EXHIBIT 4.1

                                PERFORMANT, INC.
                     2000 STOCK OPTION/RESTRICTED STOCK PLAN




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                                    CONTENTS

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1.  Introduction. . . . . . . . . . . . . . . . . . . . . . .    1
2.  Definitions . . . . . . . . . . . . . . . . . . . . . . .    1
3.  Administration. . . . . . . . . . . . . . . . . . . . . .    5
    (a)  Committee Composition. . . . . . . . . . . . . . . .    5
    (b)  Authority of the Committee . . . . . . . . . . . . .    5
    (c)  Indemnification. . . . . . . . . . . . . . . . . . .    6
    (d)  Financial Reports. . . . . . . . . . . . . . . . . .    6
4.  Eligibility . . . . . . . . . . . . . . . . . . . . . . .    6
    (a)  General Rules. . . . . . . . . . . . . . . . . . . .    6
    (b)  Incentive Stock Options. . . . . . . . . . . . . . .    7
5.  Shares Subject To Plan. . . . . . . . . . . . . . . . . .    7
    (a)  Basic Limitation . . . . . . . . . . . . . . . . . .    7
    (b)  Additional Shares. . . . . . . . . . . . . . . . . .    7
    (c)  Dividend Equivalents . . . . . . . . . . . . . . . .    7
6.  Terms and conditions of options . . . . . . . . . . . . .    7
    (a)  Stock Option Agreement . . . . . . . . . . . . . . .    7
    (b)  Number of Shares . . . . . . . . . . . . . . . . . .    8
    (c)  Exercise Price . . . . . . . . . . . . . . . . . . .    8
    (d)  Exercisability and Term. . . . . . . . . . . . . . .    8
    (e)  Modifications or Assumption of Options . . . . . . .    9
    (f)  Transferability of Options . . . . . . . . . . . . .    9
    (g)  No Rights as a Stockholder . . . . . . . . . . . . .    9
    (h)  Restrictions on Transfer . . . . . . . . . . . . . .    9
7.  Payment For Option Shares . . . . . . . . . . . . . . . .   10
    (a)  General Rule . . . . . . . . . . . . . . . . . . . .   10
    (b)  Surrender of Stock . . . . . . . . . . . . . . . . .   10
    (c)  Promissory Note. . . . . . . . . . . . . . . . . . .   10
    (d)  Other Forms of Payment . . . . . . . . . . . . . . .   10
8.  Terms And Conditions For Awards Of Restricted Stock . . .   10
    (a)  Time, Amount and Form of Awards. . . . . . . . . . .   10
    (b)  Restricted Stock Agreement . . . . . . . . . . . . .   11
    (c)  Payment for Restricted Stocks. . . . . . . . . . . .   11
    (d)  Vesting Conditions . . . . . . . . . . . . . . . . .   11
    (e)  Assignment or Transfer of Restricted Stocks. . . . .   11
    (f)  Trusts . . . . . . . . . . . . . . . . . . . . . . .   11
    (g)  Voting and Dividend Rights . . . . . . . . . . . . .   12
9.  Protection Against Dilution . . . . . . . . . . . . . . .   12
    (a)  Adjustments. . . . . . . . . . . . . . . . . . . . .   12


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    (b)  Participant Rights . . . . . . . . . . . . . . . . .   12
10. Effect Of A Change In Control . . . . . . . . . . . . . .   13
    (a)  Merger or Reorganization . . . . . . . . . . . . . .   13
    (b)  Acceleration . . . . . . . . . . . . . . . . . . . .   13
11. Limitations On Rights . . . . . . . . . . . . . . . . . .   13
    (a)  Retention Rights . . . . . . . . . . . . . . . . . .   13
    (b)  Stockholders' Rights . . . . . . . . . . . . . . . .   13
    (c)  Regulatory Requirements. . . . . . . . . . . . . . .   13
12. Withholding Taxes . . . . . . . . . . . . . . . . . . . .   14
    (a)  General. . . . . . . . . . . . . . . . . . . . . . .   14
    (b)  Share Withholding. . . . . . . . . . . . . . . . . .   14
13. Duration And Amendments . . . . . . . . . . . . . . . . .   14
    (a)  Term of the Plan . . . . . . . . . . . . . . . . . .   14
    (b)  Right to Amend or Terminate the Plan . . . . . . . .   14
14. Execution . . . . . . . . . . . . . . . . . . . . . . . .   15
15. Plan Adoption and Amendments/Adjustments Summary Page
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                                PERFORMANT, INC.

                     2000 STOCK OPTION/RESTRICTED STOCK PLAN

                        EFFECTIVE AS OF OCTOBER 30, 2000

1.   INTRODUCTION

     The Company's Board of Directors adopted the Performant, Inc. 2000 Stock
Option/Restricted Stock Plan on August 15, 2000, subject to approval by the
Company's stockholders.

     The purpose of the Plan is to promote the long-term success of the Company
and the creation of shareholder value by offering Key Employees an opportunity
to acquire a proprietary interest in the success of the Company, or to increase
such interest, and to encourage such selected persons to continue to provide
services to the Company and to attract new individuals with outstanding
qualifications.

     The Plan seeks to achieve this purpose by providing for Options (which may
constitute Incentive Stock Options or Nonstatutory Stock Options) and Awards of
Restricted Stock.

     The Plan shall be governed by, and construed in accordance with, the laws
of the State of Washington (except its choice-of-law provisions). Capitalized
terms shall have the meaning provided in Section 2 unless otherwise provided in
this Plan or Stock Option Agreement or Restricted Stock Agreement.

2.   DEFINITIONS

     (a)     "AFFILIATE" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.
For purposes of determining an individual's "Service," this definition shall
include any entity other than a Subsidiary, if the Company, a Parent and/or one
or more Subsidiaries own not less than 50% of such entity.

     (b)     "AWARD" means any award of an Option or Restricted Stock under the
Plan.


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     (c)     "BOARD" means the Board of Directors of the Company, as constituted
from time to time.

     (d)     "CHANGE IN CONTROL" except as may otherwise be provided in the
Stock Option Agreement, means:

     Any merger or consolidation of the Company into or with another corporation
or other entity, or the sale, transfer or other disposition of all or
substantially all of the assets or capital stock of the Company, or any
reorganization, recapitalization or like transaction or series of related
transactions having substantially equivalent effect and purpose, at the
conclusion of which such merger, consolidation, sale, transfer, disposition,
reorganization, recapitalization or like transaction the holders of the capital
stock of the Company entitled to vote for the election of directors or similar
governing body immediately prior to such transaction or series of related
transactions own less than a majority of the capital stock entitled to vote for
the election of directors or similar governing body of the acquiring entity or
entity surviving or resulting from such transaction or series of related
transactions immediately thereafter; provided that a merger effected exclusively
for the purpose of changing the domicile of the Company shall not be deemed to
constitute a "Change in Control".

     (e)     "CODE" means the Internal Revenue Code of 1986, as amended.

     (f)     "COMMITTEE" means a committee consisting of one or more members of
the Board that is appointed by the Board (as described in Section 3) to
administer the Plan.

     (g)     "COMMON STOCK" means the Company's common stock.

     (h)     "COMPANY" means Performant, Inc., a Delaware corporation.

     (i)     "CONSULTANT" means an individual who performs bona fide services to
the Company, a Parent, a Subsidiary or an Affiliate other than as an Employee or
Director or Non-Employee Director.

     (j)     "DIRECTOR" means a member of the Board who is also an Employee.

     (k)     "DISABILITY" means that the Key Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.


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     (l)     "EMPLOYEE" means any individual who is a common-law employee of the
Company, a Parent, a Subsidiary or an Affiliate.

     (m)     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

     (n)     "EXERCISE PRICE" means the amount for which a Share may be
purchased upon exercise of such Option, as specified in the applicable Stock
Option Agreement.

     (o)     "FAIR MARKET VALUE" means the market price of Shares, determined by
the Committee as follows:

         (i)   If the Shares were traded over-the-counter on the date in
               question but were not classified as a national market issue, then
               the Fair Market Value shall be equal to the mean between the last
               reported representative bid and asked prices quoted by the NASDAQ
               system for such date;

         (ii)  If the Shares were traded over-the-counter on the date in
               question and were classified as a national market issue, then the
               Fair Market Value shall be equal to the last-transaction price
               quoted by the NASDAQ system for such date;

         (iii) If the Shares were traded on a stock exchange on the date in
               question, then the Fair Market Value shall be equal to the
               closing price reported by the applicable composite transactions
               report for such date; and

         (iv)  If none of the foregoing provisions is applicable, then the Fair
               Market Value shall be determined by the Committee in good faith
               on such basis as it deems appropriate.

     Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Wall Street Journal.  Such
determination shall be conclusive and binding on all persons.

     (p)     "GRANT" means any grant of an Option under the Plan.

     (q)     "INCENTIVE STOCK OPTION" or "ISO" means an incentive stock option
described in Code section 422(b).


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     (r)     "KEY EMPLOYEE" means an Employee, Director, Non-Employee Director
or Consultant who has been selected by the Committee to receive an Award under
the Plan.

     (s)     "NON-EMPLOYEE DIRECTOR" means a member of the Board who is not an
Employee.

     (t)     "NONSTATUTORY STOCK OPTION" or "NSO" means a stock option that is
not an ISO.

     (u)     "OPTION" means an ISO or NSO granted under the Plan entitling the
Optionee to purchase Shares.

     (v)     "OPTIONEE" means an individual, estate or other entity that holds
an Option.

     (w)     "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a
Parent on a date after the adoption of the Plan shall be considered a Parent
commencing as of such date.

     (x)     "PARTICIPANT" means an individual or estate or other entity that
holds an Award.

     (y)     "PLAN" means this Performant Inc.  2000 Stock Option/Restricted
Stock Plan as it may be amended from time to time.

     (z)     "RESTRICTED STOCK" means a Share awarded under the Plan.

     (aa)    "RESTRICTED STOCK AGREEMENT" means the agreement described in
Section 8 evidencing each Award of Restricted Stock.

     (bb)    "SECURITIES ACT" means the Securities Act of 1933, as amended.

     (cc)    "SERVICE" means service as an Employee, Director, Non-Employee
Director or Consultant.

     (dd)    "SHARE" means one share of Common Stock.

     (ee)    "STOCK OPTION AGREEMENT" means the agreement described in Section 6
evidencing each Grant of an Option.


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     (ff)    "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.  A corporation
that attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.

     (gg)    "10-PERCENT SHAREHOLDER" means an individual who owns more than
ten percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, its Parent or any of its subsidiaries.  In
determining stock ownership, the attribution rules of Section 424(d) of the Code
shall be applied.

3.   ADMINISTRATION

     (a)  COMMITTEE COMPOSITION

          A Committee appointed by the Board shall administer the Plan.  The
Board shall designate one of the members of the Committee as chairperson. If no
Committee has been approved, the entire Board shall constitute the Committee.
Members of the Committee shall serve for such period of time as the Board may
determine and shall be subject to removal by the Board at any time. The Board
may also at any time terminate the functions of the Committee and reassume all
powers and authority previously delegated to the Committee.

          Effective with the Company's initial public offering, the Committee
shall consist either (i) of those individuals who shall satisfy the requirements
of Rule 16b-3 (or its successor) under the Exchange Act with respect to Options
to persons who are officers or directors of the Company under Section 16 of the
Exchange Act or (ii) of the Board itself.

          The Board may also appoint one or more separate committees of the
Board, each composed of one or more directors of the Company who need not
qualify under Rule 16b-3, who may administer the Plan with respect to Key
Employees who are not considered officers or directors of the Company under
Section 16 of the Exchange Act, may grant Awards under the Plan to such Key
Employees and may determine all terms of such Awards.


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     (b)  AUTHORITY OF THE COMMITTEE

          Subject to the provisions of the Plan, the Committee shall have full
authority and discretion to take any actions it deems necessary or advisable for
the administration of the Plan.  Such actions shall include:

          (i)  selecting Key Employees who are to receive Awards under the Plan;

          (ii) determining the type, number, vesting requirements and other
               features and conditions of such Awards;

         (iii) interpreting the Plan; and

          (iv) making all other decisions relating to the operation of the Plan.

     The Committee may adopt such rules or guidelines, as it deems appropriate
to implement the Plan.  The Committee's determinations under the Plan shall be
final and binding on all persons.

     (c)  INDEMNIFICATION

          Each member of the Committee, or of the Board, shall be indemnified
and held harmless by the Company against and from (i) any loss, cost, liability,
or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action taken or failure to act under the Plan or any Stock Option
Agreement or any Restricted Stock Agreement, and (ii) from any and all amounts
paid by him or her in settlement thereof, with the Company's approval, or paid
by him or her in satisfaction of any judgment in any such claim, action, suit,
or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under
any power that the Company may have to indemnify them or hold them harmless.


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     (d)  FINANCIAL REPORTS

          To the extent required by applicable law, the Company shall furnish to
Participants the Company's summary financial information including a balance
sheet regarding the Company's financial condition and results of operations,
unless such Participants have duties with the Company that assure them access to
equivalent information. Such financial statements need not be audited.

4.   ELIGIBILITY

     (a)  GENERAL RULES

          Only Employees, Directors, Non-Employee Directors and Consultants
shall be eligible for designation as Key Employees by the Committee.

     (b)  INCENTIVE STOCK OPTIONS

          Only Key Employees who are common-law employees of the Company, a
Parent or a Subsidiary shall be eligible for the grant of ISOs. In addition, a
Key Employee who is a 10-Percent Shareholder shall not be eligible for the grant
of an ISO unless the requirements set forth in Section 422(c)(5) of the Code are
satisfied.

5.   SHARES SUBJECT TO PLAN

     (a)  BASIC LIMITATION

          The stock issuable under the Plan shall be authorized but unissued
Shares or treasury Shares. The aggregate number of Shares reserved for Awards
under the Plan shall not exceed 3,456,000 Shares on a fully diluted basis,
subject to adjustment pursuant to Section 9.

     (b)  ADDITIONAL SHARES

          If Awards are forfeited or terminate for any other reason before being
exercised, then the Shares underlying such Awards shall again become available
for Awards under the Plan.

     (c)  DIVIDEND EQUIVALENTS

          Any dividend equivalents distributed under the Plan shall not be
applied against the number of Shares available for Awards.


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6.   TERMS AND CONDITIONS OF OPTIONS

     (a)  STOCK OPTION AGREEMENT

          Each Grant under the Plan shall be evidenced by a Stock Option
Agreement between the Optionee and the Company. Such Option shall be subject to
all applicable terms and conditions of the Plan and may be subject to any other
terms and conditions that are not inconsistent with the Plan and that the
Committee deems appropriate for inclusion in a Stock Option Agreement. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. A Stock Option Agreement may provide that new Options
will be granted automatically to the Optionee when he or she exercises the prior
Options. The Stock Option Agreement shall also specify whether the Option is an
ISO or an NSO.

     (b)  NUMBER OF SHARES

          Each Stock Option Agreement shall specify the number of Shares that
are subject to the Option and shall provide for the adjustment of such number in
accordance with Section 9.

     (c)  EXERCISE PRICE

          An Option's Exercise Price shall be established by the Committee and
set forth in a Stock Option Agreement. To the extent required by applicable law
the Exercise Price of an ISO shall not be less than 100% of the Fair Market
Value (110% for 10-Percent Shareholders) of a Share on the date of Grant. In the
case of an NSO, a Stock Option Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the NSO is outstanding.
To the extent required by applicable law, the Exercise Price for an NSO shall
not be less than 85% of the Fair Market Value (110% for 10-Percent Shareholders)
of a Share on the date of Grant.

     (d)  EXERCISABILITY AND TERM

          Each Stock Option Agreement shall specify the date when all or any
installment of the Option is to become exercisable.  To the extent required by
applicable law, Options shall vest at least as rapidly as 20% annually over a
five-year period.  The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO, and to the extent required by
applicable law a NSO, shall in no event exceed ten (10) years from the date of
Grant.  An ISO that is granted to a 10-Percent Shareholder shall have a maximum
term of five (5) years.  To the extent required by applicable law, vested
Options shall be exercisable for a minimum period of six (6) months following
termination of employment due to death or


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Disability and thirty (30) days following termination of employment (other than
terminations for cause, as defined in the Company's personnel policies).
Notwithstanding the previous sentence, no Option can be exercised after the
expiration date provided in the applicable Stock Option Agreement. A Stock
Option Agreement may provide for accelerated exercisability in the event of the
Optionee's death, disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee's service. A Stock Option Agreement may permit an Optionee to exercise
an Option before it is vested, subject to the Company's right of repurchase over
any Shares acquired under the unvested portion of the Option (an "early
exercise"), which right of repurchase shall lapse at the same rate the Option
would have vested had there been no early exercise. In no event shall the
Company be required to issue fractional Shares upon the exercise of an Option.

     (e)  MODIFICATIONS OR ASSUMPTION OF OPTIONS

          Within the limitations of the Plan, the Committee may modify, extend
or assume outstanding options or may accept the cancellation of outstanding
options (whether granted by the Company or by another issuer) in return for the
grant of new Options for the same or a different number of Shares and at the
same or a different Exercise Price. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair his or her rights or obligations under such Option.

     (f)  TRANSFERABILITY OF OPTIONS

          Except as otherwise provided in the applicable Stock Option Agreement
and then only to the extent permitted by applicable law, no Option shall be
transferable by the Optionee other than by will or by the laws of descent and
distribution. Except as otherwise provided in the applicable Stock Option
Agreement, an Option may be exercised during the lifetime of the Optionee only
or by the guardian or legal representative of the Optionee. No Option or
interest therein may be assigned, pledged or hypothecated by the Optionee during
his lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.

     (g)  NO RIGHTS AS A STOCKHOLDER

          An Optionee, or a transferee of an Optionee, shall have no rights as a
stockholder with respect to any Common Stock covered by an Option until such
person becomes entitled to receive such Common Stock by filing a notice of
exercise and paying the Exercise Price pursuant to the terms of such Option.


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     (h)  RESTRICTIONS ON TRANSFER

          Any Shares issued upon exercise of an Option shall be subject to such
rights of repurchase, rights of first refusal and other transfer restrictions as
the Committee may determine. Such restrictions shall apply in addition to any
restrictions that may apply to holders of Shares generally and shall also comply
to the extent necessary with applicable law.

7.   PAYMENT FOR OPTION SHARES

     (a)  GENERAL RULE

          The entire Exercise Price of Shares issued upon exercise of Options
shall be payable in cash at the time when such Shares are purchased, except as
follows:

          (i)  In the case of an ISO granted under the Plan, payment shall be
               made only pursuant to the express provisions of the applicable
               Stock Option Agreement. The Stock Option Agreement may specify
               that payment may be made in any form(s) described in this Section
               7.

          (ii) In the case of an NSO granted under the Plan, the Committee may
               in its discretion, at any time accept payment in any form(s)
               described in this Section 7.

     (b)  SURRENDER OF STOCK

          To the extent that this Section 7(b) is applicable, payment for all or
any part of the Exercise Price may be made with Shares which have already been
owned by the Optionee for such duration as shall be specified by the Committee.
Such Shares shall be valued at their Fair Market Value on the date when the new
Shares are purchased under the Plan.

     (c)  PROMISSORY NOTE

          To the extent that this Section 7(c) is applicable, payment for all or
any part of the Exercise Price may be made with a full-recourse promissory note.

     (d)  OTHER FORMS OF PAYMENT

          To the extent that this Section 7(d) is applicable, payment may be
made in any other form that is consistent with applicable laws, regulations and
rules.


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8.   TERMS AND CONDITIONS FOR AWARDS OF RESTRICTED STOCK

     (a)  TIME, AMOUNT AND FORM OF AWARDS

          Awards under the Plan may be granted in the form of Restricted Stock.

     (b)  RESTRICTED STOCK AGREEMENT

          Each Award of Restricted Stock under the Plan shall be evidenced by a
Restricted Stock Agreement between the Participant and the Company. Such Award
shall be subject to all applicable terms and conditions of the Plan and may be
subject to any other terms and conditions that are not inconsistent with the
Plan and that the Committee deems appropriate for inclusion in a Restricted
Stock Agreement. The provisions of the various Restricted Stock Agreements
entered into under the Plan need not be identical.

     (c)  PAYMENT FOR RESTRICTED STOCKS

          Restricted Stock may be issued with or without cash consideration
under the Plan.

     (d)  VESTING CONDITIONS

          Each Award of Restricted Stock shall become vested, in full or in
installments, upon satisfaction of the conditions specified in the Restricted
Stock Agreement. A Restricted Stock Agreement may provide for accelerated
vesting in the event of the Participant's death, Disability or retirement or
other events.

     (e)  ASSIGNMENT OR TRANSFER OF RESTRICTED STOCKS

          Except as provided in Section 12, or in a Restricted Stock Agreement,
or as required by applicable law, a Restricted Stock granted under the Plan
shall not be anticipated, assigned, attached, garnished, optioned, transferred
or made subject to any creditor's process, whether voluntarily, involuntarily or
by operation of law. Any act in violation of this Section 8(e) shall be void.
However, this Section 8(e) shall not preclude a Participant from designating a
beneficiary who will receive any outstanding Restricted Stocks in the event of
the Participant's death, nor shall it preclude a transfer of Restricted Stocks
by will or by the laws of descent and distribution.

     (f)  TRUSTS

          Neither this Section 8 nor any other provision of the Plan shall
preclude a Participant from transferring or assigning Restricted Stock to (a)
the trustee of a trust


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that is revocable by such Participant alone, both at the time of the transfer or
assignment and at all times thereafter prior to such Participant's death, or (b)
the trustee of any other trust to the extent approved in advance by the
Committee in writing. A transfer or assignment of Restricted Stock from such
trustee to any person other than such Participant shall be permitted only to the
extent approved in advance by the Committee in writing, and Restricted Stock
held by such trustee shall be subject to all of the conditions and restrictions
set forth in the Plan and in the applicable Restricted Stock Agreement, as if
such trustee were a party to such Agreement.

     (g)  VOTING AND DIVIDEND RIGHTS

          The holders of Restricted Stock awarded under the Plan shall have the
same voting, dividend and other rights as the Company's other stockholders. A
Restricted Stock Agreement, however, may require that the holders of Restricted
Stock invest any cash dividends received in additional Restricted Stock. Such
additional Restricted Stock shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid. Such
additional Restricted Stock shall not reduce the number of Shares available
under Section 5.

9.   PROTECTION AGAINST DILUTION

     (a)  ADJUSTMENTS

          In the event of a subdivision of the outstanding Shares, a declaration
of a dividend payable in Shares, a declaration of a dividend payable in a form
other than Shares in an amount that has a material effect on the price of
Shares, a combination or consolidation of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of:

          (i)  the number of Shares available for future Awards under Section 5;

          (ii) the number of Shares covered by each outstanding Award; or

         (iii) the Exercise Price under each outstanding Option.

     (b)  PARTICIPANT RIGHTS

          Except as provided in this Section 9, a Participant shall have no
rights by reason of any issue by the Company of stock of any class or securities
convertible


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into stock of any class, any subdivision or consolidation of shares of stock of
any class, the payment of any stock dividend or any other increase or decrease
in the number of shares of stock of any class.

10.  EFFECT OF A CHANGE IN CONTROL

     (a)  MERGER OR REORGANIZATION

          In the event that the Company is a party to a merger or other
reorganization, outstanding Awards shall be subject to the agreement of merger
or reorganization. Such agreement may provide, without limitation, for the
assumption of outstanding Awards by the surviving corporation or its parent, for
their continuation by the Company (if the Company is a surviving corporation),
for accelerated vesting or for their cancellation with or without consideration,
in all cases without the consent of the Participant.

     (b)  ACCELERATION

          The Committee may determine, at the time of granting an Award or
thereafter, that such Award shall become fully vested as to all Shares subject
to such Award in the event that a Change in Control occurs with respect to the
Company.

11.  LIMITATIONS ON RIGHTS

     (a)  RETENTION RIGHTS

          Neither the Plan nor any Award granted under the Plan shall be deemed
to give any individual a right to remain an employee, consultant or director of
the Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parents
and Subsidiaries and Affiliates reserve the right to terminate the Service of
any person at any time, and for any reason, subject to applicable laws, the
Company's Certificate of Incorporation and Bylaws and a written employment
agreement (if any).

     (b)  STOCKHOLDERS' RIGHTS

          A Participant shall have no dividend rights, voting rights or other
rights as a stockholder with respect to any Shares covered by his or her Award
prior to the issuance of a stock certificate for such Shares. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date when such certificate is issued, except as expressly provided
in Section 9.


                                      -13-
<PAGE>
     (c)  REGULATORY REQUIREMENTS

          Any other provision of the Plan notwithstanding, the obligation of the
Company to issue Shares under the Plan shall be subject to all applicable laws,
rules and regulations and such approval by any regulatory body as may be
required.  The Company reserves the right to restrict, in whole or in part, the
delivery of Shares pursuant to any Award prior to the satisfaction of all legal
requirements relating to the issuance of such Shares, to their registration,
qualification or listing or to an exemption from registration, qualification or
listing.

12.  WITHHOLDING TAXES

     (a)  GENERAL

          A Participant shall make arrangements satisfactory to the Company for
the satisfaction of any withholding tax obligations that arise in connection
with his or her Award. The Company shall not be required to issue any Shares or
make any cash payment under the Plan until such obligations are satisfied.

     (b)  SHARE WITHHOLDING

          If a public market for the Company's Shares exists, the Committee may
permit a Participant to satisfy all or part of his or her withholding or income
tax obligations by having the Company withhold all or a portion of any Shares
that otherwise would be issued to him or her or by surrendering all or a portion
of any Shares that he or she previously acquired. Such Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash. Any payment of taxes by assigning Shares to the Company may be subject to
restrictions, including, but not limited to, any restrictions required by rules
of the Securities and Exchange Commission.

13.  DURATION AND AMENDMENTS

     (a)  TERM OF THE PLAN

          The Plan, as set forth herein, shall become effective on the date of
its adoption by the Board, subject to the approval of the Company's
stockholders. No Options shall be exercisable until such stockholder approval is
obtained. In the event that the stockholders fail to approve the Plan within
twelve (12) months after its adoption by the Board, any Awards made shall be
null and void and no additional Awards shall be made. The Plan shall terminate
on the date that is ten (10) years after


                                      -14-
<PAGE>
its adoption by the Board and may be terminated on any earlier date pursuant to
Section 13(b).

     (b)  RIGHT TO AMEND OR TERMINATE THE PLAN

     The Board may amend or terminate the Plan at any time and for any reason.
The termination of the Plan, or any amendment thereof, shall not affect any
Award previously granted under the Plan. No Awards shall be granted under the
Plan after the Plan's termination. An amendment of the Plan shall be subject to
the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules.

14.  EXECUTION

     To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to execute this Plan on behalf of the Company.

                                                 PERFORMANT, INC.

                                                 By   __________________________

                                                 Title__________________________



                                      -15-
<PAGE>
<TABLE>
<CAPTION>
                    PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
                                  SUMMARY PAGE

   Date of Board     Action          Section/Effect of    Date of Stockholder
   Action                                Amendment             Approval
--------------------------------------------------------------------------------
<S>               <C>                    <C>              <C>

July 14, 2000     Plan Adoption                           September 15, 2000
October 30, 2000  Amended to             Section 5        October 3, 2000
                  increase authorized
                  shares under the
                  Plan to 2,001,000
October 30, 2001  Amended to             Section 5
                  increase authorized
                  shares under the
                  Plan to 3,456,000
</TABLE>


                                      -16-
<PAGE>