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                                                                    EXHIBIT 4.05

                            THE KERNEL GROUP, INC.,

                              A TEXAS CORPORATION,

                           1997 INCENTIVE EQUITY PLAN


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                  THE KERNEL GROUP, INC., A TEXAS CORPORATION,

                           1997 INCENTIVE EQUITY PLAN

1.      GENERAL

        1.1     PURPOSE OF THE PLAN

            1.1(a) The Kernel Group, Inc., 1997 Incentive Equity Plan (the
                "Plan") is intended to promote the interests of all of its
                subsidiaries and, in turn, the interests of The Kernel Group,
                Inc. Unless the context indicates otherwise, the term "Company"
                means The Kernel Group, Inc.

            1.1(b) The Plan has several objectives. One of them is to provide
                the officers (including directors who are also officers) and
                employees of the Company (and of its parent and subsidiaries),
                all of whom are responsible for the management, growth and
                financial success of the Company, with the opportunity to
                acquire an economic stake through equity ownership in the
                Company's business and, thereby, generate an increased personal
                interest in the continued financial success and progress of the
                Company. A second objective of the Plan is to encourage officers
                and employees to remain in the service of the Company or its
                parent or subsidiaries. Another objective is to assist in the
                recruitment of the best available individuals for positions of
                responsibility to assist in the expansion of its business
                operations and financial growth of the Company and its parent
                and subsidiaries.

        1.2     DEFINITIONS

            1.2(a) "Administrator" means the Board or any committee appointed
                pursuant to Section 2 of the Plan.

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

            1.2(c) "Code" means the Internal Revenue Code of 1986, as amended.

            1.2(d) "Common Stock" means the Common Stock of the Company without
                par value.

            1.2(e) "Consultant" means any person who is engaged by the Company,
                its parent or any of its subsidiaries to render consulting or
                advisory services and is compensated for such services. The term
                does not include Directors who are not compensated for their
                services or paid only a Director's fee to serve in such
                capacity.

            1.2(f) "Continuous Status as an Employee or Consultant" means that
                the employment or consulting relationship with the Company, its
                parent or subsidiaries is not interrupted or terminated.
                Continuous Status as an Employee or Consultant shall not be
                considered interrupted in the case of (i) any leave of absence
                approved by the Company, parent or subsidiary or (ii) transfers
                between location of the Company or between the Company, parent
                or subsidiaries, or any successor. An


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                approved leave of absence shall include sick leave, military
                leave or any other personal leave approved by an authorized
                representative of the Company, parent or subsidiary. For
                purposes of Incentive Stock Options, no such leave may exceed 90
                days, unless reemployment upon expiration of such leave is
                guaranteed by statute or contract, including Company policies.
                If reemployment upon expiration of an authorized leave of
                absence is not guaranteed as provided in the preceding sentence,
                on the 91st day of such leave any Incentive Stock Option held by
                the Optionee shall cease to be treated as an Incentive Stock
                Option and shall be treated for tax purposes as a Non Statutory
                Stock Option.

            1.2(g) "Director" means a member of the Board of Directors of the
                Company, its parent or subsidiaries.

            1.2(h) "Employee" means officers, Directors and employees of the
                Company, its parent or subsidiaries.

            1.2(i) "Incentive Stock Option" means an Option intended to qualify
                as an incentive stock option within the meaning of Section 422
                of the Code.

            1.2(j) "Nonstatutory Stock Option" means an Option not intended to
                qualify as an Incentive Stock Option.

            1.2(k) "Option" means a stock option granted under the Plan.

            1.2(1) "Optionee" means an Employee or Consultant who receives
                Performance Stock, an Option, Stock Purchase Right or other
                award under the Plan.

            1.2(m) "Permanent Disability" with respect to Options shall have the
                meaning prescribed in Section 22(e) of the Code; otherwise this
                term shall have the meaning prescribed in the agreements used
                with the Plan.

        1.3     EQUITY SUBJECT TO THE PLAN

            1.3(a) Subject to the adjustments permitted under the Plan, the
                maximum number of shares of Common Stock authorized for issuance
                under the Plan is 6,000,000 shares.

            1.3(b) Common Stock which is subject to Options which have expired
                without them being exercised, or which have been surrendered to
                the Company, shall become available for future grants or sale
                under the Plan (unless the Plan has terminated).

            1.3(c) The number of shares of Common Stock authorized for issuance
                under the plan may be changed by the Board of Directors of the
                Company, subject to the constraints on total number of
                authorized shared defined in the Company's articles of
                incorporation.


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        1.4     TERM OF THE PLAN

            1.4(a) The Plan shall become effective upon its adoption by the
                Board, and shall continue in effect for a term often (10) years
                unless sooner terminated under Section 12.1.

            1.4(b) The Plan shall be submitted to the Company's stockholders for
                their approval within 12 months of the adoption date of the
                Plan. No option granted under the Plan will become exercisable
                unless the Plan is approved by the stockholders as provided in
                the preceding sentence. If stockholder approval is not obtained
                as set forth herein, all options that may be granted after the
                Plan is adopted shall automatically terminate and be null and
                void, and no further options will be granted under the Plan.

        1.5     RESERVATION OF STOCK SUBJECT TO THE PLAN

        During the term of the Plan, the Company shall at all times reserve and
keep available such number of shares of Common Stock as shall be sufficient to
satisfy the requirements of the Plan.

        1.6     NO LIABILITY

        The inability of the Company to obtain any regulatory or governmental
approvals which the Company's counsel deems are necessary to the lawful issuance
of any right including the sale of shares of Common Stock under the Plan, shall
relieve the Company of any liability in respect of the failure to issue or sell
such shares of Common Stock as to which such requisite approvals shall not have
been obtained.

2.      ADMINISTRATION OF THE PLAN

        2.1     PROCEDURE

            2.1(a) The Board shall administer the Plan. The Board, however, may
                at anytime pursuant to written resolution appoint a committee of
                two (2) or more members of the Board and delegate to such
                committee one or more of the administrative powers allocated to
                the Board pursuant to the provisions of the Plan.

            2.1(b) Members of the committee shall serve on the committee for
                such period of time as the Board determines. Committee members
                serve at the pleasure of the Board and are subject to removal by
                the Board at anytime for any reason or for no reason at all.

            2.1(c) The Board may also at any time terminate the functions of the
                committee and re-assume all powers and authority previously
                delegated to the committee.


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        2.2     POWERS OF THE ADMINISTRATOR

        Subject to the provisions of the Plan and, in the case of a committee,
the specific duties delegated by the Board to such committee, the Administrator
shall have authority in its discretion to:

            2.2(a) Determine the fair market value of the Common Stock, in
                accordance with Section 7 of the Plan.

            2.2(b) Select the specific Consultants and Employees to whom Options
                may be granted under the Plan.

            2.2(c) Determine the number of shares of Common Stock to be covered
                in the award of Options granted under the Plan.

            2.2(d) Approve the agreement forms for the use under the Plan.

            2.2(e) Determine the terms and conditions, not inconsistent with the
                terms of the Plan, of any award granted hereunder. Such terms
                and conditions include, but are not limited to, the type of
                consideration to be paid for an award, the exercise price, the
                times or times when Options granted under the Plan may be
                exercised (which may be based on performance criteria), any
                vesting acceleration or waiver of forfeiture restrictions, and
                any restrictions, or limitations regarding any Option granted
                hereunder or the shares of Common Stock relating thereto, based
                in each case on such factors as the Administrator, in its sole
                discretion, shall determine.

            2.2(f) Reduce the exercise price of any Option if the fair market
                value of the Common Stock covered by the Option shall have
                declined since the date the was granted.

            2.2(g) Construe and interpret the terms of the Plan, awards granted
                under the Plan and agreements used under the Plan.

            2.2(h) Prescribe, amend and rescind guidelines, rules and
                regulations relating to the Plan.

            2.2(i) Modify or amend Options including the discretionary authority
                to extend the post-termination exercisability period of Options
                longer than is otherwise provided for m the Plan or agreements
                used in the Plan, subject to any limitations imposed by the Code
                with respect to Options.

            2.2(j) Determine the terms and conditions and restrictions
                applicable to Options.

            2.2(k) Determine whether granted Options are to be Incentive Stock
                Options or Nonstatutory Options.

            2.2(1) Amend the Plan from time to time to conform it with
                applicable requirements under the Code, SEC Rule 16-3 and state
                securities laws.


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            2.2(m) Make all other determinations and/or take all other actions
                deemed necessary or advisable by the Plan Administrator to
                effect the purposes of the Plan and for its administration.

        2.3     EFFECT OF ADMINISTRATOR'S DECISION

        All decisions, determinations and interpretations of the Administrator
shall be final and binding on all holders of Options granted under the Plan.

        2.4     TERMS AND CONDITIONS IMPOSED ON AWARDS BY ADMINISTRATOR

        Terms, conditions or limitations imposed by the Administrator as
conditions of the award of Options granted under the Plan need not be identical
and may vary from time to time.

3.      ELIGIBILITY

        3.1     OPTION ELIGIBILITY

        Incentive Stock Options may only be granted to Employees. Nonstatutory
Stock Options may be granted to Employees and Consultants selected by the
Administrator.

        3.2     EMPLOYMENT

        Neither the Plan nor the grant of any Option under the Plan shall confer
upon any holder of the Option any right to continue his employment or consulting
relationship with the Company, nor shall it interfere in any way with the
holder's right or the right of the Company, its parent or its subsidiary to
terminate his employment or consulting relationship at any time, with or without
reason.

        3.3     SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 16b-3
                OF THE SECURITIES AND EXCHANGE COMMISSION

        In the event any of the Company's securities are registered under the
Securities Exchange Act of 1934, any rights granted to Employees or Consultants
who, at the time of the grant, may be subject to certain reporting and liability
provisions of the aforementioned act, such rights shall be granted subject to
such additional terms and conditions as may be required thereunder and under
Rule 16b-3 to qualify for the maximum exemption from Section 16 of the
aforementioned act.

4.      STOCK OPTIONS

        4.1     GRANTS OF INCENTIVE STOCK OPTIONS AND NONSTATUTORY OPTIONS

            4.1(a) Each Option granted under the Plan shall be designated in the
                written agreement as either an Incentive Stock Option or a
                Nonstatutory Stock Option.

            4.1(b) After the Administrator has determined that awards of Options
                will be granted, the Administrator shall advise the Employee or
                Consultant in writing of the terms,


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                conditions and restriction related to the granting of the award
                of Option, including the number of shares of Common Stock
                subject to the Option, the fair market value of the shares of
                Common Stock on the effective date of the grant, and
                restrictions and limitations placed on the exercise of the
                Option and/or the related shares of Common Stock.

            4.1(c) With respect to Incentive Stock Options, the aggregate fair
                market value (determined as of the respective date or dates of
                grant) of the Common Stock for which one or more Options granted
                to any Employee under the Plan (or any other option plan of the
                Company or its parent or subsidiaries) may for the first time
                become exercisable as Incentive Stock Options under the Code
                during any one calendar year shall not exceed the sum of
                $100,000. To the extent the Employee holds two or more Incentive
                Stock Options which become exercisable for the first time in the
                same calendar year, the foregoing limitation on the extent to
                which Incentive Stock Options can be exercised shall be applied
                on the basis of the order in which such options are granted.

        4.2     OPTION EXERCISE PRICE AND CONSIDERATION

            4.2(a) The Option (exercise) price per share of Common Stock subject
                to a Non-Statutory Stock Option shall not be less than 85 % of
                the fair market value of the Common Stock on the date of the
                Option grant.

            4.2(b) The Option (exercise) price per share of Common Stock subject
                to an Incentive Stock Option shall in no event be less than 100%
                of the fair market value of the Common Stock on the date of the
                Option grant.

            4.2(c) If any Employee to whom an Incentive Stock Option is to be
                granted is on the date of grant the owner of stock (as
                determined under Section 425(d) of the Code) is deemed a 10%
                Stockholder (as defined in the Plan), the exercise price per
                share shall not be less than 110% of the fair market value per
                share of Common Stock on the date of grant.

            4.2(d) The Option price shall become immediately due and payable
                upon exercise of the Option.

            4.2(e) The consideration to be paid for the Common Stock subject to
                the Option, including the method of payment, shall be determined
                by the Administrator at the time the Option is granted. The
                consideration may consist of:

                        (1)     Cash or check in an amount equal to the Option
                                price;

                        (2)     Shares of Common Stock held by the Option holder
                                for the requisite period necessary to avoid a
                                charge to the Company's earnings for financial
                                reporting purposes and valued at the fair market
                                value on the exercise date of the Option; or


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                        (3)     A combination of shares of Common Stock held by
                                the option holder for the requisite period
                                necessary to avoid a charge to the Company's
                                earnings for financial reporting purposes and
                                valued at fair market value on the exercise date
                                of the Option, and cash or check in an amount
                                equal to the exercise price which is not being
                                paid by delivering shares of Common Stock; or

                        (4)     A reduction in the amount of any Company
                                liability to the Option holder; or

                        (5)     A promissory note; or

                        (6)     Service rendered; or

                        (7)     Any combination of the foregoing methods of
                                payment.

            4.2(f) In making its determination as to the type of consideration
                to accept, the Administrator shall consider if acceptance of
                such consideration may be reasonably expected to benefit the
                Company.

        4.3     TERM OF OPTIONS

            4.3(a) Subject to the provisions set forth below, each Option
                granted under the Plan shall become exercisable at such time or
                times, during such period, and for such number of shares as
                shall be determined by the Administrator and as set forth in the
                stock option agreement evidencing the grant of the option.

            4.3(b) No Option granted under the Plan shall have a term in excess
                of ten (10) years, determined as of the Option grant date.

            4.3(c) Notwithstanding Section 4.3(b) above, no Option granted to an
                Employee or Consultant whom is deemed a 10% Stockholder shall
                have a term in excess of 5 years, determined as of the Option
                grant date.

            4.3(d) No Option shall be exercisable by anyone other than the
                individual to whom it was granted.

            4.3(e) Options are not assignable or transferable by the Option
                holder otherwise than by will or by the laws of descent and
                distribution.

            4.3(f) In the event that an Option is transferred to the spouse of
                an employee upon termination of the marital relationship of the
                employee, the Company shall have the right to repurchase the
                Option from the ex-spouse of the employee for $0.01 per each
                share of stock for which the Option may be exercised. The
                Company may exercise its right to repurchase options which have
                been transferred upon termination of the marital relationship
                within thirty (30) days after it receives written notice of
                termination of such marital relationship by delivering payment
                in full of the repurchase price to the ex-spouse, or any other
                party to whom the


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                option has been transferred. Upon delivery of the repurchase
                price to the holder of an Option which has been transferred upon
                termination of a marital relationship, the Option shall expire
                and become void. An option which has been transferred upon
                termination of a marital relationship shall not be exercisable
                until the expiration sixty (60) days after notice of the
                transfer has been delivered to the Company by the person to whom
                the Option has been transferred.

        4.4     EXERCISE OF OPTION

            4.4(a) Any Option granted under the Plan shall be exercisable at
                such times and under such conditions as determined by the
                Administrator, including performance criteria with respect to
                the Company or its subsidiary and/or the individual selected to
                be awarded an Option, and as shall be permissible under the
                terms of the Plan.

            4.4(b) An Option may not be exercised for a fraction of a share of
                Common Stock.

            4.4(c) An Option shall be deemed to be exercised upon the following:
                (i) when written notice of the exercise has been given to the
                Company in accordance with the terms of the Option by the
                individual entitled to exercise the Option and (ii) when full
                payment for the Common Stock underlying the Option has been
                received by the Company.

            4.4(d) Unless and until a certificate representing the Common Stock
                subject to the Option exercised has been duly registered in the
                stockholder register of the Company in the name of the
                individual who has exercised the Option, the holder of the
                Option has no rights to vote, receive dividends or any other
                rights as a stockholder with respect to the Common Stock
                underlying the Option.

            4.4(e) The Company shall issue or cause to be issued one or more
                stock certificates promptly upon the exercise of any outstanding
                Option.

        4.5     EFFECT OF TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP

            4.5(a) The Option Agreement may provide for the automatic expiration
                of an Option, in the event an Option holder's Continuous Status
                as an Employee or Consultant is terminated, with or without
                cause, for reasons other than retirement, Permanent Disability
                or death. If the Option Agreement does not provide for automatic
                expiration of an Option in the event an Option holder's
                Continuous Status as an Employee or Consulted is terminated for
                reasons other than retirement, Permanent Disability or death,
                the individual may, but only within such period of time as is
                determined by the Administrator (and in the case of an Incentive
                Stock Option, with such determination not exceeding three (3)
                months after the date of termination and in no event later than
                the expiration date of the term of the respective Option),
                exercise his Option to the extent that the holder of the Option
                was entitled to exercise it at the date of termination.


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            4.5(b) A change of status from an Employee to a Consultant or from a
                Consultant to an Employee does not terminate an individual's
                Continuous Status as an Employee or Consultant.

            4.5(c) With respect to Incentive Stock Options, if there is a change
                of status from an Employee to a Consultant, an Employee's
                Incentive Stock Options shall automatically convert to a
                Nonstatutory Stock Option on the 91stday following such change
                in status.

            4.5(d) In case the holder of an Option fails to exercise an Option
                within the time specified herein, or in case the holder of an
                Option is not entitled to exercise the Option at the date of his
                termination, the Option shall terminate.

        4.6     EFFECT OF TERMINATION ON ACCOUNT OF DISABILITY

        If termination occurs on account of Permanent Disability, the holder of
the Option may exercise the Option to the extent it was exercisable at the date
of termination within twelve (12) months from the date of such termination (and
in no event later than the expiration term of the Option as set forth in the
stock option agreement).

        4.7     EFFECT OF TERMINATION ON ACCOUNT OF DEATH

        If termination occurs on account of death, the Option may be exercised
at anytime within twelve (12) months following the date of death (but in no
event later than the expiration of the term of the Option). The Option may be
exercised by the decedent's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent that the
Employee or Consultant would have been entitled to exercise the Option as of the
date of the holder's death.

        4.8     CANCELLATION AND NEW GRANT OF OPTIONS

        The Administrator shall have the authority to effect, at any time and
from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Plan, and to grant in
substitution therefor, new options under the Plan covering the same or different
numbers of shares of Common Stock but having an Option puce per share not less
than 85 % of the fair market value per share of Common Stock on the new grant
date (or 100% of fair market value in the case of an Incentive Stock Option or,
in the case of a 10% Stockholder, not less than 110% of the fair market value.

5.      REPURCHASE RIGHTS AND RIGHTS OF FIRST REFUSAL

        5.1     COMPANY'S REPURCHASE RIGHTS

        The stock option agreements, shareholders' agreements, and other
agreements used in connection with any rights granted under the Plan may grant
the Company rights to repurchase shares of Common Stock acquired pursuant to
grants of Performance Stock, upon the exercise of outstanding Options, upon the
exercise of Stock Purchase Rights or upon the exercise of SARs payable in the
form of Common Stock, including but not limited to repurchase of Common Stock


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upon termination of the employment relationship and right of first refusal to
purchase Common Stock which an employee proposed to transfer to a third party,
as set forth in those agreements from time to time.

6.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER

        6.1     CHANGES IN CAPITALIZATION

            6.1(a) The number of shares of Common Stock covered by each
                outstanding Option or Stock Purchase Right and the purchase
                price related thereto, and the number of shares of Common Stock
                which are available under the Plan for future grants shall be
                proportionately adjusted for any increase or decrease in the
                number of issued shares of Common Stock resulting from a stock
                split, reverse stock split, stock dividend, combination or
                reclassification of the Common Stock, or any other increase or
                decrease in the number of issued shares of Common Stock effected
                without receipt of consideration by the Company.

            6.1(b) The adjustments permitted hereunder shall be made by the
                Board, whose determination in that respect shall be final,
                binding and conclusive.

            6.1(c) The conversion of any convertible securities of the Company
                shall not be deemed to have been effected without receipt of
                consideration.

        6.2     MERGER OR ASSET SALE

            6.2(a) In the event of a merger of the Company with or into another
                corporation, or the sale of substantially all of the assets of
                the Company, each outstanding right to acquire shares -of Common
                Stock shall be assumed or an equivalent right substituted by the
                successor corporation or a parent or subsidiary of the successor
                corporation.

            6.2(b) If the successor corporation refuses to assume or substitute
                the rights outstanding under the Plan, the holder of the
                outstanding rights shall be entitled to exercise the rights as
                to all of the shares of Common Stock covered by such rights.

            6.2(c) If the outstanding rights become exercisable as provided
                above, the Administrator shall notify the holders of such rights
                that such rights are fully exercisable for a period of thirty
                (30) days from the date of the Administrator's notice, and the
                rights (if not exercised within the time prescribed) shall
                terminate on the last day of the exercise period.

7.      DETERMINATION OF FAIR MARKET VALUE

        The fair market value of the Common Stock on any relevant date shall be
determined in accordance with the provisions set forth in this Section.


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        7.1     DETERMINATION BY BOARD

        If the Common Stock is neither listed nor admitted to trading on any
stock exchange nor traded in the over-the-counter market, the fair market value
shall be determined by the Board after taking into account such factors as the
Board shall deem appropriate.

        7.2     COMMON STOCK LISTED FOR TRADING ON STOCK EXCHANGE

        If the Common Stock is listed or admitted to trading on any stock
exchange, the fair market value shall be the closing selling price of the Common
Stock reported on the date of grant or award by the primary market for the
Common Stock, and in case no closing selling price was reported on that date,
then the fair market value shall be the selling closing price of the Common
Stock on the date preceding the grant date of the option or award.

        7.3     COMMON STOCK LISTED FOR TRADING ON THE OVER-THE-COUNTER MARKET

        If the Common Stock is not listed or admitted to trading on any
exchange, but is traded in the over-the-counter market, the fair market value
shall be the mean between the highest bid and lowest asked price, or the closing
selling price, of the Common Stock reported by the National Association of
Securities Dealers on NASDAQ (or successor system) on the date of the option
grant or award. If there are no reported bid or asked prices, or closing selling
price, for the Common Stock on the granted or award date, then the fair market
value of the Common Stock shall be the mean between the highest bid price and
lowest asked price, or the closing selling price, on the last preceding date for
which such quotations exist.

8.      COMPANY LOANS

        8.1     DISCRETION

        The Administrator may, in its sole discretion, assist any Participant
with the exercise of any right granted under the Plan which is then exercisable
or with the purchase of shares under the Plan by authorizing the extension of a
Company loan to any Employee or Consultant who has been granted either Options
or Stock Purchase Rights under the Plan.

        8.2     TERMS

        The terms of any loan (including the interest rate and terms of
repayment) shall be established by the Administrator in its sole discretion.
Loans may be granted with or without security or collateral, but the maximum
credit available to the Employee or Consultant may not exceed the sum of the
aggregate option price or purchase price payable for the shares of Common Stock
purchased plus any federal and state income and employment tax liability
incurred by the holder of the Plan rights in connection with the exercise of the
Option or the Stock Purchase Rights.

9.      USE OF PROCEEDS

        Any cash proceeds received by the Company from the issuance of shares of
Common Stock under the Plan shall be used for general corporate purposes.


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10.     WITHHOLDINGS

        The Company's obligation to deliver shares of Common Stock upon the
exercise or surrender of any right granted, or upon the award or purchase of any
shares, under the Plan shall be subject to the satisfaction of all applicable
federal, state and local income and employment tax withholding requirements.

11.     REGULATORY APPROVALS

        11.1    SECURITIES COMPLIANCE

        The implementation of the Plan, the granting of any Performance Shares
or stock options, or the sale of any shares under the Plan, and the issuance of
any Common Stock upon the exercise of outstanding Options shall be subject to
the Company's compliance with regulatory requirements under applicable
securities laws.

        11.2    STOCK LEGENDS

            11.2(a) Each stock certificate representing shares of Common Stock
                (or other securities) issued under the Plan shall bear any
                transfer restrictions or legends required under applicable
                securities laws.

12.     AMENDMENT OF THE PLAN AND TERMINATION

        12.1    AMENDMENT AND TERMINATION

        The Board may at any time, amend, alter, suspend or discontinue the
Plan, but no amendment, alteration, suspension or discontinuation shall be made
which would impair the rights of any holder of any right granted prior to the
amendment or suspension or discontinuation of the Plan without the consent of
the holder of such rights affected. In addition, to the extent necessary and
desirable to comply with Rule lbb-3 under the Exchange Act or with Section 422
of the Code or to comply with applicable securities laws, the Company shall
obtain stockholder approval of any Plan amendments in such manner and to such
degree as required.

        12.2    EFFECT OF AMENDMENT OR TERMINATION

        Amendments or termination of the Plan shall not affect outstanding
rights granted prior to the date of the amendment or termination, and such
rights shall remain in force and effect as if the Plan had not been amended or
terminated, unless mutually agreed otherwise between the holder of the
outstanding right and the Administrator.

13.     NO CORPORATE OR BUSINESS IMPAIRMENT

        The grant of Performance Stock, Options or other rights or the sale of
shares of Common Stock under the Plan shall in no way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital
structure or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.


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14.     AGREEMENTS

        Rights granted under the Plan shall be evidenced, by written agreements
in such form as the Administrator shall approve from time to time.


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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           PAGE

<S>                                                                                        <C>
1.      GENERAL.............................................................................1

        1.1    Purpose of the Plan..........................................................1

        1.2    Definitions..................................................................1

        1.3    Equity Subject to the Plan...................................................2

        1.4    Term of the Plan.............................................................3

        1.5    Reservation of Stock Subject to the Plan.....................................3

        1.6    No Liability.................................................................3

2.      ADMINISTRATION OF THE PLAN..........................................................3

        2.1    Procedure....................................................................3

        2.2    Powers of the Administrator..................................................4

        2.3    Effect of Administrator's Decision...........................................5

        2.4    Terms and Conditions Imposed On Awards by Administrator......................5

3.      ELIGIBILITY.........................................................................5

        3.1    Option Eligibility...........................................................5

        3.2    Employment...................................................................5

        3.3    Section 16 of the Securities Exchange Act of 1934 and Rule 16b-3 of the
               Securities and Exchange Commission...........................................5

4.      STOCK OPTIONS.......................................................................5

        4.1    Grants of Incentive Stock Options and Nonstatutory Options...................5

        4.2    Option Exercise Price and Consideration......................................6

        4.3    Term of Options..............................................................7

        4.4    Exercise of Option...........................................................8

        4.5    Effect of Termination of Employment or Consulting Relationship...............8

        4.6    Effect of Termination on Account of Disability...............................9

        4.7    Effect of Termination on Account of Death....................................9

        4.8    Cancellation and New Grant of Options........................................9

5.      REPURCHASE RIGHTS AND RIGHTS OF FIRST REFUSAL.......................................9

        5.1    Company's Repurchase Rights..................................................9

6.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER...............................10

        6.1    Changes in Capitalization...................................................10
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        6.2    Merger or Asset Sale........................................................10

7.      DETERMINATION OF FAIR MARKET VALUE.................................................10

        7.1    Determination by Board......................................................11

        7.2    Common Stock Listed for Trading on Stock Exchange...........................11

        7.3    Common Stock Listed for Trading on the Over-the-Counter Market..............11

8.      COMPANY LOANS......................................................................11

        8.1    Discretion..................................................................11

        8.2    Terms.......................................................................11

9.      USE OF PROCEEDS....................................................................11

10.     WITHHOLDINGS.......................................................................12

11.     REGULATORY APPROVALS...............................................................12

        11.1   Securities Compliance.......................................................12

        11.2   Stock Legends...............................................................12

12.     AMENDMENT OF THE PLAN AND TERMINATION..............................................12

        12.1   Amendment and Termination...................................................12

        12.2   Effect of Amendment or Termination..........................................12

13.     NO CORPORATE OR BUSINESS IMPAIRMENT................................................12

14.     AGREEMENTS.........................................................................13
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