Exhibit 10.4




                                STOCK OPTION PLAN



Article

I.       Purposes of the Plan................................................1
II.      Number of Shares Subject to the Plan................................1
III.     Effective Date and Term of the Plan.................................2
IV.      Administration......................................................2
V.       Eligibility.........................................................4
VI.      Limitation on Exercise of Incentive Options.........................4
VII.     Options: Price and Payment..........................................5
VIII.    Use of Proceeds.....................................................6
IX.      Term of Options and Limitations on the Right of Exercise............6
X.       Exercise of Options.................................................7
XI.      Nontransferability of Options and Stock Appreciation Rights.........7
XII.     Termination of Directors, Employees and Independent Contractors.....7
XIII.    Adjustment of Shares; Effect of Certain Transactions...............10
XIV.     Right to Terminate Employees and Independent Contractors...........11
XV.      Purchase for Investment............................................11
XVI.     Issuance of Certificates; Legends; Payment of Expenses.............12
XVII.    Withholding Taxes..................................................12
XVIII.   Listing of Shares and Related Matters..............................13
XIX.     Amendment of the Plan..............................................13
XX.      Termination or Suspension of the Plan..............................14
XXI.     Governing Law......................................................14
XXII.    Partial Invalidity.................................................14


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                 TEXAS BORDER GAS COMPANY 2002 STOCK OPTION PLAN

                             I. PURPOSE OF THE PLAN

     1.01 TEXAS BORDER GAS COMPANY, a Delaware corporation ("Company"),  desires
     ----
to provide to certain of its directors,  employees and independent  contractors,
and the  directors,  employees and  independent  contractors  of any  subsidiary
corporation  or parent  corporation of the Company who are  responsible  for the
continued  growth of the  Company,  an  opportunity  to  acquire  a  proprietary
interest in the Company, and, therefore, to create in such directors,  employees
and independent contractors an increased interest in, and a greater concern for,
the welfare of the Company.

     The  Company,  by this TEXAS BORDER GAS COMPANY 2002 Stock Option Plan (the
"Plan"),  desires  to retain the  services  of  persons  now  serving in certain
capacities  and to secure the services of persons  capable of serving in similar
capacities.

     1.02 The stock  options  offered  pursuant  to the Plan  ("Options")  are a
     ----
matter  of  separate  inducement  and are not in lieu  of any  salary  or  other
compensation  for  the  services  of  any  director,   employee  or  independent
contractor.

     1.03  The  Options  are  intended  to be  either  incentive  stock  options
     ----
("Incentive Options") within the meaning of Section 422A of the Internal Revenue
Code  of  1986,  as  amended  ("Code"),  or  options  that  do not  satisfy  the
requirements for Incentive Options  ("Non-Qualified  Options"),  but the Company
makes no assurance,  warranty or guarantee as to the qualification of any Option
as an Incentive Option.

                    II. NUMBER OF SHARES SUBJECT TO THE PLAN

     2.01 The total number of shares of common stock of the Company which may be
     ----
purchased  pursuant  to  the  exercise  of  Options  shall  not  exceed,  in the
aggregate,  eight million  (8,000,000)  shares of the authorized common stock of
the Company ("Shares");  provided, however, in no event and at no time shall the
number of shares of common stock of the Company  issuable  upon  exercise of all
issued and outstanding  Options pursuant to the Plan or any similar plan adopted
by the Board of Directors of the Company ("Board of Directors"), exceed a number
of shares which is equal to twenty percent (20%) of the then outstanding  shares
of common stock of the Company.  For purposes of calculating that twenty percent
(20%),  convertible  preferred shares or convertible senior common shares of the
Company will be counted on an "as if converted" basis.

     2.02 Shares of common stock which may be acquired  pursuant to the Plan may
     ----
be either  authorized  but unissued  shares,  shares of issued stock held in the



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Company's  treasury,  or both, at the  discretion of the Company.  If and to the
extent that  Options  expire or terminate  without  having been  exercised,  new
Options  may be  granted  with  respect  to Shares  subject  to such  expired or
terminated Options; provided,  however, that the grant and the terms of such new
Options shall, in all respects, comply with the provisions of the Plan.

                    III. EFFECTIVE DATE AND TERM OF THE PLAN

     3.01 The Plan shall  become  effective  on the date  ("Effective  Date") on
     ----
which the Plan is adopted by the Board of Director;  provided,  however, that if
the Plan is not  approved by a vote of the  shareholders  of the Company  within
twelve (12) months after the Effective  Date,  the Plan and any Options  granted
shall terminate.

     3.02 The Company may, from time to time during the period  beginning on the
     ----
Effective  Date and ending on December  31,  2007  ("Termination  Date"),  grant
Options to persons eligible to participate in the Plan, pursuant to the terms of
the Plan.  Options granted prior to the Termination  Date may extend beyond that
date, in accordance with the terms of the agreements granting such options.

     3.03 As used in the Plan, the terms  "subsidiary  corporation"  and "parent
     ----
corporation"  shall have the meanings ascribed to such terms,  respectively,  in
Sections 425(f) and 425(e) of the Code.

     3.04 A director,  employee or  independent  contractor  to whom Options are
     ----
granted may be referred to herein as a "Participant."

                               IV. ADMINISTRATION

     4.01  The  Board  of  Directors   shall   designate  an  Option   Committee
     ----
("Committee")  which  shall  consist  of no fewer  than two (2) and no more than
three (3), each of whom shall be a "disinterested  person" within the meaning of
Rule 16b-3 (or any successor  rule or  regulation)  promulgated  pursuant to the
Securities  Exchange Act of 1934, as amended ("Exchange Act"), to administer the
Plan. A majority of the members of the Committee shall constitute a quorum,  and
the act of a majority  of the members of the  Committee  shall be the act of the
Committee. Any member of the Committee may be removed at any time either with or
without cause by resolution  adopted by the Board of Directors,  and any vacancy
on the Committee may at any time be filled by resolution adopted by the Board of
Directors.

     4.02 Any or all powers and functions of the Committee  may, at any time and
     ----
from time to time,  be exercised by the Board of Directors;  provided,  however,
that, with respect to the  participation  in the Plan by members of the Board of



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Directors,  such powers and  functions of the  Committee may be exercised by the
Board of  Directors  only if, at the time of such  exercise,  a majority  of the
members of the Board of  Directors,  as the case may be,  and a majority  of the
members  of the  Board  of  Directors  acting  in  the  particular  matter,  are
"disinterested  persons" within the meaning of Rule 16b-3 (or any successor rule
or  regulation)  promulgated  pursuant to the Exchange Act. Any reference in the
Plan to the  Committee  shall be deemed also to refer to the Board of Directors,
to the extent that the Board of  Directors is  exercising  any of the powers and
functions of the Committee.

     4.03 Subject to the express  provisions of the Plan,  the  Committee  shall
     ----
have the authority, in its discretion,

     (i)       to determine the directors, employees and independent contractors
               to whom  Options  shall be  granted,  the time when such  Options
               shall be granted,  the number of Shares which shall be subject to
               each Option;  the purchase  price or exercise price of each Share
               which shall be subject to each Option, the period(s) during which
               such Options shall be exercisable  (whether in whole or in part),
               and the other  terms and  provisions  of the  respective  Options
               (which are not required to be identical);

     (ii)      to construe  and  interpret  the  provisions  of the Plan and the
               Options;

     (iii)     to prescribe, amend and rescind rules and regulations relating to
               the Plan; and

     (iv)      to  make  all  other  determinations  appropriate,  necessary  or
               advisable for administering the Plan.

     4.04 Without  limiting the generality of the foregoing,  the Committee also
     ----
shall have the authority to require,  in its  discretion,  as a condition of the
granting of any Option,  that any Participant agree (i) not to sell or otherwise
dispose  of Shares  for a period of twelve  (12)  months  following  the date of
acquisition  of such  Shares  and  (ii)  that in the  event  of  termination  of
directorship,  employment,  term of any independent  contractor  relationship or
agreement,  or  term  of  any  consulting  relationship  or  agreement  of  such
Participant, other than as a result of dismissal without cause, such Participant
will not, for a period to be  determined at the time of the grant of the Option,
enter  into any  employment  or  participate,  directly  or  indirectly,  in any
business or enterprise  which is competitive with the business of the Company or
any subsidiary  corporation or parent corporation of the Company,  or enter into
any  employment  or  participate,  directly or  indirectly,  in any  business or
enterprise in which such person will be requested to utilize  special  knowledge
obtained  by  directorship,  employment,  or during the term of any  independent
contractor  relationship  or  agreement,  or during  the term of any  consulting



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relationship  or agreement  with the Company or any  subsidiary  corporation  or
parent corporation of the Company.

     The  determination  of the Committee on matters referred to in this Article
IV shall be  conclusive  and  obligate  all  Participants  and  their  permitted
successors.

     4.05 The Committee may employ such legal counsel, consultants and agents as
     ----
the Committee may deem desirable for the administration of the Plan and may rely
upon  any  opinion  received  from  any  such  counsel  or  consultant  and  any
computation received from any such consultant or agent. Expenses incurred by the
Committee in the  engagement of such counsel,  consultant or agent shall be paid
by the Company.  No member or former  member of the Committee or of the Board of
Directors  shall be liable  for any action or  determination  made in good faith
with respect to the Plan or any Option.

                                 V. ELIGIBILITY

     5.01 Options may be granted only to directors,  employees  and  independent
     ----
contractors  of  the  Company,  or  of  any  subsidiary  corporation  or  parent
corporation of the Company now existing or hereafter formed or acquired,  except
as  hereinafter  provided.  Any  person  who  shall  have  retired  from  active
employment  by the Company,  including any such person who may have entered into
an independent  contractor agreement with the Company, shall also be eligible to
have Options granted to such person.

                 VI. LIMITATION ON EXERCISE OF INCENTIVE OPTIONS

     6.01 Except as otherwise  provided pursuant to the Code, to the extent that
     ----
the  aggregate  fair  market  value of Shares  with  respect to which  Incentive
Options  are  exercisable  for  the  first  time  by  a  director,  employee  or
independent  contractor  during any calendar year (pursuant to all stock options
plans of the Company and any parent corporation or subsidiary corporation of the
Company) exceeds One Hundred Thousand Dollars ($100,000.00),  such Options shall
be treated as Non-Qualified  Options.  For purposes of this limitation,  (i) the
fair  market  value of  Shares  shall  be  determined  as of the  date  that the
underlying  Option is  granted,  and (ii) this  limitation  will be  applied  by
considering Options in the order in which those Options were granted.

                         VII. OPTIONS: PRICE AND PAYMENT

     7.01  The  purchase  price  for  each  Share  purchasable  pursuant  to any
     ----
Non-Qualified Option shall be such amount as the Committee shall determine to be
appropriate.





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     7.02  The  purchase  price  for  each  Share  purchasable  pursuant  to any
     ----
Incentive  Option  shall be such  amount  as the  Committee  shall,  in its best
judgment,  determine to be not less than one hundred  percent (100%) of the fair
market  value of that  Share on the  date  such  Incentive  Option  is  granted;
provided,  however,  that in the  event  of an  Incentive  Option  granted  to a
Participant  who, at the time such  Incentive  Option is granted,  owns  capital
stock of the Company or any subsidiary  corporation or parent corporation of the
Company  possessing  more than ten percent  (10%) of the total  combined  voting
power of all  classes  of  capital  stock of the  Company  or of any  subsidiary
corporation or parent  corporation,  the purchase prince for each Share shall be
such amount as the Committee  shall,  in its best judgment,  determine to be not
less than one hundred ten percent  (110%) of the fair market  value per Share at
the date such Option is granted.

     7.03 If the  Shares are listed on a  national  securities  exchange  in the
     ----
United  States  on any date on which  the fair  market  value per Share is to be
determined, the fair market value per Share shall be deemed to be the average of
the high and low  quotations  at which  such  Shares  are sold on such  national
securities  exchange  on such  date.  If the  Shares  are  listed on a  national
securities exchange in the United States of America on such date, but the Shares
are not traded on such date,  or such national  securities  exchange is not open
for business on such date,  the fair market value per Share shall be  determined
as of the closest preceding date on which such exchange shall have been open for
business and the Shares were  traded.  If the Shares are listed on more than one
national  securities  exchange  in the United  States of America on the date any
such Option is granted,  the Committee shall determine which national securities
exchange shall be used for the purpose of determining  the fair market value per
Share.

     7.04 If a public market exists for the Shares on any date on which the fair
     ----
market value per Share is to be  determined,  but the Shares are not listed on a
national  securities  exchange in the United States of America,  the fair market
value  per  Share  shall  be  deemed  to be the  closing  bid  quotation  in the
over-the-counter  market  for the  Shares  on such  date.  If  there  are no bid
quotations for the Shares on such date, the fair market value per Share shall be
deemed to be the closing bid  quotation in the  over-the-counter  market for the
Shares on the  closest  date  preceding  such date for which such  quotation  is
available.

     7.05 If no public  market  exists  for the  Shares on any date on which the
     ----
fair market value per Share is to be  determined,  the Committee  shall,  in its
sole  discretion and best judgment,  determine the fair market value of a Share.
For purposes of the Plan, the  determination by the Committee of the fair market
value of a Share shall be  conclusive  and obligate all  Participants  and their
permitted successors.





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     7.06 Upon the exercise of an Option,  the Company shall cause the purchased
     ----
Shares to be issued  only when the  Company  shall  have  received  the full and
complete purchase price for the Shares in cash or by certified check;  provided,
however, that in lieu of cash or certified check, the Participant may (if and to
the extent the terms of the Option,  as specified by the Committee,  in its sole
discretion, so provide, and to the extent permitted by applicable law), exercise
an Option in whole or in part, by  delivering to the Company a promissory  note,
in form  acceptable to the  Committee,  or otherwise pay the exercise  price for
such Shares,  in whole or in part, by  compensation  for services  rendered (the
fair value of such services  having been determined by the Board of Directors or
the Committee).

                              VIII. USE OF PROCEEDS

     8.01 The cash proceeds of the sale of Shares are to be added to the general
     ----
funds of the Company and used for the Company's  general  corporate  purposes as
the Board of Directors shall determine.

                       IX. TERM OF OPTIONS AND LIMITATIONS
                            ON THE RIGHT OF EXERCISE

     9.01 Any Option  shall be  exercisable  at such times,  in such amounts and
     ----
during such period or periods as the  Committee  shall  determine at the date of
the grant of such Option; provided,  however, that an Incentive Option shall not
be  exercisable  after  the  expiration  of five (5)  years  from the date  such
Incentive Option is granted; and provided,  further, however, that, in the event
that an Incentive  Option granted to a Participant  who, at the time such Option
is granted,  owns stock of the Company possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or of any
subsidiary  corporation  or parent  corporation  of the Company,  such Incentive
Option shall not be exercisable after the expiration of three (3) years from the
date such Incentive Option is granted.

     9.02 Subject to the  provisions  of Article XX of the Plan,  the  Committee
     ----
shall  have the  right to  accelerate,  in whole or in part,  from time to time,
conditionally or unconditionally, rights to exercise any Option.

     9.03 To the  extent  that an Option is not  exercised  within the period of
     ----
exerciseability  specified  herein,  such  Option  shall  expire  as to the then
unexercised part. In no event shall an Option be exercisable for a fraction of a
Share.







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                             X. EXERCISE OF OPTIONS

     10.01 Any Option shall be exercised by a Participant holding such Option as
     -----
to all or part of the  Shares  contemplated  by such  Option by  giving  written
notice  of such  exercise  to the  Secretary  of the  Company  at the  principal
business office of the Company,  specifying the number of Shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given,  for the payment of the purchase  price and for delivery of the
Shares being  purchased.  Subject to the terms of Articles XV, XVII and XVIII of
the Plan, the Company shall cause certificates for the Shares so purchased to be
delivered to such  Participant at the principal  business office of the Company,
in exchange for payment of the full and complete purchase price, as specified in
Section 7.06 of the Plan, on the date specified in the notice of exercise.

                        XI. NONTRANSFERABILITY OF OPTIONS
                          AND STOCK APPRECIATION RIGHTS

     11.01 No Option  shall be  transferable,  whether  by  operation  of law or
     -----
otherwise,  other than by Will or the laws of  descent  and  distribution.  Each
Option shall be exercisable,  during the lifetime of a Participant, only by such
Participant.

                    XII. TERMINATION OF DIRECTORS, EMPLOYEES
                           AND INDEPENDENT CONTRACTORS

     12.01  Upon  termination  of  the  directorship,  employment,  term  of any
     -----
independent  contractor  relationship  or agreement,  or term of any  consulting
relationship or agreement of any Participant  with the Company or any subsidiary
corporation  or parent  corporation  of the  Company now  existing or  hereafter
formed or acquired, and unless specified to the contrary in the respective Stock
Option Agreement to which the Company and such Participant are parties and which
relates to such  Option,  any  Option  previously  granted to such  Participant,
shall,  to the extent not theretofore  exercised,  terminate and become null and
void, provided that:

     (a)  if such  Participant  shall die while serving as a director,  while in
          the employ of the  Company or such  subsidiary  corporation  or patent
          corporation,   during   the   term  of  any   independent   contractor
          relationship  or  agreement,  or  during  the  term of any  consulting
          relationship  or agreement or during either the three (3) month or one
          (1) year  period,  whichever  is  applicable,  specified in clause (b)
          below and at a time when such  Participant was entitled to exercise an
          Option as  specified  in the Plan,  the legal  representative  of such
          Participant,  or such  person who  acquired  such Option by bequest or
          inheritance  or by reason of the death of such  Participant,  may, not
          later  than one (1) year  from the date of death of such  Participant,
          exercise such Option,  to the extent not theretofore  exercised,  with


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          respect  of any or all of such  number of Shares as  specified  by the
          Committee in such Option; and

     (b)  if the directorship,  employment,  term of any independent  contractor
          relationship or agreement,  or term of any consulting  relationship or
          agreement  with any  Participant  to whom such Option  shall have been
          granted shall terminate by reason of the Participant's  retirement (at
          such  age or  upon  such  conditions  as  shall  be  specified  by the
          Committee),  disability (as described in Section 22(e)(3) of the Code)
          or dismissal by the Company or any  subsidiary  corporation  or parent
          corporation  of the  Company  now  existing  or  hereafter  formed  or
          acquired  other  than for cause (as  defined  below),  and while  such
          Participant is entitled to exercise such Option,  as herein  provided,
          such Participant  shall have the right to exercise such Option, to the
          extent not  theretofore  exercised,  for any or all of such  number of
          Shares as specified by the Committee in such Option, at any time up to
          and including (i) three (3) months after the date of such  termination
          of  directorship,  employment,  term  of  any  independent  contractor
          relationship or agreement,  or term of any consulting  relationship or
          agreement  in the  event  of  termination  because  of  retirement  or
          dismissal other than for cause and (ii) one (1) year after the date of
          termination  of  directorship,  employment,  term  of any  independent
          contractor  relationship  or  agreement,  or  term  of any  consulting
          relationship  or  agreement  in the event of  termination  because  of
          disability.

     In no event,  however,  shall any person be entitled to exercise any Option
after the expiration of the period of  exerciseability  of such Option specified
in the agreement granting such Option.

     12.02 If a  Participant  voluntarily  terminates  his or her  directorship,
     -----
employment,  term of any independent  contractor  relationship or agreement,  or
term of any consulting  relationship  or agreement,  or is discharged for cause,
unless  specified to the contrary in the  agreement  granting  such option,  any
Option  shall  forthwith  terminate  with  respect  to any  unexercised  portion
thereof.

     12.03 If an Option  shall be  exercised  by the legal  representative  of a
     -----
deceased  Participant,  or by a person  who  acquired  an Option by  bequest  or
inheritance or because of the death of any  Participant,  written notice of such
exercise shall be accompanied  by a certified  copy of letters  testamentary  or
equivalent evidence of the right of such legal representative or other person to
exercise such Option.

     12.04 For the purposes of the Plan,  the term "for cause" shall mean and be
     -----
defined as (i) with respect to an employee who is a party to a written agreement



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with, or,  alternatively,  participates in a compensation or benefit plan of the
Company or a subsidiary  corporation  or parent  corporation  of the Company now
existing or hereafter  formed or acquired,  which  agreement or plan specifies a
definition of "for cause" or "cause" (or words of similar  meaning) for purposes
of termination of employment  pursuant thereto by the Company or such subsidiary
corporation  or parent  corporation  of the  Company,  "for cause" or "cause" as
defined in the most recent of such  agreements or plans;  or (ii) a party to any
independent contractor  relationship or agreement or any consulting relationship
or  agreement,  whether oral or written;  or (iii) in all other  situations,  as
determined by the Board of Directors,  in its sole  discretion,  (a) the willful
commission by an employee or  independent  contractor of a criminal or other act
that causes or probably will cause substantial economic damage to the Company or
any  such  subsidiary  corporation  or  parent  corporation  of the  Company  or
substantial injury or damage to the business or reputation of the Company or any
such  subsidiary  corporation  or parent  corporation  of the  Company;  (b) the
commission  by an employee or  independent  contractor of an act of fraud in the
performance  of such  employee's  duties on behalf  of the  Company  or any such
subsidiary  corporation or parent corporation of the Company; (c) the continuing
willful  failure of an employee or independent  contractor to perform the duties
of such employee or independent contractor to the Company or any such subsidiary
corporation  or parent  corporation  of the  Company  (other  than such  failure
resulting from such employee's or independent contractor's incapacity because of
physical  or mental  illness)  after  written  notice  thereof  (specifying  the
particulars  thereof in reasonable  detail) and a reasonable  opportunity  to be
heard and cure such failure are given to such employee or independent contractor
by the Board of Directors; or (d) the order of a court of competent jurisdiction
requiring  the  termination  of  such  employee's  employment,  or  term  of any
independent  contractor  relationship  or agreement,  or term of any  consulting
relationship or agreement.  For purposes of the Plan, no act, or failure to act,
on  such  employee's  or  independent  contractor's  part  shall  be  considered
"willful" unless done or not done by such employee or independent contractor not
in good faith and without  reasonable belief that such employee's or independent
contractor's  action or omission  was in the best  interests of the Company or a
subsidiary  corporation  or parent  corporation  of the Company now  existing or
hereafter formed or acquired.

     12.05 For the purposes of the Plan,  an  employment  relationship  shall be
     -----
deemed  to  exist  between  a  person  and the  Company  if,  at the time of the
determination,  such person was an  "employee"  of the  Company for  purposes of
Section  422A(a) of the Code.  If a person is on  maternity,  military,  or sick
leave or other bona fide leave of absence,  such person shall be  considered  an
"employee"  for  purposes of the  exercise of an Option and shall be entitled to
exercise such Option  during such leave of absence,  if the period of such leave
of absence does not exceed  ninety (90) days,  or, if longer,  if such  person's
right to  reemployment  with the Company is  guaranteed  either by statute or by
contract.  If the  period of leave  exceeds  ninety  (90) days,  the  employment




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relationship  shall be deemed to have terminated on the ninety-first  (91st) day
of such  leave  of  absence,  unless  such  person's  right to  reemployment  is
guaranteed by statute or contract.

     12.06 An employee or independent  contractor shall not be deemed terminated
     -----
by reason of (i) the transfer of a Participant  from the Company to a subsidiary
corporation  or a parent  corporation  of the Company now  existing or hereafter
formed or  acquired  or (ii) the  transfer of a  Participant  from a  subsidiary
corporation  or a parent  corporation  of the Company now  existing or hereafter
formed or acquired by the Company or by another subsidiary corporation or parent
corporation of the Company.











































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           XIII. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS

     13.01 In the event of any change in the issued  and  outstanding  shares of
     -----
the Company's common stock as a result of merger, consolidation, reorganization,
recapitalization,  stock dividend, stock split, split-up,  split-off,  spin-off,
combination or exchange of shares,  or other similar change in capital structure
of the  Company,  an  adjustment  shall be made to each  issued and  outstanding
Option  such  that  such  Option  shall   thereafter  be  exercisable  for  such
securities, cash or other property as would have been received in respect of the
Shares subject to such Option had such Option been exercised in full immediately
prior to such change,  and such an adjustment  shall be made  successively  each
time any such change shall occur.  The term "Shares" after any such change shall
refer to the  securities,  cash or property then  receivable upon exercise of an
Option. In addition,  in the event of any such change,  the Committee shall make
any additional  adjustment as may be appropriate to accommodate  the (i) maximum
number of Shares subject to the Plan; (ii) maximum number of Shares, if any, for
which Options may be granted to any one employee or independent contractor;  and
(iii)  number of Shares and price per Share  subject  to issued and  outstanding
Options as shall be  appropriate  to prevent any reduction or increase of rights
pursuant to such  Options,  and the  determination  of the Committee as to these
matters shall be conclusive and obligate all Participants.  Notwithstanding  the
foregoing,  (i) each such adjustment  with respect to an Incentive  Option shall
comply  with the  rules of  Section  425(a)  of the  Code,  and (ii)  each  such
adjustment shall comply with the rules of Section 422A of the Code.

     13.02 For purposes of the Plan, a "change in control" of the Company occurs
     -----
if (a) any "person" (defined as such term is used in Sections 13(d) and 14(d)(2)
of the  Exchange  Act,  as  amended);  other than a current  shareholder,  is or
becomes the  beneficial  owner,  directly or  indirectly,  of  securities of the
Company  representing  ten percent (10%) or more of the combined voting power of
the Company's  issued and  outstanding  securities then entitled to vote for the
election of directors;  or (b) during any period of two (2)  consecutive  years,
persons  who at the  beginning  of such  period  are  members  of the  Board  of
Directors  cease,  for any reason,  to be, at least,  a majority of the Board of
Directors;  or (c) the  Board  of  Directors  shall  approve  the sale of all or
substantially  all of the assets of the  Company or any  merger,  consolidation,
issuance of securities  or purchase of assets,  the result of which would be the
occurrence of any event described in clause (a) or (b) of this section.

     13.03 In the event of a change in control of the Company  (defined  above),
     -----
the Committee, in its discretion,  may determine that all of the then issued and
outstanding Options shall immediately become exercisable.







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<PAGE>




                        XIV. RIGHT TO TERMINATE EMPLOYEES
                           AND INDEPENDENT CONTRACTORS

     14.01 The Plan  shall not impose any  obligation  on the  Company or on any
     -----
subsidiary  corporation  or parent  corporation  of the Company now  existing or
hereafter  formed to continue  the  retention of any  Participant;  and the Plan
shall not impose any  obligation on any  Participant  to remain in the employ or
other  service of the Company or of any such  subsidiary  corporation  or parent
corporation.

                           XV. PURCHASE FOR INVESTMENT

     15.01 Except as provided  otherwise in the Plan,  each  Participant  shall,
     -----
upon any  exercise  of an Option,  execute  and deliver to the Company a written
statement,  in form  satisfactory  to the  Company,  in which  such  Participant
represents  and warrants  that such  Participant  is purchasing or acquiring the
Shares  acquired  pursuant  thereto  for such  Participant's  own  account,  for
investment  only and not with an intention of the resale or  distribution of the
Shares,  and agrees that any subsequent offer for sale, sale, or distribution of
any of such  Shares  shall be made only  pursuant  to either (a) a  Registration
Statement on an  appropriate  form  pursuant to the  Securities  Act of 1933, as
amended  ("Securities  Act"), which Registration  Statement has become effective
and is  current  with  regard to the  Shares  being  offered  or sold,  or (b) a
specific exemption from the registration and prospectus delivery requirements of
the Securities Act, but in claiming such exemption,  such Participant  shall, if
so requested by the Company, prior to any offer for sale or sale of such Shares,
obtain a prior favorable written opinion, in form and substance  satisfactory to
the Company and its counsel,  from counsel for or approved by the Company, as to
the applicability of such exemption.  The foregoing  restriction shall not apply
to (i)  issuances  of Shares by the  Company,  if the  Shares  being  issued are
registered pursuant to the Securities Act and a prospectus in respect thereof is
current and delivered or (ii) reofferings of Shares by affiliates of the Company
(as defined in Rule 405 or any successor rule or regulation promulgated pursuant
to the Securities Act), if the Shares being reoffered are registered pursuant to
the Securities Act and a prospectus in respect thereof is current and delivered.

           XVI. ISSUANCE OF CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES

     16.01 Upon any  exercise  of an Option and  payment of the  exercise  price
     -----
therefor,  a certificate or certificates  for the Shares as to which such Option
has been  exercised  shall be issued by the  Company or the  Company's  transfer
agent in the name of the person exercising such Option and shall be delivered to
or upon the order of such person.

     16.02  The  Company  may  cause  to  be  imprinted  upon  the  certificates
     -----
evidencing and representing Shares issued upon exercise of an Option such legend



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<PAGE>




or legends  and may issue such "stop  transfer"  instructions  to the  Company's
transfer  agent in respect of such Shares as, in the  discretion of the Board of
Directors,  the Company determines to be necessary or appropriate to (i) prevent
a violation of, or to perfect an exemption from, the registration and prospectus
delivery  requirements  of the Securities  Act, (ii) implement the provisions of
the Plan and any  agreement  granting  Options,  or (iii)  permit the Company to
determine the occurrence of a disqualifying  disposition,  within the meaning of
Section 421(b) of the Code, of Shares  transferred upon exercise of an Incentive
Option.

     16.03 The Company shall pay all issue or transfer taxes with respect to the
     -----
issuance or transfer of Shares and all fees and expenses incurred by the Company
in connection  with such issuance or transfer.  All Shares issued shall be fully
paid and non-assessable to the extent permitted by law.

                             XVII. WITHHOLDING TAXES

     17.01 The  Company  may  require  an  employee  or  independent  contractor
     -----
exercising a Non-Qualified  Option or disposing of Shares  acquired  pursuant to
the exercise of an Incentive Option in a disqualifying  disposition  (within the
meaning of Section  421(b) of the Code),  to reimburse the Company for any taxes
required by any  government  agency or  authority  to be  withheld or  otherwise
deducted and paid by the Company  regarding the issuance or  disposition of such
Shares. In lieu thereof, the Company shall have the right to withhold the amount
of such taxes from any other  amounts  due or to become due from the  Company to
such employee or  independent  contractor  upon such terms and conditions as the
Committee shall  prescribe.  The Company may, in its sole  discretion,  hold the
stock  certificate to which such employee or independent  contractor is entitled
upon the exercise of an Option as security  for the payment of such  withholding
tax liability, until cash sufficient to pay that liability has been accumulated.

                  XVIII. LISTING OF SHARES AND RELATED MATTERS

     18.01 If,  at any time,  the Board of  Directors  shall  determine,  in its
     -----
discretion,  that the listing,  registration or qualification of the Shares upon
any national securities exchange or pursuant to any state or federal law, or the
consent or approval of any  governmental  regulatory  agency,  is  necessary  or
desirable  as a condition  of, or in  connection  with,  the sale or purchase of
Shares,  no Shares shall be issued unless and until such listing,  registration,
qualification,  consent or approval  shall have been  effected or  obtained,  or
otherwise  provided for, free of any  conditions  not acceptable to the Board of
Directors.






                                       13
<PAGE>




                           XIX. AMENDMENT OF THE PLAN

     19.01 The Board of Directors or the Committee may, from time to time, amend
     -----
the Plan, provided that,  notwithstanding  anything to the contrary in the Plan,
no  amendment  shall be made,  without the approval of the  shareholders  of the
Company,  that will (i)  increase  the total  number of shares of the  Company's
common stock  reserved  for Options  (other than an increase  resulting  from an
adjustment  provided for in Article XIII), (ii) reduce the exercise price of any
Incentive Option to an amount less than the price required by Article VII, (iii)
modify the provisions of the Plan relating to  eligibility,  or (iv)  materially
increase the benefits  accruing to Participants  pursuant to the Plan. The Board
of  Directors or the  Committee  shall be  authorized  to amend the Plan and the
Options to permit the Incentive  Options to qualify as "incentive stock options"
within  the  meaning  of Section  422A of the Code.  The rights and  obligations
pursuant to any Option granted before  amendment of the Plan or any  unexercised
portion of such Option shall not be adversely  affected by amendment of the Plan
or such Option without the consent of the holder of such Option.

                    XX. TERMINATION OR SUSPENSION OF THE PLAN

     20.01 The Board of Directors or the Committee  may, at any time and for any
     -----
or no reason,  suspend or terminate the Plan. The Plan, unless sooner terminated
pursuant  to  Article  III of the Plan or by action  of the Board of  Directors,
shall terminate at the close of business on the Termination  Date. An Option may
not be  granted  while the Plan is  suspended  or after the Plan is  terminated.
Options  granted while the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan,  except upon the consent of the person to
whom the Option was granted.  The power of the Committee  pursuant to Article IV
to construe and  administer  any Options  granted  prior to the  termination  or
suspension  of the Plan shall  continue  after such  termination  or during such
suspension.

                               XXI. GOVERNING LAW

     21.01 The Plan,  the Options and all related  matters shall be governed by,
     -----
and  construed  and  enforced  in  accordance  with,  the  laws of the  State of
Delaware, as from time to time amended.

                            XXII. PARTIAL INVALIDITY

     22.01 The  invalidity  or illegality of any provision of the Plan shall not
     -----
be deemed to affect the validity of any other provision of the Plan.



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