Document:

2001 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

  
 
EXHIBIT 10.1 
  
 PALM, INC. 
  
 2001 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS 
  
           PALM, INC., hereby adopts the Palm, Inc. 2001 Stock Option Plan for Non-Employee Directors as follows: 
  
 SECTION 1 
 EFFECTIVE DATE AND PURPOSE 
  
           1.1    Effective Date.    The Plan is effective as of October 11, 2001, subject to
ratification by an affirmative vote of the holders of a majority of the Shares which are present in person or by proxy and entitled to vote at the 2001 Annual Meeting of Stockholders of the Company. 
  
           1.2    Purpose of the Plan.    The Plan is intended to
closely align the interests of the Non-Employee Directors with the interests of the Company’s stockholders. This is achieved by making a significant portion of Non-Employee Director compensation directly related to the total return performance
of the Shares. The Plan also is intended to encourage Share ownership on the part of Non-Employee Directors. 
  
 SECTION 2

 DEFINITIONS 
  
           The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context: 
  
           2.1    “1934 Act” means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation. 
  
           2.2    “Board” means the Board of Directors of the Company. 
  
           2.3     “Change of Control” means the occurrence of any of the following events: 
  
                         (a)    Any “person” (as such term is used in Sections 13(d) and
14(d) of the 1934 Act) becomes the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the
Company’s then outstanding voting securities; or 
  
                         (b)     The consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets; or 
  
                         (c)    The consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining out-standing or by being converted into voting
securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or
consolidation; or 
  
                         (d)    A change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (1) are directors of the Company as of the effective date of the Plan, or (2) are elected,
or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in subsections (a), (b), or (c) above, or in connection
with an actual or threatened proxy contest relating to the election of directors to the Company. 
 

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           2.4    “Committee” means the committee appointed pursuant to Section 3.1 to administer the Plan. 
  
           2.5    “Company” means Palm, Inc., a Delaware corporation, or any
successor thereto. 
  
           2.6    “Director” means an individual who is a member of the Board. 
  
           2.7    “Disability” means a permanent and total disability, as determined by the Committee (in its
discretion) in accordance with uniform and non-discriminatory standards adopted by the Committee from time to time. 
  
           2.8    “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option. 

 
           2.9    “Fair Market Value” means the
closing per share selling price for the Shares, as quoted on the Nasdaq National Market for the date in question. 
  
           2.10    “Grant Date” means, with respect to a particular Option, the date on which the Option was granted. 
  
           2.11    “Non-Employee Director” means a Director
who is an employee of neither the Company nor of any Subsidiary. 
  
           2.12    “Option” means an option to purchase Shares granted pursuant to Section 5. 
  
           2.13    “Option Agreement” means the written agreement setting
forth the terms and provisions applicable to each Option granted under the Plan. 
  
           2.14    “Participant” means a Non-Employee Director who has an outstanding Option. 
  
           2.15    “Plan” means the Palm, Inc. 2001 Stock Option Plan for
Non-Employee Directors, as set forth in this instrument and as hereafter amended from time to time. 
  
           2.16    “Shares” means the shares of the Company’s common stock, $0.001 par value. 
  
           2.17    “Subsidiary” means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. 
  
           2.18    “Termination of Service” means a cessation of the Participant’s service on the Board for any reason. 
  
 SECTION 3 
 ADMINISTRATION 
  
           3.1    The Committee.    The Plan
shall be administered by the Committee. The Committee shall consist of one or more Directors who shall be appointed by, and serve at the pleasure of, the Board. Until otherwise determined by the Board, the Compensation Committee of the Board shall
serve as the Committee. 
  
           3.2    Authority of
the Committee.    It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan
and to control its operation, including, but not limited to, the power to (a) interpret the Plan and the Options, (b) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, (c) interpret, amend or
revoke any such rules, and (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Non-Employee Directors who are foreign nationals or employed outside of the United States. 
  
           3.3    Decisions Binding.    All
determinations and decisions made by the Committee shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 
 

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 SECTION 4 
 SHARES SUBJECT TO THE PLAN 
  
           4.1    Number of Shares.    Subject to
adjustment as provided in Section 4.3, the total number of Shares available for grant under the Plan shall not exceed 6,000,000. Shares issued under the Plan may be either authorized but unissued Shares or treasury Shares. 
           4.2    Lapsed Options.    If an Option terminates or expires for any reason, any Shares
subject to such Option again shall be available to be the subject of an Option. 
           4.3    Adjustments in Options and Authorized Shares. 
                    4.3.1    Changes in Capitalization.    Subject to any required action by the
shareholders of the Company, the number and class of Shares which may be delivered under the Plan, and the number, class, and Exercise Price of Shares subject to outstanding Options and future grants, shall be proportionately adjusted by the
Committee for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, spin-off, combination or reclassification of the Shares, or any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Except as
expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price
of Shares subject to an Option. 
                    4.3.2    Dissolution or Liquidation.    In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not been previously exercised, it shall terminate immediately prior to the consummation of such proposed action. 
                    4.3.3    Merger or Asset Sale.    In the event of a merger of the Company with
or into another corporation or the sale of substantially all of the assets of the Company, outstanding Options may be assumed or equivalent options may be substituted by the successor corporation or a parent or subsidiary thereof (the
“Successor Corporation”). If the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option, the Option shall become fully vested and exercisable, including as to Shares for which it would not
otherwise be exercisable. In such event the Committee shall notify the Participant that the Option shall be fully exercisable for a period of thirty (30) days from the date of such notice, and upon the expiration of such period the Option shall
terminate. For this purpose, an Option shall be considered assumed if, following the merger or sale of assets, the Option confers the right to purchase or receive, for each Share covered by the Option immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Shares for each Share held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares). If such consideration received in the merger or sale of assets is not solely common stock of the Successor Corporation, the Committee may, with
the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of the Option, for each Share subject to the Option, to be solely common stock of the Successor Corporation equal in fair market value to the
per share consideration received by holders of Shares in the merger or sale of assets. 
  
 SECTION 5 
 STOCK OPTIONS 
  
           5.1    Granting of Options. 
  
                    5.1.1    Initial Grants.    Each Non-Employee Director automatically shall
receive an Option on the effective date of the Plan, provided that the individual will receive such Option only if he or she both (a) is a Non-Employee Director on that date, and (b) has served as a Non-Employee Director for at least the six (6)
months immediately preceding that date. Each Non-Employee Director who first becomes a Non-Employee
 
 

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Director after the effective date of the Plan, automatically shall receive an Option on the date that he or she first is appointed or elected as a Non-Employee Director. The number of Shares
covered by each Option described in this Section 5.1.1 shall equal 60,000. 
  
                    5.1.2    Ongoing Grants for Service on the Board.    Each Non-Employee Director
automatically shall receive an Option on the date of each Annual Meeting of the Company’s stockholders that occurs after the effective date of the Plan, provided that the individual will receive such Option only if he or she both (a) is a
Non-Employee Director on that date, and (b) has served as a Non-Employee Director for at least the six (6) months immediately preceding that date. The number of Shares covered by each Option described in this Section 5.1.2 shall equal 30,000.

  
                    5.1.3    Grants for Service as a Committee Chair.    Each Non-Employee Director
who is the Chairman of a standing committee of the Board (a “Committee Chair”) on the effective date of the Plan automatically shall receive an Option on that date. Each Non-Employee Director who first becomes a Committee Chair after the
effective date of the Plan automatically shall receive an Option on the date that he or she first is appointed as a Committee Chair. Each Non-Employee Director who has received an Option pursuant to the foregoing also automatically shall receive an
Option on the date of each subsequent Annual Meeting of the Company’s stockholders, provided that the individual will receive such Option only if he or she both (a) is a Committee Chair on that date, and (b) has served in such position for at
least the six (6) months immediately preceding that date. A Non-Employee Director shall be entitled to more than one Option pursuant to this Section 5.1.3 to the extent that on any Grant Date, he or she is the Chairman of more than one standing
committee of the Board. The number of Shares covered by each Option described in this Section 5.1.3 shall equal 7,000. Each Option granted pursuant to this Section 5.1.3 shall be in addition to any other Option(s) to which the Non-Employee Director
may be entitled under any other subsection of Section 5.1. 
  
                    5.1.4    Grants for Service as a Committee Member.    Each Non-Employee
Director who is a member (whether voting or non-voting) of a standing committee of the Board (a “Committee Member”) on the effective date of the Plan automatically shall receive an Option on that date. Each Non-Employee Director who first
becomes a Committee Member after the effective date of the Plan automatically shall receive an Option on the date that he or she first is appointed as a Committee Member. Each Non-Employee Director who has received an Option pursuant to the
foregoing also automatically shall receive an Option on the date of each subsequent Annual Meeting of the Company’s stockholders, provided that the individual will receive such Option only if he or she both (a) is a Committee Member on that
date, and (b) has served in such position for at least the six (6) months immediately preceding that date. A Non-Employee Director shall be entitled to more than one Option pursuant to this Section 5.1.4 to the extent that on any Grant Date, he or
she has qualifying membership on more than one standing committee of the Board. The number of Shares covered by each Option described in this Section 5.1.4 shall equal 5,000. Each Option granted pursuant to this Section 5.1.4 shall be in addition to
any other Option(s) to which the Non-Employee Director may be entitled under any other subsection of Section 5.1, except that a Non-Employee Director shall not receive an Option under this Section 5.1.4 for service on any committee with respect to
which he or she is entitled to receive an Option under Section 5.1.3. 
  
                    5.1.5    Grants for Service as Chairman of the Board.    Each Non-Employee
Director who is the Chairman of the Board on the date of an Annual Meeting of the Company’s stockholders automatically shall receive an Option to purchase 10,000 Shares on that date. Each Option granted pursuant to this Section 5.1.5 shall be
in addition to any other Option(s) to which the Non-Employee Director may be entitled under any other subsection of Section 5.1. 
  
           5.2    Terms of Options. 
  
                    5.2.1    Option Agreement.    Each Option shall be evidenced by a written
Option Agreement (satisfactory to the Committee) which shall be executed by the Participant and the Company. 
                    5.2.2    Exercise Price.    The Exercise Price for the Shares subject to each
Option shall be 100% of the Fair Market Value of such Shares on the Grant Date. 
 

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                    5.2.3    Exercisability. 
  
                                  (a)    Each Option
shall become exercisable in three (3) equal annual installments, commencing on the first anniversary of the applicable Grant Date, except as follows. If a Change of Control occurs while the Non-Employee Director is such and the Non-Employee Director
will cease to be such as an immediate and direct consequence of the Change of Control, the Option (if not yet expired) shall become fully exercisable on the date of the Change of Control. Notwithstanding the preceding, once a Participant ceases to
be a Director, his or her Options which are not then exercisable shall never become exercisable and shall be immediately forfeited, except to the limited extent provided in Section 5.2.3(b). 
  
                                  (b)    Upon a
Non-Employee Director’s death, all unvested and unexpired Options held by such person shall immediately become exercisable. 
  
                    5.2.4    Expiration of Options.    Each Option shall terminate upon the first
to occur of the following events: 
  
                                  (a)    The expiration
of ten (10) years from the Grant Date; 
  
                                  (b)    The expiration
of three (3) months from the date of the Participant’s Termination of Service prior to age 65 for any reason other than the Participant’s death or Disability; 
  
                                  (c)    The expiration
of one (1) year from the date of the Participant’s Termination of Service by reason of Disability, or 
  
                                  (d)    The expiration
of one (1) year from the date of the Participant’s Termination of Service at or after age 65 for any reason other than the Participant’s death or Disability. 
  
                    5.2.5    Death of Director.    
Notwithstanding Section 5.2.4, if a Director dies prior to the expiration of his or her Option(s) in accordance with Section 5.2.4, his or her Option(s) which are exercisable on the date of his or her death shall terminate one (1) year after the
date of death. 
  
           5.3    Exercise.    Options shall be exercised by the Participant’s delivery of a notice of exercise in such form and manner as
the Company (or its designee) may designate from time to time. In all events, the notice shall set forth the number of Shares with respect to which the Option is to be exercised, and be accompanied by full payment for the Shares. Upon the exercise
of any Option, the Exercise Price shall be payable to the Company in full in cash or its equivalent. The Committee, in its sole discretion, also may permit exercise by (a) tendering previously acquired Shares having an aggregate Fair Market Value at
the time of exercise equal to the total Exercise Price, or (b) any other means which the Committee, in its sole discretion, determines to both provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. As soon as
practicable after receipt of a written notification of exercise and full payment for the Shares purchased, the Company shall deliver to the Participant (or the Participant’s designated broker), Share certificates (which may be in book-entry
form) representing such Shares. 
  
           5.4    Options are not Incentive Stock Options.    Options are not intended to be incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. 
  
 SECTION 6 
 MISCELLANEOUS 
  
           6.1    No Effect on Service.    Nothing in the Plan shall (a) create any obligation on the part of the Board to nominate any
Participant for reelection by the Company’s stockholders, or (b) interfere with or limit in any way the right of the Company to terminate any Participant’s service. 
  
           6.2    Indemnification.    Each person who is or shall have been a member of the Committee,
or of the Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim,
 
 

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action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Option Agreement, and (b)
from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall
give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them
harmless. 
  
           6.3    Successors.    All obligations of the Company under the Plan shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 
  

          6.4    Beneficiary Designations.    If permitted by the Committee, a Participant may
name a beneficiary or beneficiaries to whom any vested but unpaid Option shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in
a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan and of
the applicable Option Agreement, any unexercised vested Option may be exercised by the administrator or executor of the Participant’s estate. 
  
           6.5    Nontransferability of Options.    No Option granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.4. All rights with respect to an Option granted to a Participant shall be available during
his or her lifetime only to the Participant. Notwithstanding the foregoing, the Participant may, if permitted by the Committee and in a manner specified by the Committee, transfer an Option by bona fide gift and not for any consideration, to a
member of the Participant’s immediate family or to a trust or other entity for the exclusive benefit of the Participant and/or a member or members of the Participant’s immediate family. 
  
           6.6    No Rights as Stockholder.    No Participant (nor
any beneficiary) shall have any of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Option (or exercise thereof), unless and until certificates representing such Shares shall have been
issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Participant or beneficiary. 
  
           6.7    Withholding Requirements.    Prior to the delivery of any Shares or cash pursuant to an Option (or exercise thereof), the
Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy the minimum Federal, state, and local taxes required to be withheld with respect to such Option (or
exercise thereof). 
  
 SECTION 7 
 AMENDMENT,
TERMINATION, AND DURATION 
  
           7.1    Amendment or Termination.    The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any
time and for any reason. The amendment, suspension, or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Option theretofore granted to such Participant. 
  
           7.2    Duration of the Plan.    The
Plan shall commence on the date specified herein, and subject to Section 7.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect thereafter. 
 

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 SECTION 8 
 LEGAL CONSTRUCTION 
  
           8.1    Gender and Number.    Except where otherwise indicated by the context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular shall include the plural. 
  
           8.2     Severability.    In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 
  
           8.3    Requirements of Law.    The granting of Options and the issuance of Shares under the
Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
  
           8.4    Compliance with Rule 16b-3.    For the purpose of ensuring that transactions under
the Plan do not subject Participants to liability under Section 16(b) of the 1934 Act, all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated under the 1934 Act, and any future regulation
amending, supplementing or superseding such regulation. To the extent any provision of the Plan, Option Agreement or action by the Committee or a Participant fails to so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee. 
  
           8.5    Governing Law.    The Plan and all Option Agreements shall be construed in accordance with and governed by the laws of the
State of California without giving effect to any choice or conflict of law provision or rule (whether of the State of California or otherwise) which would cause the application of the laws of any jurisdiction other than the State of California.

  
           8.6    Captions.    Captions provided herein are for convenience only, and shall not serve as a basis for interpretation or
construction of the Plan. 
 

 7EXHIBIT 4.1

                            GLOBAL ENERGY GROUP, INC.
                           2001 EQUITY INCENTIVE PLAN

                                ARTICLE I - PLAN

         1.1 PURPOSE.  This Plan is a plan for key Employees (including officers
and employee directors) and Consultants of the Company and its Affiliates and is
intended to advance the best interests of the Company,  its Affiliates,  and its
stockholders by providing those persons who have substantial  responsibility for
the  management  and growth of the Company and its  Affiliates  with  additional
incentives and an opportunity to obtain or increase their  proprietary  interest
in the  Company,  thereby  encouraging  them to  continue  in the  employ of the
Company or any of its Affiliates.

         1.2 RULE 16B-3 PLAN. The Plan is intended to comply with all applicable
conditions  of Rule 16b-3 (and all  subsequent  revisions  thereof)  promulgated
under the Securities  Exchange Act of 1934, as amended (the "1934 Act").  To the
extent  any  provision  of the  Plan or  action  by the  Board of  Directors  or
Committee  fails to so comply,  it shall be deemed null and void,  to the extent
permitted by law and deemed advisable by the Committee.  In addition,  the Board
of Directors may amend the Plan from time to time as it deems necessary in order
to meet the  requirements of any amendments to Rule 16b-3 without the consent of
the shareholders of the Company.

         1.3 EFFECTIVE  DATE OF PLAN.  The Plan shall be effective  September 1,
2001 (the  "Effective  Date"),  provided  that within one year of the  Effective
Date,  the  Plan  shall  have  been  approved  by at  least a  majority  vote of
stockholders.  No Incentive  Option,  Nonqualified  Option,  Stock  Appreciation
Right,  Restricted  Stock  Award or  Performance  Stock  Award  shall be granted
pursuant to the Plan ten years after the Effective Date.

                            ARTICLE II - DEFINITIONS

         The words and phrases  defined in this  Article  shall have the meaning
set out in these  definitions  throughout this Plan, unless the context in which
any such word or phrase  appears  reasonably  requires a broader,  narrower,  or
different meaning.

         2.1  "AFFILIATE"  means  any  parent  corporation  and  any  subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the  action or  transaction,  each of the  corporations  other  than the
Company owns stock  possessing 50% or more of the total combined voting power of
all  classes of stock in one of the other  corporations  in the chain.  The term
"subsidiary  corporation"  means any corporation  (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
action or transaction,  each of the corporations other than the last corporation

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in the unbroken  chain owns stock  possessing  50% or more of the total combined
voting  power of all  classes of stock in one of the other  corporations  in the
chain.

         2.2  "AWARD"  means  each of the  following  granted  under  this Plan:
Incentive Option,  Nonqualified  Option,  Stock Appreciation  Right,  Restricted
Stock Award or Performance Stock Award.

         2.3 "BOARD OF DIRECTORS" means the board of directors of the Company.

         2.4  "CHANGE  IN  CONTROL"   shall  mean  and  include  the   following
transactions or situations:

         (a) A sale,  transfer,  or other  disposition by the Company  through a
single  transaction  or a series of  transactions  of  securities of the Company
representing  thirty (30%)  percent or more of the combined  voting power of the
Company's then  outstanding  securities to any "Unrelated  Person" or "Unrelated
Persons"  acting in concert with one another.  For purposes of this  definition,
the term  "Person"  shall mean and include any  individual,  partnership,  joint
venture, association, trust corporation, or other entity (including a "group" as
referred  to in  Section  13(d)(3)  of the  1934  Act).  For  purposes  of  this
definition,  the term "Unrelated Person" shall mean and include any Person other
than the Company,  a  wholly-owned  subsidiary  of the  Company,  or an employee
benefit  plan  of the  Company;  provided  however,  a sale to  underwriters  in
connection with a public offering of the Company's securities pursuant to a firm
commitment shall not be a Change of Control.

         (b) A sale, transfer, or other disposition through a single transaction
or a series of  transactions  of all or  substantially  all of the assets of the
Company to an Unrelated  Person or Unrelated  Persons acting in concert with one
another.

         (c) A  change  in  the  ownership  of  the  Company  through  a  single
transaction  or a series  of  transactions  such  that any  Unrelated  Person or
Unrelated  Persons  acting in concert  with one another  become the  "Beneficial
Owner,"  directly or indirectly,  of securities of the Company  representing  at
least thirty (30%) percent of the combined  voting power of the  Company's  then
outstanding  securities.  For purposes of this definition,  the term "Beneficial
Owner"  shall  have  the  same  meaning  as  given  to that  term in Rule  13d-3
promulgated  under the 1934 Act,  provided that any pledgee of voting securities
is not deemed to be the  Beneficial  Owner thereof prior to its  acquisition  of
voting rights with respect to such securities.

         (d)  Any  consolidation  or  merger  of the  Company  with  or  into an
Unrelated  Person,  unless  immediately  after the  consolidation  or merger the
holders  of  the  common  stock  of  the  Company   immediately   prior  to  the
consolidation or merger are the beneficial owners of securities of the surviving
corporation  representing  at least fifty (50%)  percent of the combined  voting
power of the surviving corporation's then outstanding securities.

         (e) During any period of two years,  individuals  who, at the beginning
of such period, constituted the Board of Directors of the Company cease, for any
reason,  to  constitute  at least a majority  thereof,  unless the  election  or
nomination  for  election of each new  director  was  approved by the vote of at

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least two-thirds of the directors then still in office who were directors at the
beginning of such period.

         (f) A change  in  control  of the  Company  of a nature  that  would be
required to be reported in response to Item 6(e) of Schedule  14A of  Regulation
14A  promulgated  under the 1934 Act,  or any  successor  regulation  of similar
importance,  regardless  of whether  the  Company  is subject to such  reporting
requirement.

         2.5 "CODE" means the Internal Revenue Code of 1986, as amended.

         2.6  "COMMITTEE"  means  the  Compensation  Committee  of the  Board of
Directors or such other  committee  designated  by the Board of  Directors.  The
Committee  shall be  comprised  solely  of at  least  two  members  who are both
Disinterested  Persons and Outside Directors or by the Board of Directors in its
entirety.

         2.7 "COMPANY" means 1stopsale.com Holdings, Inc.

         2.8 "CONSULTANT" means any person, including an advisor, engaged by the
Company  or  Affiliate  to  render  services  and who is  compensated  for  such
services.

         2.9 "DISINTERESTED  PERSON" means a "disinterested person" as that term
is defined in Rule 16b-3 under the 1934 Act.

         2.10  "ELIGIBLE  PERSONS" shall mean,  with respect to the Plan,  those
persons  who,  at the  time  that an  Award is  granted,  are (i) key  personnel
(including  officers  and  directors)  of the  Company  or  Affiliate,  or  (ii)
Consultants  or independent  contractors  who provide  valuable  services to the
Company or Affiliate as determined by the Committee.

         2.11 "EMPLOYEE" means a person employed by the Company or any Affiliate
to whom an Award is granted.

         2.12  "FAIR  MARKET  VALUE" of the  Stock as of any date  means (a) the
average  of the high  and low  sale  prices  of the  Stock  on that  date on the
principal  securities exchange on which the Stock is listed; or (b) if the Stock
is not listed on a  securities  exchange,  the  average of the high and low sale
prices of the Stock on that  date as  reported  on the  Nasdaq  National  Market
System;  or (c) if the Stock is not listed on the Nasdaq National Market System,
the  average  of the high and low bid  quotations  for the Stock on that date as
reported by the National  Quotation Bureau  Incorporated;  or (d) if none of the
foregoing is  applicable,  an amount at the election of the  Committee  equal to
(x),  the  average  between the closing bid and ask prices per share of Stock on
the last  preceding  date on which those prices were reported or (y) that amount
as determined by the Committee in good faith.

         2.13 "INCENTIVE OPTION" means an option to purchase Stock granted under
this Plan  which is  designated  as an  "Incentive  Option"  and  satisfies  the
requirements of Section 422 of the Code.

                                      E-3
<PAGE>

         2.14  "NONQUALIFIED  OPTION" means an option to purchase  Stock granted
under this Plan other than an Incentive Option.

         2.15 "OPTION" means both an Incentive Option and a Nonqualified  Option
granted under this Plan to purchase shares of Stock.

         2.16 "OPTION  AGREEMENT" means the written agreement by and between the
Company and an Eligible Person which sets out the terms of an Option.

         2.17  "OUTSIDE  DIRECTOR"  means a member  of the  Board  of  Directors
serving on the Committee who satisfies Section 162(m) of the Code.

         2.18  "PLAN"  means  the  1stopsale.com   Holdings,  Inc.  2001  Equity
Incentive  Plan,  as set out in this document and as it may be amended from time
to time.

         2.19 "PLAN YEAR" means the Company's fiscal year.

         2.20 "PERFORMANCE  STOCK AWARD" means an award of shares of Stock to be
issued to an Eligible Person if specified  predetermined  performance  goals are
satisfied as described in Article VI.

         2.21  "RESTRICTED  STOCK"  means  Stock  awarded or  purchased  under a
Restricted Stock Agreement entered into pursuant to this Plan, together with (i)
all  rights,  warranties  or  similar  items  attached  or  accruing  thereto or
represented  by the  certificate  representing  the  stock and (ii) any stock or
securities  into  which or for  which  the  stock  is  thereafter  converted  or
exchanged.  The terms and conditions of the Restricted  Stock Agreement shall be
determined by the Committee consistent with the terms of the Plan.

         2.22  "RESTRICTED  STOCK  AGREEMENT"  means an  agreement  between  the
Company or any Affiliate and the Eligible  Person pursuant to which the Eligible
Person receives a Restricted Stock Award subject to Article VI.

         2.23 "RESTRICTED STOCK AWARD" means an Award of Restricted Stock.

         2.24  "RESTRICTED  STOCK PURCHASE  PRICE" means the purchase  price, if
any, per share of Restricted  Stock subject to an Award.  The  Restricted  Stock
Purchase Price shall be determined by the  Committee.  It may be greater than or
less than the Fair Market Value of the Stock on the date of the Stock Award.

         2.25 "STOCK" means the common stock of the Company, $.001 par value or,
in the event that the outstanding  shares of common stock are later changed into
or  exchanged  for a different  class of stock or  securities  of the Company or
another corporation, that other stock or security.

                                      E-4
<PAGE>

         2.26  "STOCK  APPRECIATION  RIGHT" and "SAR" means the right to receive
the  difference  between the Fair Market  Value of a share of Stock on the grant
date and the Fair Market Value of the share of Stock on the exercise date.

         2.27 "10% STOCKHOLDER"  means an individual who, at the time the Option
is granted,  owns Stock  possessing  more than 10% of the total combined  voting
power of all classes of stock of the Company or of any Affiliate.  An individual
shall be considered as owning the Stock owned, directly or indirectly, by or for
his  brothers  and  sisters  (whether  by the  whole  or  half  blood),  spouse,
ancestors, and lineal descendants;  and Stock owned, directly or indirectly,  by
or for a  corporation,  partnership,  estate,  or trust,  shall be considered as
being  owned   proportionately  by  or  for  its  stockholders,   partners,   or
beneficiaries.

                            ARTICLE III - ELIGIBILITY

         The  individuals who shall be eligible to receive Awards shall be those
Eligible  Persons of the Company or any of its Affiliates as the Committee shall
determine  from  time to time.  However,  no member  of the  Committee  shall be
eligible to receive any Award or to receive Stock,  Options,  Stock Appreciation
Rights or any Performance Stock Award under any other plan of the Company or any
of  its  Affiliates,  if  to  do so  would  cause  the  individual  not  to be a
Disinterested  Person or Outside Director.  The Board of Directors may designate
one or more  individuals  who shall not be  eligible  to receive any Award under
this Plan or under other similar plans of the Company.

               ARTICLE IV - GENERAL PROVISIONS RELATING TO AWARDS

         4.1  AUTHORITY  TO  GRANT  AWARDS.  The  Committee  may  grant to those
Eligible  Persons of the Company or any of its  Affiliates as it shall from time
to time determine,  Awards under the terms and conditions of this Plan.  Subject
only to any applicable limitations set out in this Plan, the number of shares of
Stock to be covered by any Award to be granted to an  Eligible  Person  shall be
determined by the Committee.

         4.2  SHARES  SUBJECT TO PLAN.  The total  number of shares of Stock set
aside for Awards may be granted  under the Plan shall be 3,000,000  shares.  The
shares may be treasury  shares or authorized  but unissued  shares.  The maximum
number of shares  subject to options or stock  appreciation  rights which may be
issued to any  eligible  person  under the plan  during  each plan year shall be
determined by the Committee.  The maximum number of shares subject to restricted
stock awards  which may be granted to any eligible  person under the plan during
each plan year shall be  determined  by the  Committee.  The  maximum  number of
shares subject to performance  stock awards which may be granted to any eligible
person during each plan year shall be determined by the Committee. The number of
shares  stated in this Section 4.2 shall be subject to  adjustment in accordance
with the  provisions  of Section  4.5. In the event that any  outstanding  Award
shall expire or terminate for any reason or any Award is surrendered, the shares
of Stock allocable to the unexercised portion of that Award may again be subject
to an Award under the Plan.

                                      E-5
<PAGE>

         4.3  NON-TRANSFERABILITY.  Awards  shall  not  be  transferable  by the
Eligible  Person  otherwise  than by will  or  under  the  laws of  descent  and
distribution,  and shall be exercisable,  during the Eligible Person's lifetime,
only by him. Restricted Stock shall be purchased by and/or become vested under a
Restricted Stock Agreement during the Eligible Person's  lifetime,  only by him.
Any  attempt to transfer an Award other than under the terms of the Plan and the
Agreement  shall  terminate  the Award and all rights of the Eligible  Person to
that Award.

         4.4  REQUIREMENTS  OF LAW. The Company shall not be required to sell or
issue any Stock under any Award if issuing that Stock would constitute or result
in a violation  by the  Eligible  Person or the Company of any  provision of any
law,  statute,  or regulation of any governmental  authority.  Specifically,  in
connection   with  any  applicable   statute  or  regulation   relating  to  the
registration  of  securities,  upon  exercise  of any Option or  pursuant to any
Award, the Company shall not be required to issue any Stock unless the Committee
has received  evidence  satisfactory to it to the effect that the holder of that
Option or Award will not transfer the Stock except in accordance with applicable
law,  including receipt of an opinion of counsel  satisfactory to the Company to
the  effect  that any  proposed  transfer  complies  with  applicable  law.  The
determination  by the  Committee  on this  matter  shall be final,  binding  and
conclusive. The Company may, but shall in no event be obligated to, register any
Stock covered by this Plan pursuant to applicable securities laws of any country
or any political subdivision.  In the event the Stock issuable on exercise of an
Option or pursuant to an Award is not registered, the Company may imprint on the
certificate  evidencing  the Stock  any  legend  that  counsel  for the  Company
considers  necessary  or advisable  to comply with  applicable  law. The Company
shall not be  obligated to take any other  affirmative  action in order to cause
the exercise of an Option or vesting  under an Award,  or the issuance of shares
pursuant  thereto,  to comply  with any law or  regulation  of any  governmental
authority.

         4.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.

         (a) The existence of outstanding  Options or Awards shall not affect in
any way the  right  or  power  of the  Company  or its  stockholders  to make or
authorize any or all adjustments,  recapitalizations,  reorganizations  or other
changes in the Company's  capital  structure or its  business,  or any merger or
consolidation of the Company,  or any issue of bonds,  debentures,  preferred or
prior  preference  stock ahead of or affecting  the Stock or its rights,  or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its  assets or  business,  or any  other  corporate  act or  proceeding,
whether of a similar  character  or  otherwise.  If the Company  shall  effect a
subdivision  or  consolidation  of shares  or other  capital  readjustment,  the
payment of a Stock  dividend,  or other  increase or  reduction of the number of
shares of the Stock outstanding, without receiving compensation for it in money,
services or property,  then (a) the number, class, and per share price of shares
of Stock subject to outstanding  Options under this Plan shall be  appropriately
adjusted  in such a manner as to entitle  an  Eligible  Person to  receive  upon
exercise of an Option, for the same aggregate cash consideration, the equivalent
total number and class of shares he would have  received  had he  exercised  his
Option in full immediately prior to the event requiring the adjustment;  and (b)
the  number and class of shares of Stock then  reserved  to be issued  under the
Plan shall be adjusted by substituting  for the total number and class of shares

                                      E-6
<PAGE>

of Stock then reserved, that number and class of shares of Stock that would have
been  received  by the owner of an equal  number of  outstanding  shares of each
class of Stock as the result of the event requiring the adjustment.

         (b) If the Company is merged or consolidated  with another  corporation
and  the  Company  is  not  the  surviving  corporation,  or if the  Company  is
liquidated or sells or otherwise  disposes of substantially all its assets while
unexercised Options remain outstanding under this Plan:

                  (i)      subject to the provisions of clause (c) below,  after
                           the  effective  date  of the  merger,  consolidation,
                           liquidation,  sale or other disposition,  as the case
                           may be, each holder of an outstanding Option shall be
                           entitled, upon exercise of the Option, to receive, in
                           lieu of  shares  of Stock,  the  number  and class or
                           classes  of  shares of stock or other  securities  or
                           property to which the holder would have been entitled
                           if,  immediately prior to the merger,  consolidation,
                           liquidation,  sale or other  disposition,  the holder
                           had been the  holder  of record of a number of shares
                           of Stock  equal to the  number  of shares as to which
                           the Option shall be so exercised;

                  (ii)     the Board of Directors may waive any  limitations set
                           out  in or  imposed  under  this  Plan  so  that  all
                           Options, from and after a date prior to the effective
                           date of the merger, consolidation,  liquidation, sale
                           or other  disposition,  as the case may be, specified
                           by the Board of Directors,  shall be  exercisable  in
                           full; and

                  (iii)    all outstanding  Options may be canceled by the Board
                           of Directors as of the effective  date of any merger,
                           consolidation,    liquidation,    sale    or    other
                           disposition,  if (i) notice of cancellation  shall be
                           given to each  holder  of an  Option  and  (ii)  each
                           holder of an Option  shall have the right to exercise
                           that   Option   in  full   (without   regard  to  any
                           limitations  set out in or imposed under this Plan or
                           the Option  Agreement  granting that Option) during a
                           period set by the Board of  Directors  preceding  the
                           effective   date   of  the   merger,   consolidation,
                           liquidation, sale or other disposition and, if in the
                           event all outstanding Options may not be exercised in
                           full  under   applicable   securities   laws  without
                           registration  of the  shares  of  Stock  issuable  on
                           exercise of the Options,  the Board of Directors  may
                           limit the  exercise  of the  Options to the number of
                           shares of  Stock,  if any,  as may be issued  without
                           registration.  The method of choosing  which  Options
                           may be  exercised,  and the number of shares of Stock
                           for which Options may be  exercised,  shall be solely
                           within the discretion of the Board of Directors.

         (c)  After a merger of one or more  corporations  into the  Company  or
after a consolidation  of the Company and one or more  corporations in which the
Company  shall be the  surviving  corporation,  each  Eligible  Person  shall be
entitled to have his  Restricted  Stock and shares  earned  under a  Performance
Stock Award  appropriately  adjusted  based on the manner the Stock was adjusted
under the terms of the agreement of merger or consolidation.

                                      E-7
<PAGE>

         (d) In each situation described in this Section 4.5, the Committee will
make similar  adjustments,  as appropriate,  in outstanding  Stock  Appreciation
Rights.

         (e) The  issuance  by the  Company of shares of stock of any class,  or
securities  convertible into shares of stock of any class, for cash or property,
or for labor or services  either upon direct sale or upon the exercise of rights
or warrants to subscribe for them, or upon  conversion of shares or  obligations
of the Company  convertible into shares or other  securities,  shall not affect,
and no adjustment by reason of such issuance  shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Awards.

         4.6  ELECTION  UNDER  SECTION  83(B) OF THE  CODE.  No  Employee  shall
exercise the election  permitted under Section 83(b) of the Code without written
approval of the Committee. Any Employee doing so shall forfeit all Awards issued
to him under this Plan.

                ARTICLE V - OPTIONS AND STOCK APPRECIATION RIGHTS

         5.1 TYPE OF OPTION.  The  Committee  shall specify at the time of grant
whether a given Option shall  constitute an Incentive  Option or a  Nonqualified
Option. Incentive Stock Options may only be granted to Employees.

         5.2 OPTION  PRICE.  The price at which Stock may be purchased  under an
Incentive  Option  shall not be less than the  greater  of: (a) 100% of the Fair
Market Value of the shares of Stock on the date the Option is granted or (b) the
aggregate  par value of the shares of Stock on the date the  Option is  granted.
The  Committee in its  discretion  may provide that the price at which shares of
Stock may be purchased under an Incentive Option shall be more than 100% of Fair
Market Value. In the case of any 10%  Stockholder,  the price at which shares of
Stock may be purchased under an Incentive  Option shall not be less than 110% of
the Fair Market Value of the Stock on the date the Incentive  Option is granted.
The price at which shares of Stock may be purchased under a Nonqualified  Option
shall  be such  price  as  shall  be  determined  by the  Committee  in its sole
discretion  but in no event  lower  than the par value of the shares of Stock on
the date the Option is granted.

         5.3 DURATION OF OPTIONS AND SARS. No Option or SAR shall be exercisable
after  the  expiration  of ten (10)  years  from the date the  Option  or SAR is
granted.  In the  case  of a 10%  Stockholder,  no  Incentive  Option  shall  be
exercisable  after the  expiration  of five  years  from the date the  Incentive
Option is granted.

         5.4  AMOUNT  EXERCISABLE  --  INCENTIVE  OPTIONS.  Each  Option  may be
exercised  from time to time,  in whole or in part, in the manner and subject to
the conditions the Committee, in its sole discretion,  may provide in the Option
Agreement, as long as the Option is valid and outstanding,  and further provided
that no Option  may be  exercisable  within six (6) months of the date of grant,
unless  otherwise  stated  in the  Option  Agreement.  To the  extent  that  the
aggregate Fair Market Value  (determined  as of the time an Incentive  Option is
granted)  of the Stock with  respect to which  Incentive  Options  first  become
exercisable  by the optionee  during any calendar  year (under this Plan and any

                                      E-8
<PAGE>

other  incentive  stock option plan(s) of the Company or any Affiliate)  exceeds
$100,000,  the portion in excess of $100,000 of the  Incentive  Option  shall be
treated  as a  Nonqualified  Option.  In making  this  determination,  Incentive
Options shall be taken into account in the order in which they were granted.

         5.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the delivery
of written  notice to the Committee  setting forth the number of shares of Stock
with respect to which the Option is to be exercised, together with:

         (a) cash, certified check, bank draft, or postal or express money order
payable to the order of the Company for an amount  equal to the option  price of
the shares,

         (b)  Stock  at its Fair  Market  Value  on the  date of  exercise,  (if
approved in advance by the Committee),

         (c) an  election  to make a  cashless  exercise  through  a  registered
broker-dealer (if approved in advance by the Committee),

         (d) an  election  to have  shares of Stock,  which  otherwise  would be
issued on exercise,  withheld in payment of the  exercise  price (if approved in
advance by the Committee), and/or

         (e) any other form of payment  which is  acceptable  to the  Committee,
including  without  limitation,  payment in the form of a promissory  note,  and
specifying  the  address  to which the  certificates  for the  shares  are to be
mailed.

         As promptly as practicable  after receipt of written  notification  and
payment,  the Company shall deliver to the Eligible Person  certificates for the
number of shares with respect to which the Option has been exercised,  issued in
the  Eligible  Person's  name.  If  shares  of Stock  are used in  payment,  the
aggregate  Fair Market Value of the shares of Stock tendered must be equal to or
less than the  aggregate  exercise  price of the  shares  being  purchased  upon
exercise  of the  Option,  and any  difference  must be paid by cash,  certified
check,  bank draft, or postal or express money order payable to the order of the
Company. Delivery of the shares shall be deemed effected for all purposes when a
stock transfer agent of the Company shall have deposited the certificates in the
United States mail,  addressed to the Eligible Person,  at the address specified
by the Eligible Person.

         Whenever an Option is exercised by exchanging  shares of Stock owned by
the  Eligible  Person,   the  Eligible  Person  shall  deliver  to  the  Company
certificates registered in the name of the Eligible Person representing a number
of shares of Stock legally and beneficially  owned by the Eligible Person,  free
of all liens,  claims,  and  encumbrances  of every kind,  accompanied  by stock
powers duly endorsed in blank by the record holder of the shares  represented by
the  certificates  (with  signature  guaranteed  by a  commercial  bank or trust
company or by a brokerage  firm having a  membership  on a  registered  national
stock  exchange).  The delivery of certificates  upon the exercise of Options is
subject to the  condition  that the person  exercising  the Option  provide  the
Company with the information the Company might reasonably  request pertaining to
exercise, sale or other disposition.

                                      E-9
<PAGE>

         5.6 STOCK  APPRECIATION  RIGHTS. All Eligible Persons shall be eligible
to receive Stock  Appreciation  Rights. The Committee shall determine the SAR to
be awarded from time to time to any Eligible  Person.  The grant of an SAR to be
awarded from time to time shall neither  entitle such person to, nor  disqualify
such  person,  from  participation  in any other grant of awards by the Company,
whether  under  this Plan or any other  plan of the  Company.  If  granted  as a
stand-alone  SAR  Award,  the terms of the Award  shall be  provided  in a Stock
Appreciation Rights Agreement.

         5.7  STOCK   APPRECIATION   RIGHTS  IN  TANDEM  WITH   OPTIONS.   Stock
Appreciation Rights may, at the discretion of the Committee, be included in each
Option  granted  under the Plan to permit the  holder of an Option to  surrender
that Option, or a portion of the part which is then exercisable,  and receive in
exchange,  upon the conditions and limitations  set by the Committee,  an amount
equal to the excess of the Fair Market Value of the Stock covered by the Option,
or the  portion  of it  that  was  surrendered,  determined  as of the  date  of
surrender,  over the aggregate  exercise price of the Stock.  The payment may be
made in shares of Stock valued at Fair Market Value,  in cash, or partly in cash
and  partly  in  shares  of Stock,  as the  Committee  shall  decide in its sole
discretion. Stock Appreciation Rights may be exercised only when the Fair Market
Value of the Stock covered by the Option surrendered  exceeds the exercise price
of the Stock. In the event of the surrender of an Option, or a portion of it, to
exercise the Stock Appreciation  Rights, the shares represented by the Option or
that part of it which is  surrendered,  shall not be  available  for  reissuance
under the Plan.  Each Stock  Appreciation  Right issued in tandem with an Option
(a) will expire not later than the expiration of the underlying  Option, (b) may
be for no more than 100% of the  difference  between the  exercise  price of the
underlying  Option and the Fair Market Value of a share of Stock at the time the
Stock  Appreciation  Right  is  exercised,  (c) is  transferable  only  when the
underlying Option is transferable, and under the same conditions, and (d) may be
exercised only when the underlying Option is eligible to be exercised.

         5.8 CONDITIONS OF STOCK  APPRECIATION  RIGHTS.  All Stock  Appreciation
Rights shall be subject to such terms,  conditions,  restrictions or limitations
as the Committee deems appropriate,  including by way of illustration but not by
way of limitation,  restrictions  on  transferability,  requirement of continued
employment,  individual  performance,  financial  performance  of the Company or
payment of any applicable employment or withholding taxes.

         5.9  PAYMENT  OF STOCK  APPRECIATION  RIGHTS.  The amount of payment to
which  the  Eligible  Person  who  reserves  an SAR shall be  entitled  upon the
exercise  of each SAR  shall be equal to the  amount,  if any by which  the Fair
Market Value of the  specified  shares of Stock on the exercise date exceeds the
Fair Market Value of the  specified  shares of Stock on the date of grant of the
SAR.  The SAR  shall be paid in  either  cash or  Stock,  as  determined  in the
discretion of the Committee as set forth in the SAR agreement. If the payment is
in Stock,  the number of shares to be paid shall be  determined  by dividing the
amount of such payment by the Fair Market Value of Stock on the exercise date of
such SAR.

         5.10  EXERCISE ON  TERMINATION  OF  EMPLOYMENT.  Unless it is expressly
provided  otherwise in the Option or SAR  agreement,  Options and SAR granted to
Employees  shall  terminate  one day less than three months  after  severance of

                                      E-10
<PAGE>

employment of the Employee from the Company and all  Affiliates  for any reason,
with or without cause,  other than death,  retirement under the then established
rules of the Company,  or severance for disability.  Whether authorized leave of
absence or absence on military or government service shall constitute  severance
of the  employment of the Employee  shall be determined by the Committee at that
time.

         5.11 DEATH. If, before the expiration of an Option or SAR, the Eligible
Person,  whether  in the employ of the  Company  or after he has  retired or was
severed for  disability,  or otherwise  dies,  the Option or SAR shall  continue
until the earlier of the Option's or SAR's expiration date or one year following
the date of his death,  unless it is expressly  provided otherwise in the Option
or SAR  agreement.  After  the  death of the  Eligible  Person,  his  executors,
administrators  or any persons to whom his Option or SAR may be  transferred  by
will or by the laws of descent  and  distribution  shall have the right,  at any
time prior to the  Option's or SAR's  expiration  or  termination,  whichever is
earlier,  to exercise  it, to the extent to which he was entitled to exercise it
immediately prior to his death, unless it is expressly provided otherwise in the
Option or SAR's agreement.

         5.12  RETIREMENT.  Unless it is  expressly  provided  otherwise  in the
Option  Agreement,  before the expiration of an Incentive  Option,  the Employee
shall be retired in good  standing from the employ of the Company under the then
established  rules of the Company,  the Incentive  Option shall terminate on the
earlier of the Option's  expiration date or one day less than one year after his
retirement;  provided,  if an Incentive Option is not exercised within specified
time limits  prescribed  by the Code,  it will become a  Nonqualified  Option by
operation  of law.  Unless it is  expressly  provided  otherwise  in the  Option
Agreement, if before the expiration of a Nonqualified Option, the Employee shall
be  retired  in good  standing  from the  employ of the  Company  under the then
established rules of the Company, the Nonqualified Option shall terminate on the
earlier of the  Nonqualified  Option's  expiration date or one day less than one
year after his retirement.  In the event of retirement,  the Employee shall have
the right prior to the  termination of the  Nonqualified  Option to exercise the
Nonqualified  Option,  to the extent to which he was  entitled  to  exercise  it
immediately prior to his retirement,  unless it is expressly  provided otherwise
in  the  Option  Agreement.  Upon  retirement,  an  SAR  shall  continue  to  be
exercisable for the remainder of the term of the SAR agreement.

         5.13  DISABILITY.  If,  before the  expiration of an Option or SAR, the
Employee  shall be severed  from the employ of the Company for  disability,  the
Option or SAR shall terminate on the earlier of the Option's or SAR's expiration
date or one day less than one year  after  the date he was  severed  because  of
disability,  unless it is  expressly  provided  otherwise  in the  Option or SAR
agreement.  In the event that the  Employee  shall be severed from the employ of
the  Company  for  disability,  the  Employee  shall have the right prior to the
termination of the Option or SAR to exercise the Option,  to the extent to which
he was entitled to exercise it immediately  prior to his retirement or severance
of employment for disability,  unless it is expressly  provided otherwise in the
Option Agreement.

         5.14 SUBSTITUTION OPTIONS.  Options may be granted under this Plan from
time to time in  substitution  for  stock  options  held by  employees  of other
corporations who are about to become employees of or affiliated with the Company

                                      E-11
<PAGE>

or any  Affiliate as the result of a merger or  consolidation  of the  employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation,  or the acquisition
by the Company or any  Affiliate of stock of the  employing  corporation  as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in this  Plan to the  extent  the  Committee,  at the  time of  grant,  may deem
appropriate  to conform,  in whole or in part,  to the  provisions  of the stock
options in substitution for which they are granted.

         5.15 RELOAD  OPTIONS.  Without in any way limiting the authority of the
Board  of  Directors  or  Committee  to make or not to make  grants  of  Options
hereunder, the Board of Directors or Committee shall have the authority (but not
an obligation) to include as part of any Option Agreement a provision  entitling
the  Eligible  Person to a further  Option (a "Reload  Option") in the event the
Eligible Person exercises the Option evidenced by the Option Agreement, in whole
or in part, by  surrendering  other shares of Stock in accordance with this Plan
and the terms and conditions of the Option Agreement. Any such Reload Option (a)
shall be for a number of shares  equal to the  number of shares  surrendered  as
part or all of the exercise  price of such Option;  (b) shall have an expiration
date  which is the  greater  of (i) the same  expiration  date of the Option the
exercise of which gave rise to such Reload Option or (ii) one year from the date
of grant of the Reload  Option;  and (c) shall have an  exercise  price which is
equal to one  hundred  percent  (100%)  of the Fair  Market  Value of the  Stock
subject to the Reload  Option on the date of  exercise of the  original  Option.
Notwithstanding the foregoing,  a Reload Option which is an Incentive Option and
which is granted to a 10%  Stockholder,  shall have an  exercise  price which is
equal to one hundred ten  percent  (110%) of the Fair Market  Value of the Stock
subject to the Reload Option on the date of exercise of the original  Option and
shall have a term which is no longer than five (5) years.

         Any such Reload  Option may be an  Incentive  Option or a  Nonqualified
Option,  as the Board of Directors or Committee may designate at the time of the
grant of the original  Option;  provided,  however,  that the designation of any
Reload  Option  as an  Incentive  Option  shall be  subject  to the one  hundred
thousand dollar  ($100,000)  annual  limitation on  exercisability  of Incentive
Stock  Options  described in the Plan and in Section  422(d) of the Code.  There
shall be no Reload Options on a Reload  Option.  Any such Reload Option shall be
subject to the  availability  of sufficient  shares under Section 4.2 herein and
shall be subject to such other terms and conditions as the Board of Directors or
Committee may determine which are not inconsistent  with the express  provisions
of the Plan regarding the terms of Options.

         5.16 NO RIGHTS AS STOCKHOLDER. No Eligible Person shall have any rights
as a  stockholder  with respect to Stock  covered by his Option until the date a
stock certificate is issued for the Stock.

                      ARTICLE VI - RESTRICTED STOCK AWARDS

         6.1 RESTRICTED STOCK AWARDS. The Committee may issue shares of Stock to
an Eligible  Person subject to the terms of a Restricted  Stock  Agreement.  The
Restricted  Stock may be issued for no payment by the  Eligible  Person or for a

                                      E-12
<PAGE>

payment below the Fair Market Value on the date of grant. Restricted Stock shall
be subject to restrictions  as to sale,  transfer,  alienation,  pledge or other
encumbrance  and  generally  will be subject  to  vesting  over a period of time
specified in the Restricted Stock  Agreement.  The Committee shall determine the
period of vesting, the number of shares, the price, if any, of Stock included in
a Restricted  Stock Award, and the other terms and provisions which are included
in a Restricted Stock Agreement.

         6.2  RESTRICTIONS.  Restricted  Stock shall be subject to the terms and
conditions as determined by the Committee,  including without limitation, any or
all of the following:

         (a) a prohibition  against the sale,  transfer,  alienation,  pledge or
other  encumbrance of the shares of Restricted  Stock, such prohibition to lapse
(i) at such time or times as the Committee shall determine (whether in annual or
more frequent installments,  at the time of the death,  disability or retirement
of the holder of such shares, or otherwise);

         (b) a  requirement  that the  holder  of  shares  of  Restricted  Stock
forfeit, or in the case of shares sold to an Eligible Person, resell back to the
Company at his cost, all or a part of such shares in the event of termination of
the Eligible  Person's  employment  during any period in which the shares remain
subject to restrictions;

         (c) a prohibition  against employment of the holder of Restricted Stock
by any  competitor  of the Company or its  Affiliates,  or against such holder's
dissemination of any secret or confidential information belonging to the Company
or an Affiliate;

         (d) unless stated otherwise in the Restricted Stock Agreement,

                  (i)      if  restrictions  remain at the time of  severance of
                           employment with the Company and all Affiliates, other
                           than  for  reason  of   disability   or  death,   the
                           Restricted Stock shall be forfeited; and

                  (ii)     if severance of employment is by reason of disability
                           or death,  the restrictions on the shares shall lapse
                           and the Eligible  Person or his heirs or estate shall
                           be  100%   vested  in  the  shares   subject  to  the
                           Restricted Stock Agreement.

         6.3 STOCK  CERTIFICATE.  Shares of Restricted Stock shall be registered
in the name of the Eligible  Person  receiving  the  Restricted  Stock Award and
deposited, together with a stock power endorsed in blank, with the Company. Each
such certificate shall bear a legend in substantially the following form:

         "The  transferability  of this  certificate and the shares of
         Stock  represented  by it is restricted by and subject to the
         terms and  conditions  (including  conditions of  forfeiture)
         contained in the  1stopsale.com  Holdings,  Inc.  2001 Equity
         Incentive  Plan,  and an  agreement  entered into between the
         registered  owner  and the  Company.  A copy of the  Plan and
         agreement  is on file in the office of the  Secretary  of the
         Company."

                                      E-13
<PAGE>

         6.4 RIGHTS AS  STOCKHOLDER.  Subject to the terms and conditions of the
Plan,  each Eligible Person  receiving a certificate for Restricted  Stock shall
have all the  rights  of a  stockholder  with  respect  to the  shares  of Stock
included in the  Restricted  Stock Award  during any period in which such shares
are subject to  forfeiture  and  restrictions  on  transfer,  including  without
limitation, the right to vote such shares. Dividends paid with respect to shares
of  Restricted  Stock in cash or  property  other than  Stock in the  Company or
rights to acquire  stock in the  Company  shall be paid to the  Eligible  Person
currently.  Dividends paid in Stock in the Company or rights to acquire Stock in
the Company shall be added to and become a part of the Restricted Stock.

         6.5 LAPSE OF  RESTRICTIONS.  At the end of the time period during which
any shares of Restricted  Stock are subject to forfeiture  and  restrictions  on
sale, transfer, alienation, pledge, or other encumbrance, such shares shall vest
and  will  be  delivered  in a  certificate,  free of all  restrictions,  to the
Eligible Person or to the Eligible Person's legal representative, beneficiary or
heir;  provided the certificate shall bear such legend, if any, as the Committee
determines is reasonably  required by applicable law. By accepting a Stock Award
and executing a Restricted Stock Agreement,  the Eligible Person agrees to remit
when due any  federal  and state  income and  employment  taxes  required  to be
withheld.

         6.6  RESTRICTION  PERIOD.  No  Restricted  Stock  Award may provide for
restrictions continuing beyond ten (10) years from the date of grant.

                     ARTICLE VII - PERFORMANCE STOCK AWARDS

         7.1 AWARD OF  PERFORMANCE  STOCK.  The  Committee  may award  shares of
Stock,  without any payment for such shares,  to designated  Eligible Persons if
specified  performance  goals  established by the Committee are  satisfied.  The
terms and  provisions  herein  relating to these  performance  based  awards are
intended  to  satisfy  Section  162(m)  of  the  Code  and  regulations   issued
thereunder.  The designation of an employee eligible for a specific  Performance
Stock Award shall be made by the  Committee in writing prior to the beginning of
the period for which the  performance  is  measured  (or within  such  period as
permitted by IRS regulations).  The Committee shall establish the maximum number
of shares of Stock to be issued to a designated Employee if the performance goal
or goals are met. The Committee reserves the right to make downward  adjustments
in the maximum  amount of an Award if in its discretion  unforeseen  events make
such adjustment appropriate.

         7.2 PERFORMANCE  GOALS.  Performance  goals determined by the Committee
may be based on  specified  increases in cash flow,  net  profits,  Stock price,
Company, segment or Affiliate sales, market share, earnings per share, return on
assets, and/or return on stockholders' equity.

         7.3 ELIGIBILITY.  The employees  eligible for Performance  Stock Awards
are  the  senior  officers  (i.e.,  chief  executive  officer,  president,  vice

                                      E-14
<PAGE>

presidents,  secretary, treasurer, and similar positions) of the Company and its
Affiliates, and such other employees of the Company and its Affiliates as may be
designated by the Committee.

         7.4 CERTIFICATE OF  PERFORMANCE.  The Committee must certify in writing
that a performance  goal has been attained prior to issuance of any  certificate
for a Performance  Stock Award to any Employee.  If the Committee  certifies the
entitlement of an Employee to the Performance  Stock Award, the certificate will
be issued to the Employee as soon as administratively  practicable,  and subject
to other  applicable  provisions of the Plan,  including but not limited to, all
legal requirements and tax withholding.  However,  payment may be made in shares
of  Stock,  in cash,  or partly  in cash and  partly in shares of Stock,  as the
Committee shall decide in its sole discretion. If a cash payment is made in lieu
of shares of Stock,  the number of shares  represented by such payment shall not
be available for subsequent issuance under this Plan.

                          ARTICLE VIII - ADMINISTRATION

         The Plan shall be  administered  by the  Committee.  All  questions  of
interpretation  and  application  of the Plan and Awards shall be subject to the
determination of the Committee. A majority of the members of the Committee shall
constitute a quorum.  All  determinations  of the  Committee  shall be made by a
majority of its members.  Any decision or  determination  reduced to writing and
signed by a majority of the members shall be as effective as if it had been made
by a majority  vote at a meeting  properly  called and held.  This Plan shall be
administered  in such a manner as to permit the Options which are  designated to
be  Incentive  Options to qualify as  Incentive  Options.  In  carrying  out its
authority under this Plan, the Committee shall have full and final authority and
discretion,  including  but not  limited  to the  following  rights,  powers and
authorities, to:

         (a)  determine  the  Eligible  Persons to whom and the time or times at
which Options or Awards will be made,

         (b)  determine  the  number of shares and the  purchase  price of Stock
covered in each Option or Award, subject to the terms of the Plan,

         (c) determine the terms,  provisions  and conditions of each Option and
Award, which need not be identical,

         (d) accelerate the time at which any  outstanding  Option or SAR may be
exercised, or Restricted Stock Award will vest,

         (e)  define  the  effect,  if any,  on an Option or Award of the death,
disability, retirement, or termination of employment of the Employee,

         (f)  prescribe,  amend and rescind  rules and  regulations  relating to
administration of the Plan, and

                                      E-15
<PAGE>

         (g) make all other  determinations  and take all other  actions  deemed
necessary, appropriate, or advisable for the proper administration of this Plan.

         The actions of the Committee in exercising  all of the rights,  powers,
and  authorities  set out in this  Article and all other  Articles of this Plan,
when  performed  in  good  faith  and in its  sole  judgment,  shall  be  final,
conclusive and binding on all parties.

                  ARTICLE IX - AMENDMENT OR TERMINATION OF PLAN

         The Board of Directors  of the Company may amend,  terminate or suspend
this Plan at any time, in its sole and absolute discretion;  provided,  however,
that to the extent  required to qualify  this Plan under Rule 16b-3  promulgated
under  Section  16 of the  Securities  Exchange  Act of  1934,  as  amended,  no
amendment that would (a) materially  increase the number of shares of Stock that
may be issued under this Plan,  (b)  materially  modify the  requirements  as to
eligibility for participation in this Plan, or (c) otherwise materially increase
the benefits accruing to participants under this Plan, shall be made without the
approval of the Company's stockholders;  provided further,  however, that to the
extent  required to maintain the status of any Incentive  Option under the Code,
no amendment that would (a) change the aggregate number of shares of Stock which
may be issued  under  Incentive  Options,  (b)  change  the  class of  employees
eligible to receive  Incentive  Options,  or (c)  decrease  the Option price for
Incentive  Options  below the Fair  Market  Value of the Stock at the time it is
granted,  shall be made  without  the  approval of the  Company's  stockholders.
Subject to the preceding  sentence,  the Board of Directors shall have the power
to make  any  changes  in the  Plan and in the  regulations  and  administrative
provisions under it or in any outstanding  Incentive Option as in the opinion of
counsel for the Company may be  necessary  or  appropriate  from time to time to
enable any Incentive Option granted under this Plan to continue to qualify as an
incentive  stock option or such other stock  option as may be defined  under the
Code so as to receive preferential federal income tax treatment.

                            ARTICLE X - MISCELLANEOUS

         10.1 NO  ESTABLISHMENT  OF A TRUST FUND. No property shall be set aside
nor shall a trust  fund of any kind be  established  to secure the rights of any
Eligible  Person under this Plan.  All Eligible  Persons shall at all times rely
solely  upon the  general  credit of the  Company for the payment of any benefit
which becomes payable under this Plan.

         10.2 NO  EMPLOYMENT  OBLIGATION.  The  granting  of any Option or Award
shall not constitute an employment contract, express or implied, nor impose upon
the Company or any Affiliate any  obligation to employ or continue to employ any
Eligible  Person.  The right of the Company or any  Affiliate to  terminate  the
employment  of any person shall not be  diminished  or affected by reason of the
fact that an Option or Award has been granted to him.

         10.3 FORFEITURE.  Notwithstanding any other provisions of this Plan, if
the  Committee  finds by a majority vote after full  consideration  of the facts
that an Eligible Person,  before or after termination of his employment with the

                                      E-16
<PAGE>

Company  or an  Affiliate  for any  reason  (a)  committed  or engaged in fraud,
embezzlement,  theft, commission of a felony, or proven dishonesty in the course
of his  employment  by the Company or an Affiliate,  which  conduct  damaged the
Company or Affiliate, or disclosed trade secrets of the Company or an Affiliate,
or (b) participated,  engaged in or had a material, financial or other interest,
whether as an employee, officer, director, consultant, contractor,  stockholder,
owner,  or otherwise,  in any commercial  endeavor in the United States which is
competitive with the business of the Company or an Affiliate without the written
consent of the Company or  Affiliate,  the  Eligible  Person  shall  forfeit all
outstanding  Options and all  outstanding  Awards,  and  including all exercised
Options and other situations pursuant to which the Company has not yet delivered
a stock certificate. Clause (b) shall not be deemed to have been violated solely
by reason of the  Eligible  Person's  ownership  of stock or  securities  of any
publicly  owned  corporation,  if that  ownership  does not result in  effective
control of the corporation.

         The  decision  of  the  Committee  as to  the  cause  of an  Employee's
discharge,  the damage done to the Company or an Affiliate, and the extent of an
Eligible  Person's  competitive  activity  shall be final.  No  decision  of the
Committee,  however,  shall affect the finality of the discharge of the Employee
by the Company or an Affiliate in any manner.

         10.4 TAX WITHHOLDING. The Company or any Affiliate shall be entitled to
deduct from other compensation payable to each Eligible Person any sums required
by federal,  state, or local tax law to be withheld with respect to the grant or
exercise of an Option or SAR,  lapse of  restrictions  on Restricted  Stock,  or
award of  Performance  Stock.  In the  alternative,  the Company may require the
Eligible  Person (or other person  exercising  the Option,  SAR or receiving the
Stock) to pay the sum  directly to the  employer  corporation.  If the  Eligible
Person (or other person  exercising the Option or SAR or receiving the Stock) is
required to pay the sum  directly,  payment in cash or by check of such sums for
taxes shall be  delivered  within 10 days after the date of exercise or lapse of
restrictions.  The Company shall have no obligation  upon exercise of any Option
or lapse of  restrictions  on Stock  until  payment  has been  received,  unless
withholding  (or offset  against a cash  payment)  as of or prior to the date of
exercise  or lapse of  restrictions  is  sufficient  to cover  all sums due with
respect to that exercise.  The Company and its Affiliates shall not be obligated
to advise an Eligible Person of the existence of the tax or the amount which the
employer corporation will be required to withhold.

         10.5  WRITTEN  AGREEMENT.  Each Option and Award shall be embodied in a
written  agreement  which shall be subject to the terms and  conditions  of this
Plan and shall be signed by the Eligible Person and by a member of the Committee
on behalf of the  Committee  and the  Company  or an  executive  officer  of the
Company, other than the Eligible Person, on behalf of the Company. The agreement
may contain any other provisions that the Committee in its discretion shall deem
advisable which are not inconsistent with the terms of this Plan.

         10.6 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS.  With
respect to administration of this Plan, the Company shall indemnify each present
and future member of the Committee and the Board of Directors against,  and each
member of the  Committee  and the Board of Directors  shall be entitled  without
further  act on his  part to  indemnity  from  the  Company  for,  all  expenses

                                      E-17
<PAGE>

(including  attorney's  fees, the amount of judgments and the amount of approved
settlements  made with a view to the  curtailment of costs of litigation,  other
than  amounts  paid  to  the  Company  itself)  reasonably  incurred  by  him in
connection  with or arising out of any action,  suit,  or proceeding in which he
may be involved by reason of his being or having been a member of the  Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee  and/or the Board of Directors at the time of incurring  the expenses,
including, without limitation,  matters as to which he shall be finally adjudged
in any action,  suit or proceeding to have been found to have been  negligent in
the  performance  of his  duty as a  member  of the  Committee  or the  Board of
Directors.  However,  this indemnity shall not include any expenses  incurred by
any member of the Committee  and/or the Board of Directors in respect of matters
as to which he shall be finally  adjudged in any action,  suit or  proceeding to
have been guilty of gross negligence or willful misconduct in the performance of
his duty as a member of the Committee  and the Board of Directors.  In addition,
no right of indemnification under this Plan shall be available to or enforceable
by any member of the Committee and the Board of Directors unless, within 60 days
after institution of any action,  suit or proceeding,  he shall have offered the
Company,  in  writing,  the  opportunity  to handle and  defend  same at its own
expense.  This right of indemnification shall inure to the benefit of the heirs,
executors or  administrators  of each member of the  Committee  and the Board of
Directors  and shall be in addition to all other rights to which a member of the
Committee  and the  Board of  Directors  may be  entitled  as a  matter  of law,
contract, or otherwise.

         10.7 GENDER. If the context requires,  words of one gender when used in
this Plan shall  include  the others  and words used in the  singular  or plural
shall include the other.

         10.8  HEADINGS.  Headings of Articles  and  Sections  are  included for
convenience of reference  only and do not constitute  part of the Plan and shall
not be used in construing the terms of the Plan.

         10.9 OTHER  COMPENSATION  PLANS.  The  adoption  of this Plan shall not
affect any other stock option,  incentive or other compensation or benefit plans
in effect for the  Company or any  Affiliate,  nor shall the Plan  preclude  the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.

         10.10  OTHER  OPTIONS OR AWARDS.  The grant of an Option or Award shall
not confer  upon the  Eligible  Person the right to receive  any future or other
Options  or Awards  under this  Plan,  whether  or not  Options or Awards may be
granted to similarly  situated Eligible Persons,  or the right to receive future
Options or Awards upon the same terms or conditions as previously granted.

         10.11  GOVERNING  LAW. The  provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Delaware.

                                      E-18

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