TRAVIS INDUSTRIES, INC.
         1998 OMNIBUS STOCK OPTION AND INCENTIVE PLAN

1.  PURPOSE.

The Plan is intended to provide incentive to key employees and 
directors of, and key consultants, vendors, customers, and 
others expected to provide significant services to the 
Corporation, to encourage proprietary interest in the 
Corporation, to encourage such key employees to remain in the 
employ of the Corporation and its Subsidiaries, to attract new 
employees with outstanding qualifications, and to afford 
additional incentive to consultants, vendors, customers, and 
others to increase their efforts in providing significant 
services to the Corporation.

2.  DEFINITIONS.

2.1  "Award" shall mean an Option which may be designated 
an Incentive Stock Option or a Non-statutory Stock 
Option, a Purchase Right, a Stock Appreciation Right or a 
Stock Payment, in each case as granted pursuant to the Plan.

2.2 "Award Agreement" shall mean a Stock Option 
Agreement, Restricted Stock Agreement or a Purchase Right 
Agreement.

2.3 "Beneficiary" shall mean the person, persons, trust 
or trusts entitled by will or the laws of descent and distribution 
to receive the benefits specified under the Plan in the event of 
a Participant's death.

2.4 "Board" shall mean the Board of Directors of the 
Corporation.

2.5 "Code" shall mean the Internal Revenue Code of 
1986, as amended.

2.6  "Committee" shall mean the committee, if any, 
appointed by the Board in accordance with Section 4 of the 
Plan.

2.7  "Common Stock" shall mean the Common Stock 
of the Corporation.

2.8  "Corporation" shall mean Travis Industries, Inc. 
and its Subsidiaries.

2.9 "Disability" shall mean the condition of a 
Participant who is unable to (i) perform his or her substantial 
and material job duties due to injury or sickness or such other 
condition as the Board or Committee may determine in its sole 
discretion; and/or (ii) engage in any substantial gainful activity 
by reason of any medically determinable physical or mental 
impairment which can be expected to result in death or which 
has lasted or can be expected to last for a continuous period of 
not less than twelve (12) months.

2.10 "Discount" shall mean, with respect to the 
Purchase Price of Purchase Rights, the discount from the Fair 
Market Value of a Share as set forth in Section 8.3.

2.11 "Dividend Equivalent" shall mean a right to 
receive a number of Shares or a cash amount, determined as 
provided in Article 12 hereof.

2.12 "Eligible Employee" shall mean an individual who 
is employed (within the meaning of Code Section 3401 and the 
regulations thereunder) by the Corporation.

2.13 "Event" shall mean any of the following:

(a) Any person or entity (or group of affiliated 
persons or entities) who acquired in one or more transactions, 
whether before or after the Effective Date of the Plan, 
ownership of more than fifty percent (50%) of the outstanding 
Shares of stock entitled to vote in the election of directors of 
the Corporation; or

(b) The dissolution or liquidation of the Corporation 
or a reorganization, merger or consolidation of the 
Corporation with one or more entities, as a result of which the 
Corporation is not the surviving entity, or a sale of all or 
substantially all of the assets of the Corporation as an entirety 
to another entity.

For purposes of this definition, ownership does not include 
ownership: (i) by a person owning such Shares merely of 
record (such as a member of a securities exchange, 
a nominee or a securities depository system), (ii) by a person 
who is a bona fide pledgee of Shares prior to a default and 
determination to exercise powers as an owner of the Shares, 
(iii) by a person who is not required to file a statement on 
Schedule 13D by virtue of Rule 13d-1(b) of the Securities and 
Exchange Commission under the Exchange Act, or (iv) by a 
person who owns or holds Shares as an underwriter acquired in 
connection with an underwritten offering pending and for 
purposes of resale.

2.14 "Exchange Act" shall mean the Securities Exchange 
Act of 1934, as amended from time to time.

2.15  "Exercise Price" shall mean the price per Share of 
Common Stock, determined by the Board or the Committee, at 
which an Award may be exercised.

2.16 "Fair Market Value" shall mean the value of one (1) Share 
of Common Stock, determined as follows:

(i) if the Shares are traded on an exchange, the price 
at which Shares traded at the close of business on the date
of valuation; or

(ii) if the Shares are traded over-the-counter on 
the NASDAQ System, the closing bid price if one is available, 
or the mean between the bid and asked prices on said system at 
the close of business on the date of valuation; or

(iii) if neither (i) nor (ii) above applies, the Fair 
Market Value as determined by the Board or the Committee in 
good faith. Such determination shall be conclusive and binding 
on all persons.

2.17 "Incentive Stock Option" shall mean an option described 
in Section 422A(b) of the Code.

2.18 "Nonstatutory Stock Option" shall mean an option 
not described in Section 422(b), 422A(b), 423(b) or 424(b) of 
the Code.

2.19  "Option" shall mean either an Incentive Stock 
Option or a Nonstatutory Stock Option granted pursuant to the 
Plan.

2.20 "Participant" shall mean an Eligible Employee 
who has received an Award under the Plan.

2.21 "Performance Award" shall mean a cash bonus, 
stock bonus or other performance or incentive award that is 
paid in cash, stock or a combination of both.

2.22  "Plan" shall mean the Travis Industries, Inc. 1998 
Omnibus Stock Option and Incentive Plan, as it may be 
amended from time to time.

2.23 "Purchase Price" shall mean the Exercise Price 
times the number of Shares with respect to which an Award is 
exercised.

2.24 "Purchase Right" shall mean the grant to an 
Employee of the right to purchase Shares under the Plan.

2.25 "Restricted Stock" shall mean those Shares issued 
pursuant to a Restricted Stock Award that are not free of the 
restrictions set forth in the related Restricted Stock Agreement.

2.26 "Restricted Stock Award" shall mean an award of 
a fixed number of shares subject to payment of such 
consideration, if any, and such forfeiture provisions, as are set 
forth in the related Restricted Stock Agreement.

2.27 "Retirement" shall mean the voluntary termination 
of employment by an Employee upon the attainment of age 
sixty-five (65) and the completion of not less than twenty (20) 
years of service with the Corporation or a Subsidiary.

2.28 "Share" shall mean one (1) share of Common Stock, 
adjusted in accordance with Section 15.3 of the Plan (if 
applicable).

2.29 "Securities Act" shall mean the Securities Act of 
1933, as amended from time to time.

2.30 "Stock Appreciation Right" shall mean the right to 
receive a number of Shares or a cash amount, or a combination 
of Shares and cash, based upon the Fair Market Value, book 
value or other measure determined by the Board or the 
Committee, as the case may be, pursuant to Section 9 of the 
Plan.

2.31 "Stock Payment" shall mean a payment in the 
form of Shares, or a Purchase Right, as part of a deferred 
compensation arrangement  made in lieu of all or any portion 
of the compensation, including without limitation the salary, 
bonuses or commissions, that would otherwise become payable 
in cash to an Eligible Employee.

2.32 "Subsidiary" shall mean any corporation at least 
fifty percent (50%) of the total combined voting power of 
which is owned by the Corporation or by another subsidiary.

2.33  "Tax Date" shall have the meaning set forth in 
Section 15.3 hereof.

3. EFFECTIVE DATE.

The Plan was adopted by the Corporation's 
shareholders and by the Board on September 1, 1998. The 
Effective Date of the Plan shall be September 1, 1998 (the 
"Effective Date").

4. ADMINISTRATION.

The Plan shall be administered by the Board in 
compliance with Rule 16b-3 of the Exchange Act ("Rule 
16b-3"), or by a Committee appointed by the Board, which 
Committee shall be constituted to permit the Plan to comply 
with Rule 16b-3, and which shall consist of not less than three (3)
members. The Board shall appoint one (1) of the members 
of the Committee, if there be one, as Chairman of the 
Committee. If a Committee has been appointed, the Committee 
shall hold meetings at such times and places as it may 
determine.  Acts of a majority of the Committee at which a 
quorum is present, or acts reduced to or approved in writing by 
a majority of the members of the Committee shall be valid acts 
of the Committee. The Board, or the Committee, if there be 
one, shall from time to time at its discretion select the Eligible 
Employees and consultants who are to be granted Awards, 
determine the number of Shares or cash, or the combination 
thereof, to be applicable to such Award, and designate any 
Options as incentive Stock Options or Nonstatutory Stock 
Options, except that no incentive Stock Option may be granted 
to a non-employee director or a non-employee consultant. A 
member of the Board or Committee member shall in no event 
participate in any determination relating to Awards held by or 
to be granted to such Board or Committee member; however, 
a member of the Board or a Committee member shall be 
entitled to receive Awards approved by the shareholders in 
accordance with the provisions of Rule 16b-3. The 
interpretation and construction by the Board, or by the 
Committee, if there be one, of any provision of the Plan or of 
any Award granted thereunder shall be final. No member of the 
Board or the Committee shall be liable for any action or 
determination made in good faith with respect to the Plan or 
any Award granted thereunder. In addition to any right of 
indemnification provided by the Articles of Incorporation or 
Bylaws of the Corporation, such person shall be indemnified 
and held harmless by the Corporation from any loss, cost, 
liability or expense that may be imposed upon or reasonably 
incurred by him in connection with any claim, suit, action or 
proceeding to which he may be a party by reason of any action 
or omission under the Plan.

5.	PARTICIPATION.

5.1 Eligibility. Subject to the terms and conditions of 
Section 5.2 below, the Participants shall be such 
persons as the shareholders may approve or as the Committee 
may select from among the following classes of parsons: (i) 
Employees of the Corporation or of a Subsidiary (who may be 
officers, whether or not they are directors); and (ii) Consultants, 
vendors, customers, and others expected to provide significant 
services to the Corporation or a Subsidiary.

For purposes of this Plan, a Participant who is a director 
or a consultant, vendor, customer, or other provider of 
significant services to the Corporation or a Subsidiary shall be 
deemed to be an Eligible Employee, and service as a director, 
consultant, vendor, customer, or other provider of significant 
services to the Corporation or a Subsidiary shall be deemed to 
be employment, except that no Incentive Stock Option may be 
granted to a non-employee director or non-employee 
consultant, vendor, customer, or other provider of significant 
services to the Corporation or a Subsidiary,  and except that no 
Nonstatutory Stock Option may be granted to a non-employee 
director or non-employee consultant, vendor, customer, or other 
provider of significant services to the Corporation or a 
Subsidiary other than upon a vote of a majority of disinterested 
directors finding that the value of the services rendered or to be 
rendered to the Corporation or a Subsidiary by such non-
employee director or non-employee consultant, vendor, 
customer, or other provider of services is at least equal to the 
value of the Awards granted.

5.2 Ten-Percent Shareholders. An Eligible Employee 
who owns more than ten percent (10%) of the total combined 
voting power of all classes of outstanding stock of the 
Corporation, its parent or any of its Subsidiaries shall not be 
eligible to receive an Award for an Incentive Stock Option 
unless (i) the Exercise Price of the Shares subject to such 
Award is at least one hundred ten percent (110%) of the Fair 
Market Value of such Shares on the date of grant: and (ii) such 
Awards by its terms is not exercisable after the expiration of 
five (5) years from the date of grant. 

5.3 Stock Ownership. For purposes of Section 5.2 above, in 
determining stock ownership,  an Eligible Employee shall 
be considered as owning the stock owned, directly or 
indirectly, by or for a corporation, partnership, estate or trust 
shall be considered as being owned proportionately by or for its 
shareholders, partners or beneficiaries. Stock with respect to 
which such Eligible Employee holds an Award shall not be 
counted.

5.4 Outstanding Stock. For purposes of Section 5.2 above, 
"Outstanding stock" shall include all stock actually 
issued and outstanding immediately after the grant of the 
Award to the Participant. "Outstanding stock" shall not include 
shares authorized for issue under outstanding Options or 
Purchase Rights held by the Participant or by any other person.

6. STOCK SUBJECT TO THE PLAN.

The stock subject to Awards granted under the Plan 
shall be Shares of the Corporation's authorized but unissued or 
reacquired Common Stock.  The aggregate number of Shares which may 
be issued as Awards or upon exercise of Awards under 
the Plan shall not exceed Twenty Four Million (24,000,000)
shares.  The number of Shares subject to unexercised Options, 
Stock Appreciation Rights or Purchase Rights 
(plus the number of Shares previously issued under the 
Plan) shall not at any time exceed the number of Shares 
available for issuance under the Plan. In the event that any 
unexercised Option, Stock Appreciation Right or Purchase 
Right, or any portion thereof, for any reason expires or is 
terminated, or if any Shares subject to a Restricted Stock 
Award do not vest or are not delivered, the unexercised or 
unvested Shares allocable to such Option, Stock Appreciation 
Right, Purchase Right or Restricted Stock Award may again be 
made subject to any Award. Any Shares withheld by the 
Corporation pursuant to Section 15.3 shall not be deemed to be 
issued. The number of withheld Shares shall be deducted from 
the applicable Award and shall not entitle the Participant to 
receive additional Shares. The limitations established by this 
Article 6 shall be subject to adjustment in the manner provided 
in Section 14.5 hereof upon the occurrence of an event 
specified therein.

7. OPTIONS.

7.1 Stock Option Agreements. Options shall be 
evidenced by written stock option agreements in such form as 
the Committee shall from time to time determine. Such 
agreements shall comply with and be subject to the terms and 
conditions set forth below.

7.2 Number of Shares. Each Option shall state the 
number of Shares to which it pertains and shall provide for the 
adjustment thereof in accordance with the provisions of Section 
14.5 hereof.

7.3 Exercise Price. Each Option shall state the Exercise 
Price thereof. The Exercise Price in the case of any Incentive 
Stock Option shall not be less than the Fair Market Value on 
the date of grant and, in the case of any Option granted to an 
Optionee described in Section 5.2 hereof, shall not be less than 
one hundred ten percent (110%) of the Fair Market Value on 
the date of grant. The Exercise Price in the case of any 
Nonstatutory Stock Option shall not be less than eighty-five 
percent (85%) of the Fair Market Value on the date of grant.

7.4 Medium and Time of Payment. The Purchase Price 
shall be payable in full in United States dollars upon the 
exercise of the Option; provided, however, that if the applicable 
Stock Option Agreement so provides the Purchase Price may 
the paid (i) by the surrender of Shares in good form for transfer, 
owned by the Participant and having a Fair Market Value on 
the date of exercise equal to the Purchase Price, or in any 
combination of cash and Shares, as long as the sum of the cash 
so paid and the Fair Market Value of the Shares so surrendered 
equals the Purchase Price, (ii) by cancellation of indebtedness 
owed by the Corporation to the Participant, (iii) with a full 
recourse promissory note executed by the Participant, or (iv) 
any combination of the foregoing. The interest rate and other 
terms and conditions of such note shall be determined by the 
Committee. The Committee may require that the Participant 
pledge his or her Shares to the Corporation for the purpose of 
securing the payment of such note. In no event shall the stock 
certificate(s) representing such Shares be released to the 
Participant until such note shall be paid in full.

7.5 Term and Non-Transferabiliy of Options. Each 
option shall state the time or times which all or part thereof 
becomes exercisable. No Option shall be exercisable after the 
expiration of ten (10) years from the date it was granted, and no 
Option granted to a Participant described in Section 5.2 hereof 
shall be exercisable after the expiration of five (5) years from 
the date it was granted. During the lifetime of the Participant, 
the Option shall be exercisable only by the Participant and shall 
not be assignable or transferable. In the event of the 
Participant's death, the Option shall not be transferable by the 
Participant other than by will or the laws of descent and 
distribution.

7.6 Modification, Extension and Renewal of Option. 
Within the limitations of the Plan, the Committee may modify, 
extend or renew outstanding Options or accept the cancellation 
of outstanding Options (to the extent not previously exercised) 
for the granting of new Options in substitution therefor. The 
foregoing notwithstanding, no modifications of an Option shall, 
without the consent of the Participant, alter or impair any rights 
or obligations under any Option previously granted.

7.7 Limitation on Grant of Incentive Stock Options. In 
the case of Incentive Stock Options granted hereunder, the 
aggregate Fair Market Value (determined as of the date of the 
grant thereof) of the Shares with respect to which Incentive 
Stock Options become exercisable by any Participant for the 
first time during any calendar year (under this Plan and all 
other plans maintained by the Corporation, its parent or it 
Subsidiaries) shall not exceed One Hundred Thousand Dollars 
($100,000). The Board or Committee may, however, with the 
Participant's consent authorize an amendment to the incentive 
Stock Option which renders it a Nonstatutory Stock Option.

7.8 Other Provisions. The Stock Option Agreements 
authorized under the Plan may contain such other provisions 
not inconsistent with the terms of the Plan (including, without 
limitation, restrictions upon the exercise of the Option) as the 
Committee shall deem advisable.

7.9 Specific Awards Approved by the Shareholders. 
Subject to the approval by the vote of the shareholders at the 
Annual Meeting of the Shareholders and Annual Meeting of the 
Board on September 1, 1998, the individuals whose names are 
set forth in Exhibit "A", a copy of which is attached hereto and 
incorporated herein by this reference, shall be deemed granted 
Nonstatutory Stock Options as of the Effective Date, in the 
amounts and for the amount indicated opposite their respective 
names, and in accordance with the vesting schedule set forth 
herein, all in accordance with the provisions set form in this 
Article 7 of the Plan. The provisions of this Section 7.9 shall 
not be amended more than once every six (6) months, other 
than to comport with changes in the Internal Revenue Code, the 
Employee Retirement Income Security Act, or the rules 
thereunder, and/or intended to be construed in accordance 
with the provisions pertaining to "formula awards" under 
Paragraph (c)(2)(ii) of Rule 16b-3.

8. RESTRICTED STOCK PURCHASE RIGHTS

8.1 Stock Purchase Agreements. Purchase Rights shall 
be evidenced by written Stock Purchase Agreements in such 
form as the Committee shall from time to time determine. Such 
agreements shall comply with and be subject to the terms and 
conditions set forth below.

8.2 Number of Shares. Each Purchase Right shall state 
the number of Shares to which it pertains and shall provide for 
the adjustment thereof in accordance with the provisions of 
Section 14.5 hereof.

8.3 Purchase Price. Each Stock Purchase Agreement shall state 
the Purchase Price per Share at which the Purchase 
Right may be exercised which shall not be lass than the Fair 
Market Value of a Share on the date on which the Purchase 
Rights are granted. Unless the Board or Committee otherwise 
determines, the Purchase Price per Share at which any Purchase 
Right granted under the Plan may be exercised shall not be less 
than the Fair Market Value of a Share as of the date on which 
the Purchase Right is granted, less a discount (the "Discount") 
equal to not more than seventy-five percent (75%) of such 
value.

8.4 Exercisability and Non -Transferability of Purchase 
Rights. Purchase Rights granted to an Eligible Employee 
pursuant to the Plan must be exercised within sixty (60) days 
after the later to occur of (i) Board approval of the grant of the 
Purchase Right or (ii) delivery of notice of such grant. Purchase 
Rights may not be sold, pledged assigned, hypothecated, 
transferred or disposed of in any manner and shall expire 
immediately upon the death of the Participant or the 
termination of such Participant a employment with the 
Corporation.

8.5 Medium and Time of Payment. The Purchase Price 
shall be payable in full in United States dollars upon exercise 
of the Purchase Right; provided however that if the applicable 
Stock Purchase Agreement so provides the Purchase Price may 
be paid (i) by the surrender of Shares in good form for transfer 
owned by the person exercising the Purchase Right and having 
a Fair Market Value on the date of exercise equal to the 
Purchase Price or in any combination of cash and Shares as 
long as the sum of the cash so paid and the Fair Market Value 
of the Shares so surrendered equal the Purchase Price or (iii) 
with a full recourse promissory note executed by the 
Participant. The interest rate and other terms and conditions of 
such note shall be determined by the Committee. The 
Committee may require that the Participant pledge his or her 
Shares to the Corporation for the purpose of securing the 
payment of such note. In no event shall the stock certificate(s) 
representing such Shares be released to Participant until such 
note shall be paid in full. In the event the Corporation 
determines that it is required to withhold state or federal 
income tax as a result of the exercise of a Purchase Right, as a 
condition to the exercise thereof, a Participant may be required 
to make arrangements satisfactory to the Corporation for it to 
satisfy such withholding requirements. In addition, the 
Participant shall agree to immediately notify the Corporation if 
he or she files an election pursuant to Section 83(b) of the Code 
with respect to receipt of the Shares.

8.6  Consent of Spouse. Each Participant who is 
married must cause his or her spouse to sign and deliver the 
Stock Purchase Agreement to the Corporation, in the place 
provided for such signature on the Stock Purchase Agreement.

8.7 Modification, Extension and Renewal of Purchase 
Rights. Within the limitations of the Plan, the Board or the 
Committee may modify, extend or renew outstanding Purchase 
Rights or accept the cancellation of outstanding Purchase 
Rights (to the extent not previously exercised) for the granting 
of new Purchase Rights in substitution therefor. The foregoing 
notwithstanding, no modification of a Purchase Right shall, 
without the consent of the Employee, alter or impair any rights 
or obligations under any Purchase Right previously granted.

8.8  Repurchase Option as to Unvested Shares.  

(a)  Termination of Employment. In the event of 
the voluntary or involuntary termination or cessation of 
employment or association of the Participant with the 
Corporation or any Subsidiary for any reason whatsoever, with 
or without cause (including death or disability), the Corporation 
shall, upon the date of such termination, have an irrevocable, 
exclusive option to repurchase (the "Repurchase Option") all 
or any portion of the Shares held by the Employee that are 
subject to the Repurchase Option as of such date at the original 
Purchase Price.

(b) Vesting. Initially, all of the Shares shall be 
subject to the Repurchase Option. Thereafter, the Repurchase 
Option shall lapse and expire, or "vest", as to a specified 
number of the Shares in accordance with a schedule to be 
determined by the Board or the Committee, as the case may be, 
which shall be attached to the Stock Purchase Agreement to be 
entered into between the Participant sad the Corporation as 
provided in Section 8.1 above. All Shares which continue to be 
subject to the Repurchase Option are sometimes hereinafter 
referred to as "Unvested Shares."

(c) Notice. Within ninety (90) days following 
the date of the Participant's termination of employment by the 
Corporation, the Corporation shall notify the Employee as to 
whether it wishes to repurchase the Unvested Shares pursuant 
to the exercise of the Repurchase Option. If the Corporation 
elects to repurchase said Unvested Shares, it shall set a date for 
the closing of the transaction at the Executive Offices of the 
Corporation, not later than thirty (30) days from the date of 
such notice.

(d) Transfers. Except for transfers to Participant's descendants 
and spouses, the Participant shall not transfer by sale, 
assignment, hypothecation, donation or otherwise any of 
the Shares or any interest therein prior to the release 
of such Shares from the Repurchase Option.

(e) Assignment. The Corporation's Repurchase Option may be 
assigned in whole or in part to any stockholder or 
stockholders of the Corporation or other persons or 
organizations.

8.9 Corporation's Right of First Refusal to Purchase 
Vested Shares. Each Stock Purchase Agreement entered into as 
provided herein shall provide for a right of first refusal and 
option on the part of the Corporation to purchase all or any part 
of any Shares which are no longer subject to the Repurchase 
Option which the Participant purposes to sell, transfer or 
otherwise dispose of (except for transfers to Participant's 
descendants and spouses) on the following terms and 
conditions:

(a) The Participant must notify the Corporation 
in writing of any proposed sale, transfer or other disposition of 
any of the Shares, specifying the proposed transferee, the 
number of Shares proposed to be transferred, and the price at 
which such Shares are to be sold, transferred or otherwise 
disposed.

(b)  The Corporation shall have a period of thirty (30) 
days from receipt of such notice to notify the 
Participant in writing as to whether or not the Corporation 
elects to purchase all or a specified portion of such Shares at the 
lower of: i) price per share set forth in the notice given by the 
Participant, or ii) the Fair Market Value for a share of the 
Corporation's Common Stock, without restrictions, on the date 
on which the notice is given by Participant to the Corporation 
(determined as provided in Section 2.13 above), less in either 
case an amount equal to the Discount.

(c) if the Corporation elects not to purchase all of the Shares 
specified in the notice, the Participant may sell, 
transfer or otherwise dispose of the remaining Shares in strict 
accordance with the terms specified in the notice within ninety 
(90) days following the date of the notice. It is understood and 
agreed that any transferee of any of such Shares (other than the 
Corporation) will take and acquire all of such Shares subject to 
the continuing right of first refusal and option on the part of the 
Corporation to purchase all or any portion of such Shares from 
the transferee on all of the same terms and conditions as are set 
forth in the Stock Purchase Agreement, unless the Participant 
shall have paid to the Corporation, out of the proceeds from the 
sale of such Shares or otherwise, an amount equal to the lesser 
of (i) the Discount, or (ii) the amount by which the Fair Market 
Value for a share of the Corporation's Common Stock, without 
restrictions, on the date on which the notice is given by 
Participant to the Corporation (determined as provided in 
Section 2.13 above) exceeds the price per Share paid by the 
Participant for such Shares.

8.10 Other Provisions. The Stock Purchase Agreements 
authorized may contain such other provisions not inconsistent 
with the terms of the Plan as the Board or the Committee shall 
deem advisable.

9. STOCK APPRECIATION RIGHTS.

9.1  Grant. Stock Appreciation Rights related or unrelated 
to Options or other Awards may be granted to Eligible Employees
(i) at such time, if unrelated to an Award, or if related to 
an Award other than an Incentive Stock Option; or (ii) 
only at the time of grant of an Option if related thereto. A 
Stock Appreciation Right may extend to all or a portion of the 
Shares covered by a related Award.

9.2 Exercise of Stock Appreciation Rights. A Stock Appreciation 
Right granted in connection with an Award shall be 
exercisable only at such time or times, and to the extent, that 
a related Award is exercisable. A Stock Appreciation Right 
granted in connection with an Option may be exercisable only 
when the Fair Market Value of the stock subject to the Option 
exceeds the Exercise Price of the incentive Stock Option.

9.3 Payment.  

(a) Upon the exercise of a Stock Appreciation 
Right, and, if such Stock Appreciation Right is related to an 
Award, surrender of an exercisable portion of a related Award, 
the Participant shall be entitled to receive payment of an 
amount determined by multiplying: (i) the difference obtained 
by subtracting the purchase price of a share of Common Stock 
specified in the related Award, or if such Stock Appreciation 
Right is unrelated to an Award, from the Fair Market Value, 
book value or other measure specified in the Award of such 
Stock Appreciation Right of a share of Common Stock on the 
date of exercise of such Stock Appreciation Right, by (ii) the 
number of Shares as to which such Stock Appreciation Right 
has been exercised.

(b) The Board or the Committee, as the case may be, in its
sole discretion, may require settlement of the 
amount determined under paragraph (a) above solely in cash, 
solely in Shares of Common Stock (valued at Fair Market 
Value on the business day next preceding the date of exercise 
of such Stock Appreciation Right), or partly in such Shares and 
partly in cash.

9.4 Maximum Stock Appreciation Right Term. Each 
Stock Appreciation Right and all rights and obligations 
thereunder shall expire on such date as shall be determined by 
the Board or the Committed but not later than ten (10) years 
after the date of the Award thereof, and shall be subject to 
earlier termination as provided in the related Award Agreement 
and Sections 14.6, 14.7, 14.8, 14.9 and 15.1.

10. PERFORMANCE AWARDS.

One or more Performance Awards may be granted to 
any Eligible Employee. The value of such Awards may be 
linked to the market value, book value or other measure of the 
value of the Common Stock or other specific performance 
criteria determined appropriate by the Board or the Committee, 
in each case on a specified date or over any period determined 
by the Board or the Committee, or may be based upon the 
appreciation in the market value, book value or other measure 
of the value of a specified number of Shares of Common Stock 
over a fixed period determined by the Board or the 
Committees. In making such determinations, the Board or the 
Committees may  consider (among such other factors as it 
deems relevant in light of the specific type of award) the 
contributions, responsibilities and other compensation of the 
Participant.

11. DIVIDEND EQUIVALENTS.

A Participant may also be granted "Dividend 
Equivalents" based on the dividends declared on the Common 
Stock, to be credited as of dividend payment dates, during the 
period between the Award Date and the date such Award is 
exercised, vests or expires as determined by the Board or the 
Committee. Such Dividend Equivalents shall be converted to 
cash or additional Shares of Common Stock by such formula 
and at such time and subject to such limitations as may be 
determined by the Board or the Committee.

12. STOCK PAYMENTS.

The Board or the Committee may approve Stock 
Payments to Eligible Employees who elect to receive such 
payments in the manner determined from time to time by the 
Board or the Committee. The number of Shares shall be 
determined by the Board or the Committee and may be based 
upon the Fair Market Value, book value or other measure of the 
value of such Shares on the Award Date or on any date 
thereafter.

13. LOANS.

The Corporation may, with the Board's or the 
Committee's approval, extend one or more loans to Participants 
in connection with the exercise or receipt of outstanding 
Awards granted under the Plan; provided any such loan shall be 
subject to the following terms and conditions;

(i) The principal of the loan shall not exceed the 
amount required to be paid to the Corporation upon the 
exercise or receipt of one or more Awards under the Plan less 
the aggregate Par Value of any Common Stock deliverable on 
such event, and the loan proceeds shall be paid directly to the 
Corporation in consideration of such exercise or receipt.

(ii) The initial term of the loan shall be determined by 
the Board or the Committee; provided that the 
term of the loan, including extensions, shall not exceed a period 
of ten (10) years.

(iii) The loan shall be with full recourse to the 
Participant, shall be evidenced by the Participant's promissory 
note and shall bear interest at a rate determined by the Board or 
the Committee but not less than the Corporation's average cost 
of funds as of a date within thirty-one (31) days of the date of 
such loan, as determined by the Board or Committee.

(iv) in the event a Participant terminates his or her 
employment at the request of the Corporation, the unpaid 
principal balance of the note shall become due and payable on 
the tenth (10th) business day after such termination; provided, 
however, that if a sale of such Shares would cause such 
Participant to incur liability under Section 16(b) of the 
Exchange Act, the unpaid balance shall become due and 
payable on the tenth (10th) business day after the first day on 
which a sale of such Shares could have been made without 
incurring such liability assuming for these purposes that there 
are no other transactions by the Participant subsequent to such 
termination. In the event a Participant terminates employment 
other than at the request of the Corporation, the unpaid 
principal balance of the note shall become due and payable six 
(6) months after the date of such termination.

14. RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.

14.1 Employee Status. Status as an Eligible Employee 
shall not be construed as a commitment that any Award will be 
made under the Plan to an Eligible Employee or to Eligible 
Employees generally.

14.2 No Employment Contract. Nothing contained in 
the Plan (or in the Award Agreements or in any other 
documents related to the Plan or to Awards) shall confer upon 
any Eligible Employee or any Participant any right to continue 
in the employee of the Corporation or constitute any contract 
or agreement of employment, or interfere in any way with the 
right of the Corporation to reduce such person's compensation 
or to terminate the employment of such Eligible Employee or 
Participant, with or without cause, but nothing contained in the 
Plan or any document related thereto shall affect any other 
contractual right of any Eligible employee or Participant. 
Nothing contained in the Plan (or in the Award Agreements or 
in any other documents related to the Plan or the Awards) shall 
confer upon any director of the Corporation any right to 
continue as a director of the Corporation.

14.3 No Transferability. Awards may be exercised only 
by, and amounts payable or Shares issued pursuant to an Award 
shall be paid only to or registered only in the name of the 
Participant or, in the event of the Participant's death, to the 
Participant's Beneficiary or, in the event of the Participant's 
Disability, to the participant's Personal Representative or, if 
there is none, to the Participant. Other than by will or the laws 
of descent and distribution, no right or benefit under the Plan 
or any Award, including, without limitation, any Option or 
share of Restricted Stock that has not vested, shall be subject in 
any manner to anticipation,  alienation, sale, transfer, 
assignment, pledge, encumbrance or charge and any such 
attempted action shall be void and no such right or benefit shall 
be, in any manner, liable for, or subject to, debts, contract, 
liabilities, engagements, or torts of any Eligible Employee, 
Participant or Beneficiary, in any case except as may otherwise 
by expressly required by applicable law. The Board or the 
Committee shall disregard any attempt at transfer, assignment 
or other alienation prohibited by the preceding sentence  and 
shall pay or deliver such cash or Shares of Common Stock in 
accordance with the provisions of the Plan. Notwithstanding 
the foregoing, the Board or the Committee may authorize 
exercise by or transfers or payments to a third party in a 
specific case or more generally; provided, however, with 
respect to any option or similar right (including any Stock 
Appreciation Right) such discretion may only be exercised to 
the extent that applicable rules under Section 16 of the 
Exchange Act would so permit without disqualifying the Plan 
from certain benefits thereunder.

14.4 Plan Not Funded. No Participant, Beneficiary or 
other person shall have any right, title  or interest in any fund 
or in any specific asset (including Shares of Common Stock) of 
the Corporation by reason of any Award granted hereunder. 
There shall be no funding of any benefits which may become 
payable hereunder. Neither the provision of the Plan (or of any 
documents related hereto, nor the creation or adoption of the 
Plan, nor any action taken pursuant to the provisions of the 
Plan shall create, or be construed to create, a trust of any kind 
or a fiduciary relationship between the Corporation and any 
Participant or Beneficiary. To the extent that a Participant, a 
Beneficiary or other person acquires a right to receive an 
Award hereunder, such right shall be no greater than the right 
of any unsecured general creditor of the Corporation. Awards 
payable under the Plan shall be paid in Shares of Common 
Stock or from the general assets of the Corporation, and no 
special or separate fund or deposit shall be established and no 
segregation of assets or Shares shall be made to assure payment 
of such Awards.

14.5 Adjustment Upon Recapitalization and Corporate 
Changes. If the outstanding Shares of Common Stock are 
changed into or exchanged for cash or a different number or 
kind of Shares or securities of the Corporation, or if the 
outstanding Shares of the Common Stock are increased, 
decreased, exchanged for, or otherwise changes, or if additional 
Shares or new or different shares or securities are distributed 
with respect to the outstanding Shares of the Common Stock, 
through a reorganization or merger in which the Corporation is 
the surviving entity or through a combination, consolidation, 
recapitalization, reclassification, stock split, stock dividend, 
reverse stock split, stock consolidation or other capital change 
or adjustment, an appropriate adjustment shall be made in the 
number and kind of shares or other consideration that is subject 
to or may be developed under the Plan and pursuant to 
outstanding Awards. A corresponding adjustment to the 
consideration payable with respect to Awards granted prior to 
any such change and to the price, if any, to be paid in 
connection with Restricted Stock Awards shall also be made as 
appropriate. Corresponding adjustments shall be made with 
respect to Stock Appreciation Rights related to Options to 
which they are related. In addition, the Board or the Committee 
may grant such additional rights in the  foregoing  
circumstances as the Board or the Committee deems to be in 
the best interest of any Participant and the Corporation in order 
to preserve for the participant the benefits of an Award.

14.6 Termination of Employment Except by Death, 
Disability or Retirement. If a Participant ceases to be an 
Employee for any reason other than his or her death, disability 
or retirement, such Participant shall have the right, subject to 
the restrictions of Section 14.3 above, to exercise any Award at 
any time within three (3) months after termination of 
employment, but only to the extent that, at the date of 
termination of employment, the Participant's right to exercise 
such Award had accrued pursuant to the terms of the applicable 
agreement and had not previously been exercised; provided, 
however, that if the Participant was terminated for cause (as 
defined in the applicable agreement) any Award not exercised 
in full prior to such termination shall be canceled. For this 
purpose, the employment relationship shall be treated as 
continuing intact while the Participant is on military leave, sick 
leave or other bona fide leave of absence (to be determined in 
the sole discretion of the Board or the Committee). The 
foregoing notwithstanding, in the case of an incentive Stock 
Option, employment shall not be deemed to continue beyond 
the ninetieth (90th) day after the Participant's re-employment 
rights are guaranteed by statute or by contract.

14.7 Death of Participant. If a Participant dies while an 
Employee, or after ceasing to be an Employee but during the 
period while he or she could have exercised the Award under 
this Section 14.7, and has not fully exercised the Award, then 
the Award may be exercised in full at any time within twelve 
(12) months after the Participant's death but no later than the 
date of termination (fixed in the applicable agreement), by the 
executors or administrators of his or her estate or by any person 
or persons who have acquired the Award directly from the 
Participant by bequest or inheritance, but only to the extent 
that, at the date of death, the Participant's right to exercise such 
Award had accrued and had not been forfeited pursuant to the 
terms of the applicable agreement and had not previously been 
exercised.

14.8 Disability of Participant. If a Participant ceases to 
be an Employee by reason of Disability, such Participant shall 
have the right to exercise the Award at any time within twelve 
(12) months after termination of employment (but not later than 
the termination date fixed in the applicable agreements) but only 
to the extent that at the date of termination of employment, the 
Participant's right to exercise such Award had accrued pursuant 
to the terms of the applicable agreement and had not previously 
been exercised.

14.9 Retirement of Participant. If a Participant ceases to 
be an Employee by reason of Retirement, such Participant shall 
have the right to exercise the Award at any time within three 
(3) months after termination of employment (but not later than 
the termination date fixed in the applicable agreements) but only 
to the extent that, at the date of termination of employment, the 
Participant's right to exercise such Award had accrued pursuant 
to the terms of the applicable agreement and had not previously 
been exercised.

14.10 Rights as a Stockholder. A Participant, or a 
transferee of a Participant, shall have no rights as a 
stockholder with respect to any Shares covered by his or her 
Award until the date of the issuance of a stock certificate
for such Shares. No adjustment shall be made for dividends 
(ordinary or extraordinary, whether in cash, securities or other property), 
distributions or other rights for which the record date is prior to 
the date such stock certificate is issued, except as provided in 
Section 14.5 hereof.

14.11 Deferral of Payments. The Board or the Committee 
may approve the deferral of any payments that may 
become due under the Plan. Such deferrals shall be subject to 
any conditions, restrictions or requirements as the Board or the 
Committee may determine.

14.12 Acceleration of Awards. Immediately prior to the 
occurrence of an Event, (i) each Option and Stock 
Appreciation Right under the Plan shall become exercisable in 
full; (ii) Restricted Stock delivered under the Plan shall 
immediately vest free of restriction; and (iii) each other Award 
outstanding under the Plan shall be fully vested or exercisable 
unless prior to the Event, the Board or the Committee
otherwise determines that there shall be no such acceleration or 
vesting of an Award or otherwise determines those Awards 
which shall be accelerated or vested and to the extent to which 
they shall be accelerated or vested, or that an Award shall 
terminate, or unless in connection with such Event the Board 
provides (a) for the assumption of such Awards theretofore 
granted; or (b) for the substitution for such Awards of new 
awards covering securities or obligations (or any combination 
thereof) of a successor corporation, or a parent or subsidiary 
thereof, with appropriate adjustments as to number and kind of 
shares and prices; or (c) for the payment of the Fair Market 
Value of the then outstanding Awards. In addition, the Board 
or the Committee may grant such additional rights in the 
foregoing circumstances as the Board or the Committee deems 
to be in the best interest of the Participant and the Corporation 
in order to preserve for the Participant the benefits of an 
Award. For purposes of this Section 14.12 only, Board shall 
mean the Board of Directors of the Corporation as constituted 
immediately prior to the Event. In addition, the Board may in 
its sole discretion accelerate the exercisability or vesting of any 
or all Awards outstanding under the Plan in circumstances 
under which the Board or the Committee determines such 
acceleration appropriate.

15. MISCELLANEOUS

15.1 Termination, Suspension and Amendment. The Board or the 
Committee may, at any time suspend, amend, modify of 
terminate the Plan (or any part thereof) and may, with 
the consent of a Participant, authorize such modifications 
of the terms and conditions of such Participant's Award as it 
shall deem advisable; provided that, except as permitted under 
the provision of Section 14.5 hereof, no amendment or 
modification of the Plan may be adopted without approval by 
a majority of the Shares of the Common Stock (represented in 
person or by proxy) at a meeting of stockholders at which a 
quorum is present and entitled to vote thereat, if such 
amendment or modification would:

(i) materially increase the benefits accruing to 
Participants under the Plan within the meaning of Rule 16b-3 
under the Exchange Act or any successor provision;

ii) materially increase the aggregate number of 
Shares which may be delivered pursuant to Awards granted 
under the Plan; or

iii) materially modify the requirements of 
eligibility for either adoption of the Plan.

Neither adoption of the Plan nor the provisions hereof 
shall limit the authority of the Board to adopt other Plans or to 
authorize other payment of compensation and benefits under 
applicable law. No Awards under the Plan may be granted or 
amended during any suspension of the Plan or after its 
termination. The amendment, suspension or termination of the 
Plan shall not, without the consent of the Participant, alter or 
impair any rights or obligations pertaining to any Awards 
granted under the Plan prior to such amendment, suspension or 
termination.

15.2 No Fractional Shares. No Award or installment 
thereof shall be exercisable except in respect to whole Shares, 
and fractional share interest shall be disregarded.

15.3 Tax Withholding and Tax Bonuses. As required by 
law, federal, state or local taxes that are subject to the 
withholding of tax at the source shall be withheld by the 
Corporation as necessary to satisfy such requirement. The 
Corporation is entitled to require deduction from other 
compensation payable to such Participant or, in the alternative; 
i) the Corporation may require the Participant to advance such 
sums: or ii) if Participant elects, the Corporation may withhold 
(or require the return of) Shares having the Fair Market Value 
equal to the sums required to be withheld. If the Participant 
elects to advance such sums directly, written notice of that 
election shall be delivered prior to such exercise and, whether 
pursuant to such election or pursuant to a requirement imposed 
by the Corporation, payment in cash or by check of such sums 
for taxes shall be delivered within ten (10) days after the 
Exercise Date. If the Participant elects to have the Corporation 
withhold Shares (or be entitled to the return of Shares) having a 
Fair Market Value equal to the sums required to be withheld, 
the value of the Shares to be withheld (or returned) will be 
equal to the Fair Market Value on the day the amount of tax to 
be withheld (or subject to return) is to be determined (the "Tax 
Date").

15.4 Restriction on Elections Made by Participants. 
Elections by Participants to have Shares withheld (or subject to 
return) for this purpose will be subject to the following 
restrictions: i) the election must be made prior to the Tax Date; 
ii) the election must be irrevocable; iii)  the election will be 
subject to the Board's disapproval; and (iv) if the Participant is 
an "officer" within the meaning of Section 16 of the Exchange 
Act, the election shall be subject to such additional restrictions 
as the Board or the Committee may impose in an effort to 
secure the benefits of any regulations thereunder.

15.5 Limitations on the Corporation's Obligations. The 
Corporation shall not be obligated to issue Shares and/or 
distribute cash to the Participant upon any Award exercise until 
such payment has been received or Shares have been 
withheld, (unless withholding for offset against a cash payment) 
as of or prior to the Exercise Date is sufficient to cover all such 
sums due or which may be due with respect to such exercise. 
In addition, the Board or the Committee may grant to a 
Participant a cash bonus in any amount required by federal, 
state, or local tax law to be withheld with respect to an Award.

15.6 Compliance with Laws. The Plan, the granting of 
Awards under the Plan, the Stock Option Agreements and 
Stock Purchase Agreements and the delivery of Options, Shares 
and Awards (and/or the payment of money or Common Stock) 
pursuant thereto and the extension of any loans hereunder are 
subject to such additional requirements as the Board or the 
Committee may impose to assure or facilitate compliance with 
all applicable federal and state laws, rules and regulation 
(including, without limitation, securities laws and margin 
requirements) and to such approvals by any regulatory or 
governmental agency which may be necessary or advisable in 
connection therewith. In connection with the administration of 
the Plan or the grant of any Award, the Board or the Committee 
may impose such further limitations or conditions as in its 
opinion may be required or advisable to satisfy, or secure the 
benefits of, applicable regulatory requirements (including those 
rules promulgated under Section 16 of the Exchange Act or 
those rules that facilitate exemption from or compliance with 
the Securities Act or the Exchange Act), the requirements of 
any stock exchange upon which such Shares or shares of the 
same class are then listed, and any Blue Sky or other securities 
laws applicable to such Shares.

15.7 Governing Laws. The Plan and all Awards granted 
under the Plan and the documents evidencing Awards shall be 
governed by, and construed in accordance with, the laws of the 
State of Colorado, except as to matters governed by the 
laws of the State of Colorado as the state of incorporation of 
the Corporation.

15.8 Securities Law Requirements.

a) Legality of issuance. The issuance an any Shares upon 
the exercise of any Option and the grant of any 
Option shall be contingent upon the following:

i) the Corporation and the Participant shall have 
taken all actions required to register the Shares under the 
Securities Act, and to qualify the Option and the Shares under 
any and all applicable state securities or "Blue Sky" laws or 
regulations, or to perfect an exemption from the respective 
registration and qualification requirements thereof;

ii) any applicable listing requirement of any 
stock exchange on which the Common Stock is listed shall 
have been satisfied; and

iii) any other applicable provision of federal law 
shall have been satisfied.

b) Restrictions on Transfer.  Regardless of whether the 
offering and sale of Shares under the Plan has been registered 
under the Securities Act or has been registered or qualified 
under the securities laws of any state, the Corporation may 
impose restrictions on the sale, pledge or other transfer of such 
Shares (including the placement of appropriate legends on 
stock certificates) if, in the judgment of the Corporation and its 
counsel, such restrictions are necessary or desirable in order to 
achieve compliance with the provision of the Securities Act, 
the securities laws of any state or any other law. In the event 
that the sale of Shares under the Plan is not registered under the 
Securities Act but an exemption is available which required an 
investment representation or other representation, each 
Participant shall be required to represent that such Shares are 
being acquired for investment, and not with a view to the sale 
or distribution thereof, and to make such other representations 
as are deemed necessary or appropriate by the Corporation and 
its counsel. Any determination by the Corporation and its 
counsel in connection with any of the matter set forth in this 
Section 15.8(b)  shall be conclusive and binding on all persons. 
Stock certificates evidencing Shares acquired under the Plan 
pursuant to an unregistered transaction shall bear the following 
restrictive legend and such other restrictive legends as are 
required or deemed advisable under the provisions of any 
applicable law:

THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT 
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE 
"SECURITIES ACT"). ANY TRANSFER OF SUCH SECURITIES WILL BE 
INVALID UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES 
ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF 
COUNSEL FOR THE ISSUER SUCH REGISTRATION IS UNNECESSARY IN 
ORDER FOR SUCH TRANSFER TO COMPLY WITH THE SECURITIES ACT.

c) Registration or Qualification of Securities. The 
Corporation may, but shall not be obligated to register or 
qualify the issuance of Awards and/or the sale of Shares under 
the Securities Act or any other applicable law. The Corporation 
shall not be obligated to take any affirmative action in order to 
cause the issuance of Awards or the sale of Shares under the 
Plan to comply with any law.

d) Exchange of Certificates. If, in the opinion of the 
Corporation and its counsel, any legend placed on a certificate 
representing Shares issued under that Plan is no longer 
required, the holder of such certificate shall be entitled to 
exchange such certificate for a certificate representing the same 
number of Shares but lacking such legend.

15.9 Execution. To record the adoption of the Plan in 
the form set forth above by the Board effective as of September 
1, 1998, the Corporation has caused this Plan to be executed 
in the name and on behalf of the Corporation where provided 
below by an officer of the Corporation thereunto duly 
authorized.


ARETE INDUSTRIES, INC.


By:___________________________
     
_____________________, President


Attest:

________________________
______________, Secretary