Document:

WARRANT AGREEMENT

                                   ARKONA INC.

         THIS WARRANT  AGREEMENT (the  "Agreement"),  is made as of December 21,
2001 (the "Effective  Date") by and between ARKONA INC., a Delaware  corporation
with offices at 10542 South  Jordan  Gateway,  South  Jordan,  Utah 84095,  (the
"Company"), and  ____________,  at _______________(the "Holder").

         The Board of Directors of the Company has determined  that it is to the
advantage and in the best interest of the Company and its  stockholders to issue
the Warrant  provided for herein to Holder as an inducement for Holder to make a
cash investment into the Company.

1.       ISSUANCE  OF  WARRANT.  The  Company  issues to Holder  the right  (the
         "Warrant"), subject to this Agreement, to purchase from the Company all
         or any part of an  aggregate  of 606,060  shares of Common Stock of the
         Company,  at the  purchase  price of $.33 per share as Holder  may from
         time to time elect,  exercisable  on or after the Effective Date hereof
         for a period of 12 months (the latter date  hereinafter  referred to as
         the "Termination  Date").  In no event shall the Company be required to
         transfer fractional shares to Holder.

2.       METHOD OF EXERCISE.  The Warrant issued hereunder shall be exercisable,
         from the Effective  Date, as  hereinabove  provided,  by written notice
         which shall:

         2.1      state the election to purchase  shares of stock subject to the
                  Warrant,  the number of shares in respect of which it is being
                  purchased,  the  person  in whose  name the  shares  are to be
                  issued and such person's address and social security number;

         2.2      contain such representations and agreements as to the holder's
                  investment  intent with respect to such shares of Common Stock
                  as are required by law or as may be reasonably satisfactory to
                  the Company's counsel;

         2.3      be signed by the person or persons  entitled to  exercise  the
                  Warrant  and, if the Warrant is being  exercised by any person
                  or persons  other than the Holder,  be  accompanied  by proof,
                  satisfactory to counsel for the Company,  of the right of such
                  person or persons to exercise the Warrant; and

         2.4      be  accompanied by the payment for the purchase price of those
                  shares with respect to which the Warrant is being exercised in
                  the form of cash or check.

3.       ISSUANCE OF STOCK  CERTIFICATES.  The certificate or  certificates  for
         shares of Common Stock as to which the Warrant shall be exercised shall
         be registered in the name of the person or persons designated  pursuant
         to Section 2.1 of this Agreement.  The Company shall not be required to
         transfer  or deliver any  certificate  or  certificates  for the shares
         purchased  upon exercise of the Warrant  issued  hereunder  until:  (a)
         compliance with the terms of this Agreement and (b) compliance with all
         then applicable requirements of law.

                                       1
<PAGE>

4.       STOCK SUBJECT TO THE WARRANT.  The Company shall reserve, and set aside
         as authorized and unissued shares, the number of shares of Common Stock
         of the  Company to be issued  upon  exercise  of this  Warrant.  If the
         Warrant  should expire or become  unexercisable  for any reason without
         having  been  exercised  in full,  the  unpurchased  shares  which were
         subject thereto shall be free from any restrictions  occasioned by this
         Agreement.

         Without limiting the generality of this Section 4, Holder  acknowledges
         and  understands  that the  shares  of Common  Stock to be issued  upon
         exercise  of this  Warrant  (i)  have  not been  registered  under  the
         Securities Act of 1933, as amended, or under the blue sky or securities
         laws of any  state;  (ii)  that the  Company  has no  obligation  to so
         register any of such shares and that,  except to the extent such shares
         are so registered, such shares will be restricted securities and may be
         sold,  transferred  or otherwise  disposed of only if an exemption from
         such registration is available;  and (iii) unless such shares have been
         so  registered,  there  shall be noted  conspicuously  upon each  stock
         certificate representing such shares, the following legend:

         THE SHARES OF STOCK WHICH MAY BE ISSUED UPON  EXERCISE OF THIS  WARRANT
         HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933 ("1933 ACT")
         NOR UNDER ANY APPLICABLE  STATE  SECURITIES LAWS AND MAY NOT BE OFFERED
         OR SOLD EXCEPT  PURSUANT  TO (I) AN  EFFECTIVE  REGISTRATION  STATEMENT
         RELATING TO SUCH SECURITIES UNDER THE 1933 ACT AND ANY APPLICABLE STATE
         SECURITIES ACT, (II) TO THE EXTENT APPLICABLE,  RULE 144 UNDER THE 1933
         ACT (OR ANY  SIMILAR  RULE  UNDER  SUCH  ACT OR  ACTS  RELATING  TO THE
         DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL SATISFACTORY
         TO THE CORPORATION THAT AN EXEMPTION FROM  REGISTRATION  UNDER SUCH ACT
         OR ACTS IS AVAILABLE.

5.       TERMINATION OF WARRANT. The Warrant and all rights granted hereunder to
         the extent such rights shall not have been  exercised,  shall terminate
         and become null and void on the Termination Date.

6.       LIMITATION UPON TRANSFER.  The Warrant and all rights granted hereunder
         shall be exercisable only by Holder, and except as otherwise  provided,
         the Warrant and all rights granted  hereunder shall not be transferred,
         assigned,  pledged, or hypothecated in any way (whether by operation of
         law or otherwise),  and shall not be subject to execution,  attachment,
         or similar  process.  Upon any  attempt to  transfer,  assign,  pledge,
         hypothecate,  or  otherwise  dispose of such  Warrant or of such rights
         contrary to the provisions  hereof,  or upon the levy of any attachment
         or similar  process upon such Warrant or such rights,  such Warrant and
         such rights shall immediately become null and void.

                                       2
<PAGE>

7.       STOCK AS INVESTMENT. By accepting this Warrant, the Holder acknowledges
         for  Holder  and any  heirs  and  legatees,  that  any  and all  shares
         purchased  hereunder  shall  be  acquired  for  investment  and not for
         distribution.

8.       ADJUSTMENT  PROVISIONS FOR  RECAPITALIZATIONS AND RELATED TRANSACTIONS.
         If,   through   or  as  a   result   of  any   merger,   consolidation,
         reorganization,  recapitalization,  reclassification,  stock  dividend,
         stock split, reverse stock split or other similar transaction,  (i) the
         outstanding  shares  of  Common  Stock  are  increased,   decreased  or
         exchanged for a different  number or kind of shares or other securities
         of the Company, or (ii) additional shares or new or different shares or
         other   securities  of  the  Company  or  other  non-cash   assets  are
         distributed  with  respect  to such  shares  of  Common  Stock or other
         securities,  an appropriate and proportionate  adjustment shall be made
         in (y) the  maximum  number and kind of shares  reserved  for  issuance
         under this  Warrant,  and (z) the price for each share  subject to this
         Warrant, without changing the aggregate purchase price as to which this
         Warrant shall remain exercisable.

9.       MERGER OR  CONSOLIDATION.  In the event of a consolidation or merger in
         which  outstanding  shares of Common Stock of the Company are exchanged
         for  securities,  cash or other  property of any other  corporation  or
         business entity, the Board of Directors of the Company, or the board of
         directors of any  corporation  assuming the obligations of the Company,
         may, in its discretion,  take any one or more of the following actions,
         as to this Option:  (i) provide that the Warrant  shall be assumed,  or
         equivalent   warrants  shall  be  substituted,   by  the  acquiring  or
         succeeding  corporation  (or an affiliate  thereof),  (ii) upon written
         notice  to the  Holder,  provide  that all  unexercised  warrants  will
         terminate  immediately  prior to the  consummation of such  transaction
         unless  exercised by the Holder within a specified period following the
         date of such notice,  (iii) in the event of a merger under the terms of
         which  holders of the Common  Stock of the Company  will  receive  upon
         consummation  thereof a cash payment for each share  surrendered in the
         merger (the "Merger Price"),  make or provide for a cash payment to the
         Holder equal to the  difference  between (A) the Merger Price times the
         number of shares of Common Stock subject to this Warrant (to the extent
         then  exercisable  at prices not in excess of the Merger Price) and (B)
         the exercise  price of this Warrant in exchange for the  termination of
         such   Warrant,   or  (iv)  provide  that  this  Warrant  shall  become
         exercisable in full immediately prior to such event.

10.      RIGHTS AS  STOCKHOLDER.  Holder shall not have any rights or privileges
         of a stockholder of the Company in respect of the shares  issuable upon
         exercise  of the  Warrant  granted  hereunder,  unless  and until  this
         Warrant shall have been duly  exercised and  certificates  representing
         such shares shall have been issued by the Company.

11.      NOTICES. Any notice to be given under the terms of this Agreement shall
         be  addressed  to the  Company  in care of its  Secretary  at the  main
         offices for the transaction of its business, and any notice to be given
         to Holder  shall be addressed to Holder at the address set forth above,
         or at such  other  place as either  party may  hereafter  designate  in
         writing to the other.  Any such notice  shall be deemed duly given when
         enclosed in a properly sealed  envelope or wrapper  addressed as herein
         required,  certified and deposited (postage and certification  prepaid)
         in a post office regularly maintained by the United States Government.

                                       3
<PAGE>

12.      BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit of and
         be binding  upon each  successor  of the Company  and the  Holder.  All
         obligations  imposed  upon the  Holder  and all  rights  granted to the
         Company under this Agreement  shall be binding upon the Holder's heirs,
         legal representatives, and successors. Notwithstanding anything in this
         Agreement to the contrary,  the Holder may not assign this Agreement or
         the Warrant without the prior written consent of the Company.

13.      GOVERNING LAW. The validity, construction, interpretation and effect of
         this Agreement  shall be governed by and determined in accordance  with
         the law of the State of Delaware without regard to its conflict of laws
         rules,  except to the extent  preempted by federal law,  which shall to
         such extent govern.

         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed on its behalf by its Chief Financial  Officer,  and Holder has hereunto
set its hand the date and year  first  above  written,  which is the time of the
issuance of the Warrant hereunder.

AGREED AND ACCEPTED:                        ARKONA INC.

By:                                         By: /s/
------------------------------              ------------------------------
      Signature of Holder                   Name: Stephen L. Russo
                                            Title: Chief Financial OfficerExhibit 10.1

                                  ARKONA, INC.

                            2001 STOCK INCENTIVE PLAN

         1. Purpose.  The purpose of this 2001 Incentive Stock Plan (the "Plan")
is to enable Arkona,  Inc. (the "Company") to attract and retain the services of
(i) selected  employees,  officers and directors of the Company or any parent or
subsidiary of the Company and (ii)  selected  nonemployee  agents,  consultants,
advisers and independent  contractors of the Company or any parent or subsidiary
of the Company. For purposes of this Plan, a person is considered to be employed
by or in the  service  of the  Company if the  person is  employed  by or in the
service  of  the  Company  or any  parent  or  subsidiary  of  the  Company  (an
"Employer").

         2. Shares Subject to the Plan.  Subject to adjustment as provided below
and in Section  10, the  shares to be  offered  under the Plan shall  consist of
Common Stock of the Company, and the total number of shares of Common Stock that
may be  issued  under  the Plan  shall be  6,000,000  shares.  If an  option  or
Performance-based  Award (as  defined  below)  granted  under the Plan  expires,
terminates  or is  canceled,  the  unissued  shares  subject  to that  option or
Performance-based  Award  shall  again be  available  under the Plan.  If shares
awarded as a bonus pursuant to Section 7 or sold pursuant to Section 8 under the
Plan are  forfeited  to or  repurchased  by the  Company,  the  number of shares
forfeited or repurchased shall again be available under the Plan.

         3. Effective Date and Duration of Plan.

            3.1  Effective Date. The Plan shall become  effective as of December
1, 2001. Options, and Performance-based  Awards may be granted and shares may be
awarded as bonuses or sold under the Plan at any time after the  effective  date
and before termination of the Plan.

            3.2  Duration.  The Plan shall  continue in effect  until all shares
available for issuance under the Plan have been issued and all  restrictions  on
the shares have lapsed. The Board of Directors may suspend or terminate the Plan
at any time except with respect to options,  Performance-based Awards and shares
subject to restrictions then outstanding  under the Plan.  Termination shall not
affect  any  outstanding  options,  Performance-based  Awards,  any right of the
Company to repurchase  shares or the  forfeitability  of shares issued under the
Plan.

         4. Administration.

            4.1  Board of Directors. The Plan shall be administered by the Board
of Directors of the Company, which shall determine and designate the individuals
to whom awards  shall be made,  the amount of the awards and the other terms and
conditions of the awards.  Subject to the  provisions of the Plan,  the Board of
Directors may adopt and amend rules and regulations  relating to  administration

                                       1
<PAGE>

of the Plan,  advance the lapse of any waiting  period,  accelerate any exercise
date,  waive or  modify  any  restriction  applicable  to shares  (except  those
restrictions  imposed by law) and make all other  determinations in the judgment
of the Board of Directors  necessary or desirable for the  administration of the
Plan.  The  interpretation  and  construction  of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive.  The
Board of  Directors  may correct any defect or supply any  omission or reconcile
any  inconsistency in the Plan or in any related  agreement in the manner and to
the extent it deems  expedient to carry the Plan into  effect,  and the Board of
Directors shall be the sole and final judge of such expediency.

            4.2  Committee. The Board of Directors may delegate to any committee
of  the  Board  of  Directors  (the   "Committee")  any  or  all  authority  for
administration  of the Plan.  If authority is  delegated to the  Committee,  all
references  to the Board of  Directors  in the Plan shall mean and relate to the
Committee,  except (i) as otherwise  provided by the Board of Directors and (ii)
only the Board of  Directors  may amend or  terminate  the Plan as  provided  in
Sections 3, 10 and 11.

         5. Types of Awards;  Eligibility;  Limitations.  The Board of Directors
may,  from  time  to  time,  take  the  following  actions,   separately  or  in
combination,  under the Plan:  (i) grant  options that are not  Incentive  Stock
Options as  defined in Section  422 of the  Internal  Revenue  Code of 1986,  as
amended (the "Code")  ("Non-Statutory Stock Options");  (ii) award stock bonuses
as  provided  in Section 7; and (iii) sell  shares  subject to  restrictions  as
provided  in Section 8; and (iv) award  Performance-based  Awards as provided in
Section 9. Awards may be made to employees, including employees who are officers
or directors,  and to other individuals  described in Section 1 selected by 5the
Board of Directors.  The Board of Directors shall select the individuals to whom
awards  shall be made and shall  specify the action  taken with  respect to each
individual  to  whom an  award  is  made.  At the  discretion  of the  Board  of
Directors,  an  individual  may be given an  election to  surrender  an award in
exchange for the grant of a new award.

         6. Option Grants.

            6.1  Terms of Grant. The Board of Directors  may grant options under
the Plan.  With  respect to each  option  grant,  the Board of  Directors  shall
determine the number of shares subject to the option,  the exercise  price,  the
period of the option and the time or times at which the option may be exercised,
and any other terms,  conditions or restrictions  related to the Option.  At the
time of the grant of an option or at any time thereafter, the Board of Directors
may provide  that an optionee  who  exercised an option with Common Stock of the
Company shall  automatically  receive a new option to purchase additional shares
equal to the  number  of  shares  surrendered  and may  specify  the  terms  and
conditions of such new options.

            6.2  Exercise  of  Options.  Except as provided in Section 6.4 or as
determined  by the Board of Directors,  no option  granted under the Plan may be
exercised  unless at the time of exercise  the optionee is employed by or in the
service of the Company and shall have been so employed or provided  such service

                                       2
<PAGE>

continuously  since the date the  option  was  granted.  Except as  provided  in
Sections 6.4 and 10,  options  granted under the Plan may be exercised from time
to time over the period stated in each option in amounts and at times prescribed
by the Board of  Directors,  provided  that  options  may not be  exercised  for
fractional  shares.  In the  event  the Board of  Directors  does not  specify a
vesting schedule for any Option at the time of grant,  such option (a) shall not
be  exercisable  until  12  months  after  the  Grant  Date,  (b)  shall  become
exercisable  for 1/3 of the total number of shares subject thereto at the end of
12 months following the grant date and (c) shall become exercisable with respect
to 1/36 of the total  number of shares at the end of each month  thereafter,  so
that the option will be fully exercisable on the third anniversary of the grant.
Unless otherwise  determined by the Board of Directors,  if an optionee does not
exercise  an option  in any one year for the full  number of shares to which the
optionee is entitled in that year, the optionee's rights shall be cumulative and
the optionee may purchase those shares in any subsequent year during the term of
the option.

            6.3  Nontransferability. Unless otherwise determined by the Board of
Directors (either at or following the time of grant),  each other option granted
under the Plan by its terms (i) shall be nonassignable  and  nontransferable  by
the optionee,  either  voluntarily or by operation of law,  except by will or by
the laws of descent and  distribution  of the state or country of the optionee's
domicile at the time of death, and (ii) during the optionee's lifetime, shall be
exercisable only by the optionee.

            6.4  Termination of Employment or Service.

                 6.4(a)  General Rule. Unless otherwise  determined by the Board
         of  Directors  (either  at or  following  the  time  of  grant),  if an
         optionee's  employment or service with the Company  terminates  for any
         reason other than because of total  disability  or death as provided in
         Sections  6.1(b) and 6.1(c),  his or her option may be exercised at any
         time before the  expiration  date of the option or the expiration of 30
         days after the date of  termination,  whichever is the shorter  period,
         but only if and to the extent the optionee was entitled to exercise the
         option at the date of termination.

                 6.4(b)  Termination   Because  of  Total  Disability.    Unless
         otherwise  determined  by the  Board  of  Directors,  if an  optionee's
         employment  or service  with the  Company  terminates  because of total
         disability,  his or her option may be  exercised at any time before the
         expiration  date of the option or before  the date 12 months  after the
         date of termination,  whichever is the shorter period,  but only if and
         to the extent the  optionee  was entitled to exercise the option at the
         date of  termination.  The term  "total  disability"  means a medically
         determinable  mental or physical  impairment that is expected to result
         in death or has lasted or is expected to last for a  continuous  period
         of 12 months or more and that,  in the  opinion of the  Company and two
         independent physicians, causes the optionee to be unable to perform his
         or her duties as an employee,  director,  officer or  consultant of the
         Employer and unable to be engaged in any substantial  gainful activity.
         Total  disability  shall be  deemed to have  occurred  on the first day
         after the two  independent  physicians  have  furnished  their  written
         opinion of total  disability to the Company and the Company has reached
         an opinion of total disability.

                                       3
<PAGE>

                 6.4(c)  Termination  Because  of  Death.     Unless   otherwise
         determined  by the  Board  of  Directors,  if an  optionee  dies  while
         employed by or providing service to the Company,  his or her option may
         be  exercised at any time before the  expiration  date of the option or
         before  the date 12 months  after the date of death,  whichever  is the
         shorter period, but only if and to the extent the optionee was entitled
         to  exercise  the option at the date of death and only by the person or
         persons to whom the  optionee's  rights  under the option shall pass by
         the optionee's  will or by the laws of descent and  distribution of the
         state or country of domicile at the time of death.

                 6.4(d)  Amendment of Exercise Period Applicable to Termination.
         The Board of  Directors  may at any time extend the 30-day and 12-month
         exercise  periods  any  length  of time not  longer  than the  original
         expiration  date of the option.  The Board of Directors may at any time
         increase the portion of an option that is exercisable, subject to terms
         and conditions determined by the Board of Directors.

                 6.4(e)  Failure to  Exercise  Option.  To the  extent  that the
         option of any deceased  optionee or any optionee  whose  employment  or
         service  terminates is not exercised within the applicable  period, all
         further  rights to purchase  shares  pursuant to the option shall cease
         and terminate.

                 6.4(f)  Leave of  Absence.  Absence  on leave  approved  by the
         Employer or on account of illness or  disability  shall not be deemed a
         termination or interruption of employment or service.  Unless otherwise
         determined by the Board of Directors, vesting of options shall continue
         during a medical, family or military leave of absence,  whether paid or
         unpaid,  and  vesting of options  shall be  suspended  during any other
         unpaid leave of absence.

            6.5  Purchase of Shares.

                 6.5(a)  Notice  of  Exercise.  Unless  the  Board of  Directors
         determines  otherwise,  shares may be  acquired  pursuant  to an option
         granted  under the Plan  only upon the  Company's  receipt  of  written
         notice  from the  optionee  of the  optionee's  binding  commitment  to
         purchase  shares,  specifying the number of shares the optionee desires
         to purchase under the option and the date on which the optionee  agrees
         to  complete  the  transaction,  and,  if  required  to comply with the
         Securities  Act  of  1933  and/or   governing  state  securities  laws,
         containing  a  representation  that it is the  optionee's  intention to
         acquire the shares for investment and not with a view to distribution.

                                       4
<PAGE>

                 6.5(b)  Payment.  Unless  the  Board  of  Directors  determines
         otherwise  (either at or following the time or grant), on or before the
         date specified for completion of the purchase of shares  pursuant to an
         option  exercise,  the optionee  must pay the Company the full purchase
         price of those  shares in cash or by check or,  with the consent of the
         Board of Directors, in whole or in part, in Common Stock of the Company
         valued  at fair  market  value,  restricted  stock or other  contingent
         awards denominated in either stock or cash,  promissory notes and other
         forms of  consideration.  Unless  otherwise  determined by the Board of
         Directors,  any Common Stock  provided in payment of the purchase price
         must have been  previously  acquired  and held by the  optionee  for at
         least six months.  The fair market  value of Common  Stock  provided in
         payment of the purchase  price shall be the closing price of the Common
         Stock last reported before the time payment in Common Stock is made or,
         if  earlier,  committed  to be made,  if the Common  Stock is  publicly
         traded,  or another value of the Common Stock as specified by the Board
         of  Directors.  No shares  shall be issued  until full  payment for the
         shares has been made,  including all amounts owed for tax  withholding.
         With the consent of the Board of Directors, an optionee may request the
         Company  to apply  automatically  the  shares to be  received  upon the
         exercise of a portion of a stock option (even though stock certificates
         have not yet been issued) to satisfy the purchase  price for additional
         portions of the option.

                 6.5(c)  Tax Withholding.  Each  optionee  who has  exercised an
         option shall,  immediately upon notification of the amount due, if any,
         pay to the Company in cash or by check amounts necessary to satisfy any
         applicable federal,  state and local tax withholding  requirements.  If
         additional  withholding is or becomes required (as a result of exercise
         of an option or as a result of disposition of shares acquired  pursuant
         to exercise of an option) beyond any amount  deposited  before delivery
         of the certificates,  the optionee shall pay such amount, in cash or by
         check,  to the  Company on  demand.  If the  optionee  fails to pay the
         amount  demanded,  the Company or the Employer may withhold that amount
         from other amounts payable to the optionee,  including salary,  subject
         to  applicable  law.  With the  consent of the Board of  Directors,  an
         optionee  may  satisfy  this  obligation,  in  whole  or  in  part,  by
         instructing  the Company to withhold  from the shares to be issued upon
         exercise or by  delivering to the Company other shares of Common Stock;
         provided,  however,  that the number of shares so withheld or delivered
         shall not exceed the minimum  amount  necessary to satisfy the required
         withholding obligation.

                 6.5(d)  Reduction of Reserved  Shares.  Upon the exercise of an
         option, the number of shares reserved for issuance under the Plan shall
         be reduced by the number of shares  issued upon  exercise of the option
         (less the number of any shares  surrendered in payment for the exercise
         price or withheld to satisfy withholding requirements).

            6.6  Limitations on Grants to Non-Exempt Employees. Unless otherwise
determined  by the Board of  Directors,  if an  employee  of the  Company or any
parent or  subsidiary  of the Company is a  non-exempt  employee  subject to the
overtime  compensation  provisions of Section 7 of the Fair Labor  Standards Act

                                       5
<PAGE>

(the  "FLSA"),  any  option  granted  to that  employee  shall be subject to the
following restrictions: (i) the option price shall be at least 85 percent of the
fair market value, as described in Section 6.2 4, of the Common Stock subject to
the  option  on the  date it is  granted;  and  (ii)  the  option  shall  not be
exercisable  until at least six months  after the date it is granted;  provided,
however,  that this six-month  restriction on exercisability will cease to apply
if the  employee  dies,  becomes  disabled  or  retires,  there is a  change  in
ownership of the Company, or in other circumstances permitted by regulation, all
as prescribed in Section 7(e)(8)(B) of the FLSA.

         7. Stock  Bonuses.  The Board of  Directors  may award shares under the
Plan as stock bonuses.  Shares awarded as a bonus shall be subject to the terms,
conditions  and  restrictions   determined  by  the  Board  of  Directors.   The
restrictions may include restrictions concerning  transferability and forfeiture
of the shares awarded,  together with any other  restrictions  determined by the
Board of Directors.  The Board of Directors may require the recipient to sign an
agreement as a condition of the award,  but may not require the recipient to pay
any  monetary   consideration  other  than  amounts  necessary  to  satisfy  tax
withholding  requirements.  The  agreement  may contain  any terms,  conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares awarded shall bear any legends required
by the Board of  Directors.  The Company may  require any  recipient  of a stock
bonus to pay to the Company in cash or by check upon demand amounts necessary to
satisfy any applicable federal, state or local tax withholding requirements.  If
the recipient fails to pay the amount demanded,  the Company or the Employer may
withhold  that amount from other  amounts  payable to the  recipient,  including
salary, subject to applicable law. With the consent of the Board of Directors, a
recipient may satisfy this  obligation,  in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock;  provided,  however,  that the number of shares so
withheld or delivered  shall not exceed the minimum amount  necessary to satisfy
the required  withholding  obligation.  Upon the issuance of a stock bonus,  the
number of shares  reserved for  issuance  under the Plan shall be reduced by the
number of shares  issued,  less the number of shares  withheld or  delivered  to
satisfy withholding obligations.

         8. Restricted  Stock. The Board of Directors may issue shares under the
Plan for any consideration  (including promissory notes and services) determined
by the Board of Directors.  Shares issued under the Plan shall be subject to the
terms,  conditions and  restrictions  determined by the Board of Directors.  The
restrictions may include restrictions concerning transferability,  repurchase by
the  Company  and  forfeiture  of the  shares  issued,  together  with any other
restrictions  determined  by the Board of  Directors.  All Common  Stock  issued
pursuant to this Section 8 shall be subject to a purchase agreement, which shall
be executed by the Company and the  prospective  purchaser of the shares  before
the  delivery of  certificates  representing  the shares to the  purchaser.  The
purchase   agreement   may   contain   any  terms,   conditions,   restrictions,
representations  and  warranties  required  by  the  Board  of  Directors.   The
certificates  representing  the shares  shall bear any  legends  required by the
Board of Directors. The Company may require any purchaser of restricted stock to
pay to the Company in cash or by check upon demand amounts  necessary to satisfy
any applicable  federal,  state or local tax  withholding  requirements.  If the

                                       6
<PAGE>

purchaser  fails to pay the amount  demanded,  the Company or the  Employer  may
withhold  that amount from other  amounts  payable to the  purchaser,  including
salary, subject to applicable law. With the consent of the Board of Directors, a
purchaser may satisfy this  obligation,  in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock;  provided,  however,  that the number of shares so
withheld or delivered  shall not exceed the minimum amount  necessary to satisfy
the required withholding obligation.  Upon the issuance of restricted stock, the
number of shares  reserved for  issuance  under the Plan shall be reduced by the
number of shares  issued,  less the number of shares  withheld or  delivered  to
satisfy withholding obligations.

         9. Performance-based  Awards.   To the extent  counsel  for the Company
determines  that the  applicable  grants to qualify,  the Board of Directors may
grant  awards  intended to qualify as qualified  performance-based  compensation
under   Section   162(m)   of  the   Code   and   the   regulations   thereunder
("Performance-based  Awards").  Performance-based Awards shall be denominated at
the time of grant  either in Common  Stock  ("Stock  Performance  Awards") or in
dollar amounts ("Dollar Performance Awards").  Payment under a Stock Performance
Award or a Dollar  Performance  Award shall be made,  at the  discretion  of the
Board of Directors, in Common Stock ("Performance Shares"), or in cash or in any
combination thereof.  Performance-based Awards shall be subject to the following
terms and conditions:

            9.1  Award Period. The Board of Directors shall determine the period
of time for which a Performance-based Award is made (the "Award Period").

            9.2  Performance  Goals and Payment.  The Board of  Directors  shall
establish in writing  objectives  ("Performance  Goals") that must be met by the
Company or any  subsidiary,  division  or other unit of the  Company  ("Business
Unit")  during the Award Period as a condition  to payment  being made under the
Performance-based  Award.  The Performance  Goals for each award shall be one or
more targeted levels of performance with respect to one or more of the following
objective  measures with respect to the Company or any Business Unit:  earnings,
earnings per share, stock price increase,  total shareholder return (stock price
increase plus dividends), return on equity, return on assets, return on capital,
economic value added, revenues, operating income, inventories,  inventory turns,
cash  flows  or  any  of  the  foregoing  before  the  effect  of  acquisitions,
divestitures,   accounting  changes,   and  restructuring  and  special  charges
(determined  according to criteria  established by the Board of Directors).  The
Board of Directors shall also establish the number of Performance  Shares or the
amount  of cash  payment  to be  made  under a  Performance-based  Award  if the
Performance Goals are met or exceeded, including the fixing of a maximum payment
(subject  to  Section  9.4).   The  Board  of  Directors  may  establish   other
restrictions  to payment under a  Performance-based  Award,  such as a continued
employment  requirement,  in addition to satisfaction of the Performance  Goals.
Some or all of the Performance  Shares may be issued at the time of the award as
restricted shares subject to forfeiture in whole or in part if Performance Goals
or, if applicable, other restrictions are not satisfied.

                                       7
<PAGE>

            9.3  Computation  of Payment.  During or after an Award Period,  the
performance of the Company or Business  Unit, as  applicable,  during the period
shall be measured  against the Performance  Goals. If the Performance  Goals are
not met,  no  payment  shall be made  under a  Performance-based  Award.  If the
Performance Goals are met or exceeded, the Board of Directors shall certify that
fact in writing  and  certify  the number of  Performance  Shares  earned or the
amount of cash  payment  to be made  under  the  terms of the  Performance-based
Award.

            9.4  Maximum  Awards. No participant  may receive in any fiscal year
Stock  Performance  Awards under which the  aggregate  amount  payable under the
Awards  exceeds  the  equivalent  of  500,000  shares of Common  Stock or Dollar
Performance  Awards under which the  aggregate  amount  payable under the Awards
exceeds $500,000.

            9.5  Tax Withholding. Each participant who has received  Performance
Shares shall, upon notification of the amount due, pay to the Company in cash or
by check amounts  necessary to satisfy any applicable  federal,  state and local
tax  withholding  requirements.  If the  participant  fails  to pay  the  amount
demanded,  the  Company or the  Employer  may  withhold  that  amount from other
amounts payable to the participant, including salary, subject to applicable law.
With the consent of the Board of  Directors,  a  participant  may  satisfy  this
obligation, in whole or in part, by instructing the Company to withhold from any
shares to be issued  or by  delivering  to the  Company  other  shares of Common
Stock;  provided,  however,  that the number of shares so  delivered or withheld
shall  not  exceed  the  minimum  amount   necessary  to  satisfy  the  required
withholding obligation.

            9.6  Effect on Shares Available. The payment of a  Performance-based
Award in cash shall not reduce the number of shares of Common Stock reserved for
issuance  under the Plan.  The  number of shares of Common  Stock  reserved  for
issuance  under the Plan shall be reduced  by the number of shares  issued  upon
payment of an award,  less the number of shares delivered or withheld to satisfy
withholding obligations.

         10.Changes in Capital Structure.

            10.1 Stock Splits, Stock Dividends.  If the outstanding Common Stock
of the Company is hereafter  increased or decreased or changed into or exchanged
for a different  number or kind of shares or other  securities of the Company by
reason of any stock split,  combination of shares,  dividend  payable in shares,
recapitalization or  reclassification,  appropriate  adjustment shall be made by
the Board of  Directors  in the number and kind of shares  available  for grants
under  the Plan and in all  other  share  amounts  set  forth  in the  Plan.  In
addition, the Board of Directors shall make appropriate adjustment in the number
and kind of shares as to which  outstanding  options,  or portions  thereof then
unexercised, shall be exercisable, so that the optionee's proportionate interest
before and after the occurrence of the event is maintained.  Notwithstanding the
foregoing,  the Board of  Directors  shall  have no  obligation  to  effect  any

                                       8
<PAGE>

adjustment that would or might result in the issuance of fractional  shares, and
any  fractional  shares  resulting  from any  adjustment  may be  disregarded or
provided  for in any  manner  determined  by the  Board of  Directors.  Any such
adjustments made by the Board of Directors shall be conclusive.

            10.2 Mergers,  Reorganizations,  Etc.   In the  event  of a  merger,
consolidation,  plan of exchange,  acquisition  of property or stock,  split-up,
split-off,  spin-off,  reorganization  or  liquidation to which the Company is a
party,  any sale,  lease,  exchange or other  transfer (in one  transaction or a
series of related  transactions) of all, or substantially  all, of the assets of
the  Company,  or the transfer by one or more  shareholders,  in one transfer or
several related transfers, of 50% of more of the Common Stock outstanding on the
date of such transfer (or the first of such related transfers) to persons, other
than  wholly-owned  subsidiaries or family trusts,  who were not shareholders of
the Company prior to the first such transfer (each, a "Transaction"),  the Board
of Directors  shall, in its sole discretion and to the extent possible under the
structure  of the  Transaction,  select one of the  following  alternatives  for
treating  outstanding  options under the Plan prior to the  consummation  of the
Transaction:

                 10.2(a)  Outstanding   options   shall  remain  in  effect  in
         accordance with their terms.

                 10.2(b)  Outstanding options shall be converted into options to
         purchase  stock  in one or  more  of the  corporations,  including  the
         Company,  that  are the  surviving  or  acquiring  corporations  in the
         Transaction.  The  amount,  type  of  securities  subject  thereto  and
         exercise  price of the  converted  options  shall be  determined by the
         Board of  Directors  of the  Company,  taking into account the relative
         values of the companies  involved in the  Transaction  and the exchange
         rate,   if  any,   used  in   determining   shares  of  the   surviving
         corporation(s) to be held by holders of shares of the Company following
         the Transaction. Unless otherwise determined by the Board of Directors,
         the  converted  options  shall be vested  only to the  extent  that the
         vesting  requirements  relating to options granted  hereunder have been
         satisfied.

                 10.2(c)  The  Board of  Directors  shall  provide a period of a
         least 10 days before the  completion  of the  Transaction  during which
         outstanding  options may be exercised,  to the extent then exercisable,
         and upon the expiration of that period,  all unexercised  options shall
         immediately terminate. The Board of Directors may, its sole discretion,
         accelerate the  exercisability  of options so that they are exercisable
         in full during that period.

            10.3 Dissolution of the Company.  In the event of the dissolution of
the Company, options shall be treated in accordance with Section 10.2(c).

            10.4 Rights  Issued by Another  Corporation.  The Board of Directors
may also grant options and stock bonuses and Performance-based  Awards and issue
restricted stock under the Plan with terms,  conditions and provisions that vary
from those  specified in the Plan,  provided that any such awards are granted in

                                       9
<PAGE>

substitution  for, or in connection  with the assumption of,  existing  options,
stock bonuses, Performance-based Awards and restricted stock granted, awarded or
issued by another corporation and assumed or otherwise agreed to be provided for
by the Company pursuant to or by reason of a Transaction.

         11.Amendment of the  Plan.     The Board of  Directors  may at any time
modify or amend the Plan in any  respect.  Except as  provided  in  Section  10,
however, no change in an award already granted shall be made without the written
consent  of the  holder of the award if the change  would  adversely  affect the
holder.

         12.Approvals.   The Company's obligations under the Plan are subject to
the approval of state and federal  authorities or agencies with  jurisdiction in
the matter.  The  Company  will use its best  efforts to take steps  required by
state or federal law or applicable regulations,  including rules and regulations
of the  Securities  and Exchange  Commission and any stock exchange on which the
Company's  shares may then be listed,  in  connection  with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to issue
or deliver  Common  Stock  under the Plan if such  issuance  or  delivery  would
violate state or federal  securities laws. Unless the Company  determines,  with
advice of counsel that such legend is not necessary,  certificates  representing
all shares of Common  Stock  issued in  connection  with the Plan will contain a
legend indicating that such shares of Common Stock are "restricted  securities,"
as defined  under Rule 144  promulgated  under the  Securities  Act of 1933,  as
amended,  and that such shares may not be  transferred  unless such  transfer is
registered  under the  Securities  Act and governing  state  securities  laws or
exempt from the registration requirements of the same.

         13.Employment and Service Rights.      Nothing in the Plan or any award
pursuant  to the Plan  shall  (i)  confer  upon  any  employee  any  right to be
continued  in the  employment  of an Employer or  interfere  in any way with the
Employer's right to terminate the employee's employment at will at any time, for
any reason, with or without cause, or to decrease the employee's compensation or
benefits,  or (ii) confer upon any person engaged by an Employer any right to be
retained or employed by the Employer or to the continuation,  extension, renewal
or  modification  of any  compensation,  contract or arrangement  with or by the
Employer.

         14.Rights as a Shareholder.   The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any shares of Common Stock
until the date the  recipient  becomes  the  holder  of record of those  shares.
Except as otherwise  expressly provided in the Plan, no adjustment shall be made
for  dividends or other rights for which the record date occurs  before the date
the recipient becomes the holder of record.

                                       10
<PAGE>

         The  undersigned,  who is the duly  elected  Secretary  of the Company,
hereby certifies that, following adoption of this Plan by the Board of Directors
of the Company on December 1, 2001. This Plan is not expected to be submitted to
the Shareholders of the company for approval.

                                                         ARKONA, INC.

                                                         By: /s/ Steve Russo
                                                             ---------------
                                                             Steve Russo
                                                             Secretary

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]