Exhibit 10.1

                                   VoIP, INC.
                             2004 STOCK OPTION PLAN

1.   ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
     ---------------------------------------

     1.1  Establishment.  The VoIP,  Inc. 2004 Stock Option Plan (the "Plan") is
hereby established effective as of March 10, 2004.

     1.2  Purpose.  The purpose of the Plan is to advance the  interests  of the
Participating  Company Group and its  stockholders  by providing an incentive to
attract and retain persons  performing  services for the  Participating  Company
Group  and  by  motivating   such  persons  to  contribute  to  the  growth  and
profitability of the Participating Company Group.

     1.3 Term of Plan.  The Plan shall  continue in effect  until the earlier of
its  termination  by the Board or the date on which  all of the  shares of Stock
available for issuance under the Plan have been issued and all  restrictions  on
such shares under the terms of the Plan and the  agreements  evidencing  Options
granted under the Plan have lapsed. However, all Options shall be granted, if at
all,  within ten (10) years from the  earlier of the date the Plan is adopted by
the  Board  or the date the Plan is duly  approved  by the  stockholders  of the
Company.

2.   DEFINITIONS AND CONSTRUCTION.
     ----------------------------
     2.1 Definitions. Whenever used herein, the following terms shall have their
respective meanings set forth below:

          (a) "Board"  means the Board of Directors  of the  Company.  If one or
     more  Committees  have been  appointed by the Board to administer the Plan,
     "Board" also means such Committee(s).

          (b) "Cause" shall mean any of the following:  (i) the Optionee's theft
     of Company property or falsification of any Participating Company documents
     or  records;   (ii)  the  Optionee's   improper  use  or  disclosure  of  a
     Participating Company's confidential or proprietary information;  (iii) any
     action by the Optionee  which has a detrimental  effect on a  Participating
     Company's reputation or business;  (iv) the Optionee's failure or inability
     to perform any  reasonable  assigned  duties  after  written  notice from a
     Participating  Company  of,  and a  reasonable  opportunity  to cure,  such
     failure  or  inability;  (v) any  material  breach by the  Optionee  of any
     employment or service  agreement  between the Optionee and a  Participating
     Company, which breach is not cured pursuant to the terms of such agreement;
     or (vi) the  Optionee's  conviction  (including  any plea of  guilty  or no
     contest)  of any  criminal  act which  impairs  the  Optionee's  ability to
     perform his or her duties with a Participating Company.

                  (c)  "Code"  means  the  Internal  Revenue  Code of  1986,  as
         amended, and any applicable regulations promulgated thereunder.

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          (d) "Committee" means the Compensation Committee or other committee of
     the Board duly  appointed to administer  the Plan and having such powers as
     shall be specified by the Board.  Unless the powers of the  Committee  have
     been  specifically  limited,  the Committee shall have all of the powers of
     the Board granted herein, including, without limitation, the power to amend
     or terminate the Plan at any time, subject to the terms of the Plan and any
     applicable limitations imposed by law.

          (e) "Company" means VoIP, Inc., a Texas corporation,  or any successor
     corporation thereto.

          (f)  "Consultant"  means a person  engaged  to provide  consulting  or
     advisory  services  (other  than  as  an  Employee  or  a  Director)  to  a
     Participating  Company,  provided  that the  identity of such  person,  the
     nature of such  services or the entity to which such  services are provided
     would not preclude the Company from offering or selling  securities to such
     person  pursuant  to the Plan in  reliance  on either  the  exemption  from
     registration  provided  by Rule 701  under  the  Securities  Act or, if the
     Company is required to file reports  pursuant to Section 13 or 15(d) of the
     Exchange Act,  registration on a Form S-8 Registration  Statement under the
     Securities Act.

          (g)  "Director"  means  a  member  of the  Board  or of the  board  of
     directors of any other Participating Company.

          (h)  "Disability"  means the  permanent  and total  disability  of the
     Optionee within the meaning of Section 22(e)(3) of the Code.

          (i) "Employee"  means any person treated as an employee  (including an
     officer or a Director who is also treated as an employee) in the records of
     a  Participating  Company and, with respect to any  Incentive  Stock Option
     granted to such  person,  who is an employee for purposes of Section 422 of
     the Code; provided, however, that neither service as a Director nor payment
     of a  director's  fee shall be  sufficient  to  constitute  employment  for
     purposes of the Plan.

          (j)  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
     amended.

          (k) "Fair Market Value" means, as of any date, the value of a share of
     Stock or other property as determined by the Board, in its  discretion,  or
     by the  Company,  in its  discretion,  if such  determination  is expressly
     allocated to the Company herein, subject to the following:

               (i) If,  on such  date,  the Stock is  listed  on a  national  or
          regional  securities  exchange or market system, the Fair Market Value
          of a share of Stock shall be the closing price of a share of Stock (or
          the mean of the  closing  bid and asked  prices of a share of Stock if
          the Stock is so quoted  instead)  as  quoted  on the  Nasdaq  National
          Market,  The Nasdaq SmallCap Market or such other national or regional
          securities  exchange or market system  constituting the primary market
          for the Stock,  as reported  in The Wall Street  Journal or such other
          source as the Company  deems  reliable.  If the relevant date does not
          fall on a day on  which  the  Stock  has  traded  on  such  securities


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          exchange or market  system,  the date on which the Fair  Market  Value
          shall be  established  shall be the last day on which the Stock was so
          traded prior to the relevant  date, or such other  appropriate  day as
          shall be determined by the Board, in its discretion.

               (ii) If, on such date,  the Stock is not listed on a national  or
          regional  securities  exchange or market system, the Fair Market Value
          of a share of Stock shall be as  determined by the Board in good faith
          without regard to any restriction  other than a restriction  which, by
          its terms, will never lapse.

          (l) "Good Reason" shall mean any one or more of the following:

               (i)  without  the  Optionee's   express  written   consent,   the
          assignment  to the Optionee of any duties,  or any  limitation  of the
          Optionee's  responsibilities,   substantially  inconsistent  with  the
          Optionee's  positions,  duties,  responsibilities  and status with the
          Participating  Company  Group  immediately  prior  to the  date of the
          Change in Control;

               (ii)  without  the  Optionee's   express  written  consent,   the
          relocation  of the  principal  place of the  Optionee's  employment or
          service  to a  location  that is more than  fifty  (50) miles from the
          Optionee's  principal place of employment or service immediately prior
          to the date of the  Change in  Control,  or the  imposition  of travel
          requirements  substantially  more  demanding of the Optionee than such
          travel  requirements  existing  immediately  prior  to the date of the
          Change in Control;

               (iii) any failure by the  Participating  Company Group to pay, or
          any material reduction by the Participating  Company Group of, (A) the
          Optionee's base salary in effect  immediately prior to the date of the
          Change in Control (unless reductions comparable in amount and duration
          are  concurrently  made for all other  employees of the  Participating
          Company Group with  responsibilities,  organizational  level and title
          comparable  to  the   Optionee's),   or  (B)  the   Optionee's   bonus
          compensation,  if any, in effect  immediately prior to the date of the
          Change in Control (subject to applicable performance requirements with
          respect  to the  actual  amount  of bonus  compensation  earned by the
          Optionee); or

               (iv)  any  failure  by the  Participating  Company  Group  to (A)
          continue to provide the Optionee with the  opportunity to participate,
          on terms no less favorable than those in effect for the benefit of any
          employee or service provider group which customarily includes a person
          holding the  employment or service  provider  position or a comparable
          position  with  the  Participating  Company  Group  then  held  by the
          Optionee,   in  any  benefit  or  compensation   plans  and  programs,
          including, but not limited to, the Participating Company Group's life,
          disability,  health, dental,  medical,  savings, profit sharing, stock
          purchase  and  retirement  plans,  if any, in which the  Optionee  was
          participating  immediately prior to the date of the Change in Control,
          or their equivalent, or (B) provide the Optionee with all other fringe
          benefits  (or their  equivalent)  from time to time in effect  for the


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          benefit of any  employee  group  which  customarily  includes a person
          holding the  employment or service  provider  position or a comparable
          position  with  the  Participating  Company  Group  then  held  by the
          Optionee.

          (m)  "Incentive  Stock Option" means an Option  intended to be (as set
     forth in the Option  Agreement) and which  qualifies as an incentive  stock
     option within the meaning of Section 422(b) of the Code.

          (n)  "Insider"  means an officer or a Director  of the  Company or any
     other person whose  transactions  in Stock are subject to Section 16 of the
     Exchange Act.

          (o) "Nonstatutory Stock Option" means an Option not intended to be (as
     set  forth in the  Option  Agreement)  or  which  does  not  qualify  as an
     Incentive Stock Option.

          (p) "Option" means a right to purchase Stock (subject to adjustment as
     provided in Section 4.2) pursuant to the terms and  conditions of the Plan.
     An Option may be either an Incentive  Stock Option or a Nonstatutory  Stock
     Option.

          (q) "Option  Agreement" means a written  agreement between the Company
     and an Optionee setting forth the terms, conditions and restrictions of the
     Option  granted to the Optionee and any shares  acquired  upon the exercise
     thereof.  An Option  Agreement may consist of a form of "Notice of Grant of
     Stock Option" and a form of "Stock Option Agreement"  incorporated  therein
     by  reference,  or such other form or forms as the Board may  approve  from
     time to time.

          (r)  "Optionee"  means a  person  who  has  been  granted  one or more
     Options.

          (s)  "Parent   Corporation"   means  any  present  or  future  "parent
     corporation" of the Company, as defined in Section 424(e) of the Code.

          (t)   "Participating   Company"   means  the  Company  or  any  Parent
     Corporation or Subsidiary Corporation.

          (u)  "Participating  Company  Group" means,  at any point in time, all
     corporations collectively which are then Participating Companies.

          (v) "Rule 16b-3"  means Rule 16b-3 under the Exchange  Act, as amended
     from time to time, or any successor rule or regulation.

          (w) "Securities Act" means the Securities Act of 1933, as amended.

          (x)  "Service"  means an  Optionee's  employment  or service  with the
     Participating  Company  Group,  whether in the capacity of an  Employee,  a
     Director or a Consultant. An Optionee's Service shall not be deemed to have
     terminated merely because of a change in the capacity in which the Optionee
     renders  Service  to the  Participating  Company  Group or a change  in the
     Participating Company for which the Optionee renders such Service, provided
     that there is no  interruption  or termination  of the Optionee's  Service.
     Furthermore,  an Optionee's  Service with the  Participating  Company Group
     shall not be deemed to have  terminated if the Optionee  takes any military


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     leave,  sick  leave,  or other bona fide leave of absence  approved  by the
     Company;  provided,  however,  that if any such leave  exceeds  ninety (90)
     days, on the ninety-first  (91st) day of such leave the Optionee's  Service
     shall be deemed to have terminated unless the Optionee's right to return to
     Service with the  Participating  Company  Group is guaranteed by statute or
     contract. Notwithstanding the foregoing, unless otherwise designated by the
     Company or  required  by law,  a leave of  absence  shall not be treated as
     Service for purposes of  determining  vesting under the  Optionee's  Option
     Agreement. The Optionee's Service shall be deemed to have terminated either
     upon an actual termination of Service or upon the corporation for which the
     Optionee performs Service ceasing to be a Participating Company. Subject to
     the foregoing, the Company, in its discretion,  shall determine whether the
     Optionee's   Service  has   terminated  and  the  effective  date  of  such
     termination.

          (y) "Stock"  means the common stock of the Company,  as adjusted  from
     time to time in accordance with Section 4.2.

          (z) "Subsidiary  Corporation"  means any present or future "subsidiary
     corporation" of the Company, as defined in Section 424(f) of the Code.

          (aa) "Ten Percent Owner  Optionee"  means an Optionee who, at the time
     an Option is granted to the Optionee,  owns stock  possessing more than ten
     percent (10%) of the total combined voting power of all classes of stock of
     a  Participating  Company  within the meaning of Section  422(b)(6)  of the
     Code.

          (bb)  "Termination  After Change in Control"  shall mean either of the
     following  events  occurring  within  twelve (12) months  after a Change in
     Control (as defined in Section 8):

               (i)  termination  by  the  Participating  Company  Group  of  the
          Optionee's Service with the Participating Company Group for any reason
          other than for Cause; or

               (ii)  the  Optionee's   resignation  for  Good  Reason  from  all
          capacities  in which the  Optionee  is then  rendering  Service to the
          Participating  Company  Group  within  a  reasonable  period  of  time
          following the event constituting Good Reason.

Notwithstanding  any provision herein to the contrary,  Termination After Change
in Control shall not include any termination of the Optionee's  Service with the
Participating  Company  Group  which  (1) is for  Cause;  (2) is a result of the
Optionee's  death or  disability;  (3) is a result of the  Optionee's  voluntary
termination  of Service  other than for Good Reason;  or (4) occurs prior to the
effectiveness of a Change in Control.

     2.2 Construction.  Captions and titles contained herein are for convenience
only and shall not affect the meaning or  interpretation of any provision of the
Plan. Except when otherwise indicated by the context, the singular shall include
the plural and the plural shall  include the  singular.  Use of the term "or" is
not intended to be exclusive, unless the context clearly requires otherwise.


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<PAGE>

3.   ADMINISTRATION.
     --------------

     3.1  Administration  by the Board.  The Plan shall be  administered  by the
Board.  All  questions of  interpretation  of the Plan or of any Option shall be
determined by the Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan or such Option.

     3.2  Authority of Officers.  Any officer of a  Participating  Company shall
have the  authority  to act on behalf of the Company with respect to any matter,
right,  obligation,  determination or election which is the responsibility of or
which is  allocated  to the Company  herein,  provided  the officer has apparent
authority  with  respect to such matter,  right,  obligation,  determination  or
election.

     3.3 Powers of the Board.  In addition to any other  powers set forth in the
Plan and subject to the  provisions  of the Plan,  the Board shall have the full
and final power and authority, in its discretion:

          (a) to determine the persons to whom,  and the time or times at which,
     Options shall be granted and the number of shares of Stock to be subject to
     each Option;

          (b) to designate  Options as Incentive  Stock Options or  Nonstatutory
     Stock Options;

          (c) to  determine  the Fair  Market  Value of shares of Stock or other
     property;

          (d) to determine the terms,  conditions and restrictions applicable to
     each Option (which need not be identical) and any shares  acquired upon the
     exercise thereof, including,  without limitation, (i) the exercise price of
     the  Option,  (ii) the method of  payment  for  shares  purchased  upon the
     exercise  of the  Option,  (iii) the  method  for  satisfaction  of any tax
     withholding  obligation  arising  in  connection  with the  Option  or such
     shares,  including by the withholding or delivery of shares of stock,  (iv)
     the timing, terms and conditions of the exercisability of the Option or the
     vesting of any shares acquired upon the exercise  thereof,  (v) the time of
     the expiration of the Option, (vi) the effect of the Optionee's termination
     of Service with the  Participating  Company Group on any of the  foregoing,
     and (vii) all other terms,  conditions and  restrictions  applicable to the
     Option or such shares not inconsistent with the terms of the Plan;

          (e) to approve one or more forms of Option Agreement;

          (f) to amend, modify,  extend,  cancel or renew any Option or to waive
     any  restrictions  or  conditions  applicable  to any  Option or any shares
     acquired upon the exercise thereof;

          (g) to accelerate, continue, extend or defer the exercisability of any
     Option or the vesting of any shares  acquired  upon the  exercise  thereof,
     including with respect to the period following an Optionee's termination of
     Service with the Participating Company Group;



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<PAGE>

          (h) to  prescribe,  amend or rescind  rules,  guidelines  and policies
     relating to the Plan, or to adopt  supplements to, or alternative  versions
     of, the Plan, including,  without limitation,  as the Board deems necessary
     or desirable to comply with the laws of, or to  accommodate  the tax policy
     or custom of, foreign  jurisdictions whose citizens may be granted Options;
     and

          (i) to correct  any  defect,  supply any  omission  or  reconcile  any
     inconsistency  in the Plan or any  Option  Agreement  and to make all other
     determinations  and take such other actions with respect to the Plan or any
     Option as the Board may deem advisable to the extent not inconsistent  with
     the provisions of the Plan or applicable law.

     3.4 Administration with Respect to Insiders.  With respect to participation
by  Insiders in the Plan,  at any time that any class of equity  security of the
Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall
be administered in compliance with the requirements, if any, of Rule 16b-3.

     3.5 Indemnification. In addition to such other rights of indemnification as
they  may  have  as  members  of the  Board  or  officers  or  employees  of the
Participating  Company Group, members of the Board and any officers or employees
of the Participating Company Group to whom authority to act for the Board or the
Company is delegated  shall be indemnified by the Company against all reasonable
expenses,  including  attorneys'  fees,  actually  and  necessarily  incurred in
connection with the defense of any action, suit or proceeding,  or in connection
with any appeal  therein,  to which they or any of them may be a party by reason
of any action taken or failure to act under or in  connection  with the Plan, or
any right granted hereunder,  and against all amounts paid by them in settlement
thereof  (provided  such  settlement  is approved by  independent  legal counsel
selected by the  Company) or paid by them in  satisfaction  of a judgment in any
such action,  suit or  proceeding,  except in relation to matters as to which it
shall be adjudged in such action,  suit or proceeding that such person is liable
for gross negligence,  bad faith or intentional misconduct in duties;  provided,
however,  that within sixty (60) days after the institution of such action, suit
or  proceeding,  such  person  shall  offer  to the  Company,  in  writing,  the
opportunity at its own expense to handle and defend the same.

4.   SHARES SUBJECT TO PLAN.
     ----------------------

     4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in
Section 4.2, the maximum  aggregate number of shares of Stock that may be issued
under the Plan shall be Four Million (4,000,000) and shall consist of authorized
but unissued or reacquired  shares of Stock or any  combination  thereof.  If an
outstanding  Option for any reason  expires or is  terminated  or canceled or if
shares of Stock are acquired upon the exercise of an Option subject to a Company
repurchase option and are repurchased by the Company at the Optionee's  exercise
price,  the shares of Stock allocable to the unexercised  portion of such Option
or such repurchased  shares of Stock shall again be available for issuance under
the Plan.

     4.2 Adjustments for Changes in Capital Structure. In the event of any stock
dividend,  stock  split,  reverse  stock split,  recapitalization,  combination,
reclassification  or similar  change in the capital  structure  of the  Company,
appropriate  adjustments shall be made in the number and class of shares subject
to the Plan and to any  outstanding  Options and in the exercise price per share


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of any  outstanding  Options.  If a majority of the shares which are of the same
class as the shares that are subject to  outstanding  Options are exchanged for,
converted  into,  or otherwise  become  (whether or not pursuant to an Ownership
Change Event, as defined in Section 8.1) shares of another corporation (the "New
Shares"),  the Board may unilaterally  amend the outstanding  Options to provide
that such  Options  are  exercisable  for New  Shares.  In the event of any such
amendment, the number of shares subject to, and the exercise price per share of,
the  outstanding  Options  shall be adjusted in a fair and  equitable  manner as
determined by the Board, in its discretion.  Notwithstanding the foregoing,  any
fractional share resulting from an adjustment pursuant to this Section 4.2 shall
be rounded down to the nearest  whole  number,  and in no event may the exercise
price of any Option be decreased  to an amount less than the par value,  if any,
of the stock  subject to the Option.  The  adjustments  determined  by the Board
pursuant to this Section 4.2 shall be final, binding and conclusive.

5.   ELIGIBILITY AND OPTION LIMITATIONS.
     ----------------------------------

     5.1 Persons Eligible for Options. Options may be granted only to Employees,
Consultants, and Directors. For purposes of the foregoing sentence, "Employees,"
"Consultants" and "Directors" shall include prospective  Employees,  prospective
Consultants and prospective  Directors to whom Options are granted in connection
with written  offers of an  employment or other  service  relationship  with the
Participating  Company Group.  Eligible persons may be granted more than one (1)
Option.

     5.2 Option  Grant  Restrictions.  Any person who is not an  Employee on the
effective  date of the grant of an Option to such  person may be granted  only a
Nonstatutory  Stock Option.  An Incentive  Stock Option granted to a prospective
Employee upon the condition  that such person become an Employee shall be deemed
granted effective on the date such person commences Service with a Participating
Company,  with an exercise price  determined as of such date in accordance  with
Section 6.1. In no case shall a company, corporation, trust, family trust or any
other entity which would  invalidate the Subchapter S election of the Company or
Participating Company Group be an Eligible person.

     5.3 Fair Market Value Limitation.  To the extent that options designated as
Incentive   Stock  Options   (granted  under  all  stock  option  plans  of  the
Participating  Company  Group,  including  the Plan)  become  exercisable  by an
Optionee  for the first time during any  calendar  year for stock  having a Fair
Market Value greater than One Hundred Thousand Dollars ($100,000),  the portions
of such options which exceed such amount shall be treated as Nonstatutory  Stock
Options. For purposes of this Section 5.3, options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair  Market  Value of stock shall be  determined  as of the time the option
with  respect to such stock is granted.  If the Code is amended to provide for a
different  limitation  from that set forth in this Section 5.3,  such  different
limitation shall be deemed incorporated herein effective as of the date and with
respect to such Options as required or permitted by such  amendment to the Code.
If an  Option  is  treated  as an  Incentive  Stock  Option  in  part  and  as a
Nonstatutory  Stock Option in part by reason of the limitation set forth in this
Section  5.3,  the  Optionee  may  designate  which  portion of such  Option the
Optionee is exercising.  In the absence of such designation,  the Optionee shall
be deemed to have  exercised  the Incentive  Stock Option  portion of the Option
first. Separate certificates representing each such portion shall be issued upon
the exercise of the Option.


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<PAGE>

6.   TERMS AND CONDITIONS OF OPTIONS.
     -------------------------------

     Options shall be evidenced by Option  Agreements  specifying  the number of
shares of Stock  covered  thereby,  in such form as the Board shall from time to
time  establish.  No Option or  purported  Option  shall be a valid and  binding
obligation of the Company unless evidenced by a fully executed Option Agreement.
Option  Agreements  may  incorporate  all or any of the  terms  of the  Plan  by
reference  and shall  comply  with and be  subject  to the  following  terms and
conditions:

     6.1 Exercise Price. The exercise price for each Option shall be established
in the discretion of the Board;  provided,  however, that (a) the exercise price
per share for an Option  shall be not less than the Fair Market Value of a share
of Stock on the  effective  date of grant of the  Option,  and (b) no  Incentive
Stock  Option  granted to a Ten Percent  Owner  Optionee  shall have an exercise
price per share less than one  hundred  ten  percent  (110%) of the Fair  Market
Value  of a share  of  Stock  on the  effective  date of  grant  of the  Option.
Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a
Nonstatutory  Stock Option) may be granted with an exercise price lower than the
minimum  exercise price set forth above if such Option is granted pursuant to an
assumption or substitution  for another option in a manner  qualifying under the
provisions of Section 424(a) of the Code.

     6.2  Exercisability  and Term of Options.  Options shall be  exercisable at
such time or times,  or upon such event or events,  and  subject to such  terms,
conditions,  performance criteria and restrictions as shall be determined by the
Board and set forth in the Option  Agreement  evidencing such Option;  provided,
however,  that (a) no Option shall be  exercisable  after the  expiration of ten
(10) years after the  effective  date of grant of such Option,  (b) no Incentive
Stock Option granted to a Ten Percent Owner Optionee shall be exercisable  after
the  expiration  of five (5)  years  after the  effective  date of grant of such
Option,  and  (c) no  Option  granted  to a  prospective  Employee,  prospective
Consultant or prospective  Director may become  exercisable prior to the date on
which such person commences Service with a Participating Company. Subject to the
foregoing,  unless  otherwise  specified by the Board in the grant of an Option,
any Option granted  hereunder shall terminate ten (10) years after the effective
date of grant of the Option,  unless earlier  terminated in accordance  with its
provisions.

     6.3 Payment of Exercise Price.

          (a) Forms of Consideration  Authorized.  Except as otherwise  provided
     below,  payment  of the  exercise  price for the  number of shares of Stock
     being purchased  pursuant to any Option shall be made (i) in cash, by check
     or cash  equivalent,  (ii) by tender to the Company,  or attestation to the
     ownership,  of shares of Stock owned by the  Optionee  having a Fair Market
     Value (as determined by the Company  without regard to any  restrictions on
     transferability  applicable  to such  stock by reason of  federal  or state
     securities laws or agreements with an underwriter for the Company) not less
     than the exercise  price,  (iii) by delivery of a properly  executed notice
     together  with  irrevocable  instructions  to a  broker  providing  for the
     assignment to the Company of the proceeds of a sale or loan with respect to
     some or all of the shares  being  acquired  upon the exercise of the Option


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<PAGE>

     (including,  without  limitation,  through an exercise  complying  with the
     provisions of Regulation T as promulgated from time to time by the Board of
     Governors  of the Federal  Reserve  System) (a "Cashless  Exercise"),  (iv)
     provided  that  the  Optionee  is an  Employee  and in the  Company's  sole
     discretion  at the  time  the  Option  is  exercised,  by  delivery  of the
     Optionee's  promissory  note  in a form  approved  by the  Company  for the
     aggregate exercise price,  provided that, if the Company is incorporated in
     the State of Delaware,  the Optionee  shall pay in cash that portion of the
     aggregate  exercise  price not less than the par value of the shares  being
     acquired,  (v) by such other  consideration as may be approved by the Board
     from time to time to the extent permitted by applicable law, or (vi) by any
     combination  thereof.  The Board  may at any time or from time to time,  by
     approval  of or by  amendment  to the  standard  forms of Option  Agreement
     described  in  Section 7, or by other  means,  grant  Options  which do not
     permit all of the foregoing forms of consideration to be used in payment of
     the  exercise  price  or  which  otherwise  restrict  one or more  forms of
     consideration.

          (b) Limitations on Forms of Consideration.

               (i) Tender of Stock. Notwithstanding the foregoing, an Option may
          not be  exercised  by tender to the  Company,  or  attestation  to the
          ownership, of shares of Stock to the extent such tender or attestation
          would constitute a violation of the provisions of any law,  regulation
          or agreement restricting the redemption of the Company's stock. Unless
          otherwise  provided by the Board,  an Option may not be  exercised  by
          tender to the Company,  or attestation to the ownership,  of shares of
          Stock  unless such shares  either have been owned by the  Optionee for
          more than six (6) months or were not acquired, directly or indirectly,
          from the Company.

               (ii)  Cashless  Exercise.  The Company  reserves,  at any and all
          times,  the right, in the Company's sole and absolute  discretion,  to
          establish,  decline to approve or terminate  any program or procedures
          for the exercise of Options by means of a Cashless Exercise.

               (iii)  Payment by Promissory  Note.  No promissory  note shall be
          permitted in the exercise of an Option.

     6.4  Tax  Withholding.  The  Company  shall  have  the  right,  but not the
obligation,  to deduct from the shares of Stock issuable upon the exercise of an
Option,  or to accept from the  Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company,  equal to all
or any part of the federal,  state, local and foreign taxes, if any, required by
law to be  withheld  by the  Participating  Company  Group with  respect to such
Option or the shares  acquired upon the exercise  thereof.  Alternatively  or in
addition,  in its  discretion,  the Company  shall have the right to require the
Optionee, through payroll withholding,  cash payment or otherwise,  including by
means  of a  Cashless  Exercise,  to make  adequate  provision  for any such tax
withholding obligations of the Participating Company Group arising in connection
with the Option or the  shares  acquired  upon the  exercise  thereof.  The Fair
Market Value of any shares of Stock withheld or tendered to satisfy any such tax


                                       10
<PAGE>

withholding obligations shall not exceed the amount determined by the applicable
minimum  statutory  withholding  rates.  The Company shall have no obligation to
deliver shares of Stock or to release shares of Stock from an escrow established
pursuant to the Option  Agreement  until the  Participating  Company Group's tax
withholding obligations have been satisfied by the Optionee.

     6.5 Reserved.

     6.6 Effect of Termination of Service.

          (a)  Option  Exercisability.  Subject to  earlier  termination  of the
     Option as otherwise  provided herein and unless  otherwise  provided by the
     Board in the grant of an Option and set forth in the Option  Agreement,  an
     Option shall be exercisable after an Optionee's termination of Service only
     during the  applicable  time  period  determined  in  accordance  with this
     Section 6.6 and thereafter shall terminate:

               (i) Disability.  If the Optionee's Service with the Participating
          Company Group  terminates  because of the  Disability of the Optionee,
          the Option,  to the extent  unexercised and exercisable on the date on
          which the  Optionee's  Service  terminated,  may be  exercised  by the
          Optionee (or the Optionee's  guardian or legal  representative) at any
          time  prior to the  expiration  of twelve  (12)  months (or such other
          period of time as determined by the Board,  in its  discretion)  after
          the date on which the Optionee's Service terminated,  but in any event
          no later than the date of expiration of the Option's term as set forth
          in the Option Agreement evidencing such Option (the "Option Expiration
          Date").

               (ii) Death.  If the  Optionee's  Service  with the  Participating
          Company Group  terminates  because of the death of the  Optionee,  the
          Option, to the extent unexercised and exercisable on the date on which
          the Optionee's Service terminated,  may be exercised by the Optionee's
          legal  representative  or  other  person  who  acquired  the  right to
          exercise  the  Option by reason  of the  Optionee's  death at any time
          prior to the expiration of twelve (12) months (or such other period of
          time as determined by the Board, in its discretion)  after the date on
          which the  Optionee's  Service  terminated,  but in any event no later
          than the Option  Expiration  Date.  The  Optionee's  Service  shall be
          deemed to have  terminated  on account of death if the  Optionee  dies
          within three (3) months (or such other period of time as determined by
          the Board,  in its  discretion)  after the  Optionee's  termination of
          Service (unless the termination was for Cause).

               (iii)  Termination  After  Change in Control.  If the  Optionee's
          Service  with the  Participating  Company  Group ceases as a result of
          Termination  After  Change in  Control,  then (1) the  Option,  to the
          extent unexercised and exercisable on the date on which the Optionee's
          Service  terminated,   may  be  exercised  by  the  Optionee  (or  the
          Optionee's guardian or legal  representative) at any time prior to the
          expiration  of six (6) months  after the date on which the  Optionee's
          Service  terminated,  but  in any  event  no  later  than  the  Option
          Expiration Date, and (2) the  exercisability and vesting of the Option
          and any shares acquired upon the exercise thereof shall be accelerated
          in full  effective  as of the date on  which  the  Optionee's  Service
          terminated.



                                       11
<PAGE>

               (iv) Other Termination of Service. If the Optionee's Service with
          the  Participating  Company Group  terminates  for any reason,  except
          Disability,  death or Termination After Change in Control, the Option,
          to the extent  unexercised and exercisable by the Optionee on the date
          on which the Optionee's  Service  terminated,  may be exercised by the
          Optionee at any time prior to the  expiration  of three (3) months (or
          such  other  period  of  time  as  determined  by  the  Board,  in its
          discretion) after the date on which the Optionee's Service terminated,
          but in any event no later than the Option Expiration Date.

          (b)  Extension  if  Exercise  Prevented  by Law.  Notwithstanding  the
     foregoing,  if the exercise of an Option within the applicable time periods
     set forth in Section  6.6(a) is prevented by the  provisions  of Section 10
     below, the Option shall remain  exercisable until three (3) months (or such
     longer period of time as determined by the Board, in its discretion)  after
     the date the  Optionee  is  notified  by the  Company  that the  Option  is
     exercisable, but in any event no later than the Option Expiration Date.

          (c) Extension if Optionee  Subject to Section  16(b).  Notwithstanding
     the foregoing,  if a sale within the  applicable  time periods set forth in
     Section  6.6(a) of shares  acquired  upon the  exercise of the Option would
     subject the Optionee to suit under  Section  16(b) of the Exchange Act, the
     Option  shall  remain  exercisable  until the  earliest to occur of (i) the
     tenth (10th) day  following  the date on which a sale of such shares by the
     Optionee would no longer be subject to such suit,  (ii) the one hundred and
     ninetieth (190th) day after the Optionee's termination of Service, or (iii)
     the Option Expiration Date.

     6.7  Transferability  of Options.  During the lifetime of the Optionee,  an
Option shall be exercisable  only by the Optionee or the Optionee's  guardian or
legal  representative.  No Option shall be  assignable  or  transferable  by the
Optionee,   except  by  will  or  by  the  laws  of  descent  and  distribution.
Notwithstanding  the  foregoing,  to the extent  permitted by the Board,  in its
discretion,  and set forth in the Option  Agreement  evidencing  such Option,  a
Nonstatutory  Stock Option shall be  assignable or  transferable  subject to the
applicable limitations,  if any, described in Rule 701 under the Securities Act,
and the  General  Instructions  to Form S-8  Registration  Statement  under  the
Securities Act.

7.   STANDARD FORMS OF OPTION AGREEMENT.
     ----------------------------------

     7.1 Option  Agreement.  Unless otherwise  provided by the Board at the time
the Option is granted,  an Option  shall comply with and be subject to the terms
and conditions set forth in the form of Option  Agreement  approved by the Board
concurrently with its adoption of the Plan and as amended from time to time.

     7.2 Authority to Vary Terms.  The Board shall have the authority  from time
to time to vary the terms of any standard form of Option Agreement  described in
this Section 7 either in connection with the grant or amendment of an individual
Option or in connection with the  authorization of a new standard form or forms;
provided,  however,  that the terms and  conditions of any such new,  revised or
amended standard form or forms of Option Agreement are not inconsistent with the
terms of the Plan.



                                       12
<PAGE>

8.   CHANGE IN CONTROL.
     -----------------

     8.1 Definitions.

          (a) An  "Ownership  Change  Event" shall be deemed to have occurred if
     any of the following occurs with respect to the Company:  (i) the direct or
     indirect sale or exchange in a single or series of related  transactions by
     the  stockholders  of the Company of more than fifty  percent  (50%) of the
     voting stock of the Company;  (ii) a merger or  consolidation  in which the
     Company  is a party;  (iii)  the  sale,  exchange,  or  transfer  of all or
     substantially  all of the assets of the Company;  or (iv) a liquidation  or
     dissolution of the Company.

          (b) A "Change in Control"  shall mean an  Ownership  Change Event or a
     series of related Ownership Change Events  (collectively,  a "Transaction")
     wherein the stockholders of the Company  immediately before the Transaction
     do not retain immediately after the Transaction,  in substantially the same
     proportions  as their  ownership  of shares of the  Company's  voting stock
     immediately before the Transaction, direct or indirect beneficial ownership
     of more than fifty percent (50%) of the total combined  voting power of the
     outstanding  voting stock of the Company or the corporation or corporations
     to which the  assets  of the  Company  were  transferred  (the  "Transferee
     Corporation(s)"),  as the  case  may  be.  For  purposes  of the  preceding
     sentence,  indirect beneficial ownership shall include, without limitation,
     an interest  resulting  from  ownership  of the voting stock of one or more
     corporations which, as a result of the Transaction,  own the Company or the
     Transferee  Corporation(s),  as the case may be, either directly or through
     one or more  subsidiary  corporations.  The Board  shall  have the right to
     determine  whether  multiple  sales or exchanges of the voting stock of the
     Company  or  multiple   Ownership  Change  Events  are  related,   and  its
     determination shall be final, binding and conclusive.

     8.2  Effect of Change in Control  on  Options.  In the event of a Change in
Control,  the surviving,  continuing,  successor,  or purchasing  corporation or
parent corporation  thereof,  as the case may be (the "Acquiring  Corporation"),
may either assume the Company's rights and obligations under outstanding Options
or substitute for outstanding Options  substantially  equivalent options for the
Acquiring Corporation's stock. In the event the Acquiring Corporation elects not
to assume or substitute for  outstanding  Options in connection with a Change in
Control,  any unexercisable or unvested portions of outstanding  Options and any
shares  acquired upon the exercise  thereof held by Optionees  whose Service has
not terminated prior to such date shall be immediately exercisable and vested in
full as of the date ten (10) days  prior to the date of the  Change in  Control.
The exercise or vesting of any Option and any shares  acquired upon the exercise
thereof  that was  permissible  solely by reason  of this  Section  8.2 shall be
conditioned  upon the  consummation of the Change in Control.  Any Options which


                                       13
<PAGE>

are  neither  assumed  or  substituted  for  by  the  Acquiring  Corporation  in
connection with the Change in Control nor exercised as of the date of the Change
in Control shall terminate and cease to be outstanding  effective as of the date
of the Change in Control.  Notwithstanding  the foregoing,  shares acquired upon
exercise  of an Option  prior to the  Change in  Control  and any  consideration
received  pursuant to the Change in Control  with  respect to such shares  shall
continue  to be subject to all  applicable  provisions  of the Option  Agreement
evidencing such Option except as otherwise provided in such Option Agreement.

9.   PROVISION OF INFORMATION.
     ------------------------

     Each Optionee shall be given access to  information  concerning the Company
equivalent to that information  generally made available to the Company's common
stockholders.

10.  COMPLIANCE WITH SECURITIES LAW.
     ------------------------------

     The grant of Options and the  issuance of shares of Stock upon  exercise of
Options  shall be subject to  compliance  with all  applicable  requirements  of
federal, state and foreign law with respect to such securities.  Options may not
be exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable  federal,  state or foreign securities laws or other
law or  regulations or the  requirements  of any stock exchange or market system
upon which the Stock may then be listed. In addition, no Option may be exercised
unless (a) a registration  statement  under the Securities Act shall at the time
of exercise of the Option be in effect with respect to the shares  issuable upon
exercise  of the Option or (b) in the opinion of legal  counsel to the  Company,
the shares issuable upon exercise of the Option may be issued in accordance with
the terms of an applicable  exemption from the registration  requirements of the
Securities  Act. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Company's legal counsel
to be necessary to the lawful  issuance and sale of any shares  hereunder  shall
relieve the Company of any  liability in respect of the failure to issue or sell
such shares as to which such requisite  authority  shall not have been obtained.
As a  condition  to the  exercise  of any  Option,  the  Company may require the
Optionee to satisfy any qualifications that may be necessary or appropriate,  to
evidence  compliance  with  any  applicable  law or  regulation  and to make any
representation  or warranty  with  respect  thereto as may be  requested  by the
Company.

11.  TERMINATION OR AMENDMENT OF PLAN.
     --------------------------------

     The Board may terminate or amend the Plan at any time. However,  subject to
changes in applicable  law,  regulations  or rules that would permit  otherwise,
without  the  approval  of the  Company's  stockholders,  there  shall be (a) no
increase in the maximum  aggregate  number of shares of Stock that may be issued
under the Plan (except by operation of the  provisions of Section  4.2),  (b) no
change in the class of persons eligible to receive Incentive Stock Options,  and
(c) no other amendment of the Plan that would require  approval of the Company's
stockholders  under any  applicable  law,  regulation or rule. No termination or
amendment of the Plan shall affect any then outstanding  Option unless expressly
provided by the Board. In any event, no termination or amendment of the Plan may
adversely  affect  any  then  outstanding  Option  without  the  consent  of the
Optionee,  unless such  termination or amendment is required to enable an Option
designated as an Incentive  Stock Option to qualify as an Incentive Stock Option
or is necessary to comply with any applicable law, regulation or rule.



                                       14
<PAGE>

12.  STOCKHOLDER APPROVAL.
     --------------------

     The Plan or any increase in the maximum aggregate number of shares of Stock
issuable  thereunder as provided in Section 4.1 (the "Authorized  Shares") shall
be approved by the  stockholders of the Company within twelve (12) months of the
date of adoption  thereof by the Board.  Options  granted  prior to  stockholder
approval of the Plan or in excess of the Authorized Shares  previously  approved
by the  stockholders  shall  become  exercisable  no  earlier  than  the date of
stockholder  approval of the Plan or such increase in the Authorized  Shares, as
the case may be. The Plan was  originally  approved by the Board of Directors on
March 10, 2004 and will be  submitted to  Stockholders  for approval at the next
Annual Meeting of Stockholders.




































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