of its Common Stock hereunder
     or the inability of the Company to confirm to its satisfaction that any
     issuance and sale of any shares of such Common Stock will meet applicable
     legal requirements shall relieve the Company of any liability in respect of
     the non-issuance or sale of such Common Stock as to which such
     authorization or confirmation shall have not been obtained.


14.4 Notices. Any notice to be given to the Company pursuant to the provisions
     of this Plan shall be in writing and addressed to the Company in care of
     its Plan Administrators at its principal office, and any notice to be given
     to a director, officer, employee or consultant of the Company or any of its
     Affiliates to whom a Stock Option or Restricted Stock Option is granted
     hereunder shall be in writing and addressed to him or her at the address
     given beneath his or her signature on his or her Stock Option agreement or
     Restricted Stock Option agreement, as the case may be, or at such other
     address as such employee, officer, director or consultant or his or her
     transferee (upon the transfer of Common Stock) may hereafter designate in
     writing to the Company. Any such notice shall be deemed duly given when
     delivered in person or mailed by first-class mail (return


                                      -18-
<PAGE>
     receipt requested), telecopy or overnight courier to the other's address.
     It shall be the obligation of each Participant and each transferee holding
     Common Stock granted pursuant to the Plan to provide the Plan
     Administrators, by letter mailed as provided hereinabove, with written
     notice of his or her correct mailing address.

14.5 Representations and Warranties. As a condition to the exercise of any
     portion of a Stock Option or the grant of any Restricted Stock award, the
     Company may require the person exercising such Stock Option or receiving
     such Restricted Stock to make any representation and/or warranty to the
     Company as may, in the judgment of counsel to the Company, be required
     under any applicable law or regulation, including, but not limited to, a
     representation and warranty that the shares are being acquired only for
     investment and without any present intention to sell or distribute such
     shares if, in the opinion of counsel for the Company, such a representation
     is required under the Securities Act of 1933, as amended (the "Securities
     Act"), or any other applicable law, regulation or rule of any governmental
     agency.

14.6 No Enlargement of Employee Rights. This Plan is purely voluntary on the
     part of the Company, and while the Company hopes to continue it
     indefinitely, the continuance of the Plan shall not be deemed to constitute
     a contract between the Company or any of its Affiliates and any director,
     officer, consultant or employee, or to be consideration for, or a condition
     of, the employment of any employee. Nothing contained in the Plan shall be
     deemed to give any employee the right to be retained in the employ of the
     Company or any of its Affiliates or to interfere with the right of the
     Company or any of its Affiliates to terminate the employment or service of
     any of its officers, directors, employees or consultants at any time. No
     officer, director, employee or consultant shall have any right to or
     interest in Stock Options or Restricted Stock awards authorized hereunder
     prior to the grant of such a Stock Option or Restricted Stock Option to
     such officer, director, employee or consultant, and upon such grant he
     shall have only such rights and interests as are expressly provided herein,
     subject, however, to all applicable provisions of the Company's Restated
     Articles of Incorporation, as the same may be amended from time to time.

14.7 Restrictions on Issuance of Shares. The issuance of Stock Options,
     Restricted Stock Options and shares of Common Stock related thereto shall
     be subject to compliance with all of the applicable requirements of law
     with respect to the issuance and sale of securities as the Plan
     Administrators may deem advisable under the Securities Act, including,
     without limitation, any required qualification under the rules, regulations
     or other requirements of the Securities and Exchange Commission, any Stock
     exchange upon which the Common Stock is then listed and any applicable
     federal and state


                                      -19-
<PAGE>
     securities laws including, without limitation, any required qualification
     under the Nevada Corporate Securities Law or the Securities Act.


14.8 Legends on Stock Certificates. Unless there is a currently effective
     appropriate registration statement on file with the Securities and Exchange
     Commission pursuant to the Securities Act with respect to the shares of
     Common Stock issuable under this Plan, each Certificate representing such
     Common Stock shall be endorsed on its face with the following legend or its
     equivalent:


     "Neither the shares represented by this Certificate, nor the Options
     pursuant to which such shares were issued, have been registered under the
     Securities Act of 1933, as amended. These shares have been acquired for
     investment (and not with a view to distribution or resale) and may not be
     sold, mortgaged, pledged, hypothecated or otherwise transferred without an
     effective registration statement for such shares under the Securities Act
     of 1933, as amended, or until the issuer has been furnished with an opinion
     of counsel for the registered owner of these shares, reasonably
     satisfactory to counsel for the issuer, that such sale, transfer or
     disposition is exempt from the registration or qualification provisions of
     the Securities Act of 1933, as amended."

     A copy of this Plan shall be delivered to the Secretary of the Company and
     shall be shown by him to any eligible person making reasonable inquiry
     concerning it. In addition, the Company reserves the right to place any
     legends or other restrictions on each certificate representing Common Stock
     that may be required by any applicable state securities or other laws.


14.9 Remedies. Should any dispute arise concerning the sale or other disposition
     of a Stock Option, Restricted Stock or shares of Common Stock issued or
     issuable upon the exercise of a Stock Option, or any breach by the Company
     of the terms of the Plan, any Stock Option agreement or any Restricted
     Stock Option agreement, a Participant's sole and exclusive remedy shall be
     damages.

14.10 Invalid Provisions. In the event that any provision of this Plan is found
      to be invalid or otherwise unenforceable under any applicable law, such
      invalidity or unenforceability shall not be construed as rendering any
      other provisions contained herein invalid or unenforceable, and all such
      other provisions shall be given full force and effect to the same extent
      as though the invalid or unenforceable provision was not contained herein.


                                      -20-
<PAGE>
14.11 Applicable Law. This Plan shall be governed by and construed in accordance
      with the laws of the State of Nevada applicable to agreements made and to
      be performed entirely within such state and without regard to the conflict
      of law principles thereof.

14.12 Successors and Assigns. This Plan shall be binding on and inure to the
      benefit of the Company and the officers, directors, employees and
      consultants of the Company and any Affiliate to whom a Stock Option or
      Restricted Stock is granted hereunder, and their heirs, executors,
      Administrator's, legatees personal representatives, assignees and
      transferees.

14.13 Rights as a Stockholder or Employee. A Participant or transferee of a
      Stock Option or Restricted Stock shall have no right as a stockholder of
      the Company with respect to any shares covered by any grant under this
      Plan until the date of the issuance of a share certificate for such
      shares. No adjustment shall be made for dividends (ordinary or
      extraordinary, whether cash, securities, or other property) or
      distributions or other rights for which the record date is prior to the
      date such share certificate is issued, except as provided in Section 8.2
      hereof.

     IN  WITNESS WHEREOF, the Company has caused this Plan to be executed by its
duly  authorized  officer  and  to be effective on this 10th day of April, 2002.

                                           YP.Net,  Inc.

                                           By:   /s/Angelo Tullo

                                           Angelo  Tullo
                                           President and Chief Executive Officer


Attest:

By:


     Secretary


                                      -21-
<PAGE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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