EXHIBIT 10.6

                         MOUNTAIN STATES HOLDINGS, INC.

                          2002 EQUITY INCENTIVE PLAN

                                  ARTICLE I
                                INTRODUCTION

     1.1  Establishment. Mountain States Holdings, Inc., a Colorado
corporation (the "Company"), hereby establishes the Mountain States Holdings,
Inc. 2002 Equity Incentive Plan (the "Plan") for certain employees of the
Company (as defined in subsection 2.1(f)) and certain consultants to the
Company. The Plan permits the grant of incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended,
non-qualified stock options, restricted stock awards, stock appreciation
rights, stock bonuses, and other stock grants to certain key employees of the
Company and to certain consultants to the Company.

     1.2  Purposes. The purposes of the Plan are to provide those who are
selected for participation in the Plan with added incentives to continue in
the long- term service of the Company and to create in such persons a more
direct interest in the future success of the operations of the Company by
relating incentive compensation to increases in shareholder value, so that the
income of those participating in the Plan is more closely aligned with the
income of the Company's shareholders. The Plan is also designed to provide a
financial incentive that will help the Company attract, retain and motivate
the most qualified employees and consultants.

     1.3  Effective Date. The effective date of the Plan is August 30, 2002,
the date the shareholders of the Company approved the Plan.

                                  ARTICLE II

                                 DEFINITIONS

     2.1  Definitions. The following terms shall have the meanings set forth
below:

          (a)  "Affiliated Corporation" means any corporation or other entity
that is affiliated with the Company through stock ownership or otherwise and
is designated as an "Affiliated Corporation" by the Board, provided, however,
that for purposes of Incentive Options granted pursuant to the Plan, an
"Affiliated Corporation" means any parent or subsidiary of the Company as
defined in Section 424 of the Code.

          (b)  "Award" means an Option, a Restricted Stock Award, a Stock
Appreciation Right, grants of Stock pursuant to Article X or other issuances
of Stock hereunder.

          (c)  "Board" means the Board of Directors of the Company.

          (d)  "Code" means the Internal Revenue Code of 1986, as it may be
amended   from time to time.




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          (e)  "Committee" means a committee consisting of members of the
Board who   are empowered hereunder to take actions in the administration of
the Plan.  The Committee shall be so constituted at all times as to permit the
Plan to comply with Rule 16b-3 or any successor rule promulgated under the
Securities Exchange Act of 1934 (the "1934 Act").  Except as provided in
Section 3.2, the Committee shall select Participants from Eligible Employees
and Eligible Consultants of the Company and shall determine the awards to be
made pursuant to the Plan and the terms and conditions thereof.

          (f)  "Company" means Mountain States Holdings, Inc. and the
Affiliated Corporations.

          (g)  "Disabled" or "Disability" shall have the meaning given to such
terms  in Section 22(e)(3) of the Code.

          (h)  "Effective Date" means the original effective date of the Plan,
August 30, 2002.

          (i)  "Eligible Employees" means those employees (including, without
limitation, officers and directors who are also employees) of the Company or
any subsidiary or division hereof, upon whose judgment, initiative and efforts
the Company is, or will become, largely dependent for the successful conduct
of its business. For purposes of the Plan, an employee is any individual who
provides services to the Company or any subsidiary or division thereof as a
common law employee and whose remuneration is subject to the withholding of
federal income tax pursuant to section 3401 of the Code. Employee shall not
include any individual (A) who provides services to the Company or any
subsidiary or division thereof under an agreement, contract, or any other
arrangement pursuant to which the individual is initially classified as an
independent contractor or (B) whose remuneration for services has not been
treated initially as subject to the withholding of federal income tax pursuant
to section 3401 of the Code even if the individual is subsequently
reclassified as a common law employee as a result of a final decree of a court
of competent jurisdiction or the settlement of an administrative or judicial
proceeding. Leased employees within the meaning of section 414(n) of the Code
shall not be treated as employees under this Plan.

          (j)  "Eligible Consultants" means those consultants to the Company
who are determined, by the Committee, to be individuals whose services are
important to the Company and who are eligible to receive Awards, other than
Incentive Options, under the Plan.

          (k)  "Fair Market Value" of a share of Stock shall be the last sales
price, or if no sales took place, the average of the closing bid and asked
prices on the day the determination is to be made, or if the market is closed
on such day, the last day prior to the date of determination on which the
market was open for the transaction of business, as reported in the principal
consolidated transaction reporting system for the principal national
securities exchange on which the Stock is listed or admitted for trading. If
the Stock is not listed on a national securities exchange, but is traded on
the NASDAQ System or on the OTC Bulletin Board, Fair Market Value shall be the
last reported sales price of the Stock on the NASDAQ or on the OTC Bulletin
Board System on the day the determination is to be made, or if no sale took
place on such day, the average of the closing bid and asked prices of the
Stock on the last day prior to the date of determination on which the market
was open for the transaction of business, as reported by NASDAQ or the NASD.


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If the Stock is not listed or traded on NASDAQ, the OTC Bulletin Board, or on
any national securities exchange, the Fair Market Value for purposes of the
grant of Options under the Plan shall be determined by the Committee in good
faith in its sole discretion.

          (l)  "Incentive Option" means an Option designated as such and
granted in accordance with Section 422 of the Code.

          (m)  "Non-Qualified Option" means any Option other than an Incentive
Option.

          (n)  "Option" means a right to purchase Stock at a stated or formula
price for a specified period of time. Options granted under the Plan shall be
either Incentive Options or Non-Qualified Options.

          (o)  "Option Certificate" shall have the meaning given to such term
in Section 7.2 hereof.

          (p)  "Option Holder" means a Participant who has been granted one or
more Options under the Plan.

          (q)  "Option Price" means the price at which each share of Stock
subject to an Option may be purchased, determined in accordance with
subsection 7.2(b).

          (r)  "Participant" means an Eligible Employee or Eligible Consultant
designated by the Committee from time to time during the term of the Plan to
receive one or more of the Awards provided under the Plan.

          (s)  "Restricted Stock Award" means an award of Stock granted to a
Participant pursuant to Article VIII that is subject to certain restrictions
imposed in accordance with the provisions of such Section.

          (t)  "Share" means a share of Stock.

          (u)  "Stock" means the no par value common stock of the Company.

          (v)  "Stock Appreciation Right" means the right, granted by the
Committee pursuant to the Plan, to receive a payment equal to the increase in
the Fair Market Value of a Share of Stock subsequent to the grant of such
Award.

          (w)  "Stock Bonus" means either an outright grant of Stock or a
grant of Stock subject to and conditioned upon certain employment or
performance related goals.

     2.2  Gender and Number. Except when otherwise indicated by the context,
the masculine gender shall also include the feminine gender, and the
definition of any term herein in the singular shall also include the plural.

                                 ARTICLE III
                             PLAN ADMINISTRATION

     3.1  General. The Plan shall be administered by the Committee. In
accordance with the provisions of the Plan, the Committee shall, in its sole
discretion, select the Participants from among the Eligible Employees and
Eligible Consultants, determine the Awards to be made pursuant to the Plan,

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the number of Stock Appreciation Rights or shares of Stock to be issued
thereunder and the time at which such Awards are to be made, fix the Option
Price, period and manner in which an Option becomes exercisable, establish the
duration and nature of Restricted Stock Award restrictions, establish the
terms and conditions applicable to Stock Bonuses, and establish such other
terms and requirements of the various compensation incentives under the Plan
as the Committee may deem necessary or desirable and consistent with the terms
of the Plan. The Committee shall determine the form or forms of the agreements
with Participants that shall evidence the particular provisions, terms,
conditions, rights and duties of the Company and the Participants with respect
to Awards granted pursuant to the Plan, which provisions need not be identical
except as may be provided herein; provided, however, that Eligible Consultants
shall not be eligible to receive Incentive Options. The Committee may from
time to time adopt such rules and regulations for carrying out the purposes of
the Plan as it may deem proper and in the best interests of the Company. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any agreement entered into hereunder in the
manner and to the extent it shall deem expedient and it shall be the sole and
final judge of such expediency. No member of the Committee shall be liable for
any action or determination made in good faith. The determinations,
interpretations and other actions of the Committee pursuant to the provisions
of the Plan shall be binding and conclusive for all purposes and on all
persons.

                                 ARTICLE IV
                           STOCK SUBJECT TO THE PLAN

     4.1  Number of Shares. The number of shares of Stock that are authorized
for issuance under the Plan in accordance with the provisions of the Plan and
subject to such restrictions or other provisions as the Committee may from
time to time deem necessary shall not exceed 2,500,000. This authorization may
be increased from time to time by approval of the Board and by the
shareholders of the Company if, in the opinion of counsel for the Company,
shareholder approval is required. Shares of Stock that may be issued upon
exercise of Options, or Stock Appreciation Rights, that are issued as
Restricted Stock Awards, and that are issued as incentive compensation or
other stock grants under the Plan shall be applied to reduce the maximum
number of shares of Stock remaining available for use under the Plan. The
Company shall at all times during the term of the Plan and while any Options
are outstanding retain as authorized and unissued Stock at least the number of
shares from time to time required under the provisions of the Plan, or
otherwise assure itself of its ability to perform its obligations hereunder.

     4.2  Other Shares of Stock. Any shares of Stock that are subject to an
Option that expires or for any reason is terminated unexercised, any shares of
Stock that are subject to an Award (other than an Option) and that are
forfeited, and any shares of Stock withheld for the payment of taxes or
received by the Company as payment of the exercise price of an Option shall
automatically become available for use under the Plan.

     4.3  Adjustments for Stock Split, Stock Dividend, Etc. If the Company
shall at any time increase or decrease the number of its outstanding Shares or
change in any way the rights and privileges of such Shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, the numbers,
rights and privileges of the following shall be increased, decreased or

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changed in like manner as if they had been issued and outstanding, fully paid
and nonassessable at the time of such occurrence: (i) the Shares as to which
Awards may be granted under the Plan, (ii) the Shares then included in each
outstanding Award granted hereunder, (iii) the maximum number of Shares
available for grant to any one person in a calendar year, (iv) the maximum
number of Shares available for grant pursuant to Incentive Options, and (v)
the number of Shares subject to a delegation of authority under Section 4.2 of
this Plan.

     4.4  Other Distributions and Changes in the Stock. If

          (a)  The Company shall at any time distribute with respect to the
Stock, assets or securities of persons other than the Company (excluding cash
or distributions referred to in Section 4.3), or

          (b)  The Company shall at any time grant to the holders of its
Stock, rights to subscribe pro rata for additional shares thereof or for any
other securities of the Company, or

          (c)  there shall be any other change (except as described in Section
4.3) in the number or kind of outstanding Shares or of any stock or other
securities into which the Stock shall be changed or for which it shall have
been exchanged, and if the Committee shall in its discretion determine that
the event described in subsection (a), (b), or (c) above equitably requires an
adjustment in the number or kind of Shares subject to an Option or other
Award, an adjustment in the Option Price or the taking of any other action by
the Committee, including without limitation, the setting aside of any property
for delivery to the Participant upon the exercise of an Option or the full
vesting of an Award, then such adjustments shall be made, or other action
shall be taken, by the Committee and shall be effective for all purposes of
the Plan and on each outstanding Option or Award that involves the particular
type of stock for which a change was effected.  Notwithstanding the foregoing
provisions of this Section 4.4, pursuant to Section 8.3 below, a Participant
holding Stock received as a Restricted Stock Award shall have the right to
receive all amounts, including cash and property of any kind, distributed with
respect to the Stock after such Restricted Stock Award was granted upon the
Participant's becoming a holder of record of the Stock.

     4.5  General Adjustment Rules. No adjustment or substitution provided for
in this Article IV shall require the Company to sell a fractional share of
Stock under any Option, or otherwise issue a fractional share of Stock, and
the total substitution or adjustment with respect to each Option and other
Award shall be limited by deleting any fractional share. In the case of any
such substitution or adjustment, the aggregate Option Price for the total
number of shares of Stock then subject to an Option shall remain unchanged but
the Option Price per share under each such Option shall be equitably adjusted
by the Committee to reflect the greater or lesser number of shares of Stock or
other securities into which the Stock subject to the Option may have been
changed, and appropriate adjustments shall be made to other Awards to reflect
any such substitution or adjustment.

     4.6  Determination by the Committee, Etc. Adjustments under this Article
IV shall be made by the Committee, whose determinations with regard thereto
shall be final and binding upon all parties thereto.




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                                  ARTICLE V
                   CORPORATE REORGANIZATION; CHANGE IN CONTROL

     5.1  Reorganization. Except as provided otherwise by the Committee at the
time an Award is granted, upon the occurrence of any of the following events,
if the notice required by Section 5.2 shall have first been given, the Plan
and all Options then outstanding hereunder shall automatically terminate and
be of no further force and effect whatsoever, and other Awards then
outstanding shall be treated as described in Sections 5.2 and 5.3, without the
necessity for any additional notice or other action by the Board or the
Company: (a) the merger or consolidation of the Company with or into another
corporation or other reorganization (other than a reorganization under the
United States Bankruptcy Code) of the Company (other than a consolidation,
merger, or reorganization in which the Company is the continuing corporation
and which does not result in any reclassification or change of outstanding
shares of Stock); or (b) the sale or conveyance of the property of the Company
as an entirety or substantially as an entirety (other than a sale or
conveyance in which the Company continues as a holding company of an entity or
entities that conduct the business or businesses formerly conducted by the
Company); or (c) the dissolution or liquidation of the Company.

     5.2  Required Notice. At least 30 days' prior written notice of any event
described in Section 5.1 shall be given by the Company to each Option Holder
and Participant unless (a) in the case of the events described in clauses (a)
or (b) of Section 5.1, the Company, or the successor or purchaser, as the case
may be, shall make adequate provision for the assumption of the outstanding
Options or the substitution of new options for the outstanding Options on
terms comparable to the outstanding Options except that the Option Holder
shall have the right thereafter to purchase the kind and amount of securities
or property or cash receivable upon such merger, consolidation, other
reorganization, sale or conveyance by a holder of the number of Shares that
would have been receivable upon exercise of the Option immediately prior to
such merger, consolidation, sale or conveyance (assuming such holder of Stock
failed to exercise any rights of election and received per share the kind and
amount received per share by a majority of the non-electing shares), or (b)
the Company, or the successor or purchaser, as the case may be, shall make
adequate provision for the adjustment of outstanding Awards (other than
Options) so that such Awards shall entitle the Participant to receive the kind
and amount of securities or property or cash receivable upon such merger,
consolidation, other reorganization, sale or conveyance by a holder of the
number of Shares that would have been receivable with respect to such Award
immediately prior to such merger, consolidation, other reorganization, sale or
conveyance (assuming such holder of Stock failed to exercise any rights of
election and received per share the kind and amount received per share by a
majority of the non-electing shares). The provisions of this Article V shall
similarly apply to successive mergers, consolidations, reorganizations, sales
or conveyances. Such notice shall be deemed to have been given when delivered
personally to a Participant or when mailed to a Participant by registered or
certified mail, postage prepaid, at such Participant's address last known to
the Company.

     5.3  Acceleration of Exercisability. Participants notified in accordance
with Section 5.2 may exercise their Options at any time before the occurrence
of the event requiring the giving of notice (but subject to occurrence of such
event), regardless of whether all conditions of exercise relating to length of
service, attainment of financial performance goals or otherwise have been
satisfied. Upon the giving of notice in accordance with Section 5.2, all

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restrictions with respect to Restricted Stock and other Awards shall lapse
immediately and all Stock Appreciation Rights shall become exercisable. Any
Options or Stock Appreciation Rights that are not assumed or substituted under
clauses (a) or (b) of Section 5.2 that have not been exercised prior to the
event described in Section 5.1 shall automatically terminate upon the
occurrence of such event.

     5.4  Change in Control of the Company.

          (a)  In General. Unless provided otherwise by the Committee at the
time of the grant of an Award, upon a change in control of the Company as
defined in subsection 5.4(b), then (i) all Options shall become immediately
exercisable in full during the remaining term thereof, and shall remain so,
whether or not the Participants to whom such Options have been granted remain
employees or consultants of the Company; (ii) all restrictions with respect to
outstanding Restricted Stock Awards shall immediately lapse; and (iii) all
other Awards shall become immediately exercisable or shall vest, as the case
may be, without any further action or passage of time.

          (b)  Definition. For purposes of this Plan, a "change in control"
shall be deemed to have occurred if either (i) any individual, entity, or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act),
other than Dale Stonedahl, acquires beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more
of either (A) the then-outstanding shares of Stock "Outstanding Shares") or
(B) the combined voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of directors ("Voting
Power") or (ii) at any time during any period of three consecutive years (not
including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board (and any new director whose
election by the Board or whose nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority thereof.

     5.5  Reorganization of Affiliated Corporations. If an Affiliated
Corporation is merged or consolidated with another corporation (other than a
merger or consolidation pursuant to which the Affiliated Corporation continues
to be, or the continuing corporation is, affiliated with the Company  through
stock ownership or control), or if all or substantially all of the assets or
more than fifty percent (50%) of the stock of the Affiliated Corporation is
acquired by any other corporation, business entity or person (other than a
transaction in which the successor is affiliated with the Company through
stock ownership or control), or in the case of a reorganization (other than a
reorganization under the United States Bankruptcy Code) including a divisive
reorganization under Section 355 of the Code, or liquidation of the Affiliated
Corporation, the Committee may, as to outstanding Awards, make appropriate
provision for the protection of outstanding Awards granted to Eligible
Employees of, and Eligible Consultants to, the affected Affiliated Corporation
by (i) providing for the assumption of outstanding Options or the substitution
of new Options for outstanding Options by the successor on terms comparable to
the outstanding Options, (ii) providing for the adjustment of outstanding
Awards, or (iii) taking such other action with respect to outstanding Awards
as the Committee deems appropriate.



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                                  ARTICLE VI
                                 PARTICIPATION

     Participants in the Plan shall be those Eligible Employees who, in the
judgment of the Committee, are performing, or during the term of their
incentive arrangement will perform, vital services in the management,
operation and development of the Company, and significantly contribute, or are
expected to significantly contribute, to the achievement of long-term
corporate economic objectives. Eligible Consultants shall be selected from
those non-employee consultants to the Company who are performing services
important to the operation and growth of the Company. Participants may be
granted from time to time one or more Awards; provided, however, that the
grant of each such Award shall be separately approved by the Committee and
receipt of one such Award shall not result in automatic receipt of any other
Award. Upon determination by the Committee that an Award is to be granted to a
Participant, written notice shall be given to such person, specifying the
terms, conditions, rights and duties related thereto. Each Participant shall,
if required by the Committee, enter into an agreement with the Company, in
such form as the Committee shall determine and which is consistent with the
provisions of the Plan, specifying such terms, conditions, rights and duties.
Awards shall be deemed to be granted as of  the date specified in the grant
resolution of the Committee, which date shall be the date of any related
agreement with the Participant. In the event of any inconsistency between the
provisions of the Plan and any such agreement entered into hereunder, the
provisions of the Plan shall govern.

                                 ARTICLE VII
                                   OPTIONS

     7.1  Grant of Options. Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more Options.
The Committee in its sole discretion shall designate whether an Option is an
Incentive Option or a Non-Qualified Option; provided, however, that only Non-
Qualified Options may be granted to Eligible Consultants. The Committee may
grant both an Incentive Option and a Non-Qualified Option to an Eligible
Employee at the same time or at different times. Incentive Options and
Non-Qualified Options, whether granted at the same time or at different times,
shall be deemed to have been awarded in separate grants and shall be clearly
identified, and in no event shall the exercise of one Option affect the right
to exercise any other Option or affect the number of shares for which any
other Option may be exercised. An Option shall be considered as having been
granted on the date specified in the grant resolution of the Committee.

     7.2  Stock Option Certificates. Each Option granted under the Plan shall
be evidenced by a written stock option certificate or agreement (an "Option
Certificate"). An Option Certificate shall be issued by the Company in the
name of the Participant to whom the Option is granted (the "Option Holder")
and in such form as may be approved by the Committee. The Option Certificate
shall incorporate and conform to the conditions set forth in this Section 7.2
as well as such other terms and conditions that are not inconsistent as the
Committee may consider appropriate in each case.

          (a)  Number of Shares. Each Option Certificate shall state that it
covers a specified number of shares of Stock, as determined by the Committee.



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          (b)  Price. The price at which each share of Stock covered by an
Option may be purchased shall be determined in each case by the Committee and
set forth in the Option Certificate, but, in the case of an Incentive Option,
in no event shall the price be less than 100 percent of the Fair Market Value
of the Stock on the date the Incentive Option is granted.

          (c)  Duration of Options; Restrictions on Exercise. Each Option
Certificate shall state the period of time, determined by the Committee,
within which the Option may be exercised by the Option Holder (the "Option
Period"). The Option Period must end, in all cases, not more than ten years
from the date the Option is granted. The Option Certificate shall also set
forth any installment or other restrictions on exercise of the Option during
such period, if any, as may be determined by the Committee. Each Option shall
become exercisable (vest) over such period of time, if any, or upon such
events, as determined by the Committee.

          (d)  Termination of Services, Death, Disability, Etc. The Committee
may specify the period, if any, during which an Option may be exercised
following termination of the Option Holder's services. The effect of this
subsection 7.2(d) shall be limited to determining the consequences of a
termination and nothing in this subsection 7.2(d) shall restrict or otherwise
interfere with the Company's discretion with respect to the termination of any
individual's services. If the Committee does not otherwise specify, the
following shall apply:

               (i) If the services of the Option Holder are terminated within
the Option Period for "cause", as determined by the Company, the Option shall
thereafter be void for all purposes. As used in this subsection 7.2(d),
"cause" shall mean willful misconduct, a willful failure to perform the Option
Holder's duties, insubordination, theft, dishonesty, conviction of a felony or
any other willful conduct that is materially detrimental to the Company or
such other cause as the Board in good faith reasonably determines provides
cause for the discharge of an Option Holder.

               (ii)  If the Option Holder becomes Disabled, the Option may be
exercised by the Option Holder within one year following the Option Holder's
termination of services on account of Disability (provided that such exercise
must occur within the Option Period), but not thereafter. In any such case,
the Option may be exercised only as to the shares as to which the Option had
become exercisable on or before the date of the Option Holder's termination of
services because of Disability.

               (iii)  If the Option Holder dies during the Option Period while
still performing services for the Company or within the one year period
referred to in (ii) above or the three-month period referred to in (iv) below,
the Option may be exercised by those entitled to do so under the Option
Holder's will or by the laws of descent and distribution within one year
following the Option Holder's death, (provided that such exercise must occur
within the Option Period), but not thereafter. In any such case, the Option
may be exercised only as to the shares as to which the Option had become
exercisable on or before the date of the Option Holder's death.

               (iv)  If the services of the Option Holder are terminated
(which for this purpose means that the Option Holder is no longer employed by
the Company or performing services for the Company) by the Company within the
Option Period for any reason other than cause, Disability, or death, the
Option may be exercised by the Option Holder within three  months following

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the date of such termination (provided that such exercise must occur within
the Option Period), but not thereafter. In any such case, the Option may be
exercised only as to the shares as to which the Option had become exercisable
on or before the date of termination of services.

          (e)  Transferability. Each Option shall not be transferable by the
Option Holder except by will or pursuant to the laws of descent and
distribution. Each Option is exercisable during the Option Holder's lifetime
only by him or her, or in the event of Disability or incapacity, by his or her
guardian or legal representative. The Committee may, however, provide at the
time of grant or thereafter that the Option Holder may transfer a
Non-Qualified Option to a member of the Option Holder's immediate family, a
trust of which members of the Option Holder's immediate family are the only
beneficiaries, or a partnership of which members of the Option Holder's
immediate family or trusts for the sole benefit of the Option Holder's
immediate family are the only partners. Immediate family means the Option
Holder's spouse, issue (by birth or adoption), parents, grandparents, and
siblings (including half brothers and sisters and adopted siblings). During
the Option Holder's lifetime the Option Holder may not transfer an Incentive
Option under any circumstances.

          (f)  Consideration for Grant of Option. Each Option Holder agrees to
remain in the employment of the Company or to continue providing consulting
services to the Company, as the case may be, at the pleasure of the Company,
for a continuous period of at least one year after the date the Option is
granted, at the rate of compensation in effect on the date of such agreement
or at such changed rate as may be fixed, from time to time, by the Company.
Nothing in this paragraph shall limit or impair the Company's right to
terminate the employment of any employee or to terminate the consulting
services of any consultant.

          (g)  Exercise, Payments, Etc.

               (i)  Manner of Exercise. The method for exercising each Option
granted hereunder shall be by delivery to the Company of written notice
specifying the number of Shares with respect to which such Option is
exercised. The purchase of such Shares shall take place at the principal
offices of the Company within thirty days following delivery of such notice,
at which time the Option Price of the Shares shall be paid in full by any of
the methods set forth below or a combination thereof. Except as set forth in
the next sentence, the Option shall be exercised when the Option Price for the
number of shares as to which the Option is exercised is paid to the Company in
full. If the Option Price is paid by means of a broker's loan transaction
described in subsection 7.2(g)(ii)(D), in whole or in part, the closing of the
purchase of the Stock under the Option shall take place (and the Option shall
be treated as exercised) on the date on which, and only if, the sale of Stock
upon which the broker's loan was based has been closed and settled, unless the
Option Holder makes an irrevocable written election, at the time of exercise
of the Option, to have the exercise treated as fully effective for all
purposes upon receipt of the Option Price by the Company regardless of whether
or not the sale of the Stock by the broker is closed and settled. A properly
executed certificate or certificates representing the Shares shall be
delivered to or at the direction of the Option Holder upon payment therefor.
If Options on less than all shares evidenced by an Option Certificate are
exercised, the Company shall deliver a new Option Certificate evidencing the
Option on the remaining shares upon delivery of the Option Certificate for the
Option being exercised.


Page 10


               (ii)  The exercise price shall be paid by any of the following
methods or any combination of the following methods at the election of the
Option Holder, or by any other method approved by the Committee upon the
request of the Option Holder:

                    (A)  in cash;

                    (B)  by certified check, cashier's check or other check
acceptable to the Company, payable to the order of the Company;

                    (C)  by delivery to the Company of certificates
representing the number of shares then owned by the Option Holder, the Fair
Market Value of which equals the purchase price of the Stock purchased
pursuant to the Option, properly endorsed for transfer to the Company;
provided however, that no Option may be exercised by delivery to the Company
of certificates representing Stock, unless such Stock has been held by the
Option Holder for more than six months; for purposes of this Plan, the Fair
Market Value of any shares of Stock delivered in payment of the purchase price
upon exercise of the Option shall be the Fair Market Value as of the exercise
date; the exercise date shall be the day of delivery of the certificates for
the Stock used as payment of the Option Price; or

                    (D)  by delivery to the Company of a properly executed
notice of exercise  together with irrevocable instructions to a broker to
deliver to the Company promptly the amount of the proceeds of the sale of all
or a portion of the Stock or of a loan from the broker to the Option Holder
required to pay the Option Price.

               (h)  Date of Grant. An Option shall be considered as having
been granted on the date specified in the grant resolution of the Committee.

               (i)  Withholding.

                    (i)  Non-Qualified Options. Upon exercise of an Option,
the Option Holder shall make appropriate arrangements with the Company to
provide for the amount of additional withholding the Company equity incentive
plan required by Sections 3102 and 3402 of the Code and applicable state
income tax laws, including payment of such taxes through delivery of shares of
Stock or by withholding Stock to be issued under the Option, as provided in
Article XVI.

                    (ii)  Incentive Options. If an Option Holder makes a
disposition (as defined in Section 424(c) of the Code) of any Stock acquired
pursuant to the exercise of an Incentive Option prior to the expiration of two
years from the date on which the Incentive Option was granted or prior to the
expiration of one year from the date on which the Option was exercised, the
Option Holder shall send written notice to the Company at the Company's
principal place of business of the date of such disposition, the number of
shares disposed of, the amount of proceeds received from such disposition and
any other information relating to such disposition as the Company may
reasonably request. The Option Holder shall, in the event of such a
disposition, make appropriate arrangements with the Company to provide for the
amount of additional withholding, if any, required by Sections 3102 and 3402
of the Code and applicable state income tax laws.




Page 11



     7.3  Restrictions on Incentive Options.

          (a)  Initial Exercise. The aggregate Fair Market Value of the Shares
with respect to which Incentive Options are exercisable for the first time by
an Option Holder in any calendar year, under the Plan or otherwise, shall not
exceed $100,000. For this purpose, the Fair Market Value of the Shares shall
be determined as of the date of grant of the Option.

          (b)  Ten Percent Stockholders. Incentive Options granted to an
Option Holder who is the holder of record of 10% or more of the outstanding
Stock of the Company shall have an Option Price equal to 110% of the Fair
Market Value of the Shares on the date of grant of the Option and the Option
Period for any such Option shall not exceed five years.

     7.4  Shareholder Privileges. No Option Holder shall have any rights as a
shareholder with respect to any shares of Stock covered by an Option until the
Option Holder becomes the holder of record of such Stock, and no adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Option Holder becomes the
holder of record of such Stock, except as provided in Article IV.

                                ARTICLE VIII
                           RESTRICTED STOCK AWARDS

     8.1  Grant of Restricted Stock Awards. Coincident with or following
designation for participation in the Plan, the Committee may grant a
Participant one or more Restricted Stock Awards consisting of Shares of Stock.
The number of Shares granted as a Restricted Stock Award shall be determined
by the Committee.

     8.2  Restrictions. A Participant's right to retain a Restricted Stock
Award granted to him under Section 8.1 shall be subject to such restrictions,
including but not limited to his continuous employment by or performance of
services for the Company for a restriction period specified by the Committee
or the attainment of specified performance goals and objectives, as may be
established by the Committee with respect to such Award. The Committee may in
its sole discretion require different periods of service or different
performance goals and objectives with respect to different Participants, to
different Restricted Stock Awards or to separate, designated portions of the
Shares constituting a Restricted Stock Award. In the event of the death or
Disability of a Participant, or the retirement of a Participant in accordance
with the Company's established retirement policy, all required periods of
service and other restrictions applicable to Restricted Stock Awards then held
by him shall lapse with respect to a pro rata part of each such Award based on
the ratio between the number of full months of employment or services
completed at the time of termination of services from the grant of each Award
to the total number of months of employment or continued services required for
such Award to be fully nonforfeitable, and such portion of each such Award
shall become fully nonforfeitable. The remaining portion of each such Award
shall be forfeited and shall be immediately returned to the Company. If a
Participant's employment or consulting services terminate for any other
reason, any Restricted Stock Awards as to which the period for which services
are required or other restrictions have not been satisfied (or waived or
accelerated as provided herein) shall be forfeited, and all shares of Stock
related thereto shall be immediately returned to the Company.



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     8.3  Privileges of a Stockholder, Transferability. A Participant shall
have all voting, dividend, liquidation and other rights with respect to Stock
in accordance with its terms received by him as a Restricted Stock Award under
this Article VIII upon his becoming the holder of record of such Stock;
provided, however, that the Participant's right to sell, encumber, or
otherwise transfer such Stock shall be subject to the limitations of Section
13.2.

     8.4  Enforcement of Restrictions. The Committee shall cause a legend to
be placed on the Stock certificates issued pursuant to each Restricted Stock
Award referring to the restrictions provided by Sections 8.2 and 8.3 and, in
addition, may in its sole discretion require one or more of the following
methods of enforcing the restrictions referred to in Sections 8.2 and 8.3:

          (a)  Requiring the Participant to keep the Stock certificates, duly
endorsed, in the custody of the Company while the restrictions remain in
effect; or

          (b)  Requiring that the Stock certificates, duly endorsed, be held
in the custody of a third party while the restrictions remain in effect.

                                ARTICLE IX
                         STOCK APPRECIATION RIGHTS

     9.1  Persons Eligible. The Committee, in its sole discretion, may grant
Stock Appreciation Rights to Eligible Employees or Eligible Consultants.

     9.2  Terms of Grant. The Committee shall determine at the time of the
grant of a Stock Appreciation Right the time period during which the Stock
Appreciation Right may be exercised and any other terms that shall apply to
the Stock Appreciation Right.

     9.3  Exercise. A Stock Appreciation Right shall entitle a Participant to
receive a number of shares of Stock (without any payment to the Company,
except for applicable withholding taxes), cash, or Stock and cash, as
determined by the Committee in accordance with Section 9.4 below. If a Stock
Appreciation Right is issued in tandem with an Option, except as may otherwise
be provided by the Committee, the Stock Appreciation Right shall be
exercisable during the period that its related Option is exercisable. A
Participant desiring to exercise a Stock Appreciation Right shall give written
notice of such exercise to the Company , which notice shall state the
proportion of Stock and cash that the Participant desires to receive pursuant
to the Stock Appreciation Right exercised. Upon receipt of the notice from the
Participant, the Company shall deliver to the person entitled thereto (i) a
certificate or certificates for Stock and/or (ii) a cash payment, in
accordance with Section 10.4 below. The date the Company receives written
notice of such exercise hereunder is referred to in this Article IX as the
"exercise date". The delivery of Stock or cash received pursuant to such
exercise shall take place at the principal offices of the Company within 30
days following delivery of such notice.

     9.4  Number of Shares or Amount of Cash. Subject to the discretion of the
Committee to substitute cash for Stock, or Stock for cash, the number of
Shares that may be issued pursuant to the exercise of a Stock Appreciation
Right shall be determined by dividing: (a) the total number of Shares of Stock
as to which the Stock Appreciation Right is exercised, multiplied by the
amount by which the Fair Market Value of one share of Stock on the exercise


Page 13

date exceeds the Fair Market Value of one Share of Stock on the date of grant
of one Share of Stock Appreciation Right, by (b) the Fair Market Value of one
Share of Stock on the exercise date; provided, however, that fractional shares
shall not be issued and in lieu thereof, a cash adjustment shall be paid. In
lieu of issuing Stock upon the exercise of a Stock Appreciation Right, the
Committee in its sole discretion may elect to pay the cash equivalent of the
Fair Market Value of the Stock on the exercise date for any or all of the
Shares of Stock that would otherwise be issuable upon exercise of the Stock
Appreciation Right.

     9.5  Effect of Exercise. If a Stock Appreciation Right is issued in
tandem with an Option, the exercise of the Stock Appreciation Right or the
related Option will result in an equal reduction in the number of
corresponding Options or Stock Appreciation Rights that were granted in tandem
with such Stock Appreciation Rights and Options.

     9.6  Termination of Services. Upon the termination of the services of a
Participant, any Stock Appreciation Rights then held by such Participant shall
be exercisable within the time periods, and upon the same conditions with
respect to the reasons for termination of services, as are specified in
Section 7.2(d) with respect to Options.

                                  ARTICLE X
                                STOCK BONUSES

     The Committee may award Stock Bonuses to such Participants, subject to
such conditions and restrictions, as it determines in its sole discretion.
Stock Bonuses may be either outright grants of Stock, or may be grants of
Stock subject to and conditioned upon certain employment or performance
related goals.

                                  ARTICLE XI
                          OTHER COMMON STOCK GRANTS

     From time to time during the duration of this Plan, the Board may, in its
sole discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire shares of Stock,
whether by purchase, outright grant, or otherwise. Any such arrangements shall
be subject to the general provisions of this Plan and all shares of Stock
issued pursuant to such arrangements shall be issued under this Plan.

                                 ARTICLE XII
                           RIGHTS OF PARTICIPANTS

     12.1  Service. Nothing contained in the Plan or in any Option, or other
Award granted under the Plan shall confer upon any Participant any right with
respect to the continuation of his employment by, or consulting relationship
with, the Company, or interfere in any way with the right of the Company,
subject to the terms of any separate employment agreement or other contract to
the contrary, at any time to terminate such services or to increase or
decrease the compensation of the Participant from the rate in existence at the
time of the grant of an Award. Whether an authorized leave of absence, or
absence in military or government service, shall constitute a termination of
service shall be determined by the Committee at the time.



Page 14



     12.2  Nontransferability.  Except as provided otherwise at the time of
grant or thereafter, no right or interest of any Participant in an Option, a
Stock Appreciation Right, a Restricted  Stock Award (prior to the completion
of the restriction period applicable thereto), or other Award granted pursuant
to the Plan, shall be assignable or transferable during the lifetime of the
Participant, either voluntarily or involuntarily, or subjected to any lien,
directly or indirectly, by operation of law, or otherwise, including
execution, levy, garnishment, attachment, pledge or bankruptcy. In the event
of a Participant's death, a Participant's rights and interests in Options,
Stock Appreciation Rights, Restricted Stock Awards, and other Awards, and
shall, to the extent provided in Articles VII, VIII, IX, and X, be
transferable by will or the laws of descent and distribution, and payment of
any amounts due under the Plan shall be made to, and exercise of any Options
may be made by, the Participant's legal representatives, heirs or legatees.
Notwithstanding the foregoing, the Option Holder may not transfer an Incentive
Option  during the Option Holder's lifetime. If in the opinion of the
Committee a person entitled to payments or to exercise rights with respect to
the Plan is disabled from caring for his affairs because of mental condition,
physical condition or age, payment due such person may be made to, and such
rights shall be exercised by, such person's guardian, conservator or other
legal personal representative upon furnishing the Committee with evidence
satisfactory to the Committee of such status.

     12.3  No Plan Funding. Obligations to Participants under the Plan will
not be funded, trusteed, insured or secured in any manner. The Participants
under the Plan shall have no security interest in any assets of the Company,
and shall be only general creditors of the Company.

                                ARTICLE XIII
                            GENERAL RESTRICTIONS

     13.1  Investment Representations. The Company may require any person to
whom an Option, Stock Appreciation Right, Restricted Stock Award, or Stock
Bonus is granted, as a condition of exercising such Option or Stock
Appreciation Right, or receiving such Restricted Stock Award, or Stock Bonus,
to give written assurances in substance and form satisfactory to the Company
and its counsel to the effect that such person is acquiring the Stock for his
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company
deems necessary or appropriate in order to comply with Federal and applicable
state securities laws. Legends evidencing such restrictions may be placed on
the Stock certificates.

     13.2  Compliance with Securities Laws. Each Option, Stock Appreciation
Right, Restricted Stock Award, and Stock Bonus grant shall be subject to the
requirement that, if at any time counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such
Option, Stock Appreciation Right, Restricted Stock Award, or Stock Bonus grant
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, is necessary as a
condition of, or in connection with, the issuance or purchase of shares
thereunder, such Option, Stock Appreciation Right, Restricted Stock Award, or
Stock Bonus grant may not be accepted or exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.


Page 15


     13.3  Changes in Accounting Rules. Except as provided otherwise at the
time an Award is granted, notwithstanding any other provision of the Plan to
the contrary, if, during the term of the Plan, any changes in the financial or
tax accounting rules applicable to Options, Stock Appreciation Rights,
Restricted Stock Awards, or other Awards shall occur which, in the sole
judgment of the Committee, may have a material adverse effect on the reported
earnings, assets or liabilities of the Company, the Committee shall have the
right and power to modify as necessary, any then outstanding and unexercised
Options, Stock Appreciation Rights, outstanding Restricted Stock Awards, and
other outstanding Awards as to which the applicable services or other
restrictions have not been satisfied.

                                 ARTICLE XIV
                           OTHER EMPLOYEE BENEFITS

     The amount of any compensation deemed to be received by a Participant as
a result of the exercise of an Option or Stock Appreciation Right, the sale of
shares received upon such exercise, the vesting of any Restricted Stock Award,
receipt of Stock Bonuses, or the grant of Stock shall not constitute
"earnings" or "compensation" with respect to which any other employee benefits
of such employee are determined, including without limitation benefits under
any pension, profit sharing, 401(k), life insurance or salary continuation
plan.

                                  ARTICLE XV
                 PLAN AMENDMENT, MODIFICATION AND TERMINATION

     The Board may at any time terminate, and from time to time may amend or
modify the Plan provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
shareholders if shareholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that shareholder approval is otherwise necessary
or desirable.

     No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options, Stock Appreciation Rights, Restricted Stock
Awards, Stock Bonuses or other Award theretofore granted under the Plan,
without the consent of the Participant holding such Options, Stock
Appreciation Rights, Restricted Stock Awards, Stock Bonuses or other Awards.

                                 ARTICLE XVI
                                 WITHHOLDING

     16.1  Withholding Requirement. The Company is obligations to deliver
shares of Stock upon the exercise of any Option, or Stock Appreciation Right,
the vesting of any Restricted Stock Award, or the grant of Stock shall be
subject to the Participant's satisfaction of all applicable federal, state and
local income and other tax withholding requirements.

     16.2  Withholding With Stock. At the time the Committee grants an Option,
Stock Appreciation Right, Restricted Stock Award, Stock Bonus, other Award, or
Stock or at any time thereafter, it may, in its sole discretion, grant the
Participant an election to pay all such amounts of tax withholding, or any
part thereof, by electing (a) to have the Company withhold from shares
otherwise issuable to the Participant, shares of Stock having a value equal to
the amount required to be withheld or such lesser amount as may be elected by
the Participant; provided however, that the amount of Stock so withheld shall

Page 16


not exceed the minimum amount  required to be withheld under the method of
withholding that results in the smallest amount of withholding, or (b) to
transfer to the Company a number of shares of Stock that were acquired by the
Participant more than six months prior to the transfer to the Company  and
that have a value equal to the amount required to be withheld or such lesser
amount as may be elected by the Participant. All elections shall be subject to
the approval or disapproval of the Committee. The value of shares of Stock to
be withheld shall be based on the Fair Market Value of the Stock on the date
that the amount of tax to be withheld is to be determined (the "Tax Date").
Any such elections by Participants to have shares of Stock withheld for this
purpose will be subject to the following restrictions:

          (a)  All elections must be made prior to the Tax Date.

          (b)  All elections shall be irrevocable.

          (c)  If the Participant is an officer or director of the Company
within the meaning of Section 16 of the 1934 Act ("Section 16"), the
Participant must satisfy the requirements of such Section 16 and any
applicable Rules thereunder with respect to the use of Stock to satisfy such
tax withholding obligation.

                                ARTICLE XVII
                            REQUIREMENTS OF LAW

     17.1  Requirements of Law. The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.

     17.2  Federal Securities Law Requirements. If a Participant is an officer
or director of the Company within the meaning of Section 16, Awards granted
hereunder shall be subject to all conditions required under Rule 16b-3, or any
successor rule promulgated under the 1934 Act, to qualify the Award for any
exception from the provisions of Section 16(b) of the 1934 Act available under
that Rule. Such conditions shall be set forth in the agreement with the
Participant which describes the Award or other document evidencing or
accompanying the Award.

     17.3  Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of
Colorado.

                               ARTICLE XVIII
                            DURATION OF THE PLAN

     Unless sooner terminated by the Board of Directors, the Plan shall
terminate at the close of business on August 30, 2012, and no Option, Stock
Appreciation Right, Restricted Stock Award, Stock Bonus, other Award or Stock
shall be granted, or offer to purchase Stock made, after such termination.
Options, Stock Appreciation Rights, Restricted Stock Awards, and other Awards,
outstanding at the time of the Plan termination may continue to be exercised,
or become free of restrictions, or paid, in accordance with their terms.

Dated:  August 30, 2002

                              Mountain States Holdings, Inc.,
                               a Colorado corporation

                              By:/s/ Mark Massa
                                 Mark Massa, President
Page 17