EX 10.40


    DEALERADVANCE
      INC. 2007 INCENTIVE STOCK PLAN

     

    
      

    

    
      

    

     

    This
      Dealeradvance,
      inc. 2007 Incentive Stock Plan
      (the
      "Plan")
      is
      designed to retain directors, executives and selected employees and consultants
      and reward them for making major contributions to the success of the Company.
      These objectives are accomplished by making long-term incentive awards under
      the
      Plan thereby providing Participants with a proprietary interest in the growth
      and performance of the Company.

    


    
      	
              1.

            	
              Definitions.

            


    

    


    
      	 	
              (a)

            	
              "Board"
                -
                The Board of Directors of the
                Company.

            


    

    


    
      	 	
              (b)

            	
              "Code"
                -
                The Internal Revenue Code of 1986, as amended from time to
                time.

            


    

    


    
      	 	
              (c)

            	
              "Committee"
                -
                The Compensation Committee of the Company's Board, or such other
                committee
                of the Board that is designated by the Board to administer the Plan,
                composed of not less than two members of the Board all of whom are
                disinterested persons, as contemplated by Rule 16b-3 ("Rule
                16b-3")
                promulgated under the Securities Exchange Act of 1934, as amended
                (the
                "Exchange
                Act").

            


    

    


    
      	 	
              (d)

            	
              "Company"
                -
                DealerAdvance, Inc. and its subsidiaries including subsidiaries of
                subsidiaries.

            


    

    


    
      	 	
              (e)

            	
              "Exchange Act"
                -
                The Securities Exchange Act of 1934, as amended from time to
                time.

            


    

    


    
      	 	
              (f)

            	
              "Fair
                Market Value"
                -
                The fair market value of the Company's issued and outstanding Stock
                as
                determined in good faith by the Board or
                Committee.

            


    

     

    
      	 	
              (g)

            	
              "Grant"
                -
                The grant of any form of stock option, stock award, or stock purchase
                offer, whether granted singly, in combination or in tandem, to a
                Participant pursuant to such terms, conditions and limitations as
                the
                Committee may establish in order to fulfill the objectives of the
                Plan.

            


    

    


    
      	 	
              (h)

            	
              "Grant
                Agreement"
                -
                An agreement between the Company and a Participant that sets forth
                the
                terms, conditions and limitations applicable to a
                Grant.

            


    

    


    
      	 	
              (i)

            	
              "Option"
                -
                Either an Incentive Stock Option, in accordance with Section 422
                of Code,
                or a Nonstatutory Option, to purchase the Company's Stock that may
                be
                awarded to a Participant under the Plan. A Participant who receives
                an
                award of an Option shall be referred to as an "Optionee."

            


    

    


    
      	 	
              (j)

            	
              "Participant"
                -
                A director, officer, employee or consultant of the Company to whom
                an
                Award has been made under the
                Plan.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (k)

            	
              "Restricted
                Stock Purchase Offer"
                -
                A Grant of the right to purchase a specified number of shares of
                Stock
                pursuant to a written agreement issued under the
                Plan.

            


    

    


    
      	 	
              (l)

            	
              "Securities
                Act"
                -
                The Securities Act of 1933, as amended from time to
                time.

            


    

    


    
      	 	
              (m)

            	
              "Stock"
                -
                Authorized and issued or unissued shares of common stock of the
                Company.

            


    

    


    
      	 	
              (n)

            	
              "Stock
                Award"
                -
                A Grant made under the Plan in stock or denominated in units of stock
                for
                which the Participant is not obligated to pay additional
                consideration.

            


    

    


    
      	
              2.

            	
              Administration.
                The Plan shall be administered by the Board, provided however, that
                the
                Board may delegate such administration to the Committee. Subject
                to the
                provisions of the Plan, the Board and/or the Committee shall have
                authority to (a) grant, in its discretion, Incentive Stock Options
                in
                accordance with Section 422 of the Code, or Nonstatutory Options,
                Stock
                Awards or Restricted Stock Purchase Offers; (b) determine in good
                faith
                the fair market value of the Stock covered by any Grant; (c) determine
                which eligible persons shall receive Grants and the number of shares,
                restrictions, terms and conditions to be included in such Grants;
                (d)
                construe and interpret the Plan; (e) promulgate, amend and rescind
                rules
                and regulations relating to its administration, and correct defects,
                omissions and inconsistencies in the Plan or any Grant; (f) consistent
                with the Plan and with the consent of the Participant, as appropriate,
                amend any outstanding Grant or amend the exercise date or dates thereof;
                (g) determine the duration and purpose of leaves of absence which
                may be
                granted to Participants without constituting termination of their
                employment for the purpose of the Plan or any Grant; and (h) make
                all
                other determinations necessary or advisable for the Plan's administration.
                The interpretation and construction by the Board of any provisions
                of the
                Plan or selection of Participants shall be conclusive and 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
                Grant
                made thereunder.

            


    

    


    
      	
              3.

            	
              Eligibility.

            


    

    


    
      	 	
              (a)

            	
              General:
                The persons who shall be eligible to receive Grants shall be directors,
                officers, employees or consultants to the Company. The term consultant
                shall mean any person, other than an employee, who is engaged by
                the
                Company to render services and is compensated for such services.
                An
                Optionee may hold more than one Option. Any issuance of a Grant to
                an
                officer or director of the Company subsequent to the first registration
                of
                any of the securities of the Company under the Exchange Act shall
                comply
                with the requirements of Rule
                16b-3.

            


    

    


    
      	 	
              (b)

            	
              Incentive
                Stock Options:
                Incentive Stock Options may only be issued to employees of the Company.
                Incentive Stock Options may be granted to officers or directors,
                provided
                they are also employees of the Company. Payment of a director's fee
                shall
                not be sufficient to constitute employment by the
                Company.

            


    

    


    The
      Company shall not grant an Incentive Stock Option under the Plan to any employee
      if such Grant would result in such employee holding the right to exercise for
      the first time in any one calendar year, under all Incentive Stock Options
      granted under the Plan


    
      
         

      

      
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    or
      any
      other plan maintained by the Company, with respect to shares of Stock having
      an
      aggregate fair market value, determined as of the date of the Option is granted,
      in excess of $100,000. Should it be determined that an Incentive Stock Option
      granted under the Plan exceeds such maximum for any reason other than a failure
      in good faith to value the Stock subject to such option, the excess portion
      of
      such option shall be considered a Nonstatutory Option. To the extent the
      employee holds two (2) or more such Options which become exercisable for the
      first time in the same calendar year, the foregoing limitation on the
      exercisability of such Option as Incentive Stock Options under the Federal
      tax
      laws shall be applied on the basis of the order in which such Options are
      granted. If, for any reason, an entire Option does not qualify as an Incentive
      Stock Option by reason of exceeding such maximum, such Option shall be
      considered a Nonstatutory Option.

    


    
      	 	
              (c)

            	
              Nonstatutory
                Option:
                The provisions of the foregoing Section 3(b) shall not apply to any
                Option
                designated as a "Nonstatutory
                Option"
                or which sets forth the intention of the parties that the Option
                be a
                Nonstatutory Option.

            


    

    


    
      	 	
              (d)

            	
              Stock
                Awards and Restricted Stock Purchase Offers:
                The provisions of this Section 3 shall not apply to any Stock Award
                or
                Restricted Stock Purchase Offer under the
                Plan.

            


    

    


    
      	
              4.

            	
              Stock.

            


    

    


    
      	 	
              (a)

            	
              Authorized
                Stock:
                Stock subject to Grants may be either unissued or reacquired
                Stock.

            


    

    


    
      	 	
              (b)

            	
              Number
                of Shares:
                Subject to adjustment as provided in Section 5(i) of the Plan, the
                total
                number of shares of Stock which may be purchased or granted directly
                by
                Options, Stock Awards or Restricted Stock Purchase Offers, or purchased
                indirectly through exercise of Options granted under the Plan shall
                not
                exceed Two Million (2,000,000). If any Grant shall for any reason
                terminate or expire, any shares allocated thereto but remaining
                unpurchased upon such expiration or termination shall again be available
                for Grants with respect thereto under the Plan as though no Grant
                had
                previously occurred with respect to such shares. Any shares of Stock
                issued pursuant to a Grant and repurchased pursuant to the terms
                thereof
                shall be available for future Grants as though not previously covered
                by a
                Grant.

            


    

    


    
      	 	
              (c)

            	
              Reservation
                of Shares:
                The Company shall reserve and keep available at all times during
                the term
                of the Plan such number of shares as shall be sufficient to satisfy
                the
                requirements of the Plan. If, after reasonable efforts, which efforts
                shall not include the registration of the Plan or Grants under the
                Securities Act, the Company is unable to obtain authority from any
                applicable regulatory body, which authorization is deemed necessary
                by
                legal counsel for the Company for the lawful issuance of shares hereunder,
                the Company shall be relieved of any liability with respect to its
                failure
                to issue and sell the shares for which such requisite authority was
                so
                deemed necessary unless and until such authority is
                obtained.

            


    

    


    
      	
            	(d)	
              Application
                of Funds:
                The
                proceeds received by the Company from the sale of Stock pursuant
                to the
                exercise of Options or rights under Stock Purchase Agreements will
                be used
                for general corporate purposes.

            


    


    
      
         

      

      
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            	(e)	
              No
                Obligation to Exercise:
                The issuance of a Grant shall impose no obligation upon the Participant
                to
                exercise any rights under such
                Grant.

            


    

    


    
      	
              5.

            	
              Terms
                and Conditions of Options. Options granted hereunder shall be evidenced
                by
                agreements between the Company and the respective Optionees, in such
                form
                and substance as the Board or Committee shall from time to time approve.
                The form of Incentive Stock Option Agreement attached hereto as
                Exhibit
                A
                and the three forms of a Nonstatutory Stock Option Agreement for
                employees, for directors and for consultants, attached hereto as
                Exhibit
                B-1, Exhibit
                B-2
                and
                Exhibit B-3,
                respectively, shall be deemed to be approved by the Board. Option
                agreements need not be identical, and in each case may include such
                provisions as the Board or Committee may determine, but all such
                agreements shall be subject to and limited by the following terms
                and
                conditions:

            


    

    


    
      	 	
              (a)

            	
              Number
                of Shares:
                Each Option shall state the number of shares to which it
                pertains.

            


    

    


    
      	 	
              (b)

            	
              Exercise
                Price:
                Each Option shall state the exercise price, which shall be determined
                as
                follows:

            


    

    


    
      	
            	(i)	
              Any
                Incentive Stock Option granted to a person who at the time the Option
                is
                granted owns (or is deemed to own pursuant to Section 424(d) of the
                Code)
                stock possessing more than ten percent (10%) of the total combined
                voting
                power or value of all classes of stock of the Company ("Ten
                Percent Holder")
                shall have an exercise price of no less than 110% of the Fair Market
                Value
                of the Stock as of the date of grant;
                and

            


    

    


    
      	
            	(ii)	
              Incentive
                Stock Options granted to a person who at the time the Option is granted
                is
                not a Ten Percent Holder shall have an exercise price of no less
                than 100%
                of the Fair Market Value of the Stock as of the date of
                grant.

            


    

    


    For
      the
      purposes of this Section 5(b), the Fair Market Value shall be as determined
      by
      the Board in good faith, which determination shall be conclusive and binding;
      provided however, that if there is a public market for such Stock, the Fair
      Market Value per share shall be the average of the bid and asked prices (or
      the
      closing price if such stock is listed on the NASDAQ National Market System
      or
      Small Cap Issue Market) on the date of grant of the Option, or if listed on
      a
      stock exchange, the closing price on such exchange on such date of
      grant.

    


    
      	 	
              (c)

            	
              Medium
                and Time of Payment:
                The exercise price shall become immediately due upon exercise of
                the
                Option and shall be paid in cash or check made payable to the Company.
                Should the Company's outstanding Stock be registered under Section
                12(g)
                of the Exchange Act at the time the Option is exercised, then the
                exercise
                price may also be paid as follows:

            


    

     

    
      	
            	(i)	
              in
                shares of Stock held by the Optionee for the requisite period necessary
                to
                avoid a charge to the Company's earnings for financial reporting
                purposes
                and valued at Fair Market Value on the exercise date,
                or

            


    

    


    
      	
            	(ii)	
              through
                a special sale and remittance procedure pursuant to which the Optionee
                shall concurrently provide irrevocable written instructions (a) to
                a
                Company designated

            


    


    
      
         

      

      
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    brokerage
      firm to effect the immediate sale of the purchased shares and remit to the
      Company, out of the sale proceeds available on the settlement date, sufficient
      funds to cover the aggregate exercise price payable for the purchased shares
      plus all applicable Federal, state and local income and employment taxes
      required to be withheld by the Company by reason of such purchase and (b) to
      the
      Company to deliver the certificates for the purchased shares directly to such
      brokerage firm in order to complete the sale transaction.

    


    At
      the
      discretion of the Board, exercisable either at the time of Option grant or
      of
      Option exercise, the exercise price may also be paid (i) by Optionee's delivery
      of a promissory note in form and substance satisfactory to the Company and
      permissible under the Securities Rules of the applicable state and bearing
      interest at a rate determined by the Board in its sole discretion, but in no
      event less than the minimum rate of interest required to avoid the imputation
      of
      compensation income to the Optionee under the Federal tax laws, or (ii) in
      such
      other form of consideration permitted by the applicable state corporations
      law
      as may be acceptable to the Board.

    


    
      	 	
              (d)

            	
              Term
                and Exercise of Options:
                Any Option granted to an employee of the Company shall become exercisable
                over a period of no longer than five (5) years, and no less than
                twenty
                percent (20%) of the shares covered thereby shall become exercisable
                annually. No Option shall be exercisable, in whole or in part, prior
                to
                one (1) year from the date it is granted unless the Board shall
                specifically determine otherwise, as provided herein. In no event
                shall
                any Option be exercisable after the expiration of ten (10) years
                from the
                date it is granted, and no Incentive Stock Option granted to a Ten
                Percent
                Holder shall, by its terms, be exercisable after the expiration of
                five
                (5) years from the date of the Option. Unless otherwise specified
                by the
                Board or the Committee in the resolution authorizing such Option,
                the date
                of grant of an Option shall be deemed to be the date upon which the
                Board
                or the Committee authorizes the granting of such Option.
                

            


    

    


    Each
      Option shall be exercisable to the nearest whole share, in installments or
      otherwise, as the respective Option agreements may provide. During the lifetime
      of an Optionee, the Option shall be exercisable only by the Optionee and shall
      not be assignable or transferable by the Optionee, and no other person shall
      acquire any rights therein. To the extent not exercised, installments (if more
      than one) shall accumulate, but shall be exercisable, in whole or in part,
      only
      during the period for exercise as stated in the Option agreement, whether or
      not
      other installments are then exercisable.

    


    
      	 	
              (e)

            	
              Termination
                of Status as Employee, Consultant or Director:
                If
                Optionee's status as an employee shall terminate for any reason other
                than
                Optionee's disability or death, then Optionee (or if the Optionee
                shall
                die after such termination, but prior to exercise, Optionee's personal
                representative or the person entitled to succeed to the Option) shall
                have
                the right to exercise the portions of any of Optionee's Incentive
                Stock
                Options which were exercisable as of the date of such termination,
                in
                whole or in part, not less than 30 days nor more than three (3) months
                after such termination (or, in the event of "termination
                for good cause"
                as that term is defined in the applicable state case law related
                thereto,
                or by the terms of the Plan or the Option Agreement or an employment
                agreement, the Option shall

            


    


    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    


    automatically
      terminate as of the termination of employment as to all shares covered by the
      Option). 

    


    With
      respect to Nonstatutory Options granted to employees, directors or consultants,
      the Board may specify such period for exercise, not less than 30 days (except
      that in the case of "termination
      for cause"
      or
      removal of a director, the Option shall automatically terminate as of the
      termination of employment or services as to shares covered by the Option,
      following termination of employment or services as the Board deems reasonable
      and appropriate. The Option may be exercised only with respect to installments
      that the Optionee could have exercised at the date of termination of employment
      or services. Nothing contained herein or in any Option granted pursuant hereto
      shall be construed to affect or restrict in any way the right of the Company
      to
      terminate the employment or services of an Optionee with or without
      cause.

    


    
      	 	
              (f)

            	
              Disability
                of Optionee:
                If
                an Optionee is disabled (within the meaning of Section 22(e)(3) of
                the
                Code) at the time of termination, the three (3) month period set
                forth in
                Section 5(e) shall be a period, as determined by the Board and set
                forth
                in the Option, of not less than six months nor more than one year
                after
                such termination. 

            


    

    


    
      	 	
              (g)

            	
              Death
                of Optionee:
                If
                an Optionee dies while employed by, engaged as a consultant to, or
                serving
                as a Director of the Company, the portion of such Optionee's Option
                which
                was exercisable at the date of death may be exercised, in whole or
                in
                part, by the estate of the decedent or by a person succeeding to
                the right
                to exercise such Option at any time within (i) a period, as determined
                by
                the Board and set forth in the Option, of not less than six (6) months
                nor
                more than one (1) year after Optionee's death, which period shall
                not be
                more, in the case of a Nonstatutory Option, than the period for exercise
                following termination of employment or services, or (ii) during the
                remaining term of the Option, whichever is the lesser. The Option
                may be
                so exercised only with respect to installments exercisable at the
                time of
                Optionee's death and not previously exercised by the
                Optionee.

            


    

    


    
      	 	
              (h)

            	
              Nontransferability
                of Option:
                No
                Option shall be transferable by the Optionee, except by will or by
                the
                laws of descent and distribution.

            


    

    


    
      	 	
              (i)

            	
              Recapitalization:
                Subject to any required action of shareholders, the number of shares
                of
                Stock covered by each outstanding Option, and the exercise price
                per share
                thereof set forth in each such Option, shall be proportionately adjusted
                for any increase or decrease in the number of issued shares of Stock
                of
                the Company resulting from a stock split, stock dividend, combination,
                subdivision or reclassification of shares, or the payment of a stock
                dividend, or any other increase or decrease in the number of such
                shares
                affected without receipt of consideration by the Company; provided,
                however, the conversion of any convertible securities of the Company
                shall
                not be deemed to have been "effected
                without receipt of consideration"
                by the Company.

            


    

    


    In
      the
      event of a proposed dissolution or liquidation of the Company, a merger or
      consolidation in which the Company is not the surviving entity, or a sale of
      all
      or substantially all of the assets or capital stock of the Company
      (collectively, a "Reorganization"),
      unless otherwise provided by the Board, this Option shall
      terminate


    
      
         

      

      
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    immediately
      prior to such date as is determined by the Board, which date shall be no later
      than the consummation of such Reorganization. In such event, if the entity
      which
      shall be the surviving entity does not tender to Optionee an offer, for which
      it
      has no obligation to do so, to substitute for any unexercised Option a stock
      option or capital stock of such surviving of such surviving entity, as
      applicable, which on an equitable basis shall provide the Optionee with
      substantially the same economic benefit as such unexercised Option, then the
      Board may grant to such Optionee, in its sole and absolute discretion and
      without obligation, the right for a period commencing thirty (30) days prior
      to
      and ending immediately prior to the date determined by the Board pursuant hereto
      for termination of the Option or during the remaining term of the Option,
      whichever is the lesser, to exercise any unexpired Option or Options without
      regard to the installment provisions of Paragraph 6(d) of the Plan; provided,
      that any such right granted shall be granted to all Optionees not receiving
      an
      offer to receive substitute options on a consistent basis, and provided further,
      that any such exercise shall be subject to the consummation of such
      Reorganization.

    


    Subject
      to any required action of shareholders, if the Company shall be the surviving
      entity in any merger or consolidation, each outstanding Option thereafter shall
      pertain to and apply to the securities to which a holder of shares of Stock
      equal to the shares subject to the Option would have been entitled by reason
      of
      such merger or consolidation.

    


    In
      the
      event of a change in the Stock of the Company as presently constituted, which
      is
      limited to a change of all of its authorized shares without par value into
      the
      same number of shares with a par value, the shares resulting from any such
      change shall be deemed to be the Stock within the meaning of the
      Plan.

    


    To
      the
      extent that the foregoing adjustments relate to stock or securities of the
      Company, such adjustments shall be made by the Board, whose determination in
      that respect shall be final, binding and conclusive. Except as expressly
      provided in this Section 5(i), the Optionee shall have no rights by reason
      of
      any subdivision or consolidation of shares of stock of any class or the payment
      of any stock dividend or any other increase or decrease in the number of shares
      of stock of any class, and the number or price of shares of Stock subject to
      any
      Option shall not be affected by, and no adjustment shall be made by reason
      of,
      any dissolution, liquidation, merger, consolidation or sale of assets or capital
      stock, or any issue by the Company of shares of stock of any class or securities
      convertible into shares of stock of any class.

    


    The
      Grant
      of an Option pursuant to the Plan shall not affect in any way the right or
      power
      of the Company to make any adjustments, reclassifications, reorganizations
      or
      changes in its capital or business structure or to merge, consolidate, dissolve,
      or liquidate or to sell or transfer all or any part of its business or
      assets.

    


    
      	 	
              (j)

            	
              Rights
                as a Shareholder:
                An
                Optionee shall have no rights as a shareholder with respect to any
                shares
                covered by an Option until the effective date of the issuance of
                the
                shares following exercise of such Option by Optionee. No adjustment
                shall
                be made for dividends (ordinary or extraordinary, whether in cash,
                securities or other property) or distributions or other rights for
                which
                the record date is prior to the date such stock certificate is issued,
                except as expressly provided in Section 5(i) hereof.
                

            


    


    
      
         

      

      
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              (k)

            	
              Modification,
                Acceleration, Extension, and Renewal of Options:
                Subject to the terms and conditions and within the limitations of
                the
                Plan, the Board may modify an Option, or, once an Option is exercisable,
                accelerate the rate at which it may be exercised, and may extend
                or renew
                outstanding Options granted under the Plan or accept the surrender
                of
                outstanding Options (to the extent not theretofore exercised) and
                authorize the granting of new Options in substitution for such Options,
                provided such action is permissible under applicable state securities
                law.
                Notwithstanding the provisions of this Section 5(k), however, no
                modification of an Option shall, without the consent of the Optionee,
                alter to the Optionee's detriment or impair any rights or obligations
                under any Option theretofore granted under the
                Plan.

            


    

    


    
      	 	
              (l)

            	
              Exercise
                Before Exercise Date:
                At
                the discretion of the Board, the Option may, but need not, include
                a
                provision whereby the Optionee may elect to exercise all or any portion
                of
                the Option prior to the stated exercise date of the Option or any
                installment thereof. Any shares so purchased prior to the stated
                exercise
                date shall be subject to repurchase by the Company upon termination
                of
                Optionee's employment as contemplated by Section 5(n) hereof prior
                to the
                exercise date stated in the Option and such other restrictions and
                conditions as the Board or Committee may deem
                advisable.

            


    

    


    
      	 	
              (m)

            	
              Other
                Provisions:
                The Option agreements authorized under the Plan shall contain such
                other
                provisions, including, without limitation, restrictions upon the
                exercise
                of the Options, as the Board or the Committee shall deem advisable.
                Shares
                shall not be issued pursuant to the exercise of an Option, if the
                exercise
                of such Option or the issuance of shares thereunder would violate,
                in the
                opinion of legal counsel for the Company, the provisions of any applicable
                law or the rules or regulations of any applicable governmental or
                administrative agency or body, such as the Code, the Securities Act,
                the
                Exchange Act, state and securities laws, and the rules promulgated
                under
                the foregoing or the rules and regulations of any exchange upon which
                the
                shares of the Company are listed. Without limiting the generality
                of the
                foregoing, the exercise of each Option shall be subject to the condition
                that if at any time the Company shall determine that (i) the satisfaction
                of withholding tax or other similar liabilities, or (ii) the listing,
                registration or qualification of any shares covered by such exercise
                upon
                any securities exchange or under any state or federal law, or (iii)
                the
                consent or approval of any regulatory body, or (iv) the perfection
                of any
                exemption from any such withholding, listing, registration, qualification,
                consent or approval is necessary or desirable in connection with
                such
                exercise or the issuance of shares thereunder, then in any such event,
                such exercise shall not be effective unless such withholding, listing
                registration, qualification, consent, approval or exemption shall
                have
                been effected, obtained or perfected free of any conditions not acceptable
                to the Company.

            


    

    


    
      	 	
              (n)

            	
              Repurchase
                Agreement:
                The Board may, in its discretion, require as a condition to the Grant
                of
                an Option hereunder, that an Optionee execute an agreement with the
                Company, in form and substance satisfactory to the Board in its discretion
                ("Repurchase
                Agreement"),
                (i) restricting the Optionee's right to transfer shares purchased
                under
                such Option without first offering such shares to the Company or
                another
                shareholder of the Company upon the same terms and conditions as
                provided
                therein; and (ii) providing that upon termination of Optionee's employment
                with the Company, for any reason, the Company (or
                another

            


    


    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    


    shareholder
      of the Company, as provided in the Repurchase Agreement) shall have the right
      at
      its discretion (or the discretion of such other shareholders) to purchase and/or
      redeem all such shares owned by the Optionee on the date of termination of
      his
      or her employment at a price equal to: (A) the fair value of such shares as
      of
      such date of termination; or (B) if such repurchase right lapses at 20% of
      the
      number of shares per year, the original purchase price of such shares, and
      upon
      terms of payment permissible under applicable state securities rules; provided
      that in the case of Options or Stock Awards granted to officers, directors,
      consultants or affiliates of the Company, such repurchase provisions may be
      subject to additional or greater restrictions as determined by the Board or
      Committee.

    


    
      	
              6.

            	
              Stock
                Awards and Restricted Stock Purchase
                Offers.

            


    

    


    
      	 	
              (a)

            	
              Types
                of Grants.

            


    

    


    
      	
            	(i)	
              Stock
                Award.
                All or part of any Stock Award under the Plan may be subject to conditions
                established by the Board or the Committee, and set forth in the Stock
                Award Agreement, which may include, but are not limited to, continuous
                service with the Company, achievement of specific business objectives,
                increases in specified indices, attaining growth rates and other
                comparable measurements of Company performance. Such Awards may be
                based
                on Fair Market Value or other specified valuation. All Stock Awards
                will
                be made pursuant to the execution of a Stock Award Agreement substantially
                in the form attached hereto as Exhibit
                C.

            


    

    


    
      	
            	(ii)	
              Restricted
                Stock Purchase Offer.
                A
                Grant of a Restricted Stock Purchase Offer under the Plan shall be
                subject
                to such (i) vesting contingencies related to the Participant's continued
                association with the Company for a specified time and (ii) other
                specified
                conditions as the Board or Committee shall determine, in their sole
                discretion, consistent with the provisions of the Plan. All Restricted
                Stock Purchase Offers shall be made pursuant to a Restricted Stock
                Purchase Offer substantially in the form attached hereto as Exhibit
                D.

            


    

    


    
      	 	
              (b)

            	
              Conditions
                and Restrictions.
                Shares of Stock which Participants may receive as a Stock Award under
                a
                Stock Award Agreement or Restricted Stock Purchase Offer under a
                Restricted Stock Purchase Offer may include such restrictions as
                the Board
                or Committee, as applicable, shall determine, including restrictions
                on
                transfer, repurchase rights, right of first refusal, and forfeiture
                provisions. When transfer of Stock is so restricted or subject to
                forfeiture provisions it is referred to as "Restricted
                Stock".
                Further, with Board or Committee approval, Stock Awards or Restricted
                Stock Purchase Offers may be deferred, either in the form of installments
                or a future lump sum distribution. The Board or Committee may permit
                selected Participants to elect to defer distributions of Stock Awards
                or
                Restricted Stock Purchase Offers in accordance with procedures established
                by the Board or Committee to assure that such deferrals comply with
                applicable requirements of the Code including, at the choice of
                Participants, the capability to make further deferrals for distribution
                after retirement. Any deferred distribution, whether elected by the
                Participant or specified by the Stock Award Agreement, Restricted
                Stock
                Purchase Offers or by the Board or Committee, may require the payment
                be
                forfeited in accordance with the provisions of Section 6(c). Dividends
                or
                dividend equivalent rights may be extended to and made part
                of

            


    


    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    


    any
      Stock
      Award or Restricted Stock Purchase Offers denominated in Stock or units of
      Stock, subject to such terms, conditions and restrictions as the Board or
      Committee may establish.

    


    
      	 	
              (c)

            	
              Cancellation
                and Rescission of Grants.
                Unless the Stock Award Agreement or Restricted Stock Purchase Offer
                specifies otherwise, the Board or Committee, as applicable, may cancel
                any
                unexpired, unpaid, or deferred Grants at any time if the Participant
                is
                not in compliance with all other applicable provisions of the Stock
                Award
                Agreement or Restricted Stock Purchase Offer, the Plan and with the
                following conditions:

            


    

    


    
      	
            	(i)	
              A
                Participant shall not render services for any organization or engage
                directly or indirectly in any business which, in the judgment of
                the chief
                executive officer of the Company or other senior officer designated
                by the
                Board or Committee, is or becomes competitive with the Company, or
                which
                organization or business, or the rendering of services to such
                organization or business, is or becomes otherwise prejudicial to
                or in
                conflict with the interests of the Company. For Participants whose
                employment has terminated, the judgment of the chief executive officer
                shall be based on the Participant's position and responsibilities
                while
                employed by the Company, the Participant's post-employment
                responsibilities and position with the other organization or business,
                the
                extent of past, current and potential competition or conflict between
                the
                Company and the other organization or business, the effect on the
                Company's customers, suppliers and competitors and such other
                considerations as are deemed relevant given the applicable facts
                and
                circumstances. A Participant who has retired shall be free, however,
                to
                purchase as an investment or otherwise, stock or other securities
                of such
                organization or business so long as they are listed upon a recognized
                securities exchange or traded over-the-counter, and such investment
                does
                not represent a substantial investment to the Participant or a greater
                than ten percent (10%) equity interest in the organization or
                business.

            


    

    


    
      	
            	(ii)	
              A
                Participant shall not, without prior written authorization from the
                Company, disclose to anyone outside the Company, or use in other
                than the
                Company's business, any confidential information or material, as
                defined
                in the Company's Proprietary Information and Invention Agreement
                or
                similar agreement regarding confidential information and intellectual
                property, relating to the business of the Company, acquired by the
                Participant either during or after employment with the Company.
                

            


    

    


    
      	
            	(iii)	
              A
                Participant, pursuant to the Company's Proprietary Information and
                Invention Agreement, shall disclose promptly and assign to the Company
                all
                right, title and interest in any invention or idea, patentable or
                not,
                made or conceived by the Participant during employment by the Company,
                relating in any manner to the actual or anticipated business, research
                or
                development work of the Company and shall do anything reasonably
                necessary
                to enable the Company to secure a patent where appropriate in the
                United
                States and in foreign countries.

            


    

    


    
      	
            	(iv)	
              Upon
                exercise, payment or delivery pursuant to a Grant, the Participant
                shall
                certify on a form acceptable to the Committee that he or she is in
                compliance with the terms and conditions of the Plan. Failure to
                comply
                with all of the provisions of this Section 6(c) prior to, or during
                the
                six months after, any exercise, payment or delivery pursuant to
                a

            


    


    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    


    Grant
      shall cause such exercise, payment or delivery to be rescinded. The Company
      shall notify the Participant in writing of any such rescission within two years
      after such exercise, payment or delivery. Within ten days after receiving such
      a
      notice from the Company, the Participant shall pay to the Company the amount
      of
      any gain realized or payment received as a result of the rescinded exercise,
      payment or delivery pursuant to a Grant. Such payment shall be made either
      in
      cash or by returning to the Company the number of shares of Stock that the
      Participant received in connection with the rescinded exercise, payment or
      delivery.

    


    
      	 	
              (d)

            	
              Nonassignability.

            


    

    


    
      	
            	(i)	
              Except
                pursuant to Section 6(e)(iii) and except as set forth in Section
                6(d)(ii),
                no Grant or any other benefit under the Plan shall be assignable
                or
                transferable, or payable to or exercisable by, anyone other than
                the
                Participant to whom it was granted.

            


    

    


    
      	
            	(ii)	
              Where
                a Participant terminates employment and retains a Grant pursuant
                to
                Section 6(e)(ii) in order to assume a position with a governmental,
                charitable or educational institution, the Board or Committee, in
                its
                discretion and to the extent permitted by law, may authorize a third
                party
                (including but not limited to the trustee of a "blind" trust), acceptable
                to the applicable governmental or institutional authorities, the
                Participant and the Board or Committee, to act on behalf of the
                Participant with regard to such
                Awards.

            


    

    


    
      	 	
              (e)

            	
              Termination
                of Employment.
                If
                the employment or service to the Company of a Participant terminates,
                other than pursuant to any of the following provisions under this
                Section
                6(e), all unexercised, deferred and unpaid Stock Awards or Restricted
                Stock Purchase Offers shall be cancelled immediately, unless the
                Stock
                Award Agreement or Restricted Stock Purchase Offer provides otherwise:
                

            


    

    


    
      	
            	(i)	
              Retirement
                Under a Company Retirement Plan.
                When a Participant's employment terminates as a result of retirement
                in
                accordance with the terms of a Company retirement plan, the Board
                or
                Committee may permit Stock Awards or Restricted Stock Purchase Offers
                to
                continue in effect beyond the date of retirement in accordance with
                the
                applicable Grant Agreement and the exercisability and vesting of
                any such
                Grants may be accelerated.

            


    

    


    
      	
            	(ii)	
              Rights
                in the Best Interests of the Company.
                When a Participant resigns from the Company and, in the judgment
                of the
                Board or Committee, the acceleration and/or continuation of outstanding
                Stock Awards or Restricted Stock Purchase Offers would be in the
                best
                interests of the Company, the Board or Committee may (i) authorize,
                where
                appropriate, the acceleration and/or continuation of all or any part
                of
                Grants issued prior to such termination and (ii) permit the exercise,
                vesting and payment of such Grants for such period as may be set
                forth in
                the applicable Grant Agreement, subject to earlier cancellation pursuant
                to Section 9 or at such time as the Board or Committee shall deem
                the
                continuation of all or any part of the Participant's Grants are not
                in the
                Company's best interest.

            


    

    


    
      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

    

     

    
      	
            	(iii)	
              Death
                or Disability of a Participant. 

            


    

    


    
      	 	
              (1)

            	
              In
                the event of a Participant's death, the Participant's estate or
                beneficiaries shall have a period up to the expiration date specified
                in
                the Grant Agreement within which to receive or exercise any outstanding
                Grant held by the Participant under such terms as may be specified
                in the
                applicable Grant Agreement. Rights to any such outstanding Grants
                shall
                pass by will or the laws of descent and distribution in the following
                order: (a) to beneficiaries so designated by the Participant; if
                none,
                then (b) to a legal representative of the Participant; if none, then
                (c)
                to the persons entitled thereto as determined by a court of competent
                jurisdiction. Grants so passing shall be made at such times and in
                such
                manner as if the Participant were
                living.

            


    

    


    
      	 	
              (2)

            	
              In
                the event a Participant is deemed by the Board or Committee to be
                unable
                to perform his or her usual duties by reason of mental disorder or
                medical
                condition which does not result from facts which would be grounds
                for
                termination for cause, Grants and rights to any such Grants may be
                paid to
                or exercised by the Participant, if legally competent, or a committee
                or
                other legally designated guardian or representative if the Participant
                is
                legally incompetent by virtue of such
                disability.

            


    

    


    
      	 	
              (3)

            	
              After
                the death or disability of a Participant, the Board or Committee
                may in
                its sole discretion at any time (1) terminate restrictions in Grant
                Agreements; (2) accelerate any or all installments and rights; and
                (3)
                instruct the Company to pay the total of any accelerated payments
                in a
                lump sum to the Participant, the Participant's estate, beneficiaries
                or
                representative; notwithstanding that, in the absence of such termination
                of restrictions or acceleration of payments, any or all of the payments
                due under the Grant might ultimately have become payable to other
                beneficiaries.

            


    

    


    
      	 	
              (4)

            	
              In
                the event of uncertainty as to interpretation of or controversies
                concerning this Section 6, the determinations of the Board or Committee,
                as applicable, shall be binding and
                conclusive.

            


    

    


    
      	
              7.

            	
              Investment
                Intent. All Grants under the Plan are intended to be exempt from
                registration under the Securities Act provided by Rule 701 thereunder.
                Unless and until the granting of Options or sale and issuance of
                Stock
                subject to the Plan are registered under the Securities Act or shall
                be
                exempt pursuant to the rules promulgated thereunder, each Grant under
                the
                Plan shall provide that the purchases or other acquisitions of Stock
                thereunder shall be for investment purposes and not with a view to,
                or for
                resale in connection with, any distribution thereof. Further, unless
                the
                issuance and sale of the Stock have been registered under the Securities
                Act, each Grant shall provide that no shares shall be purchased upon
                the
                exercise of the rights under such Grant unless and until (i) all
                then
                applicable requirements of state and federal laws and regulatory
                agencies
                shall have been fully complied with to the satisfaction of the Company
                and
                its counsel, and (ii) if requested to do so by the Company, the person
                exercising the rights under the Grant shall (i) give written assurances
                as
                to knowledge and experience of such person (or a representative employed
                by such person) in financial and business matters and the ability
                of such
                person (or representative) to evaluate the merits and risks of exercising
                the Option, and (ii) execute and deliver to the Company a letter
                of
                investment intent and/or such other form related to applicable exemptions
                from registration, all in such form and substance as the Company
                may
                require. If

            


    


    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    


    shares
      are issued upon exercise of any rights under a Grant without registration under
      the Securities Act, subsequent registration of such shares shall relieve the
      purchaser thereof of any investment restrictions or representations made upon
      the exercise of such rights.

    


    
      	
              8.

            	
              Amendment,
                Modification, Suspension or Discontinuance of the Plan. The Board
                may,
                insofar as permitted by law, from time to time, with respect to any
                shares
                at the time not subject to outstanding Grants, suspend or terminate
                the
                Plan or revise or amend it in any respect whatsoever, except that
                without
                the approval of the shareholders of the Company, no such revision
                or
                amendment shall (i) increase the number of shares subject to the
                Plan,
                (ii) decrease the price at which Grants may be granted, (iii) materially
                increase the benefits to Participants, or (iv) change the class of
                persons
                eligible to receive Grants under the Plan; provided, however, no
                such
                action shall alter or impair the rights and obligations under any
                Option,
                or Stock Award, or Restricted Stock Purchase Offer outstanding as
                of the
                date thereof without the written consent of the Participant thereunder.
                No
                Grant may be issued while the Plan is suspended or after it is terminated,
                but the rights and obligations under any Grant issued while the Plan
                is in
                effect shall not be impaired by suspension or termination of the
                Plan.

            


    

    


    In
      the
      event of any change in the outstanding Stock by reason of a stock split, stock
      dividend, combination or reclassification of shares, recapitalization, merger,
      or similar event, the Board or the Committee may adjust proportionally (a)
      the
      number of shares of Stock (i) reserved under the Plan, (ii) available for
      Incentive Stock Options and Nonstatutory Options and (iii) covered by
      outstanding Stock Awards or Restricted Stock Purchase Offers; (b) the Stock
      prices related to outstanding Grants; and (c) the appropriate Fair Market Value
      and other price determinations for such Grants. In the event of any other change
      affecting the Stock or any distribution (other than normal cash dividends)
      to
      holders of Stock, such adjustments as may be deemed equitable by the Board
      or
      the Committee, including adjustments to avoid fractional shares, shall be made
      to give proper effect to such event. In the event of a corporate merger,
      consolidation, acquisition of property or stock, separation, reorganization
      or
      liquidation, the Board or the Committee shall be authorized to issue or assume
      stock options, whether or not in a transaction to which Section 424(a) of the
      Code applies, and other Grants by means of substitution of new Grant Agreements
      for previously issued Grants or an assumption of previously issued
      Grants.

    


    
      	
              9.

            	
              Tax
                Withholding. The Company shall have the right to deduct applicable
                taxes
                from any Grant payment and withhold, at the time of delivery or exercise
                of Options, Stock Awards or Restricted Stock Purchase Offers or vesting
                of
                shares under such Grants, an appropriate number of shares for payment
                of
                taxes required by law or to take such other action as may be necessary
                in
                the opinion of the Company to satisfy all obligations for withholding
                of
                such taxes. If Stock is used to satisfy tax withholding, such stock
                shall
                be valued based on the Fair Market Value when the tax withholding
                is
                required to be made. 

            


    

     

    
      	
              10.

            	
              Availability
                of Information. During the term of the Plan and any additional period
                during which a Grant granted pursuant to the Plan shall be exercisable,
                the Company shall make available, not later than one hundred and
                twenty
                (120) days following the close of each of its fiscal years, such
                financial
                and other information regarding the Company as is required by the
                bylaws
                of the Company and applicable law to be furnished in an annual report
                to
                the shareholders of the Company.


            


    


    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    


    
      	
              11.

            	
              Notice.
                Any written notice to the Company required by any of the provisions
                of the
                Plan shall be addressed to the chief personnel officer or to the
                chief
                executive officer of the Company, and shall become effective when
                it is
                received by the office of the chief personnel officer or the chief
                executive officer. 

            


    

    


    
      	
              12.

            	
              Indemnification
                of Board. In addition to such other rights or indemnifications as
                they may
                have as directors or otherwise, and to the extent allowed by applicable
                law, the members of the Board and the Committee shall be indemnified
                by
                the Company against the reasonable expenses, including attorneys'
                fees,
                actually and necessarily incurred in connection with the defense
                of any
                claim, action, suit or proceeding, or in connection with any appeal
                thereof, 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 Grant granted thereunder, 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 claim, action, suit or proceeding, except
                in any
                case in relation to matters as to which it shall be adjudged in such
                claim, action, suit or proceeding that such Board or Committee member
                is
                liable for negligence or misconduct in the performance of his or
                her
                duties; provided that within sixty (60) days after institution of
                any such
                action, suit or Board proceeding the member involved shall offer
                the
                Company, in writing, the opportunity, at its own expense, to handle
                and
                defend the same. 

            


    

     

    
      	
              13.

            	
              Governing
                Law. The Plan and all determinations made and actions taken pursuant
                hereto, to the extent not otherwise governed by the Code or the securities
                laws of the United States, shall be governed by the law of the State
                of
                Texas and construed accordingly. 

            


    

    


    
      	
              14.

            	
              Effective
                and Termination Dates. The Plan shall become effective on the date
                it is
                approved by the holders of a majority of the shares of Stock then
                outstanding. The Plan shall terminate ten years later, subject to
                earlier
                termination by the Board pursuant to Section 8.


            


    

     

    
      
         

      

        -14-