CYBEROPTICLABS, INC.
                           2001 EQUITY INCENTIVE PLAN



     This  Cyberopticlabs,  Inc.  2001  Equity  Incentive  Plan (the  "Plan") is
established  by  Cyberopticlabs,  Inc., a Nevada  corporation  (the  "Company"),
effective as of January 5, 2001 (the "Effective Date"),  subject to the approval
of the  shareholders  of the  Company  within  twelve  (12)  months  thereafter.
Capitalized  terms not  otherwise  defined  shall have the meanings set forth in
Section 25.


     1. Purpose. The Plan is intended to provide qualifying Employees (including
officers and  Directors),  Independent  Directors  and  Consultants  with equity
ownership in the Company,  thereby strengthening their commitment to the success
of the  Company,  promoting  the  identity of  interests  between the  Company's
shareholders  and such  Employees,  Independent  Directors and  Consultants  and
stimulating their efforts on behalf of the Company, and to assist the Company in
attracting and retaining talented personnel.

     2. Scope of the Plan.  Subject to adjustment in accordance with Section 20,
the total number of Shares for which grants under the Plan shall be available is
5,000,000. If any Shares subject to any Award granted hereunder are forfeited or
such Award otherwise terminates without the issuance of such Shares or for other
consideration  in lieu of such Shares,  the Shares subject to such Award, to the
extent of any such forfeiture or termination, shall again be available for grant
under  the  Plan.  Shares  awarded  under  the Plan may be  treasury  shares  or
newly-issued shares.

     3.   Administration.

         (a) The Plan shall be  administered  by a Committee which shall consist
of at least  two or more  members  of the  Board,  all of  whom,  so long as the
Company  remains a Public  Company,  shall qualify as  "non-employee  directors"
under  Section  (b)(3)(i) of Rule 16b-3.  The number of members of the Committee
may from time to time be  increased  or  decreased,  and so long as the  Company
remains a Public  Company,  shall be  subject to such  conditions,  as the Board
deems  appropriate  to permit  transactions  in Shares  pursuant  to the Plan to
satisfy such conditions of Rule 16b-3 as then in effect.

         (b) Subject to the express  provisions  of the Plan,  the Committee has
full and final authority and discretion as follows:

                  (i) to determine when and to whom Awards should be granted and
         the  terms,  conditions  and  restrictions  applicable  to each  Award,
         including, without limitation, (A) the exercise price of the Award, (B)
         the method of payment  for Shares  purchased  upon the  exercise of the
         Award, (C) the method of satisfaction of any tax withholding obligation
         arising  in  connection  with the  Award,  (D) the  timing,  terms  and
         conditions  of the  exercisability  of the Award or the  vesting of any
         Shares  acquired  upon  the  exercise

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         thereof,  (E) the time of the  expiration  of the vesting of any Shares
         acquired  upon the exercise  thereof,  (F) the effect of the  Grantee's
         termination  of  employment  or service  with the Company on any of the
         foregoing,  (G) all other terms, conditions and restrictions applicable
         to the  Award or such  Shares  not  inconsistent  with the terms of the
         Plan, (H) the benefit payable under any SAR or Performance  Share,  and
         (I)  whether or not  specific  Awards  shall be  identified  with other
         specific  Awards,  and,  if  so,  whether  they  shall  be  exercisable
         cumulatively with, or alternatively to, such other specific Awards;

                  (ii) to determine the amount, if any, that a Grantee shall pay
         for Restricted Shares, whether to permit or require the payment of cash
         dividends  thereon to be deferred and the terms related  thereto,  when
         Restricted  Shares  (including  Restricted  Shares  acquired  upon  the
         exercise of any Award) shall be forfeited and whether such Shares shall
         be held in escrow;

                  (iii) to  interpret  the  Plan and to make all  determinations
         necessary or advisable for the administration of the Plan;

                  (iv) to make, amend and rescind rules, guidelines and policies
         relating  to the  Plan,  or to adopt  supplements  to,  or  alternative
         versions  of,  the Plan,  including,  without  limitation,  rules  with
         respect to the  exercisability  and  forfeitability  of Awards upon the
         termination of employment or service of a Grantee;

                  (v) to determine the terms, conditions and restrictions of all
         Award Agreements (which need not be identical) and, with the consent of
         the Grantee, to amend any such Award Agreement at any time, among other
         things,  to permit  transfers of such Awards to the extent permitted by
         the Plan,  except that the consent of the Grantee shall not be required
         for any amendment which (A) does not adversely affect the rights of the
         Grantee  or  (B)  is  necessary  or  advisable  (as  determined  by the
         Committee)  to carry  out the  purpose  of the Award as a result of any
         change in applicable law;

                  (vi) to cancel,  with the consent of the Grantee,  outstanding
         Awards and to grant new Awards in substitution therefor;

                  (vii) to accelerate the  exercisability  of, and to accelerate
         or  waive  any  or  all  of  the  terms,  conditions  and  restrictions
         applicable  to,  any Award or any group of Awards for any reason and at
         any time,  including in  connection  with a  termination  of employment
         (other than for Cause);

                  (viii)  subject to  Section  6(c),  to extend the time  during
         which any Award or group of Awards may be exercised;

                  (ix) to make such  adjustments or  modifications  to Awards to
         Grantees  working outside the United States as are advisable to fulfill
         the purposes of the Plan;

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                  (x)  to  impose  such   additional   terms,   conditions   and
         restrictions  upon the grant,  exercise or  retention  of Awards as the
         Committee  may,  before  or  concurrent  with the grant  thereof,  deem
         appropriate; and

                  (xi) to take any other  action  with  respect  to any  matters
         relating to the Plan for which it is responsible.

                  The  determination of the Committee on all matters relating to
         the Plan or any Award Agreement shall be final.

         4.  Indemnification  and  Reimbursement.  Service  as a  member  of the
Committee or any other duly appointed subcommittee shall constitute service as a
Board  member,   and  such  members  shall   accordingly  be  entitled  to  full
indemnification  and reimbursement as Board members for their service as members
of the Committee or any other duly appointed subcommittee. No Committee or other
duly appointed  subcommittee member shall be liable for any act or omission made
in good faith with respect to the Plan or any Award granted under the Plan.

         5. Eligibility.  The Committee may, in its discretion,  grant Awards to
any Eligible Person,  whether or not he or she has previously received an Award,
except in the case of an ISO,  which can only be granted to an  Employee  of the
Company or any Subsidiary.

         6. Conditions to Grants.

            (a) General  Conditions.  Awards shall be evidenced by written Award
Agreements  specifying the number of Shares covered thereby, in such form as the
Committee  shall from time to time establish.  Award  Agreements may incorporate
all or any of the terms of the Plan by  reference  and shall  comply with and be
subject to the following terms and conditions:

                  (i) The Grant Date of an Award  shall be the date on which the
         Committee  grants the Award or such later date as  specified in advance
         by the Committee;

                  (ii) In the case of an Award of options, the Option Term shall
         under no circumstances  extend more than ten (10) years after the Grant
         Date and shall be subject to earlier  termination  as herein  provided;
         and

                  (iii) Any terms  and  conditions  of an Award not set forth in
         the Plan  shall be set forth in the  Award  Agreement  related  to that
         Award.

           (b) Grant of Options. No later than the Grant Date of any option, the
Committee  shall  determine the Option Price of such option.  Subject to Section
6(c),  the Option  Price of an option may be the Fair Market Value of a Share on
the Grant  Date or may be less than or more than  that  Fair  Market  Value.  An
option shall be exercisable for unrestricted Shares,  unless the Award Agreement
provides that it is exercisable for Restricted Shares.

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           (c)  Grant of  ISOs.  At the time of the  grant  of any  option,  the
Committee  may, in its  discretion,  designate  that such  option  shall be made
subject  to  additional  restrictions  to permit  the  option to  qualify  as an
"incentive  stock option" under the requirements of Section 422 of the Code. Any
option designated as an ISO:

                  (i) shall have an Option  Price that is not less than the Fair
         Market  Value of a Share on the Grant  Date and,  if  granted  to a Ten
         Percent  Owner,  have an Option Price that is not less than 110% of the
         Fair Market Value of a Share on the Grant Date;

                  (ii)  shall be for a period  of not more  than ten (10)  years
         and, if granted to a Ten Percent  Owner,  not more than five (5) years,
         from the Grant  Date and shall be subject  to  earlier  termination  as
         provided herein or in the applicable Award Agreement;

                  (iii)  shall  meet  the   limitations  of  this   subparagraph
         6(c)(iii). If the aggregate Fair Market Value of Shares with respect to
         which ISOs first become  exercisable  by a Grantee in any calendar year
         exceeds the limit  determined  in  accordance  with the  provisions  of
         Section  422 of the Code  (the  "Limit")  taking  into  account  Shares
         subject  to all  ISOs  granted  by the  Company  that  are  held by the
         Grantee,  the  excess  will be  treated  as  nonqualified  options.  To
         determine  whether  the Limit is  exceeded,  the Fair  Market  Value of
         Shares  subject to options shall be determined as of the Grant Dates of
         the options.  In reducing the number of options treated as ISOs to meet
         the Limit,  the most recently granted options will be reduced first. If
         a reduction of simultaneously  granted options is necessary to meet the
         Limit,  the Committee  may designate  which Shares are to be treated as
         Shares acquired pursuant to an ISO;

                  (iv) shall be granted within ten (10) years from the Effective
         Date;

                  (v) shall  require the Grantee to notify the  Committee of any
         disposition of any Shares issued upon the exercise of the ISO under the
         circumstances  described  in Section  421(b) of the Code  (relating  to
         certain  disqualifying  dispositions,  a "Disqualifying  Disposition"),
         within ten (10) business days after such Disqualifying Disposition; and

                  (vi)  unless  otherwise  permitted  by the Code,  shall by its
         terms not be assignable or transferable  other than by will or the laws
         of descent and distribution and may be exercised,  during the Grantee's
         lifetime,  only  by the  Grantee,  except  that  the  Grantee  may,  in
         accordance  with  Section  7,  designate  in writing a  beneficiary  to
         exercise his or her ISOs after the Grantee's death.

           (d) Grant of SARs.

                  (i) When granted, SARs may, but need not, be identified with a
         specific option,  specific  Restricted Shares, or specific  Performance
         Shares of the Grantee

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         (including any option, Restricted Shares, or Performance Shares granted
         on or  before  the  Grant  Date of the  SARs) in a  number  equal to or
         different  from the number of SARs so granted.  If SARs are  identified
         with  Shares  subject to an option,  with  Restricted  Shares,  or with
         Performance  Shares,  then, unless otherwise provided in the applicable
         Award Agreement, the Grantee's associated SARs shall terminate upon (A)
         the  expiration,  termination,  forfeiture,  or  cancellation  of  such
         option,  Restricted Shares or Performance  Shares,  (B) the exercise of
         such  option or  Performance  Shares,  or (C) the date such  Restricted
         Shares become nonforfeitable.

                  (ii) The strike  price (the  "Strike  Price") of any SAR shall
         equal, for any SAR that is identified with an option,  the Option Price
         of such option, or for any other SAR, one hundred percent (100%) of the
         Fair Market Value of a Share on the Grant Date of such SAR, except that
         the  Committee  may (A)  specify  a higher  Strike  Price in the  Award
         Agreement or (B) provide that the benefit  payable upon exercise of any
         SAR shall not exceed  such  percentage  of the Fair  Market  Value of a
         Share on such Grant Date as the Committee shall specify.

           (e) Grant of Performance Shares.

                  (i)  Before the grant of  Performance  Shares,  the  Committee
         shall:

                      (A)  determine  objective  performance  goals,  which  may
           consist of any one or more of the following goals deemed  appropriate
           by the Committee: earnings (either in the aggregate or on a per share
           basis),   operating  income,   cash  flow,  EBITDA  (earnings  before
           interest,  taxes,  depreciation and amortization),  return on equity,
           indices  related to EVA  (economic  value  added),  per share rate of
           return on the Common Stock  (including  dividends),  general  indices
           relative  to levels of  general  customer  service  satisfaction,  as
           measured through various randomly-generated customer service surveys,
           market  share (in one or more  markets),  customer  retention  rates,
           market penetration rates, revenues, reductions in expense levels, the
           attainment  by the Common  Stock of a  specified  market  value for a
           specified  period of time,  and any  other  object  performance  goal
           deemed appropriate by the Committee, in each case where applicable to
           be determined either on a company-wide basis,  individual basis or in
           respect  of any  one or  more  business  units,  and  the  amount  of
           compensation under the goals applicable to such grant;

                      (B) designate a period for the  measurement  of the extent
           to  which   performance   goals   are   attained,   which  may  begin
           simultaneously  with,  prior to or  following  the  Grant  Date  (the
           "Performance Period"); and

                      (C)  assign  a  performance  percentage  to each  level of
           attainment of performance goals during the Performance  Period,  with
           the percentage  applicable to minimum  attainment  being zero percent
           and the percentage

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           applicable  to maximum  attainment  to be determined by the Committee
           from time to time (the "Performance Percentage").

                  (ii) If a Grantee is promoted,  demoted,  or  transferred to a
         different  business unit of the Company  during a  Performance  Period,
         then,  to the extent the  Committee  determines  any one or more of the
         performance goals,  Performance Period or Performance Percentage are no
         longer  appropriate,  the Committee may make any changes  thereto as it
         deems appropriate in order to make them appropriate.

                  (iii) When granted,  Performance  Shares may, but need not, be
         identified  with  Shares  subject  to  a  specific   option,   specific
         Restricted  Shares or specific  SARs of the Grantee  granted  under the
         Plan  in a  number  equal  to or  different  from  the  number  of  the
         Performance Shares so granted. If Performance Shares are so identified,
         then, unless otherwise provided in the applicable Award Agreement,  the
         Grantee's  associated  Performance  Shares shall terminate upon (A) the
         expiration,  termination,  forfeiture  or  cancellation  of the option,
         Restricted  Shares  or SARs  with  which  the  Performance  Shares  are
         identified,  (B) the  exercise of such option or SARs,  or (C) the date
         Restricted Shares become nonforfeitable.

           (f) Grant of Restricted Shares.

                  (i) The Committee shall  determine the amount,  if any, that a
         Grantee  shall pay for  Restricted  Shares,  subject  to the  following
         sentence.  The Committee  shall require the Grantee to pay at least the
         Minimum  Consideration for each Restricted Share. Such payment shall be
         made in full by the  Grantee  before the  delivery of the shares and in
         any event no later than ten (10) business days after the Grant Date. In
         the  discretion of the  Committee  and to the extent  permitted by law,
         payment may also be made in accordance with Section 9.

                  (ii) The Committee may, but need not,  provide that all or any
         portion of a Grantee's Restricted Shares, or Restricted Shares acquired
         upon exercise of an option, shall be forfeited:

                      (A) except as otherwise specified in the Plan or the Award
           Agreement,  upon the Grantee's  termination  of  employment  within a
           specified time period after the Grant Date; or

                      (B) if  the  Company  or  the  Grantee  does  not  achieve
           specified  performance  goals (if any) within a specified time period
           after  the  Grant  Date  and  before  the  Grantee's  termination  of
           employment; or

                      (C) upon failure to satisfy such other  conditions  as the
           Committee may specify in the Award Agreement.

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                  (iii) If  Restricted  Shares are forfeited and the Grantee was
         required to pay for such shares or acquired such Restricted Shares upon
         the exercise of an option,  the Grantee  shall be deemed to have resold
         such Restricted Shares to the Company at a price equal to the lesser of
         (A) the amount paid by the Grantee  for such  Restricted  Shares or (B)
         the  Fair  Market  Value  of  the  Restricted  Shares  on the  date  of
         forfeiture,  which  shall  be  paid to the  Grantee  in cash as soon as
         administratively  practicable. Such Restricted Shares shall cease to be
         outstanding  and shall no  longer  confer on the  Grantee  thereof  any
         rights as a shareholder of the Company,  from and after the date of the
         event causing the  forfeiture,  whether or not the Grantee  accepts the
         Company's tender of payment for such Restricted Shares.

                  (iv) The Committee may provide that the  certificates  for any
         Restricted  Shares  (A)  shall  be held  (together  with a stock  power
         executed  in blank by the  Grantee) in escrow by the  Secretary  of the
         Company  until such  Restricted  Shares  become  nonforfeitable  or are
         forfeited  or (B) shall  bear an  appropriate  legend  restricting  the
         transfer of such  Restricted  Shares.  If any Restricted  Shares become
         nonforfeitable, the Company shall cause certificates for such shares to
         be issued without such legend.

                  (v) At the time of a grant of Restricted Shares, the Committee
         may require the payment of cash  dividends  thereon to be deferred and,
         if the Committee so  determines,  reinvested  in additional  Restricted
         Shares.  Stock dividends or deferred cash dividends issued with respect
         to  Restricted  Shares  shall be subject to the same  restrictions  and
         other terms as apply to the  Restricted  Shares  with  respect to which
         such dividends are issued.  The Committee may in its discretion provide
         for payment of interest on deferred cash dividends.

           (g) Grant of Stock  Bonuses.  The Committee may grant Bonus Shares to
any Eligible Employee.

         7.  Non-Transferability.  An  Award  granted  hereunder  shall  not  be
assignable  or  transferable  other  than  by will or the  laws of  descent  and
distribution  and may be exercised  during the  Grantee's  lifetime  only by the
Grantee or his or her guardian or legal representative,  except that, subject to
Section 6(c) in respect of ISOs,  a Grantee may, if permitted by the  Committee,
in its  discretion,  (a) designate in writing a beneficiary to exercise an Award
after his or her death (if that  designation  has been  received  by the Company
prior to the Grantee's  death) and (b) transfer the Award to one or more members
of the Grantee's Immediate Family or any other individuals or entities.

         8. Exercise.

           (a) Exercise of Options.

                  (i) Subject to Section 6, each option shall become exercisable
         at such time or times as may be specified by the Committee from time to
         time in the applicable Award Agreement.

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                  (ii) An  option  shall be  exercised  by the  delivery  to the
         Company  during  the Option  Term of (A) a written  notice of intent to
         purchase  a  specific  number  of  Shares  subject  to  the  option  in
         accordance  with the terms of the  option  by the  person  entitled  to
         exercise the option and (B) payment in full of the Option Price of such
         specific number of Shares in accordance with Section 8(a)(iii).

                  (iii)  Payment of the  Option  Price may be made by any one or
         more of the following means:

                           (A) cash, check, or wire transfer;

                           (B)  with  the  approval  of  the  Committee,  Mature
                  Shares,  valued  at  their  Fair  Market  Value on the date of
                  exercise;

                           (C) with the  approval of the  Committee,  Restricted
                  Shares held by the  Grantee for at least six (6) months  prior
                  to the  exercise of the option,  each such share valued at the
                  Fair Market Value of a Share on the date of exercise;

                           (D) so long as the Company  remains a Public Company,
                  in  accordance  with  procedures  previously  approved  by the
                  Company,  through the sale of the Shares  acquired on exercise
                  of the  option  through  a bank or  broker-dealer  to whom the
                  Grantee has  submitted an  irrevocable  notice of exercise and
                  irrevocable  instructions  to deliver  promptly to the Company
                  the amount of sale or loan proceeds sufficient to pay for such
                  Shares, together with, if requested by the Company, the amount
                  of federal,  state, local or foreign withholding taxes payable
                  by Grantee by reason of such exercise; or

                           (E) in the discretion of the  Committee,  payment may
                  also be made in accordance with Section 9.

                           (F)  with  the  approval  of  the  Committee,  in any
                  combination  of the foregoing or such other manner  determined
                  by the Committee.

The Committee may in its discretion specify that, if any Restricted Shares are
used to pay the Option Price ("Tendered Restricted Shares"), (A) all the Shares
acquired on exercise of the option shall be subject to the same restrictions as
the Tendered Restricted Shares, determined as of the date of exercise of the
option or (B) a number of Shares acquired on exercise of the option equal to the
number of Tendered Restricted Shares shall be subject to the same restrictions
as the Tendered Restricted Shares, determined as of the date of exercise of the
option.

         (b) Exercise of SARs.

                  (i) Subject to Section 6(d), (A) each SAR not identified  with
         any other Award shall become  exercisable  at such time or times as may
         be specified by the

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         Committee from time to time in the applicable  Award  Agreement and (B)
         except as otherwise  provided in the applicable Award  Agreement,  each
         SAR which is identified  with any other Award shall become  exercisable
         as and to the extent  that the option or  Restricted  Shares with which
         such SAR is identified may be exercised or becomes  nonforfeitable,  as
         the case may be.

                  (ii) SARs shall be  exercised  by  delivery  to the Company of
         written notice of intent to exercise a specific number of SARs.  Unless
         otherwise  provided in the applicable Award Agreement,  the exercise of
         SARs that are identified with Shares subject to an option or Restricted
         Shares shall result in the cancellation or forfeiture of such option or
         Restricted Shares, as the case may be, to the extent of such exercise.

                  (iii) The benefit for each SAR exercised shall be equal to (A)
         the Fair Market  Value of a Share on the date of such  exercise,  minus
         (B) the Strike  Price  specified  in such SAR.  Such  benefit  shall be
         payable in cash,  except  that the  Committee  may provide in the Award
         Agreement that benefits may be paid wholly or partly in Shares.

         (c) Payment of Performance  Shares.  Unless  otherwise  provided in the
Award Agreement with respect to an Award of Performance  Shares,  if the minimum
performance  goals  applicable  to such  Performance  Shares have been  achieved
during the  applicable  Performance  Period,  then the Company  shall pay to the
Grantee of such Award that number of Shares equal to the product of:

                  (i) the sum of (A) number of Performance  Shares  specified in
         the applicable Award Agreement and (B) the number of additional  Shares
         that  would  have been  issuable  if such  Performance  Shares had been
         Shares  outstanding  throughout  the  Performance  Period and the stock
         dividends,  cash dividends  (except as otherwise  provided in the Award
         Agreement),  and other property paid in respect of such Shares had been
         reinvested  in  additional  Shares as of each  dividend  payment  date,
         multiplied by

                  (ii)  the   Performance   Percentage   achieved   during  such
         Performance Period.

The Committee  may, in its  discretion,  determine  that cash be paid in lieu of
some or all of such Shares.  The amount of cash payable in lieu of a Share shall
be determined by valuing such Share at its Fair Market Value on the business day
immediately  preceding  the date such cash is to be paid.  Payments  pursuant to
this Section 8 shall be made as soon as administratively practical after the end
of the applicable  Performance  Period.  Any Performance  Shares with respect to
which the  performance  goals  shall not have  been  achieved  by the end of the
applicable Performance Period shall expire.

         9. Loans.  The Committee may in its discretion allow a Grantee to defer
payment  to the  Company of all or any  portion  of (a) the  Option  Price of an
option, (b) the purchase price of Restricted Shares, or (c) any taxes associated
with the  exercise,  nonforfeitability  of, or payment of benefits in connection
with, an Award.  Any such payment deferral by the Company shall be

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on such terms and  conditions  as the  Committee  may  determine,  except that a
Grantee  shall  not be  entitled  to defer the  payment  of such  Option  Price,
purchase  price,  or any  related  taxes  unless the  Grantee  (a) enters into a
binding obligation to pay the deferred amount and (b) other than with respect to
treasury shares,  pays upon exercise of an option or grant of Restricted Shares,
as applicable,  an amount at least equal to the Minimum Consideration  therefor.
If the  Committee  has  permitted  a payment  deferral in  accordance  with this
Section 9, then the Committee may require the immediate payment of such deferred
amount upon the Grantee's  termination  of employment or if the Grantee sells or
otherwise  transfers his or her Shares purchased pursuant to such deferral.  The
Committee may at any time in its discretion  forgive the repayment of any or all
of the principal of, or interest on, any such deferred payment obligation.

         10.  Notification  under Section 83(b).  If the Grantee,  in connection
with the  exercise of any option or the grant of  Restricted  Shares,  makes the
election  permitted under Section 83(b) of the Code to include in such Grantee's
gross income in the year of transfer the amounts  specified in Section  83(b) of
the Code,  then such  Grantee  shall  notify the  Company,  in writing,  of such
election  within ten (10) days after filing the notice of the election  with the
Internal  Revenue Service,  in addition to any filing and notification  required
pursuant to  regulations  issued under Section 83(b) of the Code.  The Committee
may,  in  connection  with the  grant  of an  Award  or at any time  thereafter,
prohibit a Grantee from making the election described in this Section 10.

         11. Mandatory Tax Withholding.

             (a)  Whenever  under  the Plan,  Shares  are to be  delivered  upon
exercise   or  payment  of  an  Award  or  upon   Restricted   Shares   becoming
nonforfeitable,  or  any  other  event  with  respect  to  rights  and  benefits
hereunder,  the Company  shall be entitled to require (i) that the Grantee remit
an amount in cash,  or in the Company's  discretion,  Mature Shares or any other
form of  consideration,  sufficient to satisfy all federal,  state and local tax
withholding  requirements  related thereto  ("Required  Withholding"),  (ii) the
withholding of such Required Withholding from compensation  otherwise due to the
Grantee  or from any  Shares  due to the  Grantee  under the Plan,  or (iii) any
combination of the foregoing.

             (b)  Any  Grantee  who  makes  a  Disqualifying  Disposition  or an
election  under  Section  83(b) of the Code shall remit to the Company an amount
sufficient to satisfy all resulting Required Withholding, except that in lieu of
or in addition to the  foregoing,  the Company  shall have the right to withhold
such Required Withholding from compensation otherwise due to the Grantee or from
any Shares or other payment due to the Grantee under the Plan.

             (c) Any  surrender  by a Section  16 Grantee  of  previously  owned
shares of Common Stock to satisfy tax  withholding  arising upon exercise of the
Award must comply with the applicable provisions of Rule 16b-3(e) under the 1934
Act.

         12. Elective Share Withholding.  At the Company's discretion, a Grantee
may,  with the prior  consent of the  Committee,  elect the  withholding  by the
Company of a portion of the Shares  otherwise  deliverable  to such Grantee upon
the  exercise  of an Award or upon  Restricted

                                       10
<PAGE>

Shares becoming  nonforfeitable  (each, a "Taxable  Event") having a Fair Market
Value equal to the minimum amount necessary to satisfy the Required  Withholding
liability attributable to the Taxable Event.

         13. Termination of Employment.

             (a) For Cause.  Except as otherwise provided by the Committee in an
Award  Agreement,  if a Grantee's  employment is terminated  for Cause,  (i) the
Grantee's  Restricted  Shares (and any SARs identified  therewith) that are then
forfeitable  shall on the date of the  Grantee's  termination  of  employment be
forfeited on such date, subject to the provisions of Section 6(f)(iii) regarding
repayment of certain amounts to the Grantee;  and (ii) any  unexercised  option,
SAR or  Performance  Share  shall  terminate  effective  immediately  upon  such
termination of employment.

             (b) On  Account  of Death.  Except  as  otherwise  provided  by the
Committee  in the Award  Agreement,  if a  Grantee's  employment  terminates  on
account of death, then:

                          (i) the  Grantee's  Restricted  Shares  (and  any SARs
             identified  therewith) that are then forfeitable  shall on the date
             of the  Grantee's  termination  of  employment be forfeited on such
             date;

                          (ii) any  unexercised  option  or SAR,  to the  extent
             exercisable on the date of such  termination of employment,  may be
             exercised, in whole or in part, within the first twelve (12) months
             after such  termination  of employment  (but only during the Option
             Term)  after the death of the  Grantee  by (A) his or her  personal
             representative  or by the  person  to whom the  option  or SAR,  as
             applicable,  is  transferred  by  will  or the  applicable  laws of
             descent and distribution, (B) the Grantee's designated beneficiary,
             or (C) a Permitted Transferee; and

                          (iii)  any  unexercised   Performance  Shares  may  be
             exercised  in whole or in part,  at any time  within six (6) months
             after such termination of employment on account of the death of the
             Grantee, by (A) his or her personal representative or by the person
             to whom  the  Performance  Shares  are  transferred  by will or the
             applicable  laws of descent  and  distribution,  (B) the  Grantee's
             designated beneficiary, or (C) a Permitted Transferee,  except that
             the benefit  payable  with  respect to any  Performance  Shares for
             which the  Performance  Period has not ended as of the date of such
             termination of employment on account of death shall be equal to the
             product of Fair Market Value of such Performance  Shares multiplied
             successively by each of the following:

                                       (A) a fraction, the numerator of which is
                          the number of months  (including  as a whole month any
                          partial month) that has elapsed since the beginning of
                          such  Performance   Period  until  the  date  of  such
                          termination of employment and the denominator of which
                          is the number of months  (including  as a whole  month
                          any partial month) in the Performance Period; and

                                       11
<PAGE>

                                       (B)  a  percentage   determined   in  the
                          discretion of the Committee that would be earned under
                          the terms of the applicable  Award Agreement  assuming
                          that the rate at which the performance goals have been
                          achieved  as  of  the  date  of  such  termination  of
                          employment   would  continue  until  the  end  of  the
                          Performance  Period,  or, if the  Committee  elects to
                          compute the benefit  after the end of the  Performance
                          Period, the Performance  Percentage,  as determined by
                          the Committee,  attained during the Performance Period
                          for such Performance Shares.

             (c) On Account of Disability.  Except as otherwise  provided by the
Committee  in the Award  Agreement,  if a  Grantee's  employment  terminates  on
account of Disability, then:

                          (i) the  Grantee's  Restricted  Shares  (and  any SARs
             identified  therewith) that are then forfeitable  shall on the date
             of the  Grantee's  termination  of  employment be forfeited on such
             date;

                          (ii) any  unexercised  option  or SAR,  to the  extent
             exercisable on the date of such  termination of employment,  may be
             exercised in whole or in part,  within the first twelve (12) months
             after such  termination  of employment  (but only during the Option
             Term) by the Grantee, or by (A) his or her personal  representative
             or by the  person to whom the  option  or SAR,  as  applicable,  is
             transferred  by  will  or  the  applicable   laws  of  descent  and
             distribution,  (B) the Grantee's designated  beneficiary,  or (C) a
             Permitted Transferee; and

                          (iii)  any  unexercised   Performance  Shares  may  be
             exercised  in whole or in part,  at any time  within six (6) months
             after such  termination  of  employment on account of Disability by
             the Grantee, or by (A) his personal representative or by the person
             to whom  the  Performance  Shares  are  transferred  by will or the
             applicable  laws of descent  and  distribution,  (B) the  Grantee's
             designated beneficiary, or (C) a Permitted Transferee,  except that
             the benefit  payable  with  respect to any  Performance  Shares for
             which the  Performance  Period has not ended as of the date of such
             termination  of employment on account of Disability  shall be equal
             to the product of the Fair Market Value of the  Performance  Shares
             multiplied successively by each of the following:

                                       (A) a fraction, the numerator of which is
                          the number of months  (including  as a whole month any
                          partial  month) that have elapsed  since the beginning
                          of such  Performance  Period  until  the  date of such
                          termination of employment and the denominator of which
                          is the number of months  (including  as a whole  month
                          any partial month) in the Performance Period; and

                                       (B)  a  percentage   determined   in  the
                          discretion of the Committee that would be earned under
                          the terms of the applicable  Award Agreement  assuming
                          that the rate at which the performance goals have been
                          achieved  as  of  the  date  of  such  termination  of
                          employment   would  continue  until  the  end  of  the
                          Performance  Period,  or, if the  Committee  elects to
                          compute the

                                       12
<PAGE>

                          benefit after the end of the Performance  Period,  the
                          Performance   Percentage,   as   determined   by   the
                          Committee,  attained during the Performance Period for
                          such Performance Shares.


             (d) Any  Reason  Other  Than For  Cause Or On  Account  of Death or
Disability.  Except  as  otherwise  provided  by  the  Committee  in  the  Award
Agreement,  if a Grantee's  employment  terminates for any reason other than for
Cause,  or on account of death or  Disability,  then:

                          (i) the  Grantee's  Restricted  Shares  (and  any SARs
             identified therewith),  that are then forfeitable shall on the date
             of the  Grantee's  termination  of  employment be forfeited on such
             date;

                          (ii) any  unexercised  option or SAR (other than a SAR
             identified with a Restricted  Share or Performance  Share),  to the
             extent exercisable  immediately before the Grantee's termination of
             employment,  may be exercised  in whole or in part,  not later than
             three (3) months after such  termination  of  employment  (but only
             during the Option Term); and

                          (iii) the Grantee's  Performance  Shares (and any SARs
             identified  therewith) shall terminate  effective  immediately upon
             such termination of employment.

         14.  Substituted  Awards.  If the Committee  cancels any Award (whether
granted  under the Plan or any plan of any entity  acquired  by the Company or a
Subsidiary),  the  Committee  may,  in its  discretion,  substitute  a new Award
therefor  upon  such  terms  and  conditions  consistent  with  the  Plan as the
Committee may determine, except that (a) the Option Price of any new option, and
the  Strike  Price of any new SAR,  shall not be less than one  hundred  percent
(100%) (one hundred ten percent (110%) in the case of an incentive  stock option
granted to a Ten Percent  Owner) of the Fair Market Value of a Share on the date
of the grant of the new Award;  and (b) the Grant Date of the new Award shall be
the date on which such new Award is granted.

         15  Securities Law Matters.

             (a) If the Committee  deems necessary to comply with any applicable
securities  law,  the  Committee  may  require  a  written   investment   intent
representation  by the  Grantee  and may require  that a  restrictive  legend be
affixed to certificates for Shares.  If, based upon the advice of counsel to the
Company, the Committee determines that the exercise or nonforfeitability  of, or
delivery  of  benefits  pursuant  to, any Award  would  violate  any  applicable
provision  of  (i)  federal  or  state  securities  laws  or  (ii)  the  listing
requirements  of any national  exchange or national  market  system on which are
listed any of the Company's equity  securities,  then the Committee may postpone
any such exercise, nonforfeitability or delivery, as applicable, but the Company
shall use all reasonable  efforts to cause such exercise,  nonforfeitability  or
delivery to comply with all such provisions at the earliest practicable date.

                                       13
<PAGE>

             (b) Grants of options to Section 16 Grantees shall comply with Rule
16b-3 and shall contain such  additional  conditions or  restrictions  as may be
required  thereunder  for such grants to qualify for  exemption  from  liability
under Section 16(b) of the 1934 Act.

         16. No Employment Rights. Neither the establishment of the Plan nor the
grant of any Award shall (a) give any  Grantee  the right to remain  employed by
the Company or any  Subsidiary or to any benefits not  specifically  provided by
the Plan or (b) modify the right of the  Company  or any  Subsidiary  to modify,
amend,  or terminate the Plan or any other  employee  benefit plan or employment
agreement.

         17. No Rights as a Shareholder.  A Grantee shall not have any rights as
a shareholder  of the Company with respect to the Shares (other than  Restricted
Shares) which may be deliverable upon exercise or payment of an Award until such
Shares have been delivered to him or her.  Restricted Shares,  whether held by a
Grantee or in escrow by the Company, shall confer on the Grantee all rights of a
shareholder  of the  Company,  except  as  otherwise  provided  in the  Plan  or
applicable Award Agreement.

         18. Nature of Payments.  Awards shall be special incentive  payments to
the  Grantee  and shall not be taken  into  account in  computing  the amount of
salary or  compensation  of the Grantee for purposes of determining any pension,
retirement,   death  or  other  benefit  under  (a)  any  pension,   retirement,
profit-sharing,  bonus,  insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (i) the Company or any Subsidiary
and (ii) the Grantee, except as such plan or agreement shall otherwise expressly
provide.

         19. Non-uniform  Determinations.  The Committee's  determinations under
the Plan need not be uniform and may be made by the Committee  selectively among
persons who  receive,  or are eligible to receive,  Awards,  whether or not such
persons  are  similarly  situated.   Without  limiting  the  generality  of  the
foregoing,  the  Committee  shall be  entitled  to enter  into  non-uniform  and
selective Award Agreements as to (a) the identity of the Grantees, (b) the terms
and provisions of Awards, including,  without limitation,  vesting and manner of
payment of purchase price upon exercise,  and (c) the treatment of  terminations
of employment.

         20. Adjustments. The Committee shall make equitable adjustment of:

             (a) the  aggregate  number of Shares  available  under the Plan for
Awards and the aggregate number of Shares for which Awards may be granted to any
individual  Grantee in any  calendar  year  pursuant  to the second  sentence of
Section 2;

             (b) the number of Shares,  SARs or Performance Shares covered by an
Award; and

             (c) the  Option  Price of all  outstanding  options  and the Strike
Price of all outstanding SARs;

                                       14
<PAGE>

to  reflect  a  stock  dividend,   stock  split,   reverse  stock  split,  share
combination,   recapitalization,  merger,  consolidation,  spin-off,  split-off,
reorganization,  rights  offering,  liquidation  or  similar  event of or by the
Company.

         21.  Amendment of the Plan. The Committee may from time to time, in its
discretion,  amend the Plan without the approval of the Company's  shareholders,
except  (a) as such  shareholder  approval  may be  required  under the  listing
requirements  of any securities  exchange or national market system on which are
listed  the  Company's  equity  securities  and (b) that the  Committee  may not
without the approval of the  Company's  shareholders  amend the Plan to increase
the total number of shares  reserved for the purposes of the Plan (other than in
accordance with Section 20).

         22.  Termination  of the Plan.  The Plan shall continue in effect until
the earlier of its  termination by the Committee or the date on which all of the
shares of Common Stock  available  for issuance  under the Plan have been issued
and all  restrictions  on such  shares  under  the  terms  of the  Plan  and the
agreements  evidencing Awards granted under the Plan have lapsed.  However,  all
Awards  shall be granted,  if at all,  within ten (10) years from the earlier of
the date  the  Plan is  adopted  by the  Committee  or the date the Plan is duly
approved by the shareholders of the Company.  Notwithstanding the foregoing,  if
the maximum number of shares of Common Stock  issuable  pursuant to the Plan has
been  increased at any time,  all Awards  shall be granted,  if at all, no later
than the last day preceding the ten (10) year  anniversary of the earlier of (a)
the date on which the latest such  increase  in the maximum  number of shares of
Common Stock  issuable  under the Plan was approved by the  shareholders  of the
Company  or (b) the  date  such  amendment  was  adopted  by the  Committee.  No
termination shall affect any Award then outstanding under the Plan.

         23. No Illegal  Transactions.  The Plan and all Awards granted pursuant
to it are subject to all applicable laws and  regulations.  Notwithstanding  any
provision of the Plan or any Award,  Grantees shall not be entitled to exercise,
or receive  benefits under any Award,  and the Company shall not be obligated to
deliver  any  Shares or  deliver  benefits  to a Grantee,  if such  exercise  or
delivery  would  constitute  a  violation  by the  Grantee or the Company of any
applicable law or regulation.

         24.  Constructive  Sales. The Grantee shall not directly or indirectly,
through  related  parties or otherwise,  "short" or "short  against the box" (as
those terms are generally  understood in the securities  markets),  or otherwise
directly or indirectly (through derivative  instruments or otherwise) dispose of
or hedge, any securities of the Company issuable upon exercise of such Grantee's
Award(s).

         25. Definitions.  The terms set forth below have the indicated meanings
which are applicable to both the singular and plural forms thereof:

             "Award"  shall mean options,  including  ISOs,  Restricted  Shares,
Bonus Shares, SARs or Performance Shares granted under the Plan.

                                       15
<PAGE>

             "Award  Agreement"  shall mean the  written  agreement  by which an
Award shall be evidenced.

             "Board" shall mean the Board of Directors of the Company.

             "Bonus  Shares"  shall mean  Shares  that are  awarded to a Grantee
without cost and without restrictions.

             "Cause",  with respect to any employee or consultant of the Company
shall have the  meaning  set forth in such  person's  employment  or  consulting
agreement or, in the absence of such an agreement or if such term is not defined
in such agreement, shall mean any one or more of the following, as determined by
the  Committee  (in the case of a Section  16  Grantee)  or the Chief  Executive
Officer or President of the Company (in the case of any other Grantee):

               (i) a Grantee's commission of a crime that is likely to result in
injury to the Company or a Subsidiary;

               (ii) the material violation by the Grantee of written policies of
the Company or a Subsidiary;

               (iii) the habitual  neglect by the Grantee in the  performance of
his or her duties to the Company or a Subsidiary; or

               (iv) a Grantee's  willful  misconduct  or inaction in  connection
with his or her duties to the Company or a  Subsidiary  resulting  in a material
injury to the Company or a Subsidiary.

             "Code" shall mean the Internal  Revenue Code of 1986, as amended or
superseded,  and  the  regulations  and  rulings  thereunder.   Reference  to  a
particular section of the Code shall include references to successor provisions.

             "Committee"  shall  mean  the  committee  of  the  Board  appointed
pursuant  to  Section  3(a),  or if not so  appointed  or  unable to act or with
reference to Awards to Independent Directors, shall mean the entire Board.

             "Common  Stock" shall mean the common  stock,  $0.001 par value per
share, of the Company.

             "Consultant"  shall mean any person,  including a Director,  who is
engaged by the Company or any Parent, Subsidiary or Affiliate thereof, to render
services  to or for the  benefit  of the  Company  and is  compensated  for such
services.

             "Director" shall mean a member of the Board.

                                       16
<PAGE>

             "Disability"  shall mean a permanent and total  disability,  within
the meaning of Section 22(e)(3) of the Code.

             "Effective  Date"  shall  mean  the date  set  forth  in the  first
paragraph hereof.

             "Eligible  Person" shall mean any Employee,  Consultant or Director
of the Company or any Subsidiary, including any prospective Employee or Employee
on an  approved  leave of absence or  layoff,  if such leave or layoff  does not
qualify as a Disability.

             "Employee" shall mean any person treated as an employee  (including
officers and directors) in the records of the Company (or Subsidiary) and who is
subject to the control and direction of the Company (or Subsidiary)  with regard
to both the work to be performed and the manner and method of  performance.  The
payment of a director's  fee by the Company (or  Subsidiary) to a Director shall
not be sufficient to constitute  "employment" of the Director by the Company (or
Subsidiary).

             "Fair Market  Value" per share of Common Stock on any relevant date
shall mean such value as determined in accordance with the following provisions:

             (i) If the  Common  Stock  is at that  time  listed  on a  national
securities  exchange,  then the Fair Market Value shall mean the closing selling
price per share of Common  Stock on the  exchange on which such Common  Stock is
principally traded on the relevant date or, if there were no sales on that date,
the closing  selling  price of such Common Stock on the last  preceding  date on
which there were sales.

                 (ii) If the Common  Stock is at that time  traded on the Nasdaq
National Market(R),  Nasdaq Small Cap MarketSM or OTC Bulletin Board(R),  as the
case may be, then the Fair Market Value shall mean the closing selling price per
share of Common  Stock on the  relevant  date,  as the price is  reported by the
National  Association of Securities  Dealers on the Nasdaq  National  Market(R),
Nasdaq Small Cap MarketSM or OTC Bulletin  Board(R),  as the case may be, or any
successor  system.  If there is no closing selling price for the Common Stock on
the relevant  date,  then the Fair Market  Value shall mean the closing  selling
price on the last preceding date for which such quotation exists.

                 (iii) If the  Common  Stock is neither  listed on any  national
securities  exchange nor traded on the Nasdaq National  Market(R),  Nasdaq Small
Cap  MarketSM or OTC  Bulletin  Board(R),  then the Fair Market Value shall mean
that value determined by the Committee after taking into account such factors as
the Committee shall in good faith deem appropriate.

                 "Grant Date" shall have the meaning specified in Section 6(a).

                 "Grantee"  shall mean a person who has been granted an Award or
any Permitted Transferee.

                                       17
<PAGE>

                 "ISO" shall mean an incentive  stock option  within the meaning
of Section 422 of the Code.

                 "Immediate  Family"  shall mean,  with  respect to a particular
Grantee, the Grantee's spouse, children and grandchildren.

                 "Independent  Director" shall mean a member of the Board who in
not an Employee of the Company.

                  "Mature Shares" shall mean Shares for which the holder thereof
has good title, free and clear of all liens and encumbrances, and which such
holder has held for at least six (6) months.

                  "Minimum Consideration" shall mean par value per Share or such
other amount that is from time to time considered to be minimum consideration
under applicable law.

                  "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended. References to a particular section of the 1934 Act or rule thereunder,
include references to successor provisions.

                  "Option Price" shall mean the per share exercise price of an
option.

                  "Option Term" shall mean the period beginning on the Grant
Date of an option and ending on the expiration date of such option, as specified
in the Award Agreement for such option and as may, in the discretion of the
Committee and consistent with the provisions of the Plan, be extended from time
to time.

                  "Performance Shares" shall mean an Award to a Grantee pursuant
to Section 6(e).

                  "Permitted Transferee" shall mean a person to whom an Award
may be transferred or assigned in accordance with Section 7.

                  "Public Company" shall mean any entity issuing any class of
equity securities that has been, or is required to be, registered under Section
12 of the 1934 Act.

                  "Restricted Shares" shall mean Shares that are subject to
forfeiture if the Grantee does not satisfy the conditions specified in the Award
Agreement applicable to those Shares.

                  "Rule 16b-3" shall mean Rule 16b-3 of the SEC under the 1934
Act, as amended from time to time, together with any successor rule.

                  "SAR" shall mean a stock appreciation right.

                  "SEC" shall mean the Securities and Exchange Commission.

                                       18
<PAGE>

                  "Section 16 Grantee" shall mean a person who is subject to
potential liability under Section 16(b) of the 1934 Act with respect to
transactions involving equity securities of the Company.

                  "Share" shall mean a share of Common Stock.

                  "Strike Price" shall have the meaning specified in Section
6(d)(ii).

                  "Subsidiary" shall mean a subsidiary corporation, as defined
in Section 424(f) of the Code (with the Company being treated as the employer
corporation for purposes of this definition).

                  "Ten Percent Owner" shall mean a person who owns capital stock
(including stock treated as owned under Section 424(d) of the Code) possessing
more than ten percent of the total combined Voting Power of all classes of
capital stock of the Company or any Subsidiary.

                  "Voting Power" shall mean the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors.

         26.  Controlling  Law.  The law of the State of Nevada,  except its law
with respect to choice of law, shall control all matters relating to the Plan.

         27.  Severability.  If any part of the Plan is declared by any court or
governmental   authority  to  be  unlawful  or  invalid,  such  unlawfulness  or
invalidity  shall not invalidate any other part of the Plan. Any Section or part
of a Section so  declared  to be  unlawful or invalid  shall,  if  possible,  be
construed  in a manner  which will given  effect to the terms of such Section to
the fullest extent possible while remaining lawful and valid.

                                       19