Document:

EXHIBIT 10.7
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                               PRO URO CARE, INC.

                                 2002 STOCK PLAN

     1. Purpose. The purpose of the 2002 Stock Plan (the "Plan") of Pro Uro Care
Inc.  (the  "Company")  is to  increase  stockholder  value and to  advance  the
interests  of the  Company  by  furnishing  a  variety  of  economic  incentives
("Incentives")  designed to attract,  retain and motivate employees.  Incentives
may consist of  opportunities  to purchase  or receive  shares of Common  Stock,
$0.01 par value, of the Company ("Common  Stock"),  monetary payments or both on
terms determined under this Plan.

     2. Administration. The Plan shall be administered by the Board of Directors
or by a stock option or compensation committee (the "Committee") of the Board of
Directors  of the  Company.  The  Committee  shall  consist of not less than two
directors of the Company and shall be  appointed  from time to time by the board
of  directors  of  the  Company.  Each  member  of  the  Committee  shall  be  a
"non-employee  director"  within the  meaning  of Rule  16b-3 of the  Securities
Exchange Act of 1934,  and the  regulations  promulgated  thereunder  (the "1934
Act"). The Committee shall have complete authority to award Incentives under the
Plan,  to  interpret  the  Plan,  and to make any other  determination  which it
believes necessary and advisable for the proper  administration of the Plan. The
Committee's  decisions  and  matters  relating  to the Plan  shall be final  and
conclusive on the Company and its participants. If at any time there is no stock
option or compensation  committee,  the term  "Committee",  as used in the Plan,
shall refer to the Board of Directors.

     3. Eligible  Participants.  Officers of the Company, other employees of the
Company or its  subsidiaries  or affiliates,  members of the Board of Directors,
and consultants or other  independent  contractors  who provide  services to the
Company  or  its  subsidiaries  or  affiliates  shall  be  eligible  to  receive
Incentives under the Plan when designated by the Committee.  Participants may be
designated  individually or by groups or categories (for example,  by pay grade)
as the Committee deems appropriate.  Participation by officers of the Company or
its subsidiaries or affiliates and any performance  objectives  relating to such
officers  must be approved  by the  Committee.  Participation  by others and any
performance  objectives  relating  to  others  may  be  approved  by  groups  or
categories (for example,  by pay grade) and authority to designate  participants
who are not officers and to set or modify such targets may be delegated.

     4. Types of Incentives. Incentives under the Plan may be granted in any one
or a  combination  of the  following  forms:  (a)  incentive  stock  options and
non-statutory  stock options (section 6); (b) stock appreciation rights ("SARs")
(section 7); (c) stock awards (section 8); (d) restricted stock (section 8); (e)
performance shares (section 9); and (f) cash awards (section 10).

     5. Shares Subject to the Plan.

          5.1.  Number of Shares.  Subject to  adjustment as provided in Section
     11.6,  the number of shares of Common  Stock which may be issued  under the
     Plan shall not exceed 500,000  shares of Common Stock,  subject to approval
     by the stockholders of the Company at the next meeting of stockholders.

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          5.2. Cancellation. To the extent that cash in lieu of shares of Common
     Stock is delivered upon the exercise of an SAR pursuant to Section 7.4, the
     Company  shall be deemed,  for purposes of applying the  limitation  on the
     number of shares,  to have  issued  the  greater of the number of shares of
     Common  Stock which it was  entitled to issue upon such  exercise or on the
     exercise of any  related  option.  In the event that a stock  option or SAR
     granted  hereunder  expires or is terminated or canceled  unexercised as to
     any shares of Common Stock,  such shares may again be issued under the Plan
     either  pursuant to stock  options,  SARs or  otherwise.  In the event that
     shares of Common  Stock are issued as  restricted  stock or  pursuant  to a
     stock award and  thereafter  are  forfeited  or  reacquired  by the Company
     pursuant to rights  reserved  upon  issuance  thereof,  such  forfeited and
     reacquired  shares may again be issued under the Plan, either as restricted
     stock,  pursuant  to stock  awards or  otherwise.  The  Committee  may also
     determine to cancel,  and agree to the  cancellation  of, stock  options in
     order to make a  participant  eligible for the grant of a stock option at a
     lower price than the option to be canceled.

          5.3.  Type of Common  Stock.  Common  Stock  issued  under the Plan in
     connection with stock options, SARs,  performance shares,  restricted stock
     or stock awards, may be authorized and unissued shares.

     6. Stock  Options.  A stock option is a right to purchase  shares of Common
Stock from the Company.  Each stock option  granted by the Committee  under this
Plan shall be subject to the following terms and conditions:

          6.1.  Price.  The option  price per share shall be  determined  by the
     Committee, subject to adjustment under Section 11.6.

          6.2.  Number.  The  number of shares of Common  Stock  subject  to the
     option shall be  determined  by the  Committee,  subject to  adjustment  as
     provided in Section 11.6. The number of shares of Common Stock subject to a
     stock  option  shall be  reduced  in the same  proportion  that the  holder
     thereof  exercises  a SAR if any  SAR is  granted  in  conjunction  with or
     related to the stock option.

          6.3. Duration and Time for Exercise. Subject to earlier termination as
     provided in Section 11.4, the term of each stock option shall be determined
     by the  Committee  but shall not exceed ten years and one day from the date
     of grant. Each stock option shall become  exercisable at such time or times
     during  its term as shall be  determined  by the  Committee  at the time of
     grant. The Committee may accelerate the exercisability of any stock option.
     Subject to the foregoing and with the approval of the Committee, all or any
     part of the  shares  of Common  Stock  with  respect  to which the right to
     purchase  has accrued may be  purchased  by the Company at the time of such
     accrual or at any time or times thereafter during the term of the option.

          6.4. Manner of Exercise. A stock option may be exercised,  in whole or
     in part, by giving written notice to the Company,  specifying the number of
     shares of Common Stock to be purchased and accompanied by the full purchase
     price for such  shares.  The option  price  shall be payable  (a) in United
     States  dollars  upon  exercise  of the  option  and may be  paid by  cash;
     uncertified or certified check; bank draft; or (b) by delivery of shares of
     Common  Stock in  payment  of all or any part of the  option  price,  which
     shares  shall be valued for this  purpose at the Fair  Market  Value on the
     date such option is exercised.  The shares of Common Stock delivered by the
     participant  pursuant  to  Section  6.4(b)  must  have  been  held  by  the
     participant  for a period of not less than six months prior to the exercise
     of the option,  unless otherwise determined by the Committee.  Prior to the
     issuance of shares of Common Stock upon the exercise of a stock  option,  a
     participant shall have no rights as a stockholder.

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          6.5. Incentive Stock Options.  Notwithstanding anything in the Plan to
     the contrary,  the following additional provisions shall apply to the grant
     of stock options  which are intended to qualify as Incentive  Stock Options
     (as such term is defined in Section  422 of the  Internal  Revenue  Code of
     1986, as amended (the "Code")):

               (a) The aggregate  Fair Market Value  (determined  as of the time
          the option is granted) of the shares of Common  Stock with  respect to
          which  Incentive  Stock Options are  exercisable for the first time by
          any  participant  during any calendar year (under all of the Company's
          plans) shall not exceed $100,000.

               (b) Any Incentive Stock Option  certificate  authorized under the
          Plan shall contain such other  provisions as the Committee  shall deem
          advisable,  but shall in all events be consistent with and contain all
          provisions required in order to qualify the options as Incentive Stock
          Options.

               (c) All Incentive  Stock Options must be granted within ten years
          from the  earlier of the date on which this Plan was  adopted by board
          of directors or the date this Plan was approved by the stockholders.

               (d) Unless sooner  exercised,  all Incentive  Stock Options shall
          expire no later than 10 years after the date of grant.

               (e) The option price for  Incentive  Stock  Options  shall be not
          less than the Fair  Market  Value of the Common  Stock  subject to the
          option on the date of grant.

               (f) If  Incentive  Stock  Options are granted to any  participant
          who, at the time such option is granted, would own (within the meaning
          of  Section  422 of the Code)  stock  possessing  more than 10% of the
          total  combined  voting  power of all classes of stock of the employer
          corporation or of its parent or subsidiary corporation, (i) the option
          price for such Incentive  Stock Options shall be not less than 110% of
          the Fair Market Value of the Common Stock subject to the option on the
          date of grant and (ii) such  Incentive  Stock  Options shall expire no
          later than five years after the date of grant.

     7. Stock Appreciation Rights. An SAR is a right to receive, without payment
to the  Company,  a number of shares of Common  Stock,  cash or any  combination
thereof,  the amount of which is determined pursuant to the formula set forth in
Section 7.4. An SAR may be granted (a) with respect to any stock option  granted
under this Plan,  either  concurrently with the grant of such stock option or at
such later time as  determined by the Committee (as to all or any portion of the
shares of Common  Stock  subject to the stock  option),  or (b)  alone,  without
reference to any related stock option.  Each SAR granted by the Committee  under
this Plan shall be subject to the following terms and conditions:

          7.1. Number.  Each SAR granted to any participant shall relate to such
     number of shares of Common Stock as shall be determined  by the  Committee,
     subject to  adjustment  as provided in Section  11.6. In the case of an SAR
     granted  with  respect  to a stock  option,  the number of shares of Common
     Stock to which the SAR  pertains  shall be reduced  in the same  proportion
     that the holder of the option exercises the related stock option.

          7.2. Duration.  Subject to earlier  termination as provided in Section
     11.4,  the term of each SAR shall be  determined by the Committee but shall
     not exceed ten years and one day from the date of grant.  Unless  otherwise
     provided by the Committee,  each SAR shall become  exercisable at such time
     or times, to such extent and upon such  conditions as the stock option,  if
     any,  to  which  it  relates  is  exercisable.  The  Committee  may  in its
     discretion accelerate the exercisability of any SAR.

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          7.3. Exercise. An SAR may be exercised, in whole or in part, by giving
     written  notice to the  Company,  specifying  the  number of SARs which the
     holder wishes to exercise. Upon receipt of such written notice, the Company
     shall,  within  90  days  thereafter,  deliver  to  the  exercising  holder
     certificates  for the shares of Common Stock or cash or both, as determined
     by the Committee, to which the holder is entitled pursuant to Section 7.4.

          7.4. Payment. Subject to the right of the Committee to deliver cash in
     lieu of shares of Common  Stock  (which,  as it pertains  to  officers  and
     directors of the Company,  shall comply with all  requirements  of the 1934
     Act), the number of shares of Common Stock which shall be issuable upon the
     exercise of an SAR shall be determined by dividing:

               (a) the  number of shares of Common  Stock as to which the SAR is
          exercised  multiplied by the amount of the appreciation in such shares
          (for this purpose, the "appreciation" shall be the amount by which the
          Fair Market Value of the shares of Common Stock  subject to the SAR on
          the exercise date exceeds (1) in the case of an SAR related to a stock
          option,  the  purchase  price of the shares of Common  Stock under the
          stock  option  or (2) in the  case of an SAR  granted  alone,  without
          reference  to a  related  stock  option,  an  amount  which  shall  be
          determined  by  the  Committee  at  the  time  of  grant,  subject  to
          adjustment under Section 11.6); by

               (b) the  Fair  Market  Value of a share  of  Common  Stock on the
          exercise date.

          In lieu of issuing  shares of Common Stock upon the exercise of a SAR,
     the Committee may elect to pay the holder of the SAR cash equal to the Fair
     Market Value on the  exercise  date of any or all of the shares which would
     otherwise be issuable. No fractional shares of Common Stock shall be issued
     upon the  exercise  of an SAR;  instead,  the  holder  of the SAR  shall be
     entitled  to receive a cash  adjustment  equal to the same  fraction of the
     Fair Market  Value of a share of Common  Stock on the  exercise  date or to
     purchase  the  portion  necessary  to make a whole share at its Fair Market
     Value on the date of exercise.

     8.  Stock  Awards and  Restricted  Stock.  A stock  award  consists  of the
transfer  by the Company to a  participant  of shares of Common  Stock,  without
other payment therefor, as additional  compensation for services to the Company.
A share of restricted stock consists of shares of Common Stock which are sold or
transferred  by the  Company  to a  participant  at a  price  determined  by the
Committee  (which price shall be at least equal to the minimum price required by
applicable  law for the  issuance  of a share of Common  Stock)  and  subject to
restrictions on their sale or other transfer by the participant. The transfer of
Common Stock  pursuant to stock  awards and the transfer and sale of  restricted
stock shall be subject to the following terms and conditions:

          8.1. Number of Shares.  The number of shares to be transferred or sold
     by the Company to a participant  pursuant to a stock award or as restricted
     stock shall be determined by the Committee.

          8.2. Sale Price.  The Committee  shall determine the price, if any, at
     which shares of restricted stock shall be sold to a participant,  which may
     vary from time to time and  among  participants  and which may be below the
     Fair Market Value of such shares of Common Stock at the date of sale.

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          8.3. Restrictions.  All shares of restricted stock transferred or sold
     hereunder  shall be  subject  to such  restrictions  as the  Committee  may
     determine, including, without limitation any or all of the following:

               (a) a  prohibition  against the sale,  transfer,  pledge or other
          encumbrance  of the shares of restricted  stock,  such  prohibition to
          lapse 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 a participant) resell back
          to the Company at his or her cost, all or a part of such shares in the
          event of termination of his or her employment or consulting engagement
          during any period in which such shares are subject to restrictions;

               (c) such other  conditions or  restrictions  as the Committee may
          deem advisable.

          8.4.  Escrow.  In order to  enforce  the  restrictions  imposed by the
     Committee  pursuant to Section 8.3, the  participant  receiving  restricted
     stock shall enter into an  agreement  with the  Company  setting  forth the
     conditions of the grant.  Shares of restricted stock shall be registered in
     the name of the  participant  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
         COMMON  STOCK  REPRESENTED  BY IT ARE SUBJECT TO THE TERMS AND
         CONDITIONS  (INCLUDING  CONDITIONS OF FORFEITURE) CONTAINED IN
         THE 2002 STOCK PLAN OF PRO URO CARE INC. (THE "COMPANY"),  AND
         AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND THE
         COMPANY.  A COPY OF THE PLAN AND THE  AGREEMENT  IS ON FILE IN
         THE OFFICE OF THE SECRETARY OF THE COMPANY.

          8.5. End of  Restrictions.  Subject to Section 11.5, at the end of any
     time  period  during  which the shares of  restricted  stock are subject to
     forfeiture and restrictions on transfer, such shares will be delivered free
     of all  restrictions  to the  participant  or to  the  participant's  legal
     representative, beneficiary or heir.

          8.6.  Stockholder.  Subject to the terms and  conditions  of the Plan,
     each participant  receiving restricted stock shall have all the rights of a
     stockholder with respect to shares of stock 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 in cash
     or property  other than Common Stock with  respect to shares of  restricted
     stock shall be paid to the participant currently.

     9. Performance Shares. A performance share consists of an award which shall
be paid in shares of Common Stock, as described  below. The grant of performance
share  shall be subject  to such terms and  conditions  as the  Committee  deems
appropriate, including the following:

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          9.1. Performance Objectives. Each performance share will be subject to
     performance  objectives for the Company or one of its operating units to be
     achieved by the end of a specified period. The number of performance shares
     granted  shall be  determined  by the  Committee and may be subject to such
     terms and conditions,  as the Committee shall determine. If the performance
     objectives are achieved,  each participant will be paid in shares of Common
     Stock or cash. If such  objectives  are not met, each grant of  performance
     shares  may  provide  for  lesser  payments  in  accordance  with  formulas
     established in the award.

          9.2. Not Stockholder. The grant of performance shares to a participant
     shall not create any rights in such  participant  as a  stockholder  of the
     Company,  until the  payment of shares of Common  Stock with  respect to an
     award.

          9.3. No Adjustments. No adjustment shall be made in performance shares
     granted  on  account of cash  dividends  which may be paid or other  rights
     which may be issued to the holders of Common  Stock prior to the end of any
     period for which performance objectives were established.

          9.4. Expiration of Performance Share. If any participant's  employment
     or  consulting  engagement  with the Company is  terminated  for any reason
     other than normal retirement,  death or disability prior to the achievement
     of the participant's stated performance  objectives,  all the participant's
     rights  on  the  performance  shares  shall  expire  and  terminate  unless
     otherwise  determined  by the  Committee.  In the event of  termination  of
     employment  or  consulting  by  reason  of  death,  disability,  or  normal
     retirement,  the  Committee,  in its  own  discretion  may  determine  what
     portions,  if  any,  of  the  performance  shares  should  be  paid  to the
     participant.

     10. Cash Awards.  A cash award  consists of a monetary  payment made by the
Company to a participant as additional  compensation  for his or her services to
the Company.  Payment of a cash award will  normally  depend on  achievement  of
performance  objectives  by the  Company  or by  individuals.  The amount of any
monetary payment  constituting a cash award shall be determined by the Committee
in its  sole  discretion.  Cash  awards  may  be  subject  to  other  terms  and
conditions,  which may vary from  time to time and  among  participants,  as the
Committee determines to be appropriate.

     11. General.

          11.1. Effective Date. The Plan will become effective upon its approval
     by the affirmative vote of the holders of a majority of the voting power of
     the shares of the Company's  Common Stock present and entitled to vote at a
     meeting of the stockholders. Unless approved within one year after the date
     of the Plan's  adoption  by the board of  directors,  the Plan shall not be
     effective for any purpose.

          11.2.  Duration.  The Plan shall remain in effect until all Incentives
     granted under the Plan have either been satisfied by the issuance of shares
     of Common Stock or the payment of cash or been  terminated  under the terms
     of the Plan and all  restrictions  imposed  on shares  of  Common  Stock in
     connection  with their issuance  under the Plan have lapsed.  No Incentives
     may be granted under the Plan after the tenth  anniversary  of the date the
     Plan is approved by the stockholders of the Company.

          11.3.   Non-transferability  of  Incentives.  No  stock  option,  SAR,
     restricted  stock or  performance  award  may be  transferred,  pledged  or
     assigned by the holder thereof (except, in the event of the holder's death,
     by will or the laws of  descent  and  distribution  to the  limited  extent
     provided in the Plan or the Incentive), or pursuant to a qualified domestic
     relations  order  as  defined  by the  Code  or  Title  I of  the  Employee
     Retirement  Income Security Act, or the rules  thereunder,  and the Company
     shall not be required to recognize any attempted  assignment of

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     such rights by any  participant.  Notwithstanding  the preceding  sentence,
     stock  options  may be  transferred  by the holder  thereof  to  Employee's
     spouse,  children,  grandchildren  or parents  (collectively,  the  "Family
     Members"),  to trusts for the benefit of Family Members, to partnerships or
     limited  liability  companies in which Family Members are the only partners
     or  shareholders,  or to  entities  exempt  from  federal  income  taxation
     pursuant to Section  501(c)(3)  of the Internal  Revenue  Code of 1986,  as
     amended.  During a participant's  lifetime, a stock option may be exercised
     only by him or her, by his or her  guardian or legal  representative  or by
     the transferees permitted by the preceding sentence.

          11.4.  Effect of Termination or Death. In the event that a participant
     ceases to be an  employee of or  consultant  to the Company for any reason,
     including  death,  any  Incentives may be exercised or shall expire at such
     times as may be determined by the Committee.

          11.5. Additional Condition.  Notwithstanding  anything in this Plan to
     the  contrary:  (a) the Company may, if it shall  determine it necessary or
     desirable  for any  reason,  at the time of award of any  Incentive  or the
     issuance of any shares of Common Stock pursuant to any  Incentive,  require
     the recipient of the Incentive, as a condition to the receipt thereof or to
     the receipt of shares of Common Stock issued pursuant  thereto,  to deliver
     to the Company a written representation of present intention to acquire the
     Incentive or the shares of Common Stock issued pursuant  thereto for his or
     her own account for investment and not for distribution;  and (b) if at any
     time the  Company  further  determines,  in its sole  discretion,  that the
     listing,  registration  or  qualification  (or  any  updating  of any  such
     document) of any Incentive or the shares of Common Stock issuable  pursuant
     thereto is  necessary  on any  securities  exchange or under any federal or
     state  securities  or blue sky law,  or that the consent or approval of any
     governmental  regulatory  body is necessary or desirable as a condition of,
     or in connection with the award of any Incentive, the issuance of shares of
     Common Stock pursuant thereto,  or the removal of any restrictions  imposed
     on such  shares,  such  Incentive  shall not be awarded  or such  shares of
     Common Stock shall not be issued or such restrictions shall not be removed,
     as the case may be, in whole or in part, unless such listing, registration,
     qualification,  consent or  approval  shall have been  effected or obtained
     free of any conditions not acceptable to the Company.

          11.6.  Adjustment.  In the  event  of  any  merger,  consolidation  or
     reorganization  of the Company with any other  corporation or corporations,
     there  shall be  substituted  for each of the  shares of Common  Stock then
     subject to the Plan, including shares subject to restrictions,  options, or
     achievement of performance share objectives,  the number and kind of shares
     of stock or other  securities  to which the holders of the shares of Common
     Stock will be  entitled  pursuant to the  transaction.  In the event of any
     recapitalization,  stock  dividend,  stock split,  combination of shares or
     other change in the Common Stock, the number of shares of Common Stock then
     subject to the Plan,  including shares subject to restrictions,  options or
     achievements of performance shares,  shall be adjusted in proportion to the
     change in  outstanding  shares of  Common  Stock.  In the event of any such
     adjustments,  the purchase price of any option, the performance  objectives
     of any Incentive,  and the shares of Common Stock issuable  pursuant to any
     Incentive  shall  be  adjusted  as and to the  extent  appropriate,  in the
     discretion of the Committee, to provide participants with the same relative
     rights before and after such adjustment.

          11.7.  Incentive  Plans  and  Agreements.  Except in the case of stock
     awards or cash  awards,  the terms of each  Incentive  shall be stated in a
     plan or  agreement  approved  by the  Committee.  The  Committee  may  also
     determine to enter into agreements with holders of options to reclassify or
     convert  certain  outstanding  options,  within  the terms of the Plan,  as
     Incentive Stock Options or as  non-statutory  stock options and in order to
     eliminate  SARs with  respect to all or part of such  options and any other
     previously issued options.

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          11.8. Withholding.

               (a) The  Company  shall  have  the  right  to  withhold  from any
          payments  made under the Plan or to collect as a condition of payment,
          any  taxes  required  by  law  to be  withheld.  At  any  time  when a
          participant is required to pay to the Company an amount required to be
          withheld  under  applicable  income  tax  laws  in  connection  with a
          distribution of Common Stock or upon exercise of an option or SAR, the
          participant  may  satisfy  this  obligation  in  whole  or in  part by
          electing  (the  "Election")  to have  the  Company  withhold  from the
          distribution  shares of Common  Stock having a value up to the minimum
          amount  of   withholding   taxes  required  to  be  collected  on  the
          transaction.  The value of the shares to be withheld shall be based on
          the Fair Market  Value of the Common Stock on the date that the amount
          of tax to be withheld shall be determined ("Tax Date").

               (b)  Each  Election  must be made  prior  to the  Tax  Date.  The
          Committee may disapprove of any Election, may suspend or terminate the
          right to make Elections,  or may provide with respect to any Incentive
          that the right to make Elections shall not apply to such Incentive. An
          Election is irrevocable.

          11.9.  No  Continued  Employment,  Engagement  or Right  to  Corporate
     Assets. No participant under the Plan shall have any right,  because of his
     or her  participation,  to  continue  in the employ of the  Company for any
     period of time or to any right to continue  his or her present or any other
     rate of compensation.  Nothing  contained in the Plan shall be construed as
     giving an employee, a consultant,  such persons' beneficiaries or any other
     person any equity or  interests of any kind in the assets of the Company or
     creating  a trust  of any  kind or a  fiduciary  relationship  of any  kind
     between the Company and any such person.

          11.10.  Deferral  Permitted.  Payment of cash or  distribution  of any
     shares  of  Common  Stock to which a  participant  is  entitled  under  any
     Incentive  shall  be made as  provided  in the  Incentive.  Payment  may be
     deferred at the option of the participant if provided in the Incentive.

          11.11.  Amendment of the Plan. The Board may amend or discontinue  the
     Plan at any time. However, no such amendment or discontinuance shall change
     or impair,  without the consent of the recipient,  an Incentive  previously
     granted.  Further,  no  such  amendment  shall,  without  approval  of  the
     shareholders  of the Company,  (a) increase the maximum number of shares of
     Common Stock which may be issued to all  participants  under the Plan,  (b)
     change or expand  the types of  Incentives  that may be  granted  under the
     Plan, (c) change the class of persons eligible to receive  Incentives under
     the Plan, or (d) materially  increase the benefits accruing to participants
     under the Plan.

          11.12.  Immediate  Acceleration  of  Incentives.  Notwithstanding  any
     provision  in  this  Plan  or in any  Incentive  to the  contrary,  (a) the
     restrictions  on  all  shares  of  restricted   stock  awards  shall  lapse
     immediately,  (b) all outstanding  options and SARs will become exercisable
     immediately,  and (c) all performance  shares shall be deemed to be met and
     payment  made  immediately,  if  subsequent  to the  date  that the Plan is
     approved by the Board of  Directors of the  Company,  any of the  following
     events occur unless  otherwise  determined  by the board of directors and a
     majority of the "Continuing Directors" (as defined below):

                                       8
<PAGE>

               (1) any person or group of persons  becomes the beneficial  owner
          of 50% or more of the aggregate number of all equity securities of the
          Company entitled to vote for the election of directors;

               (2) a majority  of the members of the board of  directors  of the
          Company  is  replaced  within  the  period  of less  than two years by
          directors who are not Continuing Directors; or

               (3) the stockholders of the Company approve an agreement to merge
          or consolidate with or into another  corporation  (unless,  after such
          merger or  consolidation,  the former  stockholders of the Company own
          50% or more of the successor  entity's voting equity securities) or an
          agreement to sell or otherwise  dispose of all or substantially all of
          the Company's assets (including a plan of liquidation).

          For purposes of this Section 11.12,  beneficial  ownership by a person
     or group of persons shall be determined in accordance  with  Regulation 13D
     (or any similar  successor  regulation)  promulgated  by the Securities and
     Exchange Commission pursuant to the 1934 Act. Beneficial  ownership of more
     than 50% of an equity security may be established by any reasonable method,
     but shall be  presumed  conclusively  as to any person who files a Schedule
     13D report with the  Securities  and  Exchange  Commission  reporting  such
     ownership. If the restrictions and forfeitability periods are eliminated by
     reason of  provision  (1),  the  limitations  of this Plan shall not become
     applicable  again  should the person cease to own 50% or more of any equity
     security of the Company.

          For  purposes  of  this  Section  11.12,  "Continuing  Directors"  are
     directors (a) who were in office prior to the time any of  provisions  (1),
     (2) or (3)  occurred  or any person  publicly  announced  an  intention  to
     acquire 25% or more of any equity security of the Company, (b) directors in
     office for a period of more than two years, and (c) directors nominated and
     approved by a majority of the Continuing Directors.

          11.13. Definition of Fair Market Value. For purposes of this Plan, the
     "Fair Market  Value" of a share of Common Stock at a specified  date shall,
     unless otherwise  expressly  provided in this Plan, be the amount which the
     Committee or the board of directors of the Company determines in good faith
     to be 100% of the  fair  market  value  of such a share  as of the  date in
     question;  provided,  however, that notwithstanding the foregoing,  if such
     shares are listed on a U.S. securities exchange or are quoted on the NASDAQ
     National Market System or NASDAQ  Small-Cap Stock Market  ("NASDAQ"),  then
     Fair Market Value shall be  determined  by reference to the last sale price
     of a share of Common  Stock on such U.S.  securities  exchange or NASDAQ on
     the applicable date. If such U.S.  securities  exchange or NASDAQ is closed
     for  trading  on such date,  or if the Common  Stock does not trade on such
     date, then the last sale price used shall be the one on the date the Common
     Stock last traded on such U.S. securities exchange or NASDAQ.

                                       9EXHIBIT 10.8
                                                                    ------------

                             PROUROCARE MEDICAL INC.

                             2004 STOCK OPTION PLAN

     1.  Purpose.  The  purpose of the 2004 Stock  Option  Plan (the  "Plan") of
ProUroCare  Medical Inc., a Nevada  corporation (the "Company"),  is to increase
shareholder  value and to advance the  interests of the Company by  furnishing a
variety  of  economic  incentives  (variously  referred  to  hereinafter  as the
"Incentives") designed to attract, retain and motivate employees,  directors and
consultants.  Incentives  may  consist of  opportunities  to purchase or receive
shares of the  Company's  common  stock,  $0.01 par value (the "Common  Stock"),
monetary payments, or both, on terms and conditions determined under this Plan.

     2. Administration.

          2.1 The Plan shall be  administered  by a committee  of the  Company's
     board of directors (the  "Committee").  The Committee  shall consist of not
     less than two directors of the Company who shall be appointed  from time to
     time by the  Company's  board of  directors.  Each member of the  Committee
     shall qualify both as a "non-employee  director" within the meaning of Rule
     16b-3 of the Securities Exchange Act of 1934, as amended (together with the
     rules and regulations promulgated  thereunder,  the "Exchange Act"), and as
     an "outside  director" as defined in Section 162(m) of the Internal Revenue
     Code of 1986,  as amended (the "Code").  The Committee  shall have complete
     discretion  and  authority to determine all  provisions  of all  Incentives
     awarded under the Plan (consistent  with the terms of the Plan),  interpret
     the Plan, and make any other  determination which it believes necessary and
     advisable  for the  proper  administration  of the  Plan.  The  Committee's
     decisions  and matters  relating to the Plan shall be final and  conclusive
     for the Company and its  participants.  No member of the Committee  will be
     liable for any action or  determination  made in good faith with respect to
     the Plan or any Incentives  granted under the Plan. The Committee will also
     have the  authority  under  the Plan to amend or  modify  the  terms of any
     outstanding  Incentives  in any manner;  provided,  however,  that any such
     amended or modified terms are permitted by the Plan as then in effect,  and
     any  recipient  of an  Incentive  adversely  affected  by such  amended  or
     modified  terms  has  consented  to  such  amendment  or  modification.  No
     amendment or modification  to an Incentive,  however,  whether  pursuant to
     this Section 2 or any other  provisions of the Plan, will be deemed to be a
     re-grant of such  Incentive for purposes of this Plan. If at any time there
     is no Committee,  then for purposes of the Plan the term "Committee"  shall
     mean the Company's board of directors.

          2.2 In the  event of (i) any  reorganization,  merger,  consolidation,
     recapitalization,  liquidation,  reclassification,  stock  dividend,  stock
     split,  combination of shares, rights offering,  extraordinary  dividend or
     divestiture,  including a spinoff, or any other similar change in corporate
     structure or shares, (ii) any purchase, acquisition, sale or disposition of
     a significant amount of assets or a significant business,  (iii) any change
     in accounting principles or practices, or (iv) any other similar change, in
     each case with respect to the Company or any other entity whose performance
     is relevant to the grant or vesting of an Incentive,  the Committee (or, if
     the Company is not the surviving  corporation in any such transaction,  the
     board of directors of the surviving  corporation)  may, without the consent
     of any  affected  recipient  of an  Incentive,  amend or modify the vesting
     criteria of any  outstanding  Incentive  based, in whole or in part, on the
     financial  performance  of the  Company  (or  any  subsidiary  or  division
     thereof) or such other entity so as  equitably to reflect such event,  with
     the  desired  result  that  the  criteria  for  evaluating  such

<PAGE>

     financial  performance  of  the  Company  or  such  other  entity  will  be
     substantially  the same (in the sole  discretion  of the  Committee  or the
     board of directors of the surviving  corporation)  following  such event as
     prior to such event; provided,  however, that the amended or modified terms
     are permitted by the Plan as then in effect.

     3.  Eligible  Participants.  Employees of the Company or its  subsidiaries,
including officers and employees of the Company or its subsidiaries),  directors
and consultants,  advisors or other independent contractors who provide services
to the Company or its  subsidiaries,  including  members of any advisory  board,
shall become  eligible to receive  Incentives  under the Plan when designated by
the  Committee.  Participants  may be  designated  individually  or by groups or
categories  (for  example,  by pay grade) as the  Committee  deems  appropriate.
Participation  by  Company  officers  or its  subsidiaries  and any  performance
objectives  relating  to  such  officers  must  be  approved  by the  Committee.
Participation by others and any performance objectives relating to others may be
approved by groups or categories  (for  example,  by pay grade) and authority to
designate  participants  who  are  not  officers  and  to  set  or  modify  such
performance objectives may be delegated.

     4.  Types of  Incentives.  Incentives  under the Plan may be granted in any
combination   of  the  following   forms:   (a)  incentive   stock  options  and
non-statutory  stock  options  under  Section 6; (b)  stock-appreciation  rights
("SARs") under Section 7; (c) stock awards under Section 8; (d) restricted stock
under Section 8; and (e) performance shares under Section 9.

     5. Shares Subject to the Plan.

          5.1 Subject to adjustment  as provided in Section 11.6,  the number of
     shares of Common  Stock which may be issued under the Plan shall not exceed
     1,000,000  shares of Common Stock.  Shares of Common Stock issued under the
     Plan or that  are  currently  subject  to  outstanding  Incentives  will be
     applied to reduce the maximum  number of shares of Common  Stock  remaining
     available for issuance under the Plan.

          5.2 To the  extent  that cash in lieu of  shares  of  Common  Stock is
     delivered  upon the exercise of an SAR pursuant to Section 7.4, the Company
     shall be deemed,  for purposes of applying the  limitation on the number of
     shares,  to have issued the greater of the number of shares of Common Stock
     which it was  entitled to issue upon such  exercise or upon the exercise of
     any  related  option.  In the  event  that a stock  option  or SAR  granted
     hereunder  expires or is terminated or canceled  unexercised or unvested as
     to any shares of Common  Stock,  such shares may again be issued  under the
     Plan either pursuant to stock options, SARs or otherwise. In the event that
     shares of Common Stock are issued hereunder as restricted stock or pursuant
     to a stock award and  thereafter are forfeited or reacquired by the Company
     pursuant to rights  reserved  upon  issuance  thereof,  such  forfeited and
     reacquired  shares may again be issued under the Plan, either as restricted
     stock,  pursuant  to stock  awards or  otherwise.  The  Committee  may also
     determine to cancel,  and agree to the  cancellation  of, stock  options in
     order to make a  participant  eligible for the grant of a stock option at a
     lower price than the option to be canceled.

     6. Stock  Options.  A stock option is a right to purchase  shares of Common
Stock from the Company.  The Committee may designate  whether an option is to be
considered an incentive  stock option or a  non-statutory  stock option.  To the
extent that any  incentive  stock option  granted  under the Plan ceases for any
reason to qualify as an "incentive  stock option" for purposes of Section 422 of
the Code,  such  incentive  stock  option will  continue to be  outstanding  for
purposes of the Plan but will thereafter be deemed to be a  non-statutory  stock
option.  Each stock  option  granted by the  Committee  under this Plan shall be
subject to the following terms and conditions:

                                       2
<PAGE>

          6.1  Price.  The option  price per share  shall be  determined  by the
     Committee, subject to adjustment under Section 11.6.

          6.2 Number. The number of shares of Common Stock subject to the option
     shall be determined by the Committee,  subject to adjustment as provided in
     Section  11.6.  The  number of shares of Common  Stock  subject  to a stock
     option  shall be reduced  in the same  proportion  that the holder  thereof
     exercises a SAR if any SAR is granted in conjunction with or related to the
     stock  option.  No  individual  may receive  options to purchase  more than
     1,000,000 shares in any year.

          6.3 Term and Time for  Exercise.  Subject  to earlier  termination  as
     provided in Section 11.4, the term of each stock option shall be determined
     by the  Committee  but shall not exceed ten (10) years and one day from the
     date of grant.  Each stock option shall become  exercisable at such time or
     times during its term as shall be  determined  by the Committee at the time
     of grant. The Committee may in its discretion accelerate the exercisability
     of any stock option.  Subject to the foregoing and with the approval of the
     Committee,  all or any part of the shares of Common  Stock with  respect to
     which the right to purchase  has accrued may be purchased by the Company at
     the time of such accrual or at any time or times thereafter during the term
     of the option.

          6.4 Manner of Exercise.  Subject to the  conditions  contained in this
     Plan and in the agreement  with the  recipient  evidencing  such option,  a
     stock  option  may be  exercised,  in whole or in part,  by giving  written
     notice to the Company,  specifying  the number of shares of Common Stock to
     be purchased and  accompanied  by the full purchase  price for such shares.
     The  exercise  price shall be payable  (a) in United  States  dollars  upon
     exercise of the option and may be paid by cash;  uncertified  or  certified
     check; or bank draft;  (b) at the discretion of the Committee,  by delivery
     of shares of Common Stock  already owned by the  participant  in payment of
     all or any part of the  exercise  price,  which  shares shall be valued for
     this purpose at the Fair Market  Value (as defined in Section  11.12 below)
     on the date  such  option is  exercised;  or (c) at the  discretion  of the
     Committee, by instructing the Company to withhold from the shares of Common
     Stock  issuable upon exercise of the stock option shares of Common Stock in
     payment  of all or any  part  of the  exercise  price  and/or  any  related
     withholding-tax obligations,  which shares shall be valued for this purpose
     at the Fair Market Value or in such other manner as may be authorized  from
     time to time by the  Committee.  Any shares of Common Stock  delivered by a
     participant  pursuant  to  clause  (b)  above  must  have  been held by the
     participant  for a period  of not less  than  six (6)  months  prior to the
     exercise of the option, unless otherwise determined by the Committee. Prior
     to the  issuance  of shares of Common  Stock upon the  exercise  of a stock
     option, a participant shall have no rights as a shareholder with respect to
     shares  of  Common  Stock  issuable  under  such  stock  option.  Except as
     otherwise provided in the Plan, no adjustment will be made for dividends or
     distributions  declared as of a record date  preceding  the date on which a
     participant becomes the holder of record of shares of Common Stock acquired
     upon exercise of a stock  option,  except as the Committee may determine in
     its sole discretion.

          6.5 Incentive Stock Options.  Notwithstanding  anything in the Plan to
     the contrary,  the following additional provisions shall apply to the grant
     of stock options  which are intended to qualify as incentive  stock options
     (as such term is defined in Section 422 of the Code):

               (a) The aggregate  Fair Market Value  (determined  as of the time
          the option is granted) of the shares of Common  Stock with  respect to
          which  incentive  stock options are  exercisable for the first time by
          any participant during any calendar year (under the Plan and any other
          incentive  stock-option  plans of the  Company  or any  subsidiary  or
          parent  corporation  of the Company)  shall not exceed  $100,000.  The
          determination  will be made by taking  incentive  stock  options  into
          account in the order in which they were granted.

                                       3
<PAGE>

               (b) Any  certificate  for an incentive  stock  option  authorized
          under the Plan shall  contain such other  provisions  as the Committee
          shall deem  advisable,  but shall in all events be consistent with and
          contain  all  provisions  required  in order to qualify the options as
          incentive stock options.

               (c) All incentive  stock options must be granted  within ten (10)
          years from the  earlier of the date on which this Plan was  adopted by
          board of directors or the date this Plan was approved by the Company's
          shareholders.

               (d) Unless sooner  exercised,  all incentive  stock options shall
          expire  no later  than ten (10)  years  after  the date of  grant.  No
          incentive  stock option may be  exercisable  after ten (10) years from
          its date of grant (or five (5) years from its date of grant if, at the
          time of grant, the participant owns, directly or indirectly, more than
          ten percent (10%) of the total combined voting power of all classes of
          stock of the Company or any parent or  subsidiary  corporation  of the
          Company).

               (e) The  exercise  price  for a share of  Common  Stock  under an
          incentive  stock  options  shall be not less than one hundred  percent
          (100%) of the Fair  Market  Value of one share of Common  Stock on the
          date of grant; provided, however, that the exercise price shall be one
          hundred  ten percent  (110%) of the Fair Market  Value if, at the time
          the incentive stock option is granted,  the participant owns, directly
          or  indirectly,  more than ten  percent  (10%) of the  total  combined
          voting  power of all  classes of stock of the Company or any parent or
          subsidiary corporation of the Company.

     7. Stock-Appreciation Rights. An SAR is a right to receive, without payment
to the Company,  a number of shares of Common Stock,  cash,  or any  combination
thereof,  the amount of which is determined pursuant to the formula set forth in
Section 7.4. An SAR may be granted (a) with respect to any stock option  granted
under this Plan,  either  concurrently with the grant of such stock option or at
such later time as  determined by the Committee (as to all or any portion of the
shares of Common  Stock  subject to the stock  option),  or (b)  alone,  without
reference to any related stock option.  Each SAR granted by the Committee  under
this Plan shall be subject to the following terms and conditions:

          7.1 Number;  Exercise Price. Each SAR granted to any participant shall
     relate to such number of shares of Common Stock as shall be  determined  by
     the  Committee,  subject to  adjustment as provided in Section 11.6. In the
     case of an SAR granted with respect to a stock option, the number of shares
     of Common  Stock to which the SAR  pertains  shall be  reduced  in the same
     proportion  that the  holder of the  option  exercises  the  related  stock
     option.  The exercise  price of an SAR will be determined by the Committee,
     in its  discretion,  at the  date of  grant  but may not be less  than  one
     hundred  percent  (100%)  of the Fair  Market  Value of one share of Common
     Stock on the date of grant.

          7.2 Duration.  Subject to earlier  termination  as provided in Section
     11.4,  the term of each SAR shall be  determined by the Committee but shall
     not  exceed  ten (10)  years  and one day from  the date of  grant.  Unless
     otherwise  provided by the Committee,  each SAR shall become exercisable at
     such time or times,  to such extent and upon such  conditions  as the stock
     option,  if any, to which it relates is  exercisable.  The Committee may in
     its discretion accelerate the exercisability of any SAR.

                                       4
<PAGE>

          7.3 Exercise. An SAR may be exercised,  in whole or in part, by giving
     written  notice to the  Company,  specifying  the  number of SARs which the
     holder wishes to exercise. Upon receipt of such written notice, the Company
     shall, within ninety (90) days thereafter, deliver to the exercising holder
     certificates for the shares of Common Stock or cash, or both, as determined
     by the Committee, to which the holder is entitled pursuant to Section 7.4.

          7.4 Payment.  Subject to the right of the Committee to deliver cash in
     lieu of shares of Common Stock (which,  as it pertains to Company  officers
     and directors, shall comply with all requirements of the Exchange Act), the
     number of shares of Common Stock which shall be issuable  upon the exercise
     of an SAR shall be determined by dividing:

               (a) the  number of shares of Common  Stock as to which the SAR is
          exercised  multiplied by the amount of the appreciation in such shares
          (i.e.,  the  amount by which the Fair  Market  Value of the  shares of
          Common Stock  subject to the SAR on the  exercise  date exceeds (1) in
          the case of an SAR related to a stock  option,  the exercise  price of
          the shares of Common  Stock under the stock  option or (2) in the case
          of an SAR  granted  alone and  without  reference  to a related  stock
          option,  an amount which shall be  determined  by the Committee at the
          time of grant, subject to adjustment under Section 11.6); by

               (b) the  Fair  Market  Value of a share  of  Common  Stock on the
          exercise date.

          In lieu of issuing  shares of Common Stock upon the exercise of a SAR,
     the Committee may elect to pay the holder of the SAR cash equal to the Fair
     Market Value on the  exercise  date of any or all of the shares which would
     otherwise be issuable. No fractional shares of Common Stock shall be issued
     upon the  exercise  of an SAR;  instead,  the  holder  of the SAR  shall be
     entitled  to receive a cash  adjustment  equal to the same  fraction of the
     Fair Market  Value of a share of Common  Stock on the  exercise  date or to
     purchase  the  portion  necessary  to make a whole share at its Fair Market
     Value on the date of exercise.

     8.  Stock  Awards and  Restricted  Stock.  A stock  award  consists  of the
transfer  by the Company to a  participant  of shares of Common  Stock,  without
other payment therefor, as additional  compensation for services rendered to the
Company. The participant receiving a stock award will have all voting, dividend,
liquidation  and other  rights with respect to the shares of Common Stock issued
to a  participant  as a stock  award under this  Section 8 upon the  participant
becoming  the  holder of  record of such  shares.  A share of  restricted  stock
consists of shares of Common Stock which are sold or  transferred by the Company
to a participant at a price determined by the Committee (which price shall be at
least equal to the minimum price  required by applicable law for the issuance of
a share of Common  Stock)  and  subject to  restrictions  on their sale or other
transfer by the participant, which restrictions and conditions may be determined
by  the  Committee  as  long  as  such   restrictions  and  conditions  are  not
inconsistent  with the terms of the Plan.  The transfer of Common Stock pursuant
to stock awards and the transfer and sale of  restricted  stock shall be subject
to the following terms and conditions:

          8.1 Number of Shares.  The number of shares to be  transferred or sold
     by the Company to a participant  pursuant to a stock award or as restricted
     stock shall be determined by the Committee.

          8.2 Sale Price.  The Committee  shall  determine the price, if any, at
     which shares of restricted stock shall be sold or granted to a participant,
     which may vary from  time to time and among  participants  and which may be
     below the Fair Market  Value of such shares of Common  Stock at the date of
     sale.

                                       5
<PAGE>

          8.3  Restrictions.  All shares of restricted stock transferred or sold
     hereunder  shall be  subject  to such  restrictions  as the  Committee  may
     determine, including without limitation any or all of the following:

               (a) a  prohibition  against the sale,  transfer,  pledge or other
          encumbrance  of the shares of restricted  stock,  such  prohibition to
          lapse 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 a participant) resell back
          to the Company at his or her cost, all or a part of such shares in the
          event of termination of his or her employment or consulting engagement
          during any period in which such shares are subject to restrictions; or

               (c) such other  conditions or  restrictions  as the Committee may
          deem advisable.

          In order to enforce the restrictions imposed by the Committee pursuant
     to Section 8.3, the participant receiving restricted stock shall enter into
     an agreement  with the Company  setting forth the  conditions of the grant.
     Shares  of  restricted  stock  shall  be  registered  in  the  name  of the
     participant  and deposited,  together with a stock power endorsed in blank,
     with the Company unless  otherwise  determined by the Committee.  Each such
     certificate shall bear a legend in substantially the following form:

          THE  TRANSFERABILITY  OF THIS  CERTIFICATE  AND THE  SHARES OF
          COMMON  STOCK  REPRESENTED  BY IT ARE SUBJECT TO THE TERMS AND
          CONDITIONS  (INCLUDING  CONDITIONS OF FORFEITURE) CONTAINED IN
          THE 2004 STOCK OPTION PLAN OF  PROUROCARE  MEDICAL  INC.  (THE
          "COMPANY"),   AND  AN  AGREEMENT   ENTERED  INTO  BETWEEN  THE
          REGISTERED  OWNER AND THE  COMPANY.  A COPY OF THE 2004  STOCK
          OPTION PLAN AND THE  AGREEMENT IS  AVAILABLE  FROM THE COMPANY
          UPON REQUEST.

          8.4 End of  Restrictions.  Subject to Section  11.5, at the end of any
     time  period  during  which the shares of  restricted  stock are subject to
     forfeiture and restrictions on transfer, such shares will be delivered free
     of all  restrictions  to the  participant  or to  the  participant's  legal
     representative, beneficiary or heir.

          8.5 Shareholder. Subject to the terms and conditions of the Plan, each
     participant  receiving  restricted  stock  shall  have all the  rights of a
     shareholder with respect to shares of stock 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 in cash or
     property other than Common Stock with respect to shares of restricted stock
     shall be paid to the participant currently. Unless the Committee determines
     otherwise in its sole discretion, any dividends or distributions (including
     regular  quarterly  cash  dividends)  paid with respect to shares of Common
     Stock  subject to the  restrictions  set forth above will be subject to the
     same  restrictions  as the shares to which such dividends or  distributions
     relate.  In the event the  Committee  determines  not to pay  dividends  or
     distributions   currently,   the  Committee  will  determine  in  its  sole
     discretion  whether  any  interest  will  be  paid  on  such  dividends  or
     distributions.  In  addition,  the  Committee  in its sole  discretion  may
     require such dividends and distributions to be reinvested (and in such case
     the participant  consents to such  reinvestment)  in shares of Common Stock
     that will be subject to the same  restrictions  as the shares to which such
     dividends or distributions relate.

                                       6
<PAGE>

     9. Performance Shares. A performance share consists of an award which shall
be  paid in  shares  of  Common  Stock,  as  described  below.  The  grant  of a
performance share shall be subject to such terms and conditions as the Committee
deems appropriate, including the following:

          9.1 Performance Objectives.  Each performance share will be subject to
     performance objectives respecting the Company or one of its operating units
     to be achieved by the participant before the end of a specified period. The
     Committee  shall  determine the terms and  conditions of each grant and the
     number of performance  shares granted.  If the  performance  objectives are
     achieved, the participant will be paid in shares of Common Stock or cash as
     determined by the Committee.  If such objectives are not met, each grant of
     performance  shares may provide  for lesser  payments  in  accordance  with
     formulas established in the award.

          9.2 Not Shareholder.  The grant of performance shares to a participant
     shall not create any rights in such  participant  as a  shareholder  of the
     Company,  until the  payment of shares of Common  Stock with  respect to an
     award.

          9.3 No Adjustments.  No adjustment shall be made in performance shares
     granted  on  account of cash  dividends  which may be paid or other  rights
     which may be issued to the holders of Common  Stock prior to the end of any
     period for which performance objectives were established.

          9.4 Expiration of Performance  Share. If any participant's  employment
     or  consulting  engagement  with the Company is  terminated  for any reason
     other than normal retirement,  death or disability prior to the achievement
     of the participant's stated performance  objectives,  all the participant's
     rights  on  the  performance  shares  shall  expire  and  terminate  unless
     otherwise  determined  by the  Committee.  In the event of  termination  of
     employment  or  consulting  by  reason  of  death,  disability,  or  normal
     retirement,  the  Committee,  in its  own  discretion  may  determine  what
     portions,  if  any,  of  the  performance  shares  should  be  paid  to the
     participant.

10.  General.

          10.1 Effective  Date. The Plan will become  effective upon approval by
     the Company's  board of  directors;  and the ability of the Company to make
     grants of incentive  stock options  hereunder  will become  effective  upon
     approval of the Company's  shareholders within one year of the date of this
     Plan's adoption by the Board.

          10.2  Duration.  The Plan shall remain in effect until all  Incentives
     granted under the Plan have either been satisfied by the issuance of shares
     of Common  Stock or the payment of cash or have been  terminated  under the
     terms of the Plan and all restrictions imposed on shares of Common Stock in
     connection  with their issuance  under the Plan have lapsed.  No Incentives
     may be granted under the Plan after the tenth  anniversary  of the date the
     Plan is approved by the shareholders of the Company.

          10.3   Non-Transferability  of  Incentives.   No  stock  option,  SAR,
     restricted  stock or  performance  award  may be  transferred,  pledged  or
     assigned by the holder thereof (except, in the event of the holder's death,
     by will or the laws of  descent  and  distribution  to the  limited  extent
     provided in the Plan or the Incentive), or pursuant to a qualified domestic
     relations  order  as  defined  by the  Code  or  Title  I of  the  Employee
     Retirement  Income Security Act, or the rules

                                       7
<PAGE>

     thereunder,  and  the  Company  shall  not be  required  to  recognize  any
     attempted assignment of such rights by any participant. Notwithstanding the
     preceding sentence,  stock options may be transferred by the holder thereof
     to Employee's spouse, children, grandchildren or parents (collectively, the
     "Family  Members"),  to  trusts  for the  benefit  of  Family  Members,  to
     partnerships or limited liability companies in which Family Members are the
     only partners or  shareholders,  or to entities  exempt from federal income
     taxation  pursuant  to  Code  Section  501(c)(3).  During  a  participant's
     lifetime, a stock option may be exercised only by him or her, by his or her
     guardian or legal  representative  or by the  transferees  permitted by the
     preceding sentence

          10.4 Effect of Termination  or Death.  In the event that a participant
     ceases  to  be  an  employee  of or  consultant  to  the  Company,  or  the
     participant's other service with the Company is terminated, for any reason,
     including  death,  any  Incentives may be exercised or shall expire at such
     times as may be determined  by the Committee in its sole  discretion in the
     agreement evidencing an Incentive.  Notwithstanding the other provisions of
     this Section 10.4, upon a participant's  termination of employment or other
     service with the Company and all  subsidiaries,  the Committee  may, in its
     sole discretion (which may be exercised at any time on or after the date of
     grant,  including  following such termination),  cause options and SARs (or
     any part  thereof) then held by such  participant  to become or continue to
     become exercisable and/or remain exercisable  following such termination of
     employment or service and restricted stock awards,  performance  shares and
     stock awards then held by such  participant to vest and/or continue to vest
     or become free of transfer restrictions, as the case may be, following such
     termination of employment or service, in each case in the manner determined
     by  the  Committee;   provided,  however,  that  no  Incentive  may  remain
     exercisable or continue to vest beyond its  expiration  date. Any incentive
     stock  option that  remains  unexercised  more than one (1) year  following
     termination  of  employment  by reason of death or  disability or more than
     three (3) months  following  termination for any reason other than death or
     disability will thereafter be deemed to be a non-statutory stock option.

          10.5 Additional Conditions.  Notwithstanding  anything in this Plan to
     the  contrary:  (a) the Company may, if it shall  determine it necessary or
     desirable  for any  reason,  at the time of award of any  Incentive  or the
     issuance of any shares of Common Stock pursuant to any  Incentive,  require
     the recipient of the Incentive, as a condition to the receipt thereof or to
     the receipt of shares of Common Stock issued pursuant  thereto,  to deliver
     to the Company a written representation of present intention to acquire the
     Incentive or the shares of Common Stock issued pursuant  thereto for his or
     her own account for investment and not for distribution;  and (b) if at any
     time the  Company  further  determines,  in its sole  discretion,  that the
     listing,  registration  or  qualification  (or  any  updating  of any  such
     document) of any Incentive or the shares of Common Stock issuable  pursuant
     thereto is  necessary  on any  securities  exchange or under any federal or
     state  securities law, or that the consent or approval of any  governmental
     regulatory  body  is  necessary  or  desirable  as a  condition  of,  or in
     connection  with the  award of any  Incentive,  the  issuance  of shares of
     Common Stock pursuant thereto,  or the removal of any restrictions  imposed
     on such  shares,  such  Incentive  shall not be awarded  or such  shares of
     Common Stock shall not be issued or such restrictions shall not be removed,
     as the case may be, in whole or in part, unless such listing, registration,
     qualification,  consent or  approval  shall have been  effected or obtained
     free of any conditions  unacceptable  to the Company.  Notwithstanding  any
     other provision of the Plan or any agreements  entered into pursuant to the
     Plan,  the Company will not be required to issue any shares of Common Stock
     under  this Plan,  and a  participant  may not sell,  assign,  transfer  or
     otherwise  dispose  of  shares  of  Common  Stock  issued  pursuant  to any
     Incentives  granted  under the  Plan,  unless  (a) there is in effect  with
     respect to such shares a registration statement under the Securities Act of
     1933,  as amended  (the  "Securities  Act"),  and any  applicable  state or
     foreign  securities laws or an exemption from such  registration  under the
     Securities Act and  applicable

                                       8
<PAGE>

     state or foreign securities laws, and (b) there has been obtained any other
     consent,  approval  or permit  from any  other  regulatory  body  which the
     Committee,  in its sole  discretion,  deems  necessary  or  advisable.  The
     Company may condition such  issuance,  sale or transfer upon the receipt of
     any  representations  or  agreements  from the  parties  involved,  and the
     placement  of any  legends on  certificates  representing  shares of Common
     Stock,  as may be deemed  necessary or advisable by the Company in order to
     comply with such securities law or other restrictions.

          10.6 Adjustment. In the event of any recapitalization, stock dividend,
     stock split, combination of shares or other change in the Common Stock, the
     number of shares of Common Stock then subject to the Plan, including shares
     subject to  restrictions,  options or achievements  of performance  shares,
     shall be  adjusted in  proportion  to the change in  outstanding  shares of
     Common Stock. In the event of any such  adjustments,  the purchase price of
     any option, the performance objectives of any Incentive,  and the shares of
     Common Stock issuable pursuant to any Incentive shall be adjusted as and to
     the extent  appropriate,  in the  discretion of the  Committee,  to provide
     participants   with  the  same  relative   rights  before  and  after  such
     adjustment.

          10.7  Incentive  Plans  and  Agreements.  Except  in the case of stock
     awards or cash  awards,  the terms of each  Incentive  shall be stated in a
     plan or  agreement  approved  by the  Committee.  The  Committee  may  also
     determine to enter into agreements with holders of options to reclassify or
     convert  certain  outstanding  options,  within  the terms of the Plan,  as
     Incentive Stock Options or as  non-statutory  stock options and in order to
     eliminate  SARs with  respect to all or part of such  options and any other
     previously issued options.

          10.8 Withholding.

               (a) The Company  shall have the right to (i)  withhold and deduct
          from any  payments  made  under the Plan or from  future  wages of the
          participant  (or from other  amounts  that may be due and owing to the
          participant from the Company or a subsidiary of the Company),  or make
          other arrangements for the collection of, all legally required amounts
          necessary  to satisfy any and all  foreign,  federal,  state and local
          withholding and employment-related tax requirements attributable to an
          Incentive,  or (ii)  require  the  participant  promptly  to remit the
          amount of such  withholding  to the Company  before taking any action,
          including  issuing  any  shares of Common  Stock,  with  respect to an
          Incentive.  At any time when a  participant  is required to pay to the
          Company an amount required to be withheld under applicable  income tax
          laws  in  connection  with a  distribution  of  Common  Stock  or upon
          exercise  of an  option  or SAR,  the  participant  may  satisfy  this
          obligation  in whole or in part by electing (the  "Election")  to have
          the Company  withhold  from the  distribution  shares of Common  Stock
          having a value up to the amount required to be withheld.  The value of
          the shares to be withheld  shall be based on the Fair Market  Value of
          the  Common  Stock on the date that the  amount of tax to be  withheld
          shall be determined (the "Tax Date").

               (b) The Committee may disapprove of any Election,  may suspend or
          terminate the right to make Elections,  or may provide with respect to
          any Incentive that the right to make Elections shall not apply to such
          Incentive. An Election is irrevocable.

               (c) If a participant is a Company  officer or director within the
          meaning of Section 16 of the Exchange Act, then an Election is subject
          to the following  additional  restrictions:  (a) no Election  shall be
          effective  for a Tax Date  which  occurs  within six (6) months of the
          grant or exercise of the award,  except that this limitation shall not
          apply in the event death or disability of the participant occurs prior
          to the expiration of the six-

                                       9
<PAGE>

          month  period;  and (b) the  Election  must be made  either six months
          prior to the Tax Date or must be made during a period beginning on the
          third  business day following the date of release for  publication  of
          the  Company's  quarterly or annual  summary  statements  of sales and
          earnings and ending on the twelfth business day following such date.

          10.9 No Continued Employment, Engagement or Right to Corporate Assets.
     No participant  under the Plan shall have any right,  because of his or her
     participation,  to  continue in the employ of the Company for any period of
     time or to any right to  continue  his or her  present or any other rate of
     compensation. Nothing contained in the Plan shall be construed as giving an
     employee, a consultant, such persons' beneficiaries or any other person any
     equity or  interests of any kind in the assets of the Company or creating a
     trust of any kind or a  fiduciary  relationship  of any  kind  between  the
     Company and any such person.

          10.10  Deferral  Permitted.  Payment  of cash or  distribution  of any
     shares  of  Common  Stock to which a  participant  is  entitled  under  any
     Incentive  shall  be made as  provided  in the  Incentive.  Payment  may be
     deferred at the option of the participant if provided in the Incentive.

          10.11  Amendment  of  the  Plan.  The  Board  may  amend,  suspend  or
     discontinue the Plan at any time; provided,  however, that no amendments to
     the Plan will be  effective  without  approval of the  shareholders  of the
     Company if shareholder  approval of the amendment is then required pursuant
     to Section 422 of the Code or the rules of any stock  exchange or Nasdaq or
     similar  regulatory  body. No  termination,  suspension or amendment of the
     Plan may adversely affect any outstanding  Incentive without the consent of
     the affected  participant;  provided,  however, that this sentence will not
     impair  the  right  of the  Committee  to take  whatever  action  it  deems
     appropriate under Section 10.6 of the Plan.

          10.12 Merger, Sale, Exchange or Liquidation. Unless otherwise provided
     in the agreement for an Incentive,  in the event of an  acquisition  of the
     Company through the sale of  substantially  all of the Company's  assets or
     through a merger, exchange, reorganization or liquidation of the Company or
     a  similar  event  as  determined   by  the   Committee   (collectively   a
     "transaction"),  the Committee shall be authorized, in its sole discretion,
     to take any and all  action it deems  equitable  under  the  circumstances,
     including but not limited to any one or more of the following:

               (a) providing  that the Plan and all Incentives  shall  terminate
          and the holders of (i) all  outstanding  vested options shall receive,
          in lieu of any  shares of  Common  Stock  they  would be  entitled  to
          receive  under  such  options,  such  stock,   securities  or  assets,
          including cash, as would have been paid to such  participants if their
          options had been exercised and such  participant  had received  Common
          Stock   immediately   prior  to  such  transaction  (with  appropriate
          adjustment for the exercise price, if any),  (ii)  performance  shares
          and/or SARs that entitle the participant to receive Common Stock shall
          receive,  in lieu of any shares of Common Stock each  participant  was
          entitled to receive as of the date of the transaction  pursuant to the
          terms of such  Incentive,  if any,  such stock,  securities or assets,
          including  cash, as would have been paid to such  participant  if such
          Common  Stock  had  been  issued  to  and  held  by  the   participant
          immediately prior to such  transaction,  and (iii) any Incentive under
          this  Agreement  which does not  entitle  the  participant  to receive
          Common  Stock  shall  be  equitably   treated  as  determined  by  the
          Committee;

                                       10
<PAGE>

               (b) providing that participants holding outstanding vested Common
          Stock based  Incentives  shall receive,  with respect to each share of
          Common Stock issuable  pursuant to such Incentives as of the effective
          date of any such  transaction,  at the determination of the Committee,
          cash,  securities or other property, or any combination thereof, in an
          amount  equal to the excess,  if any, of the Fair Market Value of such
          Common Stock on a date within ten days prior to the effective  date of
          such  transaction  over the  option  price or other  amount  owed by a
          participant,  if any,  and that such  Incentives  shall be  cancelled,
          including the cancellation  without  consideration of all options that
          have an exercise price below the per share value of the  consideration
          received by the Company in the transaction;

               (c) providing that the Plan (or replacement  plan) shall continue
          with  respect to  Incentives  not  cancelled or  terminated  as of the
          effective date of such transaction and provide to participants holding
          such  Incentives  the right to earn their  respective  Incentives on a
          substantially  equivalent  basis (taking into account the  transaction
          and the  number  of shares or other  equity  issued by such  successor
          entity)  with  respect  to the  equity of the  entity  succeeding  the
          Company by reason of such transaction; or

               (d)  providing   that  all   unvested,   unearned  or  restricted
          Incentives,  including but not limited to  restricted  stock for which
          restrictions  have  not  lapsed  as of  the  effective  date  of  such
          transaction,   shall  be  void  and  deemed  terminated,  or,  in  the
          alternative, for the acceleration or waiver of any vesting, earning or
          restrictions on any Incentive.

          The Board may restrict the rights of participants or the applicability
     of this Section 10.12 to the extent  necessary to comply with Section 16(b)
     of the Securities  Exchange Act of 1934,  the Code or any other  applicable
     law or  regulation.  The grant of an Incentive  award  pursuant to the Plan
     shall  not  limit in any way the  right or  power  of the  Company  to make
     adjustments,  reclassifications,  reorganizations or changes of its capital
     or business structure or to merge,  exchange or consolidate or to dissolve,
     liquidate, sell or transfer all or any part of its business or assets.

          10.13  Definition of Fair Market Value. For purposes of this Plan, the
     "Fair Market  Value" of a share of Common Stock at a specified  date shall,
     unless otherwise  expressly  provided in this Plan, be the amount which the
     Committee or the Company's  board of directors  determines in good faith in
     the exercise of its reasonable  discretion to be one hundred percent (100%)
     of the  fair  market  value  of such a share  as of the  date in  question;
     provided,  however, that notwithstanding the foregoing,  if such shares are
     listed on a U.S.  securities  exchange or are quoted on the Nasdaq National
     Market   System,   Nasdaq   SmallCap  Stock  Market   ("Nasdaq"),   or  the
     Over-The-Counter  Bulletin Board ("OTCBB"), then Fair Market Value shall be
     determined  by  reference to the last sale price of a share of Common Stock
     on such U.S.  securities  exchange or Nasdaq, or the average of the bid and
     ask price on the OTCBB,  on the  applicable  date. If such U.S.  securities
     exchange  or Nasdaq is closed for  trading  on such date,  or if the Common
     Stock does not trade on such  date,  then the last sale price used shall be
     the one on the date the Common  Stock last  traded on such U.S.  securities
     exchange or Nasdaq.

          10.14  Breach  of  Confidentiality,   Assignment  of  Inventions,   or
     Non-Compete  Agreements.  Notwithstanding  anything  in  the  Plan  to  the
     contrary, in the event that a participant  materially breaches the terms of
     any  confidentiality,  assignment-of-inventions,  or  noncompete  agreement
     entered into with the Company or any parent or  subsidiary  of the Company,
     whether  such  breach   occurs   before  or  after   termination   of  such
     participant's   employment  or  other  service  with  the  Company  or  any
     subsidiary,  the Committee in its sole discretion may immediately terminate
     all rights of the participant under the Plan and any agreements  evidencing
     an Incentive then held by the participant without notice of any kind.

                                       11
<PAGE>

          10.15  Governing  Law.  The  validity,  construction,  interpretation,
     administration  and  effect  of the Plan  and any  rules,  regulations  and
     actions relating to the Plan will be governed by and construed  exclusively
     in accordance with the laws of the State of Minnesota,  notwithstanding the
     conflicts-of-law principles of Minnesota or any other jurisdiction.

          10.16 Successors and Assigns.  The Plan will be binding upon and inure
     to the benefit of the successors  and permitted  assigns of the Company and
     the participants in the Plan.

                                       12

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