RELIABLE OFFICE SERVICES, INC.



 

CALIBRUS, INC.




2001 INCENTIVE STOCK OPTION PLAN




 

Calibrus, Inc.

2001 Incentive Stock Option Plan







Calibrus, Inc., a Nevada corporation (the "Company"), hereby
adopts this 2001 Incentive Stock Option Plan (the "Plan"), this 2nd day of
January, 2001, under which options to acquire stock of the Company may be
granted from time to time to employees of the Company or its subsidiaries all on
the terms and conditions set forth herein.




1.

Purpose of the Plan.  The Plan is intended to aid the
Company in maintaining and developing a management team, attracting qualified
officers and employees capable of assisting in the future success of the
Company, and rewarding those individuals who have contributed to the success of
the Company.  It is designed to aid the Company in retaining the services
of executives and employees and in attracting new personnel when needed for
future operations and growth and to provide such personnel with an incentive to
remain employees of the Company, to use their best efforts to promote the
success of the Company's business, and to provide them with an opportunity to
obtain or increase a proprietary interest in the Company.  The above aims
will be effectuated through the granting of options ("Options") to purchase
shares of common stock of the Company, par value $0.001 per share (the "Stock"),
subject to the terms and conditions of this Plan.  It is intended that the
Options issued pursuant to this Plan include, when designated as such at the
time of grant, options which qualify as Incentive Stock Options ("Incentive
Options") within the meaning of section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or any amendment or successor provision of like
tenor.




2.

Shareholder Approval.  The Plan shall become effective
immediately on adoption by the board of directors of the Company (the "Board").
 However, any rights granted under the Plan shall be conditioned on the
approval of the Plan by the Company's shareholders in the manner set forth
below:




(a)

Within 12 months after the Plan has been adopted by the Board, the
Plan shall be submitted for approval by those shareholders of the Company who
are entitled to vote on such matters at a duly held shareholders' meeting or
approved by the unanimous written consent of the holders of the issued and
outstanding Stock of the Company.  If the Plan is presented at a
shareholders' meeting, it shall be approved by the affirmative vote of the
holders of a majority of the issued and outstanding Stock in attendance, in
person or by proxy, at such meeting.  Notwithstanding the foregoing, the
Plan may be approved by the shareholders in any other manner not inconsistent
with the Company's articles of incorporation and bylaws, the applicable
provisions of state corporate laws, and the applicable provisions of the Code
and regulations adopted thereunder.




(b)

In the event the Plan is so approved, the secretary of the Company
shall, as soon as practicable following the date of final approval, prepare and
attach to this Plan certified copies of all relevant resolutions adopted by the
shareholders and the Board.  All Options previously granted under this Plan
shall be deemed to have been granted as of the date of approval by the
shareholders.




(c)

In the event the Plan is not approved by the shareholders on or
before the date that is one year subsequent to the date of this Plan, all
Options previously granted under the Plan shall be deemed to have been granted
as of the date that is one year subsequent to the date of this Plan and any
Options granted thereafter shall be deemed to be granted as of the date of the
grant under the terms of this Plan.  As a result of the failure to obtain
shareholder approval within the time specified, none of the Options issued under
this Plan will qualify as Incentive Options and none of the Options deemed
issued prior to shareholder approval will qualify for the exemption provided in
Rule 16b-3.




3.

Administration of the Plan.  Administration of the
Plan shall be determined by the Board.  Subject to compliance with
applicable provisions of the governing law, the Board may delegate
administration of the Plan or specific administrative duties with respect to the
Plan, on such terms and to 





such committees of the Board as it deems proper.  Any Option
approved by the Board shall be approved by a majority vote of those members of
the Board in attendance at a meeting at which a quorum is present.  Any
Option approved by a committee designated by the Board shall be approved as
specified by the Board at the time of delegation.  The interpretation and
construction of the terms of the Plan by the Board or a duly authorized
committee shall be final and binding on all participants in the Plan absent a
showing of demonstrable error.  No member of the Board or duly authorized
committee shall be liable for any action taken or determination made in good
faith with respect to the Plan.




Transactions under this Plan involving officers, directors, and
beneficial owners of more than 10% of any class of equity security registered
pursuant to section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are intended to comply with all applicable conditions of Rule
16b-3 ("Rule 16b-3") promulgated under the Exchange Act or any amendment or
successor rule of like tenor.  To the extent any provisions of the Plan, or
any action taken by an administrator fails to so comply, it shall be deemed null
and void to the extent permitted by law and deemed advisable by the Board or the
duly authorized committee.




4.

Shares of Stock Subject to the Plan.  A total of four
hundred twenty five thousand (425,000) shares of Stock may be subject to, or
issued pursuant to, Options granted under the terms of this Plan.  To the
extent permitted for plans qualifying under Rule 16b-3, (i) any shares subject
to an Option under the Plan, which Option for any reason expires or is
forfeited, terminated, or surrendered unexercised as to such shares, shall be
added back to the total number of shares reserved for issuance under the terms
of this Plan, and (ii) if any right to acquire Stock granted under the Plan is
exercised by the delivery of shares of Stock or the relinquishment of rights to
shares of Stock, only the net shares of Stock issued (the shares of Stock issued
less the shares of Stock surrendered) shall count against the total number of
shares reserved for issuance under the terms of this Plan.




5.

Reservation of Stock on Granting of Option.  At the
time of granting any Option under the terms of this Plan, there will be reserved
for issuance on the exercise of the Option the number of shares of Stock of the
Company subject to such Option.  The Company may reserve either authorized
but unissued shares or issued shares that have been reacquired by the
Company.




6.

Eligibility.  Options under the Plan may be granted to
employees, including officers, of the Company or its subsidiaries, as may be
existing from time to time, as may be deemed in the best interest of the Company
by the Board or a duly authorized committee.  Such Options shall be in the
amounts, and shall have the rights and be subject to the restrictions, as may be
determined by the Board or a duly authorized committee, all as may be within the
general provisions of this Plan.




7.

Term
of Options and Certain Limitations on Right to Exercise.




(a)

Each Option shall have the term established by the Board or duly
authorized committee at the time the Option is granted but in no event may an
Option have a term in excess of five years.




(b)

The term of the Option, once it is granted, may be reduced only as
provided for in this Plan under the written provisions of the Option.




(c)

Unless otherwise specifically provided by the written provisions
of the Option, no holder or his or her legal representative, legatee, or
distributee will be, or shall be deemed to be, a holder of any shares subject to
an Option unless and until the holder exercises his or her right to acquire all
or a portion of the Stock subject to the Option and delivers the required
consideration to the Company in accordance with the terms of this Plan and then
only to the extent of the number of shares of Stock acquired.  Except as
specifically provided in this Plan or as otherwise specifically provided by the
written provisions of the Option, no adjustment to the exercise price or the
number of shares of Stock subject to the Option shall be made for dividends or
other rights for which the record date is prior to the date the Stock subject to
the Option is acquired by the holder.

 

(d)

Options under the Plan shall vest and become exercisable at such
time or times and on such terms as the Board or a duly authorized committee may
determine at the time of the grant of the Option.




(e)

Options granted under the Plan shall contain such other
provisions, including, without limitation, further restrictions on the vesting
and exercise of the Option, as the Board or a duly authorized committee shall
deem advisable.




(f)

In no event may an Option be exercised after the expiration of its
term.




8.

Exercise Price.  The exercise price of each Option
issued under the Plan shall be determined by the Board or a duly authorized
committee on the date of grant.




9.

Payment of Exercise Price.  The exercise of any Option
shall be contingent on receipt by the Company of cash, certified bank check to
its order, or other consideration acceptable to the Company; provided, that at
the discretion of the Board or a duly authorized committee, the written
provisions of the Option made provide that payment can be made in whole or in
part in shares of Stock of the Company, which Stock shall be valued at its then
fair market value as determined by the Board or a duly authorized committee, or
by the surrender or cancellation of other rights to Stock of the Company.
 Any consideration approved by the Board or a duly authorized committee,
that calls for the payment of the exercise price over a period of more than one
year shall provide for interest, which shall not be included as part of the
exercise price, that is equal to or exceeds the imputed interest provided for in
section 483 of the Code or any amendment or successor section of like tenor.




10.

Withholding.  If the grant or exercise of an Option
pursuant to this Plan is subject to withholding or other trust fund payment
requirements of the Code or applicable state or local laws, such requirements
may, at the discretion of the Board or a duly authorized committee at the time
of the grant of the Option and to the extent permitted by the terms of the
Option and the then governing provisions of the Code and the Exchange Act, be
met (i) by the holder of the Option either delivering shares of Stock or
canceling Options or other rights to acquire Stock with a fair market value
equal to such requirements; (ii) by the Company withholding shares of Stock
subject to the Option with a fair market value equal to such requirements; or
(iii) by the Company making such withholding or other trust fund payment and the
Option holder reimbursing the Company such amount paid within 10 days after
written demand therefor from the Company.




11.

Incentive Options.  In addition to the other
restrictions and provisions of this Plan, any Option granted hereunder that is
intended to be an Incentive Option shall meet the following further
requirements:




(a)

The exercise price of an Incentive Option shall not be less than
the fair market value of the Stock on the date the Incentive Option is granted
as determined by the Board or a duly authorized committee and permitted by the
applicable provisions of the Code or the greater of 100% of the average trading
price of the Company's Stock over a ten (10) day trading period immediately
prior to the date of the grant as determined by the Board or a duly authorized
committee based on an independent reliable source or 100% of the cash offering
price at which Stock of the Company was sold for cash (excluding the exercise of
other options conversion rights, or similar rights granted by the Company)
within one year prior to the date of grant.




(b)

No Incentive Option may be granted under the Plan to any
individual that owns (either of record or beneficially) Stock possessing more
than 10% of the combined voting power of the Company or any parent or subsidiary
corporation unless both the exercise price is at least 110% of the fair market
value of the Stock on the date the Option is granted and the Incentive Option by
its terms is not exercisable more than five years after the date it is
granted.

 

(c)

Incentive Options may be granted only to employees of the Company
or its subsidiaries and only in connection with that employee's employment by
the Company or the subsidiary.  Notwithstanding the above, directors and
other individuals who have contributed to the success of the Company or its
subsidiaries may be granted Incentive Options under the Plan, subject to, and to
the extent permitted by, applicable provisions of the Code and regulations
promulgated thereunder, as they may be amended from time to time.




(d)

The aggregate fair market value (determined as of the date the
Incentive Option is granted) of the shares of Stock with respect to which
Incentive Options are exercisable for the first time by any individual during
any calendar year under the Plan (and all other plans of the Company and its
subsidiaries) may not exceed $100,000.




(e)

No Incentive Option shall be transferable other than by will or
the laws of descent and distribution and shall be exercisable, during the
lifetime of the optionee, only by the optionee to whom the Incentive Option is
granted.




(f)

No stock appreciation rights or other rights can be granted in
tandem with an Incentive Option.




(g)

No individual acquiring shares of Stock pursuant to any Incentive
Option granted under this Plan shall sell, transfer, or otherwise convey the
Stock until after the date that is both two years from the date the Incentive
Option was granted and one year from the date the Stock was acquired pursuant to
the exercise of the Incentive Option.  If any individual makes a
disqualifying disposition, he or she shall notify the Company within 30 days of
such transaction.




(h)

No Incentive Option may be exercised unless the holder was, within
three months of such exercise, and had been since the date the Incentive Option
was granted, an eligible employee of the Company as specified in the applicable
provisions of the Code, unless the employment was terminated as a result of the
death or disability (as defined in the Code and the regulations promulgated
thereunder as they may be amended from time to time) of the employee or the
employee dies within three months of the termination.  In the event of
termination as a result of disability, the holder shall have a one year period
following termination in which to exercise the Incentive Option.  In the
event of death of the holder, the Incentive Option must be exercised within six
months of the issuance of letters testamentary or administration or the
appointment of an administrator, executor, or personal representative, but not
later than one year after the date of termination of employment.  An
authorized absence or leave approved by the Board or a duly authorized committee
for a period of 90 days or less shall not be considered an interruption of
employment for any purpose under the Plan.




(i)

All Incentive Options shall be deemed to contain such other
limitations and restrictions as are necessary to conform the Incentive Option to
the requirements for "incentive stock options" as defined in section 422 of the
Code, or any amendment or successor statute of like tenor.




All of the foregoing
restrictions and limitations are based on the governing provisions of the Code
as of the date of adoption of this Plan.  If at any time the Code is
amended to permit the qualification of an Option as an incentive stock option
without one or more of the foregoing restrictions or limitations or the terms of
such restrictions or limitations are modified, the Board or a duly authorized
committee may grant Incentive Options, and may modify outstanding Incentive
Options in accordance with such changes, all to the extent that such action by
the Board or duly authorized committee does not disqualify the Options from
treatment as incentive stock options under the provisions of the Code as may be
amended from time to time.




12.

Awards to Directors and Officers.  Options granted
under the Plan to directors and officers (as defined in Rule 16a-1 promulgated
under the Exchange Act or any amendment or successor rule of like tenor)
intended to qualify for the exemption from section 16(b) of the Exchange Act
provided in Rule 16b-3 shall be subject to the following requirements, in
addition to the other restrictions and limitations set forth in this Plan:




(a)

The selection of any director or officer, the number of shares of
Stock subject to an Option granted to such director or officer, and the terms of
the Option shall be determined by the Board or a duly authorized committee,
composed of two or more directors of the Company, all of whom are disinterested
persons (as defined in Rule 16b-3).




(b)

With respect to any award, the exercise price may not be less than
the minimum required by applicable state law.




(c)

Approval of the Plan by the shareholders of the Company shall have
been solicited substantially in accordance with the rules and regulations in
effect under section 14(a) of the Exchange Act or any amendment or successor
statute in effect at the time of the approval or, if the Company is not subject
to section 14(a) of the Exchange Act at the time of shareholder approval, such
information as would have been required concerning the Plan is provided to the
shareholders at the first annual meeting of shareholders subsequent to the
Company becoming subject to such rules.




(d)

The Option or, if exercised, the Stock acquired on exercise, may
not be transferred prior to six months subsequent to the date of the grant of
the Option.




(e)

The Option may not be transferable other than by will or the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title 1 of the Employee Retirement Income Security
Act.




(f)

Any cash settlement of Options, withholding of shares of Stock to
satisfy the tax withholding obligations of the Company under the Code, or
surrender or withholding of shares of Stock to pay the exercise price of the
Option, shall be made in accordance with the requirements of Rule 16b-3 or any
amendment or successor rule of like tenor.




All of the foregoing
restrictions and limitations are based on the governing provisions of the
Exchange Act and the rules and regulations promulgated thereunder as of the date
of adoption of this Plan.  If at any time the governing provisions are
amended to permit an Option to be granted or exercised pursuant to Rule 16b-3 or
any amendment or successor rule of like tenor without one or more of the
foregoing restrictions or limitations, or the terms of such restrictions or
limitations are modified, the Board or a duly authorized committee may issue
Options to directors and officers, and may modify outstanding Options, in
accordance with such changes, all to the extent that such action by the Board or
a duly authorized committee does not disqualify the Options from exemption under
the provisions of Rule 16b-3 or any amendment or successor rule of similar
tenor.




13.

Dilution or Other Adjustment.  In the event that the
number of shares of Stock of the Company from time to time issued and
outstanding is increased pursuant to a stock split or a stock dividend, the
number of shares of Stock then covered by each outstanding Option granted
hereunder shall be increased proportionately, with no increase in the total
purchase price of the shares then so covered, and the number of shares of Stock
subject to the Plan shall be increased by the same proportion.  In the
event that the number of shares of Stock of the Company from time to time issued
and outstanding is reduced by a combination or consolidation of shares, the
number of shares of Stock then covered by each outstanding Option granted
hereunder shall be reduced proportionately, with no reduction in the total
purchase price of the shares then so covered, and the number of shares of Stock
subject to the Plan shall be reduced by the same proportion.  In the event
that the Company should transfer assets to another corporation and distribute
the stock of such other corporation without the surrender of Stock of the
Company, and if such distribution is not taxable as a dividend and no gain or
loss is recognized by reason of section 355 of the Code or any amendment or
successor statute of like tenor, then the total purchase price of the Stock then
covered by each outstanding Option shall be reduced by an amount that bears the
same ratio to the total purchase price then in effect as the market value of the
stock distributed in respect 

of a share of the Stock of the Company, immediately following the
distribution, bears to the aggregate of the market value at such time of a share
of the Stock of the Company plus the stock distributed in respect thereof.
 In the event that the Company distributes the stock of a subsidiary to its
shareholders, makes a distribution of a major portion of its assets, or
otherwise distributes significant portion of the value of its issued and
outstanding Stock to its shareholders, the number of shares then subject to each
outstanding Option and the Plan, or the exercise price of each outstanding
Option, may be adjusted in the reasonable discretion of the Board or a duly
authorized committee.  All such adjustments shall be made by the Board or
duly authorized committee, whose determination upon the same, absent
demonstrable error, shall be final and binding on all participants under the
Plan.  No fractional shares shall be issued, and any fractional shares
resulting from the computations pursuant to this section shall be eliminated
from the respective Option.  No adjustment shall be made for cash
dividends, for the issuance of additional shares of Stock for consideration
approved by the Board, or for the issuance to stockholders of rights to
subscribe for additional Stock or other securities.




14.

Options to Foreign Nationals.  The Board or a duly
authorized committee may, in order to fulfill the purposes of this Plan and
without amending the Plan, grant Options to foreign nationals or individuals
residing in foreign countries that contain provisions, restrictions, and
limitations different from those set forth in this Plan and the Options made to
United States residents in order to recognize differences among the countries in
law, tax policy, and custom.  Such grants shall be made in an attempt to
provide such individuals with essentially the same benefits as contemplated by a
grant to United States residents under the terms of this Plan.




15.

Assignment.  No Option granted under this Plan shall
be transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the Code.
 Except as permitted by the foregoing, each Option granted under the Plan
and the rights and privileges thereby conferred shall not be transferred,
assigned, pledged, or hypothecated in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment, or similar
process.  On any attempt to transfer, assign, pledge, hypothecate, or
otherwise dispose of the Option, or of any right or privilege conferred thereby,
contrary to the provisions thereof, or on the levy of any attachment or similar
process on such rights and privileges, the Option and such rights and privileges
shall immediately become null and void.




16.

Effect of Termination of Employment.  In the event
that any holder is terminated or resigns from his or her position with the
Company or a subsidiary within six months of the grant of an award, any
unexercised portion of such Option shall immediately become null and void and
such holder shall have no further rights thereunder.  In the event that any
officer or employee of the Company or a subsidiary is terminated at any time
for, in the determination of the Board or a duly authorized committee, gross
negligence in the performance of his or her duties, substantial failure to meet
written standards established by the Company for the performance of his or her
duties, criminal misconduct, or willful or gross misconduct in the performance
of his or her duties, the Board or a duly authorized committee may cancel any
and all rights such individual may have in the unexercised portion of any Option
held at the time of termination.  The Board or a duly authorized committee
may, at the time of the grant of the Option, establish any other restrictions on
the exercise of such Option subsequent to the termination or resignation of any
individual that it deems appropriate.




17.

Listing and Registration of Shares.  Each Option shall
be subject to the requirement that if at any time the Board shall determine, in
its sole discretion, that it is necessary or desirable to list, register, or
qualify the shares covered thereby on any securities exchange or under any state
or federal law, or obtain the consent or approval of any governmental agency or
regulatory body as a condition of, or in connection with, the granting of such
Option or the issuance or purchase of shares thereunder, such Option may not be
exercised in whole or in part unless and until such listing, registration,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Board.




18.

Expiration and Termination of the Plan.  The Plan may
be abandoned or terminated at any time by the Board or a duly authorized
committee except with respect to any Options then granted but not exercised
under the Plan.  The Plan shall otherwise terminate on the earlier of the
date that is:  (i) ten years after the date the Plan is adopted by the
Board; or (ii) ten years after the date the Plan is approved by the shareholders
of the Company.




19.

Form
of Options.  Options granted under the Plan shall be represented by a
written agreement which shall be executed by the Company and the holder and
which shall contain such terms and conditions as may be determined by the Board
or a duly authorized committee and permitted under the terms of this Plan.
 Option agreements evidencing Incentive Options shall contain such terms
and conditions, among others, as may be necessary in the opinion of the Board or
a duly authorized committee to qualify them as incentive stock options under
section 422 of the Code or any amendment or successor statute of like tenor.




20.

No
Right of Employment.  Nothing contained in this Plan or any Option
awarded pursuant to this Plan shall be construed as conferring on a director,
officer, or employee any right to continue or remain as a director, officer, or
employee of the Company or its subsidiaries.




21.

Amendment of the Plan.  This Plan may not be amended
more than once during any six month period, other than to comport with changes
in the Code or the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder.  Subject to the foregoing and the
limitations of Rule 16b-3 promulgated under the Exchange Act or any amendment or
successor rule of like tenor, the Board or a duly authorized committee may
modify and amend the Plan in any respect; provided, however, that to the extent
such amendment or modification would cause the Plan to no longer comply with the
applicable provisions of the Exchange Act with respect to Options granted to
officers or directors under Rule 16b-3 or any amendment or successor rule of
like tenor or with the provisions of the Code governing incentive stock options
as they may be amended from time to time, such amendment or modification shall
also be approved by the shareholders of the Company.




Subject
only to the prohibition against amending this Plan more than once during any six
month period, the Plan shall be deemed to be automatically amended as is
necessary (i) with respect to the issuance of Incentive Options, to maintain the
Plan in compliance with the provisions of section 422 of the Code, and
regulations promulgated thereunder from time to time, or any amendment or
successor statute thereto, and (ii) with respect to Options granted to officers
and directors of the Company, to maintain the Plan in compliance with the
provisions of Rule 16b-3 promulgated under the Exchange Act or any amendment or
successor rule of like tenor.







Calibrus, Inc.







By:_________________________________

     Dave Biggs, President




ATTEST:

  The
undersigned hereby attests to this Calibrus, Inc. 2001 Incentive Stock Option
Plan.




 Calibrus, Inc.




                                                                                 
By: _______________________________

                              

      Gregg Holmes, Secretary