**Exhibit 10.2**

**PARTICLE DRILLING TECHNOLOGIES, INC.**

**2007 STOCK INCENTIVE PLAN**

**I.****                                         PURPOSE**

The purpose of the **PARTICLE DRILLING TECHNOLOGIES, INC. 2007STOCK INCENTIVE PLAN** (the “Plan”) is to provide a means throughwhich **PARTICLEDRILLING TECHNOLOGIES, INC**., a Nevada corporation (the “Company”),and its Affiliates may attract able persons to serve as Directors orConsultants or to enter the employ of the Company and its Affiliates and toprovide a means whereby those individuals upon whom the responsibilities of thesuccessful administration and management of the Company and its Affiliatesrest, and whose present and potential contributions to the Company and itsAffiliates are of importance, can acquire and maintain stock ownership, therebystrengthening their concern for the welfare of the Company and itsAffiliates.  A further purpose of thePlan is to provide such individuals with additional incentive and rewardopportunities designed to enhance the profitable growth of the Company and itsAffiliates.  Accordingly, the Planprovides for granting Incentive Stock Options, options that do not constituteIncentive Stock Options, Restricted Stock Awards, or any combination of theforegoing, as is best suited to the circumstances of the particular employee,Consultant or Director as provided herein.

**II.****                                     DEFINITIONS**

The following definitions shall be applicablethroughout the Plan unless specifically modified by any paragraph:

(a)           “***Affiliate***”means any corporation, partnership, limited liability company or partnership,association, trust or other organization which, directly or indirectly,controls, is controlled by, or is under common control with, the Company.  For purposes of the preceding sentence, “control”(including, with correlative meanings, the terms “controlled by” and “undercommon control with”), as used with respect to any entity or organization,shall mean the possession, directly or indirectly, of the power (i) to votemore than 50% of the securities having ordinary voting power for the electionof directors of the controlled entity or organization, or (ii) to direct orcause the direction of the management and policies of the controlled entity ororganization, whether through the ownership of voting securities or by contractor otherwise.

(b)           “***Award***”means, individually or collectively, any Option or Restricted Stock Award.

(c)           “***Board***”means the Board of Directors of the Company.

(d)           “***Code***”means the Internal Revenue Code of 1986, as amended.  Reference in the Plan to any section of theCode shall be deemed to include any amendments or successor provisions to suchsection and any regulations under such section.

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(e)           “***Committee***”means a committee of the Board that is selected by the Board as provided inParagraph IV(a).

(f)            “***CommonStock***” means the common stock, par value $0.001 per share, ofthe Company, or any security into which such common stock may be changed byreason of any transaction or event of the type described in Paragraph IX.

(g)           “***Company***”means Particle Drilling Technologies, Inc., a Nevada corporation, and anysuccessor thereto that adopts the Plan.

(h)           “***Consultant***”means any person who is not an employee or a Director and who is providingadvisory or consulting services to the Company or any Affiliate.

(i)            “***CorporateChange***” shall have the meaning assigned to such term inParagraph IX(c) of the Plan.

(j)            “***Director***”means an individual who is a member of the Board.

(k)           An “***employee***”means any person (including a Director) in an employment relationship with theCompany or any Affiliate.

(l)            “***FairMarket Value***” means, as of any specified date, the mean of thehigh and low sales prices of the Common Stock (i) reported by the NationalMarket System of NASDAQ on that date or (ii) if the Common Stock is listed on anational stock exchange, reported on the stock exchange composite tape on thatdate (or such other reporting service approved by the Committee); or, in eithercase, if no prices are reported on that date, on the last preceding date onwhich such prices of the Common Stock are so reported.  If the Common Stock is traded over thecounter at the time a determination of its fair market value is required to bemade hereunder, its fair market value shall be deemed to be equal to theaverage between the reported high and low or closing bid and asked prices ofCommon Stock on the most recent date on which Common Stock was publiclytraded.  In the event Common Stock is notpublicly traded at the time a determination of its value is required to be madehereunder, the determination of its fair market value shall be made by theCommittee in such manner as it deems appropriate.

(m)          “***IncentiveStock Option***” means an incentive stock option within the meaningof section 422 of the Code.

(n)           “***1934Act***” means the Securities Exchange Act of 1934, as amended.

(o)           “***Option***”means an Award granted under Paragraph VII of the Plan and includes bothIncentive Stock Options to purchase Common Stock and Options that do notconstitute Incentive Stock Options to purchase Common Stock.

(p)           “***OptionAgreement***” means a written agreement between the Company and aParticipant with respect to an Option.

(q)           “***Participant***”means an employee, Consultant, or Director who has been granted an Award.

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(r)            “***Plan***”means the Particle Drilling Technologies, Inc. 2007 Stock Incentive Plan, as amendedfrom time to time.

(s)           “***RestrictedStock Agreement***” means a written agreement between the Companyand a Participant with respect to a Restricted Stock Award.

(t)            “***RestrictedStock Award***” means an Award granted under Paragraph VIII of thePlan.

(u)           “***Rule16b-3***” means SEC Rule 16b-3 promulgated under the 1934 Act, assuch may be amended from time to time, and any successor rule, regulation orstatute fulfilling the same or a similar function.

(v)           “***StockAppreciation Right***” shall have the meaning assigned to such termin Paragraph VII(d) of the Plan.

**III.****                                 EFFECTIVEDATE AND DURATION OF THE PLAN**

The Plan shall become effective upon the date of itsadoption by the Board, provided the Plan is approved by the stockholders of theCompany within 12 months thereafter. Notwithstanding any provision in the Plan,in any Option Agreement or in any Restricted Stock Agreement, no Option shallbe exercisable and no Restricted Stock Award shall be granted prior to suchstockholder approval.  No further Awardsmay be granted under the Plan after 10 years from the date the Plan is adoptedby the Board.  The Plan shall remain ineffect until all Options granted under the Plan have been satisfied or expired,and all Restricted Stock Awards granted under the Plan have vested or beenforfeited.

**IV.****                                ADMINISTRATION**

(a)           **Composition of Committee**.  The Plan shall be administered by a committeeof, and appointed by, the Board that shall be comprised solely of two or moreoutside Directors (within the meaning of the term “outside directors” as usedin section 162(m) of the Code and applicable interpretive authority thereunderand within the meaning of the term “Non-Employee Director” as defined in Rule16b-3).

(b)           **Powers**. Subject to the express provisions of the Plan, the Committee shall haveauthority, in its discretion, to determine which employees, Consultants, orDirectors shall receive an Award, the time or times when such Award shall bemade, whether an Incentive Stock Option or nonqualified Option shall begranted, and the number of shares to be subject to each Option or RestrictedStock Award.  In making suchdeterminations, the Committee shall take into account the nature of theservices rendered by the respective employees, Consultants, or Directors, theirpresent and potential contribution to the Company’s success and such otherfactors as the Committee in its discretion shall deem relevant.

(c)           **Additional Powers**.  The Committee shall have such additionalpowers as are delegated to it by the other provisions of the Plan.  Subject to the express provisions of thePlan, this shall include the power to construe the Plan and the respectiveagreements executed hereunder, to prescribe rules and regulations relating tothe Plan, and to determine the terms, restrictions and provisions of theagreement relating to each Award, including such terms, restrictions and 

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provisions as shall be requisite in the judgment ofthe Committee to cause designated Options to qualify as Incentive StockOptions, and to make all other determinations necessary or advisable foradministering the Plan.  The Committeemay correct any defect or supply any omission or reconcile any inconsistency inthe Plan or in any agreement relating to an Award in the manner and to theextent it shall deem expedient to carry it into effect.  The determinations of the Committee on thematters referred to in this Paragraph IV shall be conclusive.

**V.****                                    SHARESSUBJECT TO THE PLAN; AWARD LIMITS;**

**GRANT OF AWARDS**

(a)           **Shares Subject to the Plan and Award Limits**.  Subject to adjustment in the same manner asprovided in Paragraph IX with respect to shares of Common Stock subject toOptions then outstanding, the aggregate number of shares of Common Stock thatmay be issued under the Plan, and the aggregate maximum number of shares of CommonStock that may be issued under the Plan through Incentive Stock Options, shallnot exceed 1,500,000 shares.  Sharesshall be deemed to have been issued under the Plan only to the extent actuallyissued and delivered pursuant to an Award. To the extent that an Award lapses or the rights of its holderterminate, any shares of Common Stock subject to such Award shall again beavailable for the grant of an Award under the Plan.  In addition, shares issued under the Plan andforfeited back to the Plan, shares surrendered in payment of the exercise priceor purchase price of an Award, and shares withheld for payment of applicableemployment taxes and/or withholding obligations associated with an Award shallagain be available for the grant of an Award under the Plan.  Notwithstanding any provision in the Plan tothe contrary, the maximum number of shares of Common Stock that may be subjectto Awards granted to any one individual during any calendar year may not exceed250,000 shares of Common Stock (as adjusted from time to time in accordancewith the provisions of the Plan).  Thelimitation set forth in the preceding sentence shall be applied in a mannerthat will permit compensation generated under the Plan to constitute “performance-based”compensation for purposes of section 162(m) of the Code, including, withoutlimitation, counting against such maximum number of shares, to the extentrequired under section 162(m) of the Code and applicable interpretive authoritythereunder, any shares subject to Options that are canceled or repriced.

(b)           **Grant of Awards**. The Committee may fromtime to time grant Awards to one or more employees, Consultants, or Directorsdetermined by it to be eligible for participation in the Plan in accordancewith the terms of the Plan.

(c)           **Stock Offered**.  Subject to the limitations set forth inParagraph V(a), the stock to be offered pursuant to the grant of an Award maybe authorized but unissued Common Stock or Common Stock previously issued andoutstanding and reacquired by the Company. Any of such shares which remain unissued and which are not subject tooutstanding Awards at the termination of the Plan shall cease to be subject tothe Plan but, until termination of the Plan, the Company shall at all timesmake available a sufficient number of shares to meet the requirements of thePlan.

**VI.****                                ELIGIBILITY**

Awards may be granted only to persons who, at the timeof grant, are employees, Consultants, or Directors.  An Award may be granted on more than oneoccasion to the same person, and, subject to the limitations set forth in thePlan, such Award may include an Incentive

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 Stock Option,an Option that is not an Incentive Stock Option, a Restricted Stock Award, orany combination thereof.

**VII.****                            STOCKOPTIONS**

(a)           **Option Period**.  The term of each Option shall be as specifiedby the Committee at the date of grant; provided, however, that each such Optionby its terms shall not be exercisable after the expiration of ten years fromthe date of grant.

(b)           **Limitations on Exercise of Option**.  An Option shall be exercisable in whole or insuch installments and at such times as determined by the Committee.

(c)           **Special Limitations on Incentive Stock Options**.  An Incentive Stock Option may be granted onlyto an individual who is employed by the Company or any parent or subsidiarycorporation (as defined in section 424 of the Code) of the Company at the timethe Option is granted. To the extent that the aggregate fair market value(determined at the time the respective Incentive Stock Option is granted) of stockwith respect to which Incentive Stock Options are exercisable for the firsttime by an individual during any calendar year under all incentive stock optionplans of the Company and its parent and subsidiary corporations exceeds$100,000, such Incentive Stock Options shall be treated as Options which do notconstitute Incentive Stock Options. The Committee shall determine, inaccordance with applicable provisions of the Code, Treasury Regulations andother administrative pronouncements, which of a Participant’s Incentive StockOptions will not constitute Incentive Stock Options because of such limitationand shall notify the Participant of such determination as soon as practicableafter such determination.  No Incentive StockOption shall be granted to an individual if, at the time the Option is granted,such individual owns stock possessing more than 10% of the total combinedvoting power of all classes of stock of the Company or of its parent orsubsidiary corporation, within the meaning of section 422(b)(6) of the Code,unless (i) at the time such Option is granted the option price is at least 110%of the Fair Market Value of the Common Stock subject to the Option and (ii)such Option by its terms is not exercisable after the expiration of five yearsfrom the date of grant.  An IncentiveStock Option shall not be transferable otherwise than by will or the laws ofdescent and distribution, and shall be exercisable during the Participant’slifetime only by such Participant or the Participant’s guardian or legalrepresentative.

(d)           **Option Agreement**.  Each Option shall be evidenced by an OptionAgreement in such form and containing such provisions not inconsistent with theprovisions of the Plan as the Committee from time to time shall approve,including, without limitation, provisions to qualify an Incentive Stock Optionunder section 422 of the Code.  EachOption Agreement shall specify the effect of termination of (i) employment,(ii) the consulting or advisory relationship, or (iii) membership on the Board,as applicable, on the exercisability of the Option.  An Option Agreement may provide for thepayment of the option price, in whole or in part, by the delivery of a numberof shares of Common Stock (plus cash if necessary) having a Fair Market Valueequal to such option price.  Moreover, anOption Agreement may provide for a “cashless exercise” of the Option byestablishing procedures satisfactory to the Committee with respectthereto.  Further, an Option Agreementmay provide for the surrender of the right to purchase shares under the Optionin return for a payment in cash or shares of Common Stock or a combination ofcash and shares of Common Stock equal in value to the excess of the Fair MarketValue of the shares with respect to which the right to purchase is surrenderedover the option price therefor (“Stock Appreciation Rights”), on 

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such terms and conditions as the Committee in its solediscretion may prescribe.  In the case ofany such Stock Appreciation Right that is granted in connection with an IncentiveStock Option, such right shall be exercisable only when the Fair Market Valueof the Common Stock exceeds the price specified therefor in the Option or theportion thereof to be surrendered.  Theterms and conditions of the respective Option Agreements need not beidentical.  Subject to the consent of theParticipant, the Committee may, in its sole discretion, amend an outstandingOption Agreement from time to time in any manner that is not inconsistent withthe provisions of the Plan (including, without limitation, an amendment thataccelerates the time at which the Option, or a portion thereof, may beexercisable).

(e)           **Option Price and Payment**.  The price at which a share of Common Stockmay be purchased upon exercise of an Option shall be determined by theCommittee but, subject to adjustment as provided in Paragraph IX, such purchaseprice shall not be less than the Fair Market Value of a share of Common Stockon the date such Option is granted.  TheOption or portion thereof may be exercised by delivery of an irrevocable noticeof exercise to the Company, as specified by the Committee.  The purchase price of the Option or portionthereof shall be paid in full in the manner prescribed by the Committee.  If permitted by applicable law, the Company mayassist a Participant who has received an Option in the payment of such Option’spurchase price by lending the amount of some or all of such purchase price tosuch Participant on such terms and such rates of interest and upon suchsecurity (or unsecured) as shall have been authorized by or under authority ofthe Board; provided, however, that the Company may not under any circumstanceslend any amount or otherwise extend credit or arrange for the extension ofcredit to any Participant who is a Director or an executive officer of theCompany.  Separate stock certificatesshall be issued by the Company for those shares acquired pursuant to theexercise of an Incentive Stock Option and for those shares acquired pursuant tothe exercise of any Option that does not constitute an Incentive Stock Option.

(f)            **Stockholder Rights and Privileges**.  The Participant shall be entitled to all theprivileges and rights of a stockholder only with respect to such shares ofCommon Stock as have been purchased under the Option and for which certificatesof stock have been registered in the Participant’s name.

(g)           **Options and Rights in Substitution for Options Granted byOther Employers**. Options and Stock Appreciation Rights may be granted under the Plan fromtime to time in substitution for options held by individuals providing servicesto corporations or other entities who become employees, Consultants, orDirectors as a result of a merger or consolidation or other businesstransaction with the Company or any Affiliate.

**VIII.****                        RESTRICTEDSTOCK AWARDS**

(a)           **Forfeiture Restrictions To Be Established by the Committee**.  Shares of Common Stock that are the subjectof a Restricted Stock Award shall be subject to restrictions on disposition bythe Participant and an obligation of the Participant to forfeit and surrenderthe shares to the Company under certain circumstances (the “ForfeitureRestrictions”).  The ForfeitureRestrictions shall be determined by the Committee in its sole discretion, andthe Committee may provide that the Forfeiture Restrictions shall lapse upon (i)the attainment of one or more performance targets established by the Committeethat are based on (1) the price of a share of Common Stock, (2) the Company’searnings per share, (3) the Company’s market share, (4) the market share of abusiness 

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unit of the Company designated by the Committee, (5)the Company’s sales, (6) the sales of a business unit of the Company designatedby the Committee, (7) the net income (before or after taxes) of the Company orany business unit of the Company designated by the Committee, (8) the cash flowreturn on investment of the Company or any business unit of the Companydesignated by the Committee, (9) the earnings before or after interest, taxes,depreciation, and/or amortization of the Company or any business unit of theCompany designated by the Committee, (10) the economic value added, (11) thereturn on stockholders’ equity achieved by the Company, or (12) the totalstockholders’ return achieved by the Company, (13) the achievement of certaincommercial milestones such as first revenue, (14) certain technologyenhancements to the PID system such as better PID bit performance, continuousparticle injection or successfully testing a new particle injector, or (15)enhancing the Company’s customer base through additional contractualrelationships, (ii) the Participant’s continued employment with the Company oran Affiliate or continued service as a Consultant or Director for a specifiedperiod of time, (iii) the occurrence of any event or the satisfaction of anyother condition specified by the Committee in its sole discretion, or (iv) acombination of any of the foregoing.  Theperformance measures described in clause (i) of the preceding sentence may besubject to adjustment for specified significant extraordinary items or events,and may be absolute, relative to one or more other companies, or relative toone or more indexes, and may be contingent upon future performance of theCompany or any Affiliate, division, or department thereof.  Each Restricted Stock Award may havedifferent Forfeiture Restrictions, in the discretion of the Committee.

(b)           **Other Terms and Conditions**.  Common Stock awarded pursuant to a RestrictedStock Award shall be represented by a stock certificate registered in the nameof the Participant.  Unless providedotherwise in a Restricted Stock Agreement, the Participant shall have the rightto receive dividends with respect to Common Stock subject to a Restricted StockAward, to vote Common Stock subject thereto and to enjoy all other stockholderrights, except that (i) the Participant shall not be entitled to delivery ofthe stock certificate until the Forfeiture Restrictions have expired, (ii) theCompany shall retain custody of the stock until the Forfeiture Restrictionshave expired, (iii) the Participant may not sell, transfer, pledge, exchange,hypothecate or otherwise dispose of the stock until the Forfeiture Restrictionshave expired, and (iv) a breach of the terms and conditions established by theCommittee pursuant to the Restricted Stock Agreement shall cause a forfeitureof the Restricted Stock Award.  At thetime of such Award, the Committee may, in its sole discretion, prescribeadditional terms, conditions or restrictions relating to Restricted StockAwards, including, but not limited to, rules pertaining to the termination ofemployment or service as a Consultant or Director (by retirement, disability,death or otherwise) of a Participant prior to expiration of the ForfeituresRestrictions.  Such additional terms,conditions or restrictions shall be set forth in a Restricted Stock Agreementmade in conjunction with the Award.

(c)           **Payment for Restricted Stock**.  The Committee shall determine the amount andform of any payment for Common Stock received pursuant to a Restricted StockAward, provided that in the absence of such a determination, a Participantshall not be required to make any payment for Common Stock received pursuant toa Restricted Stock Award, except to the extent otherwise required by law.

(d)           **Committee’s Discretion to Accelerate Vesting of RestrictedStock Awards**.  TheCommittee may, in its discretion and as of a date determined by the Committee,fully vest any or all Common Stock awarded to a Participant pursuant to aRestricted Stock Award and, upon such vesting, all restrictions applicable tosuch Restricted Stock Award shall terminate as of such date.

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Any action by the Committee pursuant to thisSubparagraph may vary among individual Participants and may vary among theRestricted Stock Awards held by any individual Participant.  Notwithstanding the preceding provisions ofthis Subparagraph, the Committee may not take any action described in thisSubparagraph with respect to a Restricted Stock Award that has been granted toa “covered employee” (within the meaning of Treasury Regulation section1.162-27(c)(2)) if such Award has been designed to meet the exception forperformance-based compensation under section 162(m) of the Code.

(e)           **Restricted Stock Agreements**.   At the time any Award is made under thisParagraph VIII, the Company and the Participant shall enter into a RestrictedStock Agreement setting forth each of the matters contemplated hereby and suchother matters as the Committee may determine to be appropriate.  The terms and provisions of the respectiveRestricted Stock Agreements need not be identical.  Subject to the consent of the Participant andthe restriction set forth in the last sentence of Subparagraph (d) above, theCommittee may, in its sole discretion, amend an outstanding Restricted StockAgreement from time to time in any manner that is not inconsistent with theprovisions of the Plan.

**IX.****                                RECAPITALIZATIONOR REORGANIZATION**

(a)           **No Effect on Right or Power**.  The existence of the Plan and the Awardsgranted hereunder shall not affect in any way the right or power of the Boardor the stockholders of the Company to make or authorize any adjustment,recapitalization, reorganization or other change in the Company’s or anyAffiliate’s capital structure or its business, any merger or consolidation ofthe Company or any Affiliate, any issue of debt or equity securities ahead ofor affecting Common Stock or the rights thereof, the dissolution or liquidationof the Company or any Affiliate or any sale, lease, exchange or other dispositionof all or any part of its assets or business or any other corporate act orproceeding.

(b)           **Subdivision or Consolidation of Shares; Stock Dividends**.  The shares with respect to which Options maybe granted are shares of Common Stock as presently constituted, but if, andwhenever, prior to the expiration of an Option theretofore granted, the Companyshall effect a subdivision or consolidation of shares of Common Stock or thepayment of a stock dividend on Common Stock without receipt of consideration bythe Company, the number of shares of Common Stock with respect to which suchOption may thereafter be exercised (i) in the event of an increase in thenumber of outstanding shares shall be proportionately increased, and thepurchase price per share shall be proportionately reduced, and (ii) in theevent of a reduction in the number of outstanding shares shall beproportionately reduced, and the purchase price per share shall beproportionately increased.  Any fractionalshare resulting from such adjustment shall be rounded up to the next wholeshare.

(c)           **Recapitalizations and Corporate Changes**.  If the Company recapitalizes, reclassifiesits capital stock, or otherwise changes its capital structure (a “recapitalization”),the number and class of shares of Common Stock covered by an Option theretoforegranted shall be adjusted so that such Option shall thereafter cover the numberand class of shares of stock and securities to which the Participant would havebeen entitled pursuant to the terms of the recapitalization if, immediatelyprior to the recapitalization, the Participant had been the holder of record ofthe number of shares of Common Stock then covered by such Option.  If (i) the Company shall not be the survivingentity in any merger or consolidation (or survives only as a subsidiary of 

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an entity), (ii) the Company sells, leases orexchanges or agrees to sell, lease or exchange all or substantially all of itsassets to any other person or entity, (iii) the Company is to be dissolved andliquidated, (iv) any person or entity, including a “group” as contemplated bySection 13(d)(3) of the 1934 Act, acquires or gains ownership or control(including, without limitation, power to vote) of more than 50% of theoutstanding shares of the Company’s voting stock (based upon voting power), or(v) as a result of or in connection with a contested election of Directors, thepersons who were Directors of the Company before such election shall cease toconstitute a majority of the Board (each such event is referred to herein as a “CorporateChange”), no later than (x) 10 days after the approval by the stockholders ofthe Company of such merger, consolidation, reorganization, sale, lease orexchange of assets or dissolution or such election of Directors or (y) 30 daysafter a Corporate Change of the type described in clause (iv), the Committee,acting in its sole discretion without the consent or approval of anyParticipant, shall effect one or more of the following alternatives, whichalternatives may vary among individual Participants and which may vary amongOptions held by any individual Participant: (1) accelerate the time at which Options then outstanding may beexercised so that such Options may be exercised in full for a limited period oftime on or before a specified date (before or after such Corporate Change)fixed by the Committee, after which specified date all unexercised Options andall rights of Participants thereunder shall terminate, (2) require themandatory surrender to the Company by selected Participants of some or all ofthe outstanding Options held by such Participants (irrespective of whether suchOptions are then exercisable under the provisions of the Plan) as of a date,before or after such Corporate Change, specified by the Committee, in which eventthe Committee shall thereupon cancel such Options and cause the Company to payto each Participant an amount of cash per share equal to the excess, if any, ofthe amount calculated in Subparagraph (d) below (the “Change of Control Value”)of the shares subject to such Option over the exercise price(s) under suchOptions for such shares, or (3) make such adjustments to Options thenoutstanding as the Committee deems appropriate to reflect such Corporate Change(provided, however, that the Committee may determine in its sole discretionthat no adjustment is necessary to Options then outstanding), including,without limitation, adjusting an Option to provide that the number and class ofshares of Common Stock covered by such Option shall be adjusted so that suchOption shall thereafter cover securities of the surviving or acquiringcorporation or other property (including, without limitation, cash) asdetermined by the Committee in its sole discretion.

(d)           **Change of Control Value**.  For the purposes of clause (2) inSubparagraph (c) above, the “Change of Control Value” shall equal the amountdetermined in clause (i), (ii) or (iii), whichever is applicable, as follows:(i) the per share price offered to stockholders of the Company in any suchmerger, consolidation, sale of assets or dissolution transaction, (ii) the pershare price offered to stockholders of the Company in any tender offer orexchange offer whereby a Corporate Change takes place, or (iii) if suchCorporate Change occurs other than pursuant to a tender or exchange offer, thefair market value per share of the shares into which such Options beingsurrendered are exercisable, as determined by the Committee as of the datedetermined by the Committee to be the date of cancellation and surrender of suchOptions.  In the event that theconsideration offered to stockholders of the Company in any transactiondescribed in this Subparagraph (d) or Subparagraph (c) above consists ofanything other than cash, the Committee shall determine the fair cash equivalentof the portion of the consideration offered which is other than cash.

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                (e)           **Other Changes in the CommonStock**.  In the event ofchanges in the outstanding Common Stock by reason of recapitalizations,reorganizations, mergers, consolidations, combinations, split-ups, split-offs,spin-offs, exchanges or other relevant changes in capitalization ordistributions to the holders of Common Stock occurring after the date of thegrant of any Award and not otherwise provided for by this Paragraph IX, suchAward and any agreement evidencing such Award shall be subject to adjustment bythe Committee at its discretion as to the number and price of shares of CommonStock or other consideration subject to such Award.  In the event of any such change in theoutstanding Common Stock or distribution to the holders of Common Stock, orupon the occurrence of any other event described in this Paragraph IX, theaggregate number of shares available under the Plan, the aggregate number ofshares that may be issued under the Plan through Incentive Stock Options, andthe maximum number of shares that may be subject to Awards granted to any oneindividual shall be appropriately adjusted to the extent, if any, determined bythe Committee, whose determination shall be conclusive.

(f)            **Stockholder Action**.  Any adjustment provided for in the aboveSubparagraphs shall be subject to any required stockholder action.

(g)           **No Adjustments unless Otherwise Provided**.  Except as hereinbefore expressly provided,the issuance by the Company of shares of stock of any class or securitiesconvertible into shares of stock of any class, for cash, property, labor orservices, upon direct sale, upon the exercise of rights or warrants tosubscribe therefor, or upon conversion of shares or obligations of the Companyconvertible into such shares or other securities, and in any case whether ornot for fair value, shall not affect, and no adjustment by reason thereof shallbe made with respect to, the number of shares of Common Stock subject to Awardstheretofore granted or the purchase price per share, if applicable.

**X.****                                    AMENDMENTAND TERMINATION OF THE PLAN**

The Board in its discretion may terminate the Plan atany time with respect to any shares of Common Stock for which Awards have nottheretofore been granted.  The Boardshall have the right to alter or amend the Plan or any part thereof from timeto time; provided that no change in the Plan may be made that would impair therights of a Participant with respect to an Award theretofore granted withoutthe consent of the Participant, and provided, further, that the Board may not,without approval of the stockholders of the Company, amend the Plan to increasethe maximum aggregate number of shares that may be issued under the Plan,increase the maximum number of shares that may be issued under the Plan throughIncentive Stock Options or change the class of individuals eligible to receiveAwards under the Plan.

**XI.****                                MISCELLANEOUS**

(a)           **No Right To An Award**.  Neither the adoption of the Plan nor anyaction of the Board or of the Committee shall be deemed to give an employee,Consultant, or Director any right to be granted an Option, a right to aRestricted Stock Award, or any other rights hereunder except as may beevidenced by an Option Agreement or a Restricted Stock Agreement duly executedon behalf of the Company, and then only to the extent and on the terms andconditions expressly set forth therein. The Plan shall be unfunded.  TheCompany shall not be required to establish any special or separate fund or tomake any other segregation of funds or assets to assure the performance of itsobligations under any Award.

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(b)           **No Employment/Membership Rights Conferred**.  Nothing contained in the Plan shall (i)confer upon any employee or Consultant any right with respect to continuationof employment or of a consulting or advisory relationship with the Company orany Affiliate or (ii) interfere in any way with the right of the Company or anyAffiliate to terminate his or her employment or consulting or advisoryrelationship at any time.  Nothingcontained in the Plan shall confer upon any Director any right with respect tocontinuation of membership on the Board.

(c)           **Other Laws; Withholding**.  The Company shall not be obligated to issueany Common Stock pursuant to any Award granted under the Plan at any time whenthe shares covered by such Award have not been registered under the SecuritiesAct of 1933, as amended, and such other state and federal laws, rules andregulations as the Company or the Committee deems applicable and, in theopinion of legal counsel for the Company, there is no exemption from theregistration requirements of such laws, rules and regulations available for theissuance and sale of such shares.  Nofractional shares of Common Stock shall be delivered, nor shall any cash inlieu of fractional shares be paid.  TheCompany shall have the right to deduct in connection with all Awards any taxesrequired by law to be withheld and to require any payments required to enableit to satisfy its withholding obligations.

(d)           **No Restriction on Corporate Action**.  Nothing contained in the Plan shall beconstrued to prevent the Company or any Affiliate from taking any action whichis deemed by the Company or such Affiliate to be appropriate or in its bestinterest, whether or not such action would have an adverse effect on the Planor any Award made under the Plan.  NoParticipant, beneficiary or other person shall have any claim against theCompany or any Affiliate as a result of any such action.

(e)           **Restrictions on Transfer**.  An Award (other than an Incentive StockOption, which shall be subject to the transfer restrictions set forth inParagraph VII(c)) shall not be transferable otherwise than (i) by will or thelaws of descent and distribution, (ii) pursuant to a qualified domesticrelations order as defined by the Code or Title I of the Employee RetirementIncome Security Act of 1974, as amended, or the rules thereunder, or (iii) withthe consent of the Committee.

**(f)           ****Governing Law**.  **The Plan shall be governed by, and construed in accordance with, thelaws of the State of Nevada, without regard to conflicts of law principlesthereof.**

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