10.1 1999 Stock Option Plan of the Company

                         VERTICAL COMPUTER SYSTEMS, INC.
                            (a Delaware Corporation)

                                STOCK OPTION PLAN

                                December 15, 1999

1.    PURPOSE OF PLAN; ADMINISTRATION

      1.    Purpose

The Vertical Computer Systems, Inc. Stock Option Plan (hereinafter the "Plan"),
            is hereby established to grant to officers and other employees of
            Vertical Computer Systems, Inc., a Delaware corporation (the
            "Company") or its parents or subsidiaries (as defined in Sections
            424(e) and (f), respectively, of the Internal Revenue Code of 1986,
            as amended (the "Code")), if any, and to non-employee directors,
            consultants and advisors and other persons who may perform
            significant services for or on behalf of the Company, a favorable
            opportunity to acquire common stock, $.001 par value ("Common
            Stock"), of the Company and, thereby, to create an incentive for
            such persons to remain in the employ of or provide services to the
            Company and to contribute to its success.

      The Company may grant under the Plan both incentive stock options within
the meaning of Section 422 of the Code ("Incentive Stock Options") and stock
options that do not qualify for treatment as Incentive Stock Options
("Nonstatutory Options"). Unless expressly provided to the contrary herein, all
references herein to "options," shall include both incentive Stock Options and
Nonstatutory Options.

      1.2   Administration

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      The Plan shall be administered by the Board of Directors of the Company
(the "Board" or "Committee"), or a committee of two or more directors.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.

      A majority of the members of the Committee shall constitute a quorum for
the purposes of the Plan. Provided a quorum is present, the Committee may take
action by affirmative vote or consent of a majority of its members present at a
meeting. Meetings may be held telephonically as long as all members are able to
hear one another, and a member of the Committee shall be deemed to be present
for this purpose if he or she is in simultaneous communication by telephone with
the other members who are able to hear one another. In lieu of action at a
meeting, the Committee may act by written consent of a majority of its members.

      Subject to the express provisions of the Plan, the Committee shall have
the authority to construe and interpret the Plan and all Stock Option Agreements
(as defined in Section 3.4) entered into pursuant hereto and to define the terms
used therein, to prescribe, adopt, amend and rescind rules and regulations
relating to the administration of the Plan and to make all other determinations


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necessary or advisable for the administration ofthe Plan; provided, however,
that the Committee may delegate nondiscretionary administrative duties to such
employees of the Company as it deems proper; and, provided, further. in its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan. Subject to the
express limitations of the Plan, the Committee shall designate the individuals
from among the class of persons eligible to participate as provided in Section
1.3 who shall receive options, whether an optionee will receive Incentive Stock
Options or Nonstatutory Options, or both, and the amount, price, restrictions
and all other terms and provisions of such options (which need not be
identical).

      Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of this Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and the
Company's officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. No members of the Committee or the
Board shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan, and all members of the Committee
shall be fully protected by the Company in respect of any such action,
determination or interpretation.

      1.3   Participation

Officers and other employees of the Company, non-employee directors, consultants
            and advisors and other persons who may perform significant services
            on behalf of the Company shall be eligible for selection to
            participate in the Plan upon approval by the Committee; provided,
            however, that only "employees" (within the meaning of Section
            3401(c) of the Code) of the Company shall be eligible for the grant
            of Incentive Stock Options. An individual who has been granted an
            option may, if otherwise eligible, be granted additional options if
            the Committee shall so determine. No person is eligible to
            participate in the Plan by matter of right; only those eligible
            persons who are selected by the Committee in its discretion shall
            participate in the Plan.

      1.4   Stock Subject to the Plan.

      Subject to adjustment as provided in Section 3.5, the stock to be offered
tinder the Plan shall be shares of authorized by unissued Common Stock,
including any shares repurchased under the terms of the Plan or any Stock Option
Agreement entered into pursuant hereto. The cumulative number of shares of
Common Stock to be issued under the Plan shall not exceed 2,500,000 subject to
adjustment as set forth in Section 3.5.

      If any option granted hereunder shall expire or terminate for any reason
without having been fully exercised, the unpurchased shares subject thereto
shall again be available for the purposes ofthe Plan. For purposes of this
Section 1.4, where the exercise price of options is paid by means of the
grantee's surrender of previously owned shares of Common Stock, only the net
number of additional shares of Common Stock, only the net number of additional
shares issued and which remain


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outstanding in connection with such exercise shall be deemed "issued" for
purposes of the Plan.

2.    STOCK OPTIONS

      2.1   Exercise Price; Payment.

      (a) The exercise price of each Incentive Stock Option granted under the
Plan shall be determined by the Committee, but shall not be less than 100% of
the "Fair Market Value" (as defined below) of Common Stock on the date of grant.
If an Incentive Stock Option is granted to an employee who at the time such
option is granted owns (within the meaning of section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of capital stock of
the Company, the option exercise price shall be at least 110% of the Fair Market
Value of Common Stock on the date of grant. The exercise price of each
Nonstatutory Option also shall be determined by the Committee, but shall not be
less than 85% of the Fair Market Value of Common Stock on the date of grant. The
status of each option granted under the Plan as either an Incentive Stock Option
or a Nonstatutory Option shall be determined by the Committee at the time the
Committee acts to grant the option, and shall be clearly identified as such in
the Stock Option Agreement relating thereto.

      "Fair Market Value" for purposes of the Plan shall mean: (i) the closing
price of a share of Common Stock on the principal exchange on which shares of
Common Stock are then trading, if any, on the day immediately preceding the date
of grant, or, if shares were not traded on the day preceding such date of grant,
then on the next preceding trading day during which a sale occurred; or (ii) if
Common Stock is not traded on as exchange but is quoted on Nasdaq or a successor
quotation system, (1) the last sales price (if Common Stock is then listed on
the Nasdaq Stock Market) or (2) the mean between the closing representative bid
and asked price (in all other cases) for Common Stock on the day prior to the
date of grant as reported by Nasdaq or such successor quotation system or (iii)
if there is no listing or trading of Common Stock either on a national exchange
or over-the-counter, that price determined in good faith by the Committee to be
the fair value per share of Common Stock, based upon such evidence as it deems
necessary or advisable.

      (b) In the discretion of the Committee at the time the option is
exercised, the exercise price of any option granted under the Plan shall be paid
in full in cash, by check or by the optionee's interest-bearing promissory note
(subject to any limitations of applicable state corporations law) delivered at
the time of exercise; provided, however, that subject to the timing requirements
of Section 2.7, in the discretion of the Committee and upon receipt of all
regulatory approvals, the person exercising the option may deliver as payment in
whole or in part of such exercise price certificates for Common Stock of the
Company (duly endorsed or with duly endorsed stock powers attached), which shall
be valued at its Fair Market Value on the day of exercise fo the option, or
other property deemed appropriate by the Committee; and, provided further, that
subject to Section 422 of the Code, so-called cashless exercises as permitted
under applicable rules and regulations of the Securities and Exchange Commission
and the Federal Reserve Board shall be permitted in the discretion of the
Committee. Without limiting the Committee's discretion in this regard,
consecutive


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book entry stock-for-stock exercises of options (or "pyramiding") also are
permitted in the Committee's discretion.

      Irrespective of the form of payment, the delivery of shares issuable upon
the exercise of an option shall be conditioned upon payment by the optionee to
the Company of amounts sufficient to enable the Company to pay all federal,
state, and local withholding taxes resulting in, the Company's judgment, from
the exercise. In the discretion of the Committee, such payment to the Company
may be effected through (i) the Company's withholding from the number of shares
of Common Stock that would otherwise be delivered to the optionee by the Company
on exercise of the option a number of shares of Common Stock equal in value (as
determined by the Fair Market Value of Common Stock on the date of the exercise)
to the aggregate withholding taxes, (ii) payment by the optionee to the Company
of the aggregate withholding taxes in cash, (iii) withholding by the Company
from other amounts contemporaneously owed by the Company to the optionee, or
(iv) any combination of these three methods, as determined by the Committee in
its discretion.

      2.2   Option Period.

      (a) The Committee shall provide, in the terms of each Stock Option
Agreement, when the option subject to such agreement expires and becomes
unexercisable, but in no event will an Incentive Stock Option granted under the
Plan be exercisable after the expiration often years from the date is granted.
Without limiting the generality of the foregoing, the Committee may provide in
the Stock Option Agreement that the option subject thereto expires 30 days
following a Termination of Employment (as defined in Section 3.2 hereof) for any
reason other than death or disability, or six months following a Termination of
Employment for disability or following an optionee's death.

      (b) Outside Date for Exercise. Notwithstanding any provisions of this
Section 2.2, in no event shall any option granted under the Plan be exercised
after the expiration date of such option set forth in the applicable Stock
Option Agreement.

      2.3   Exercise of Options.

      Each option granted under the Plan shall become exercisable and the total
number of shares subject thereto shall be purchaseable, in a lump sum or in such
installments, whichneed not be equal, as the Committee shall determine;
provided, however, that each option shall become exercisable in full no later
than ten years after such option is granted, and each option shall become
exercisable as to at least 10% of the shares of Common Stock covered thereby on
each anniversary of the date such option is granted; and provided, further, that
if the holder of an option shall not in any given installment period purchase
all of the shares which such holder is entitled to purchase in such installment
period, such holder's right to purchase any share not purchased in such
installment period shall continue until the expiration or sooner termination of
such holder's option. The Committee may, at any time after grant of the option
and from time to time, increase the number of shares purchasable in any
installment, subject to the total number of shares subject to the option and the
limitations set forth in Section 2.5. At any time and from time to time prior to
the time when any


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exercisable option or exercisable portion thereof becomes unexercisable under
the Plan or the applicable Stock Option Agreement, such option, or portion
thereof may be exercised in whol or in part; provided, however, that the
Committee may, by the terms of the option, require any partial exercise to be
with respect to a specified minimum number of shares. No option or installment
thereof shall be exercisable except with respect to whole shares. Fractional
share interests shall be disregarded, except that they may be accumulated as
provided above and except that if such a fractional share interest constitutes
the total the total shares of Common Stock remaining available for purchase
under an option at the time of exercise, the optionee shall be entitled to
receive on exercise a certified or bank cashier's check in an amount equal to
the Fair Market Value of such fractional share of stock.

      2.4   Transferability of Options.

Except as the Committee may determine as aforesaid, an option granted under the
            Plan shall, by its terms, be nontransferable by the optionee other
            than by will or the laws of descent and distribution, or pursuant to
            a qualified domestic relations order (as defined by the Code), and
            shall be exercisable during the optionee's lifetime only by the
            optionee or by his or her guardian or legal representative. More
            particularly, but without limiting the generality of the immediately
            preceding sentence, an option may not be assigned, transferred
            (except as provided in the preceding sentence), pledged or
            hypothecated (whether by operation of law or otherwise), and shall
            not be subject to execution, attachment or similar process. Any
            attempted assignment, transfer, pledge, hypothecation or other
            disposition of any option contrary to the provisions of the Plan and
            the applicable Stock Option Agreement, and any levy of any
            attachment or similar process upon an option, shall be null and
            void, and otherwise without effect, and the Committee may, in its
            sole discretion, upon the happening of any such event, terminate
            such option forthwith.

      2.5   Limitation on Exercise of Incentive Stock Options.

      To the extent that the aggregate Fair Market Value (determined on the date
of grant as provided in Section 2.1 above) of the Common Stock with respect to
which Incentive Stock Options granted hereunder (together with all other
Incentive Stock Option plans of the Company) are exercisable for the first time
by an optionee in any calendar year under the Plan exceeds $100,000, such
options granted hereunder shall be treated as Nonstatutory Options to the extent
required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking options into account in the order in which
they were granted.

      2.6   Disqualifying Dispositions of Incentive Stock Options.

If Common Stock acquired upon exercise of any Incentive Stock Option is disposed
            of in a disposition that, under Section 422 of the Code,
            disqualifies the option holder from the application of Section 42
            1(a) of the Code, the holder of the Common Stock immediately before
            the disposition shall comply with any requirements imposed by the
            Company in order to enable the Company to secure the related income
            tax deduction to which it is entitled in such event.


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      2.7   Certain Timing Requirements.

      At the discretion of the Committee, shares of Common Stock issuable to the
optionee upon exercise of an option may be used to satisfy the option exercise
price or the tax withholding consequences of such exercise, in the case of
persons subject to Section 16 of the Securities Exchange Act of 1934, as
amended, only (i) during the period beginning on the third business day
following the date of release of the quarterly or annual summary statement of
sales and earnings of the company and ending on the twelfth business day
following such date or (ii) pursuant to an irrevocable written election by the
optionee to use shares of Common Stock issuable to the optionee upon exercise of
the option to pay all or part of the option price or the withholding taxes made
at least six months prior to the payment of such option price or the withholding
taxes made at least six months prior to the payment of such option price or
withholding taxes.

      2.8   No Effect on Employment.

      Nothing in the Plan or in any Stock Option Agreement hereunder shall
confer upon any optionee any right to continue in the employ of the Company, any
Parent Corporate or any subsidiary or shall interfere with or restrict in any
way the rights of the Company, its Parent Corporation and its Subsidiaries,
which are hereby expressly reserved, to discharge any optionee at any time for
any reason whatsoever, with or without cause.

      For purposes of the Plan, "Parent Corporation" shall mean any corporation
in an unbroken chain of corporations ending with the Company if each of the
corporations other than the Company then owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. For purposes of the Plan, "Subsidiary" shall mean
any corporation in an unbroken chain of corporations beginning with the Company
if each of the corporations other than the last corporation in the unbroken
chain then owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

3.    OTHER PROVISIONS

      3.1   Sick Leave and Leaves of Absence

Unless otherwise provided in the Stock Option Agreement, and to the extent
            permitted by Section 422 of the Code, an optionee's employment shall
            not be deemed to terminate by reason of sick leave, military leave
            or other leave of absence approved by the Company if the period of
            any such leave does not exceed a period approved by the Company is
            guaranteed either contractually or by statute. A Stock Option
            Agreement may contain such additional or different provisions with
            respect to leave of absence as the Committee may approve, either at
            the time of grant of an option or at a later time.


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      3.2   Termination of Employment.

For purposes of the Plan "Termination of Employment," shall mean the time when
            the employee-employer relationship between the optionee and the
            Company, any Subsidiary or any Parent Corporation is terminated for
            any reason, including, but not by way of limitation, a termination
            by resignation, discharge, death, disability or retirement; but
            excluding (i) terminations where there is a simultaneous
            reemployment or continuing employment of an optionee by the Company,
            any Subsidiary or any Parent Corporation, (ii) at the discretion of
            the Committee, terminations which result in a temporary severance of
            the employee-employer relationship, and (iii) at the discretion of
            the committee, terminations which are followed by the simultaneous
            establishment of a consulting relationship by the Company, a
            Subsidiary or any Parent Corporation with the former employee.
            Subject to Section 3.1, the Committee, in its absolute discretion,
            shall determine the effect of all matters and questions relating to
            Termination of Employment; provided, however, that, with respect to
            employee-employer relationship shall constitute a Termination of
            Employment if and to the extent that such leave of absence or other
            change interrupts employment for the purposes of Section 422(a) (2)
            of the Code and the then-applicable regulations and revenue ruling
            under said Section.

      3.3   Issuance of Stock Certificates.

Upon exercise of an option, the Company shall deliver to the person exercising
            such option a stock certificate evidencing the shares of Common
            Stock acquired upon exercise. Notwithstanding the foregoing, the
            Committee in its discretion may require the Company to retain
            possession of any certificate evidencing stock acquired upon
            exercise ofan option which remains subject to repurchase under the
            provisions of the Stock Option Agreement or any other agreement
            signed by the optionee in order to facilitate such repurchase
            provisions.

      3.4   Terms and Conditions of Options.

      Each option granted under the Plan shall be evidenced by a written Stock
Option Agreement ("Stock Option Agreement") between the option holder and the
Company providing that the option is subject to the terms and conditions of the
Plan and to such other terms and conditions not inconsistent therewith as the
Committee may deem appropriate in each case.

      3.5   Adjustments Upon Changes in Capitalization; Merger and
            Consolidation.

If the outstanding share of Common Stock are changed into, or exchanged for cash
            or a different number or kind of shares or securities of the Company
            or of another corporation through reorganization, merger,
            recapitalization, reclassification, stock split-up, reverse stock
            split, stock dividend, stock consolidation, stock combination, stock
            reclassification or similar transaction, an appropriate adjustment
            shall be made by the Committee in the number and kind of shares as
            to which options may be granted. In the event of such a change or
            exchange, other than for shares or securities of another corporation
            or by reason of reorganization, the Committee shall also make a
            corresponding


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adjustment changing the number or kind of shares and the exercise price per
share allocated to unexercised options or portions thereof; which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment, however, shall be made without change in the total price applicable
to the unexercised portion of the option (except for any change in the aggregate
price resulting from rounding-off of shares quantities or prices).

      In the event of a "spin-off' or other substantial distribution of assets
of the Company which has a material diminutive effect upon the Fair Market Value
of the Common Stock, the Committee in its discretion shall make an appropriate
and equitable adjustment to the exercise prices of options then outstanding
under the Plan.

      Where an adjustment under this Section 3.5 of the type described above is
made to an Incentive Stock Option, the adjustment will be made in a manner which
will not be considered a "modification" under the provisions of subsection
424(b)(3) of the Code.

      In connection with the dissolution or liquidation of the Company or a
partial liquidation involving 50% or more of the assets of the Company, a
reorganization of the Company in which another entity is the survivor, a merger
or reorganization of the Company under which more than 50% of the Common Stock
outstanding prior to the merger or reorganization is converted into cash or into
a security of another entity, a sale of more than 50% of the Company's assets,
or a similar event that the Committee determines, in its discretion, would
materially alter the structure of the Company or its ownership, the Committee,
upon 30 days prior written notice to the option holders, may, in its discretion,
do one or more of the following: (i) shorten the period during which options are
exercisable (provided they remain exercisable for at least 30 days after the
date the notice is given); (ii) accelerate any vesting schedule to which an
option is subject; (iii) arrange to have the surviving or successor entity grant
securities and option prices, or (iv) cancel options upon payment to the option
holders in cash, with respect to each option to the extent then exercisable
(including any options as to which the exercise has been accelerated as
contemplated in clause (ii) above, of any amount that is the equivalent of the
Fair Market Value of the Common Stock (at the effective time of the dissolution,
liquidation, merger, reorganization, sale or other event) or the fair market
value of the option. In the case of a change in corporate control, the Committee
acceleration of the exercisability of any option pursuant to this Section 3.5,
take into account the penalties that my result directly or indirectly from such
acceleration to either the Company or the option holder, or both, under Section
280G of the Code, and may decide to limit such acceleration to the extent
necessary to avoid or mitigate such penalties or their effects.

      No fractional share of Common Stock shall be issued under the Plan on
account of any adjustment under this Section 3,5.

      3.6   Rights of Participants and Beneficiaries.

      The Company shall pay all amounts payable hereunder only to the option
holder or beneficiaries entitled thereto pursuant to the Plan. The Company shall
not be liable for the date,


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      3.10  Privileges of Stock Ownership; Non-Distributive Intent; Reports to
            Option Holders.

      A participant in the Plan shall not be entitled to the privilege of stock
ownership as to any shares of Common Stock not actually issued to the optionee.
Upon exercise of an option at a time when there is not in effect under the
Securities Act of 1933, as amended, a Registration Statement relating to the
delivery a Prospectus meeting the requirement of Section 1 O(a)(3) of said Act,
the optionee shall represent and warrant in writing to the Company that the
shares purchased are being acquired for investment and not with a view to the
distribution thereof.

      The Company shall furnish to each optionee under the Plan the Company's
annual report and such other periodic reports, if any, as are disseminated by
the Company in the ordinary course to its stockholders.

      3.11  Legending Share Certificates.

      In order the enforce any restrictions imposed upon Common Stock issued
upon exercise of an option granted under the Plan or to which such Common Stock
may be subject, the Committee may cause a legend or legends to be placed on any
share certificates representing such Common Stock, which legend or legends shall
made appropriate reference to such restrictions, including, but not limited to,
a restriction against sale of such Common Stock for any period of time as may be
required by applicable laws or regulations. If any restrictions with respect to
which a legend was placed on any certificate ceases to apply to Common Stock
represented by such certificate, the owner of the Common Stock represented by
such certificates may require the Company to cause the issuance of a new
certificate not bearing the legend.

      Additionally, and not by way of limitation, the Committee may impose such
restrictions on any Common Stock issued pursuant to the Plan as it may deem
advisable, including, without limitation., restrictions under the requirements
of any stock exchange upon which Common Stock is then traded.

      3.12  Use of Proceeds.

      Proceeds realized pursuant to the exercise of options Under the Plan shall
constitute general funds of the Company.

      3.13  Changes in Capital Structure; No Impediment to Corporate
            Transaction.

      The existence of outstanding options under the Plan shall not effect the
Company's right to effect adjustments, recapitalization, reorganizations or
other changes in its or any other corporation's capital structure or business,
any merger or consolidation, any issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting Common Stock, the dissolution or
liquidation of the Company's or any other corporation's assets or business, or
any other corporate


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act, whether similar to the events described above or otherwise.

      3.14  Effective Date of the Plan.

      The Plan shall be effective as of the date of its approval by the
stockholders of the Company within twelve months after the date of the Board's
initial adoption of the Plan. Options may be granted but not exercised prior to
stockholder approval of the Plan. If any options are so granted and stockholder
approval shall not have been obtained within twelve months of the date of
adoption of this Plan by the Board ofDirectors, such options shall terminate
retroactively as ofthe date they were granted.

      3.15  Termination.

      The Plan shall terminate automatically as of the close of business on
December 15, 2009 or earlier as provided in Section 3.8. Unless otherwise
provided herein, the termination of the Plan shall not affect the validity of
any option agreement outstanding at the date of such termination.

      3.16  No Effect on Other Plans.

      The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Subsidiary or any Parent
Corporation. Nothing in the Plan shall be construed to limit the right of the
Company (i) to establish any other forms or incentives or compensation for
employees of the Company, any Subsidiary or any Parent Corporation or (ii) to
grant or assume options or other rights otherwise that under the Plan in
connection with any proper corporate purpose including but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase. lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, firm or association.

      10.2  Business Development and Marketing Agreement between Company and
            Avenel Alliance, Inc.