Document:

Exhibit 10.45

                      INTEGRATED INFORMATION SYSTEMS, INC.
                      2002 BROAD-BASED STOCK INCENTIVE PLAN

ARTICLE 1
                                     PURPOSE

     1.1 GENERAL. The purpose of the Integrated Information Systems, Inc. 2002
Broad-Based Stock Incentive Plan (the "Plan") is to promote the success and
enhance the value of Integrated Information Systems, Inc. (the "Company") by
linking the personal interests of its employees, officers, and executives of the
Company to those of Company stockholders and by providing such individuals with
an incentive for outstanding performance in order to generate superior returns
to stockholders of the Company. The Plan is intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services of
employees, officers, and executives of the Company upon whose judgment,
interest, and special effort the successful conduct of the Company's operation
is largely dependent. This Plan is further intended to qualify as a
"broadly-based" plan under the National Association of Securities Dealers,
Inc.'s Marketplace Rules for purposes of the exception to shareholder approval
requirements.

ARTICLE 2
                             EFFECTIVE DATE AND TERM

     2.1 EFFECTIVE DATE. The Plan is effective as of January 1, 2002 (the
"Effective Date").

     2.2 TERM. The Plan shall expire on, and no additional Awards may be issued
after, the tenth anniversary of the Effective Date. Any Awards that are
outstanding on the tenth anniversary of the Effective Date shall remain in force
according to the terms of the Award Agreement.

ARTICLE 3
                          DEFINITIONS AND CONSTRUCTION

     3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:

          (a) "Award" means any Option or Restricted Stock Award granted to a
     Participant under the Plan.

          (b) "Award Agreement" means any written agreement, contract, or other
     instrument or document evidencing an Award.

          (c) "Board" means the Board of Directors of the Company.

          (d) "Cause" means (except as otherwise provided in an Award Agreement)
     if the Board, in its reasonable and good faith discretion, determines that
     the employee, consultant

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2002 Broad-Based Stock Incentive Plan
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     or advisor (i) has developed or pursued interests substantially adverse to
     the Company, (ii) materially breached any employment, engagement,
     confidentiality, non-competition/non-solicitation or similar agreement, or
     other agreement or otherwise failed to satisfactorily discharge his or her
     duties, (iii) has not devoted all or substantially all of his or her
     business time, effort and attention to the affairs of the Company (or such
     lesser amount as has been agreed to in writing by the Company), (iv) is
     convicted of a felony involving moral turpitude, or (v) has engaged in
     activities or omissions that are detrimental to the well-being of the
     Company. If, subsequent to a Participant's termination of employment or
     services, it is discovered that such Participant's employment or services
     could have been terminated for Cause, the Participant's employment or
     services shall, at the election of the Board, in its sole discretion, be
     deemed to have been terminated for Cause retroactively to the date the
     events giving rise to Cause occurred.

          (e) "Change of Control" means and includes each of the following
     (except as otherwise provided in an Award Agreement):

               (1) there shall be consummated any consolidation or merger of the
          Company in which the Company is not the continuing or surviving
          entity, or pursuant to which Stock would be converted into cash,
          securities or other property, other than a merger of the Company in
          which the holders of the Company's Stock immediately prior to the
          merger either (A) have the same proportionate ownership of beneficial
          interest of common stock or other voting securities of the surviving
          entity immediately after the merger or (B) own, in the aggregate, at
          least a majority of the outstanding shares of capital stock of the
          combined entity immediately after the merger.

               (2) there shall be consummated any sale, lease, exchange or other
          transfer (in one transaction or a series of related transactions) of
          assets aggregating more than 50% of the assets of the Company and its
          subsidiaries (taken as a whole), other than pursuant to a
          sale-leaseback, structured finance or other form of financing
          transaction;

               (3) the stockholders of the Company shall approve any plan or
          proposal for liquidation or dissolution of the Company; or

               (4) any person (as such term is used in Section 13(d) and
          14(d)(2) of the Exchange Act), other than any current stockholder of
          the Company or affiliate thereof or any employee benefit plan of the
          Company or any subsidiary of the Company or any entity holding shares
          of capital stock of the Company for or pursuant to the terms of any
          such employee benefit plan in its role as an agent or trustee for such
          plan, shall become the beneficial owner (within the meaning of Rule
          13d-3 under the Exchange Act) of 20% or more of the Company's
          outstanding Stock, unless approved in advance of such acquisition by
          the Board.

          (f) "Code" means the Internal Revenue Code of 1986, as amended.

          (g) "Committee" means the committee of the Board described in Article
     4.

          (h) "Disability" shall mean (unless otherwise defined in an employment
     agreement between the Company or any of its Subsidiaries and the
     Participant or in the Participant's Award Agreement) any illness or other
     physical or mental condition of a Participant

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     which renders the Participant incapable of performing his customary and
     usual duties for the Company, or any medically determinable illness or
     other physical or mental condition resulting from a bodily injury, disease
     or mental disorder which in the judgment of the Committee is permanent and
     continuous in nature. The Committee may require such medical or other
     evidence as it deems necessary to judge the nature and permanency of the
     Participant's condition.

          (i) "Director" means a member of the Board.

          (j) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended.

          (k) "Fair Market Value" means with respect to Stock or any other
     property, the fair market value of such Stock or other property as
     determined by the Board in its discretion, under one of the following
     methods: (i) the average of the closing bid and asked prices for the Stock
     as reported on the Nasdaq National Market (or any national securities
     exchange on which the Stock is then listed) for that date or, if no prices
     are so reported for that date, such prices on the next preceding date for
     which closing bid and asked prices were reported; or (ii) the price as
     determined by such methods or procedures as may be established from time to
     time by the Board.

          (l) "Non-Employee Director" means a member of the Board who qualifies
     as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange
     Act, or any successor definition adopted by the Board.

          (m) "Non-Qualified Stock Option" means an Option that is not intended
     to be an incentive stock option as defined in Section 422 of the Code or
     any successor provision thereto.

          (n) "Officer" means an employee of the Company or any Subsidiary who
     is an "officer" as defined in Rule 16a-1(f) promulgated under the Exchange
     Act or any successor provision thereto.

          (o) "Option" means a right granted to a Participant under Article 7 to
     purchase Stock at a specified price during specified time periods. All
     Options granted under this Plan are Non-Qualified Stock Options.

          (p) "Participant" means a person who, as an employee, officer, or
     executive of, or consultant or advisor providing services to, the Company
     or any Subsidiary, has been granted an Award under the Plan.

          (q) "Plan" means the Integrated Information Systems, Inc. 2001
     Broad-Based Stock Incentive Plan.

          (r) "Restricted Stock Award" means Stock granted to a Participant
     under Article 8 that is subject to certain restrictions and to risk of
     forfeiture.

          (s) "Securities Act" means the Securities Act of 1933, as amended.

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2002 Broad-Based Stock Incentive Plan
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          (t) "Stock" means the common stock of the Company and such other
     securities of the Company that may be substituted for Stock pursuant to
     Article 10.

          (u) "Subsidiary" means any corporation or other entity of which a
     majority of the outstanding voting stock or voting power is beneficially
     owned directly or indirectly by the Company.

                                   ARTICLE 4
                                 ADMINISTRATION

     4.1 COMMITTEE. The Plan shall be administered by the Board of Directors or,
to the extent required to comply with Rule 16b-3 promulgated under the Exchange
Act, a Committee that is appointed by, and serves at the discretion of, the
Board. Any Committee shall consist of at least two individuals who are members
of the Board and are Non-Employee Directors, except as may be otherwise
permitted under Section 16 of the Exchange Act and the regulations and rules
promulgated thereunder. For purposes of this Plan, reference to the Board shall
refer to the Board or the Committee, as the case may be. Reference to the
Committee shall refer to the Board if the Board does not appoint a Committee.

     4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present, and acts approved in writing by a majority of the Committee
in lieu of a meeting, shall be deemed the acts of the Committee. Each member of
the Committee is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of
the Company or any Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.

     4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the Plan
and to Section 4.4 below, the Committee has the exclusive power, authority and
discretion to:

          (a)  Designate Participants to receive Awards;

          (b) Determine the type or types of Awards to be granted to each
     Participant;

          (c) Determine the number of Awards to be granted and the number of
     shares of Stock to which an Award will relate;

          (d) Determine the terms and conditions of any Award granted under the
     Plan including but not limited to, the exercise price, grant price, or
     purchase price, any restrictions or limitations on the Award, any
     provisions related to non-competition or non-solicitation and recapture of
     gain on an Award, any schedule for lapse of forfeiture restrictions or
     restrictions on the exercisability of an Award, and accelerations or
     waivers thereof, based in each case on such considerations as the Committee
     in its sole discretion determines;

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          (e) Amend, modify, or terminate any outstanding Award, with the
     Participant's consent unless the Committee has the authority to amend,
     modify, or terminate an Award without the Participant's consent under any
     other provision of the Plan;

          (f) Determine whether, to what extent, and under what circumstances an
     Award may be settled in, or the exercise price of an Award may be paid in,
     cash, Stock, other Awards, or other property, or an Award may be canceled,
     forfeited, or surrendered;

          (g) Prescribe the form of each Award Agreement, which need not be
     identical for each Participant;

          (h) Decide all other matters that must be determined in connection
     with an Award;

          (i) Establish, adopt, or revise any rules and regulations as it may
     deem necessary or advisable to administer the Plan;

          (j) Interpret the terms of, and any matter arising under, the Plan or
     any Award Agreement; and

          (k) Make all other decisions and determinations that may be required
     under the Plan or as the Committee deems necessary or advisable to
     administer the Plan.

     4.4 CEO GRANTS. The Company's Chief Executive Officer has the same power,
authority and discretion as the Committee under Section 4.3 to grant Awards
pursuant to which a maximum of 500,000 shares of Stock may be awarded to any one
individual; provided that the recipients of such Awards are not Officers or
Directors (other than Non-Employee Directors). When the Chief Executive Officer
is acting as the Committee under this Plan, references in the Plan to the
Committee will be deemed to refer to the Chief Executive Officer.

     4.5 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.

                                   ARTICLE 5
                           SHARES SUBJECT TO THE PLAN

     5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 10.1, the
aggregate number of shares of Stock reserved and available for grant under the
Plan shall be 6,000,000.

     5.2 LAPSED AWARDS. To the extent that an Award terminates, expires, or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan.

     5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.

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     5.4 BROADLY-BASED PLAN REQUIREMENTS. At least a majority of the shares of
Stock awarded under this Plan (or shares of Stock underlying Options awarded
under this Plan) during the shorter of (i) the three-year period commencing on
the date the Plan is adopted by the Company, and then on each anniversary
thereafter during the term of the Plan, or (ii) the term of the Plan, shall be
made to employees of the Company who are not Officers or Directors.

                                   ARTICLE 6
                          ELIGIBILITY AND PARTICIPATION

     6.1 ELIGIBILITY.

          (a) GENERAL. Persons eligible to participate in this Plan include all
     employees, Officers, and executives of the Company or a Subsidiary, as
     determined by the Committee.

          (b) FOREIGN PARTICIPANTS. In order to assure the viability of Awards
     granted to Participants employed in foreign countries, the Committee may
     provide for such special terms as it may consider necessary or appropriate
     to accommodate differences in local law, tax policy, or custom. Moreover,
     the Committee may approve such supplements to, or amendments, restatements,
     or alternative versions of the Plan as it may consider necessary or
     appropriate for such purposes without thereby affecting the terms of the
     Plan as in effect for any other purpose; provided, however, that no such
     supplements, amendments, restatements, or alternative versions shall
     increase the share limitations contained in Section 5.1 of the Plan.

     6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award; provided, however, that the Plan is intended to be a
broadly-based plan and, therefore, participation in the Plan must satisfy the
requirements of Section 5.4 such that less than 50% of the shares of Stock
awarded or underlying Options awarded under this Plan shall be made to Officers
and Directors (whether or not employees). No individual shall have any right to
be granted an Award under this Plan.

                                   ARTICLE 7
                                  STOCK OPTIONS

     7.1 GENERAL. The Committee is authorized to grant Options to Participants
on the following terms and conditions:

          (a) EXERCISE PRICE. The exercise price per share of Stock under an
     Option shall be determined by the Committee and set forth in the Award
     Agreement. It is the intention under the Plan that the exercise price for
     any Option shall not be less than the Fair Market Value as of the date of
     grant; provided, however that the Committee may, in its discretion, grant
     Options with an exercise price of less than Fair Market Value on the date
     of grant.

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          (b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the
     time or times at which an Option may be exercised in whole or in part. The
     Committee shall also determine the performance or other conditions, if any,
     that must be satisfied before all or part of an Option may be exercised.
     Unless otherwise provided in an Award Agreement, an Option will lapse
     immediately if a Participant's employment or services are terminated for
     Cause.

          (c) PAYMENT. The Committee shall determine the methods by which the
     exercise price of an Option may be paid, the form of payment, including,
     without limitation, cash, promissory note, shares of Stock (through actual
     tender or by attestation), or other property (including broker-assisted
     "cashless exercise" arrangements), and the methods by which shares of Stock
     shall be delivered or deemed to be delivered to Participants.

          (d) EVIDENCE OF GRANT. All Options shall be evidenced by a written
     Award Agreement between the Company and the Participant. The Award
     Agreement shall include such additional provisions as may be specified by
     the Committee.

                                   ARTICLE 8
                             RESTRICTED STOCK AWARDS

     8.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards
of Restricted Stock to Participants in such amounts and subject to such terms
and conditions as determined by the Committee. All Awards of Restricted Stock
shall be evidenced by an Award Agreement.

     8.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.

     8.3 FORFEITURE. Except as otherwise determined by the Committee at the time
of the grant of the Award or thereafter, upon termination of employment during
the applicable restriction period, Restricted Stock that is at that time subject
to restrictions shall be forfeited, provided, however, that the Committee may
provide in any Award Agreement that restrictions or forfeiture conditions
relating to Restricted Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee may in other
cases waive in whole or in part restrictions or forfeiture conditions relating
to Restricted Stock.

     8.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

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                                   ARTICLE 9
                         PROVISIONS APPLICABLE TO AWARDS

     9.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in
the discretion of the Committee, be granted either alone, in addition to, or in
tandem with, any other Award granted under the Plan. Awards granted in addition
to or in tandem with other Awards may be granted either at the same time as or
at a different time from the grant of such other Awards.

     9.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange or
buy out any previously granted Award for a payment in cash, Stock, or another
Award, based on the terms and conditions the Committee determines and
communicates to the Participant at the time the offer is made.

     9.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee.

     9.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, promissory note, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.

     9.5 LIMITS ON TRANSFER. No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company or a
Subsidiary. Except as otherwise provided by the Committee, no Award shall be
assignable or transferable by a Participant other than by will or the laws of
descent and distribution.

     9.6 BENEFICIARIES. Notwithstanding Section 9.5, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50%
of the Participant's interest in the Award shall not be effective without the
written consent of the Participant's spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.

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2002 Broad-Based Stock Incentive Plan
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     9.7 STOCK CERTIFICATES. Notwithstanding anything herein to the contrary,
the Company shall not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Awards, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded. All Stock
certificates delivered under the Plan are subject to any stop-transfer orders
and other restrictions as the Committee deems necessary or advisable to comply
with Federal, state, or foreign jurisdiction, securities or other laws, rules
and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements.

     9.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control occurs,
all outstanding Options and other Awards shall become fully exercisable and all
restrictions on outstanding Awards shall lapse, unless such Options and Awards
are assumed on substantially similar terms as to vesting and exercise price (as
adjusted for the Change in Control event) by the acquiring person or entity.
Upon, or in anticipation of, such an event, the Committee may cause every Award
outstanding hereunder to terminate at a specific time in the future and shall
give each Participant the right to exercise Awards during a period of time as
the Committee, in its sole and absolute discretion, shall determine.

                                   ARTICLE 10
                          CHANGES IN CAPITAL STRUCTURE

     10.1 GENERAL. In the event a stock dividend is declared upon the Stock, the
shares of Stock then subject to each Award (and the number of shares subject
thereto) shall be increased proportionately without any change in the aggregate
purchase price therefor. Subject to Section 9.8, in the event the Stock shall be
changed into or exchanged for a different number or class of shares of Stock or
of shares of another corporation, whether through reorganization,
recapitalization, stock split-up or combination of shares, there shall be
substituted for each such share of Stock then subject to each Award (and for
each share of Stock then subject thereto) the number and class of shares of
Stock into which each outstanding share of Stock shall be so exchanged, all
without any change in the aggregate purchase price for the shares then subject
to each Award.

                                   ARTICLE 11
                    AMENDMENT, MODIFICATION, AND TERMINATION

     11.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan; provided, however, that if required to comply with any
applicable law, regulation, or stock exchange rule, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.

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2002 Broad-Based Stock Incentive Plan
February 20, 2002 - Page 10

     11.2 AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the Plan,
including without limitation, the provisions of Article 10, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant.

                                   ARTICLE 12
                               GENERAL PROVISIONS

     12.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person shall
have any claim to be granted any Award under the Plan, and neither the Company
nor the Committee is obligated to treat Participants, employees, and other
persons uniformly.

     12.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.

     12.3 WITHHOLDING. The Company or any Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan. With the
Committee's consent, a Participant may elect to have the Company withhold from
those Stock that would otherwise be received upon the exercise of any Option, a
number of shares having a Fair Market Value equal to the minimum statutory
amount necessary to satisfy the Company's applicable federal, state, local and
foreign income and employment tax withholding obligations.

     12.4 NO RIGHT TO EMPLOYMENT. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.

     12.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an "unfunded"
plan for incentive compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give the Participant any rights that are greater than those of a
general creditor of the Company or any Subsidiary.

     12.6 INDEMNIFICATION. To the extent allowable under applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, 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 or failure to act under
the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her
provided he or she gives 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

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2002 Broad-Based Stock Incentive Plan
February 20, 2002 - Page 11

persons may be entitled under the Company's Certificate of Incorporation or
By-Laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

     12.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.

     12.8 EXPENSES. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.

     12.9 TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.

     12.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.

     12.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on the
relevant date, obligated to file reports under Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be void to the extent permitted by law and voidable as deemed advisable by
the Committee.

     12.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
make payment of awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by government agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act, any of the shares of Stock paid under the Plan. If the shares
paid under the Plan may in certain circumstances be exempt from registration
under the Securities Act, the Company may restrict the transfer of such shares
in such manner as it deems advisable to ensure the availability of any such
exemption.

     12.13 GOVERNING LAW. The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of Arizona.<PAGE>

                        SYNERGY TECHNOLOGIES CORPORATION
                             2002 STOCK OPTION PLAN

1.       DEFINITIONS

         The following terms when used in this Plan shall, except where the
context otherwise requires, have the following meanings:

         (a) The term "Act" shall mean the Securities Act 1933 as now in effect
or hereafter amended,

         (b) The term "Board" shall mean the Board of Directors of the
Corporation.

         (c) The Term "Code" shall mean the Internal Revenue Code of 1986 as now
in effect or hereafter amended.

         (d) The Term "Common Shares" shall mean the Common Shares, $0.002 par
value, of the Corporation (as hereinafter defined) or such other capital stock
as may hereafter be authorized and listed in lieu thereof,

         (e) The term "Corporation" shall mean SYNERGY TECHNOLOGIES CORPORATION,
a Nevada corporation, or any successor thereto.

         (f) The Term "Discharged for Cause" shall mean discharge for
dishonesty, theft, disclosing trade secrets of the Corporation or, if
hereinafter incorporated or acquired, any Subsidiary (as hereinafter defined),
entering into competition, directly or indirectly, with the Corporation or any
Subsidiary while employed, or using the Corporation's or any Subsidiary's
facilities or premises for the conduct of illegal or unlawful activities,
transactions or business.

         (g) The Term "Effective Date" shall mean the date upon which this Plan
becomes effective.

         (h) The term "Exchange Act" shall mean the Securities Exchange Act of
1934 as now in effect or hereafter amended.

         (h) The term "Incentive Stock Option" shall mean every Option (as
hereinafter defined) granted under the Plan (as hereinafter defined) which is
intended to qualify as an Incentive stack option pursuant to Section 422 of the
Code.

         (i) The term 'Non-Qualified Stock Option" shall mean every Option (as
hereinafter defined) granted under the Plan (as hereinafter defined) which is
not an Incentive Stock Option.

         (j) The term "Option" shall mean any right to purchase shares of Common
Stock to be granted under the Plan.

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         (l) The term "Option Price" shall mean the price at which a share of
Common Stock may be purchased upon exercise of an Option,

         (m) The term "Plan" shall mean the SYNERGY TECHNOLOGIES CORPORATION
2002 Stock Option Plan."

         (n) The term "Subsidiary" shall be defined in the same manner as the
term "subsidiary corporation" is defined in section 424(f) of the code.

         (o) The term "Warrant" shall mean any right to purchase shares of
common shares, such as is commonly called an option, warrant or right, which is
not granted under the Plan.

         (p) Any term used in the plan in the masculine gender shall include the
feminine gender or, in the case of a consultant or an advisor, the neuter
gender.

2.       ADMINISTRATION

         (a) The Plan shall be administered by the Compensation Committee of the
Board (hereinafter referred to as the "Committee") which shall consist of two or
more persons who shall be selected by and serve at the pleasure of the Board. In
the event that the Board has not appointed a Compensation Committee or at the
election of the Board, the Plan shall be administered by the Board.

         (b) The Committee or, if applicable, the Board, is authorized to
interpret the Plan and may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem best. The Committee or, if applicable,
the Board, may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent it shall deem
expedient to carry it into effect, and it shall be the sole and final judge of
such expediency. The determinations of the Committee or, if applicable, the
Board on the matters referred to in this paragraph 2 shall be conclusive.

         (c) Subject to the terms, provisions and conditions of the Plan, the
Committee or, if applicable, the board shall have exclusive jurisdiction (i) to
select the optionees to be granted options, (ii) to determine the number of
shares subject to each Option, (iii) to determine the time or times when the
Options will be granted, (iv) to determine the Option Price of the shares
subject to each Option, which Option Price may be higher than, or equal to, (or
less than) the fair market value of a share of the Common Shares on the
respective date of grant (except as provided in the succeeding sentence) and
shall be subject to adjustment as provided in paragraph 10 of the Plan, (v) to
determine the dates after which the Option may be exercised, in whole or in
part, and (vi) to prescribe the form, which shall be consistent with the Plan,
of the instruments evidencing any Options granted under the Plan. Any Options
granted under the Plan to an optionee shall be at the fair market value of a
share of the Common Shares on the respective date of grant and, if the optionee
on the date of grant is the beneficial owner of more than 10% of the outstanding
shares of the Common Shares, the exercise price of the Incentive Stock Option
shall be 110% of the fair market value of a share of the Common Shares on such
date.

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         In addition, anything in the Plan to the contrary notwithstanding, an
Incentive Stock Option shall be subject to such limitations on exercise or other
provisions as required by the Code or the regulations promulgated thereunder.

3.       GRANT OF OPTION

         (a) The aggregate number of shares as to which Options may be granted
pursuant to the Plan shall be 10,000,000 shares of the Common Shares, subject to
adjustment as provided in paragraph 10 hereof,

         (b) An optionee shall be granted an Option for such number of shares of
the Common Shares as may be determined by the Committee or, if applicable, the
Board. Nothing contained in the Plan shall be construed to preclude the granting
of an Option or Options to an optionee in addition to any Option or Options
already granted to him and in existence or in addition to any outstanding
Warrant owned by him, provided that in each event the optionee is eligible under
the provisions of paragraph 4 hereof. (An Option shall be Non-Qualified Stock
Option unless the optionee is an employee of the Corporation or a Subsidiary and
requests in writing that he be granted an Incentive Stock Option and the option
complies with all the other provisions of the Code.) An Incentive Stock Option
shall not be granted later than ten years from the tenth anniversary of the date
that the Plan is adopted by the holders of a majority of the outstanding shares
of the Common Shares.

         (c) Whenever any Option granted pursuant to the Plan terminates under
the terms hereof prior to exercise thereof, the Committee or, if applicable, the
Board may grant a new Option or Options with respect to such shares; provided,
however, that the Committee or, if applicable, the Board may not grant any such
Option if the effect of such grant would be to increase the number of shares
which may be issued upon exercise of Options granted under the Plan to more then
the amount provided in paragraph 3(a) hereof, subject to adjustment as provided
in paragraph 10 hereof.

4.       ELIGIBLE OPTIONEES

         Every key employee (including officers) of the Corporation or of any
Subsidiary (or any director of, or consultant or advisor to, the Corporation as
may be selected by the Committee or, if applicable, the Board) is eligible for
grant of an Option under the Plan, (except that, if the optionee is not an
employee of the Corporation or a Subsidiary, he may receive only a Non-Qualified
Stock Option and except that bona fide services shall be rendered by the
consultant or advisor and such services must not be in connection with the offer
or sale of securities in a capital raising transaction.

5.       EXERCISE OF OPTIONS

         (a) Except as provided in paragraphs 7 and 10 hereof, the Option shall
be exercisable, either in its entirety or in such installments (which may be
accumulated) as the resolution granting the Option of the Committee or, if
applicable, the Board shall provide.

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         Each optionee may exercise his Option with respect to all shares then
available for purchase or with respect to such lesser number of shares as he may
from time to time desire prior to the expiration or termination of the option.

         (b) Except as another date (whether later or earlier) for the
expiration or termination of the Option is provided in the resolution of the
Committee or, if applicable, the Board granting an Option, each Option shall
expire and become void, to the extent it has not theretofore been exercised, at
the close of business five (5) years from the date of grant; provided, however,
that no Option may be granted to expire more than ten (10) years from the date
of grant. An Incentive Stock Option granted to the beneficial owner of more than
10% of the outstanding shares of the Common Shares shall expire and become void,
to the extent that it has not theretofore been exercised, at the close of
business five (5) years from the date of grant.

6.       TERMINATION OF EMPLOYMENT OR DIRECTORSHIP

         An Option shall terminate and all rights thereunder shall cease upon
termination of the optionee's employment (or termination of his directorship or
consulting or advisory relationship) unless (a) such termination is by reason of
the optionee's death, in which event the provisions of paragraph 7(a) hereof
shall govern; (b) such termination is as a result of the optionee's disability
(as determined by the Committee or, if applicable, the Board) or his retirement
in accordance with the retirement policies of the Corporation or the Subsidiary
by which the optionee was employed ( or for which he served as a director,
consultant or advisor) in which event the provisions of paragraph 7(b) shall
govern; (c) such termination is for a reason other than Discharge for Cause and
under the terms of an employment, consulting or advisory agreement with the
Corporation and/or a Subsidiary such optionee was entitled to notice of
termination, in which event the provisions of paragraph 7(c) shall govern; (d)
such termination is for a reason other than Discharge for Cause, in which event
the provisions of paragraph 7(d) hereof shall govern; and (e) the Committee or,
if applicable, the Board otherwise provides when it grants the Option.

7.       RIGHTS TO EXERCISE OPTION IN EVENT OF DEATH OR OTHER TERMINATION
         OF EMPLOYMENT

         (a) If an optionee shall die while in the employ of the Corporation or
a Subsidiary, or within three (3) months after leaving the employ (because of
his retirement or disability as provided in paragraph 7(b) hereof (or if the
optionee shall die serving as a director of, or as a consultant or an advisor
to, the Corporation, or within three (3) months after such cessation of service
(because of his retirement or disability as provided in paragraph 6(b) hereof)
his Option may be exercised, whether or not such Option was exercisable by him
at the date of his death, by the person or persons to whom his rights under the
Option are transferred by will or by the laws of descent and distribution, or by
his legal representative(s), whichever shall be applicable, at any time or from
time to time for one (1) year after the earlier of his death or his cessation of
service as an employee, director, consultant or advisor

         (b) If an optionee shall retire or become disabled and leave the employ
of the Corporation and all of its Subsidiaries (or cease to be a director of, or
a consultant or an advisor to, the

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Corporation) for any such reasons as prescribed in paragraph 6(b) hereof, his
Option may be exercised by him, whether or not such Option was exercisable by
him at the date of his retirement or his ceasing to be an employee (director,
consultant or advisor) because of disability, at any time or from time to time
for three (3) months after the date of his retirement or his ceasing to be an
employee (director, consultant or advisor) because of disability.

         (c) In the event that, pursuant to the terms of an employment,
consulting or advisory agreement between the optionee and the Corporation and/or
a Subsidiary, such optionee shall be entitled to notice of termination of
employment and such optionee shall be terminated for a reason other than
Discharge for Cause, then such optionee may exercise his Option, whether or not
such Option was exercisable at the time of delivery of the notice of
termination, at any time or from time to time for thirty (30) days after
delivery of the notice,

         (d) In the event an optionee is discharged by the Corporation and/or a
Subsidiary for a reason other than Discharge for Cause or the optionee
voluntarily terminates his employment (directorship or consulting or advisory
arrangement) such optionee may exercise his Option only as to such shares as to
which the Option was exercisable at the date of his discharge or his voluntary
termination at any time or from time to time for thirty (30) days from the date
of his discharge or his termination of employment (directorship, or consulting
or advisory arrangement).

         (e) This paragraph 7 is subject to the provisions of paragraph 11
hereof.

8.       NON-TRANSFERABILITY OF OPTIONS

         (a) No Option shall be transferable otherwise than by will or by the
laws of descent and distribution, and each Option is exercisable during the
lifetime of an optionee only by him or, in the case of the optionee's certified
incompetency, by his duly authorized legal representative(s). Anything in the
foregoing to the contrary notwithstanding, an optionee may request that the
shares of the Common Shares to be issued upon the exercise of an Option be
issued in his and his spouse's name as joint tenants, with right of ownership.

         (b) No Options nor any rights of the optionee pursuant to his Option
shall be subject to pledge, hypothecation, execution, attachment or similar
process.

9.       EXERCISE OF OPTION AND PAYMENT FOR SHARES

         (a) There shall be an exercise of an Option upon receipt by the
Corporation, at its principal office, during the term of such Option of (i) a
written notice signed by the optionee advising of his exercise of such Option
with respect to a specified number of shares, the notice to be in such form and
to contain such provisions as may at the time be required by the Committee or,
if applicable, the Board, including representations which comply with paragraph
12 hereof and his commitment pursuant to paragraph 11 (b) hereof, and (ii)
payment in United States funds of the full purchase price of the shares covered
by the notice. A check, bank draft or money order will be accepted as payment
subject to collection, and stock certificates registered in the name of the
optionee for the shares of the Common Shares covered by such exercise will be
delivered in

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the ordinary course of business after such collection; provided that the
Corporation shall not be obligated to deliver any shares of the Common Shares
until there has been compliance with any federal or state law or regulations
which the Corporation may deem applicable. If a person or persons to whom the
rights of an optionee under an Option are transferred by will or by laws of
descent and distribution shall become entitled to exercise an Option as provided
in paragraph 7(a) hereof, or if the legal representative(s) of an optionee shall
become so entitled, references to the optionee in this paragraph 9 shall, except
where the context otherwise requires, be deemed to mean such person or persons
or such legal representative(s).

         (b) A person entitled to exercise an Option shall have none of the
rights of a shareholder with respect to shares subject to such Option until such
shares shall have been issued upon exercise of such Option,

         (c) Anything in paragraph 9(a) to the contrary notwithstanding an
optionee may, in lieu of payment by check, bank draft or money order, surrender
to the Corporation shares of the Common Shares having a fair market value on the
date of exercise at least equal to the product of the Option Price and the
number of shares of the Common Shares as to which the Option was exercised. For
the purpose of the foregoing calculation, the fair market value of a share of
the Common Shares shall be the mean of the high bid and the low asked prices
quoted on the date of exercise (i) in the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System if the Common Shares are traded in
the NASDAQ System; (ii) on the exchange on which the Common Shares are then
traded; or (iii) in the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. or in the pink sheets as reported by the National
Quotation Bureau, Inc., if not traded in the NASDAQ system or on an exchange.

10.      STOCK DIVIDEND CAPITAL CHANGES

         (a) In the event that the Corporation shall pay a stock dividend with
respect to, or affect a subdivision or combination of shares or a
reclassification of the Common Shares, the Board shall make such adjustments in
the number and kind of shares then subject to each Option and the Option Price
as it may deem appropriate to reflect such action, and such adjustment shall
take effect at such time and in such a manner as the Board may determine in its
discretion.

         (b) In the event of a complete or partial liquidation or reorganization
of the Corporation, including a merger, consolidation or sale or distribution of
assets, the Board may (i) make such adjustments, if any, as it may deem
appropriate in the provisions of any Option as to the Option Price and as to the
kind and number of shares or kind and amount properly deliverable upon exercise
of such Option, (ii) terminate any Option at, or prior to, the effective date of
the liquidation or reorganization, or (iii) provide in connection with the
liquidation or reorganization for the assumption of any Option by any surviving,
consolidated or successor corporation or corporations.

          (c) Notwithstanding any provisions of the Plan to the contrary, an
optionee shall have the right to exercise his Option in whole or in part as to
all shares then subject to the Option, whether or not such Option is otherwise
exercisable on such date, at any time subsequent to (i) the sale or transfer by
the Corporation of all or substantially all of its assets or the merger or
consolidation

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of the Corporation where the Corporation is not the surviving entity (other than
a transfer of assets to, or a merger or consolidation with, a Subsidiary, (ii)
the sale or transfer of shares of the Corporation by the Corporation and/or any
one or more of its shareholders, in one or more transactions, related or
unrelated, to one or more Persons under circumstances whereby any Person (as
such term is defined in the Exchange Act) and its Affiliates (as such term is
defined in the Exchange Act) shall own, after such sales and transfers, at least
one-fourth, but less than one-half, of the shares of the Corporation having
voting power for the election of directors, unless such sale or transfer has
been approved in advance by three-fourths of the directors of the Corporation
who have been directors of the Corporation for at least two years (or who have
been elected, or nominated for election by the shareholders of the Corporation,
by the directors who have so served), (iii) the sale or transfer of shares of
the Corporation by the Corporation and/or any one or more of its shareholders,
in one or more transactions, related or unrelated, to one or more Persons under
circumstances whereby any Person and its Affiliates shall own, after such sales
and transfers, at least one-half of the shares of the Corporation having voting
power for the election of directors, or (iv) the election of one or more
individuals to the Board which election results in one-third of the directors of
the Corporation consisting of individuals who have not been directors of the
Corporation for at least two years, unless such individuals have been elected as
directors, or nominated for election by the shareholders of the Corporation as
directors, by three-fourths of the directors of the Corporation who have been
directors of the Corporation for at least two years.

         Anything in subparagraph (i) of this paragraph 10(c) to the contrary
notwithstanding, the Corporation shall give notice to each optionee, at least
ten (10) days prior to the date of the meeting of shareholders called to approve
the sale by the Corporation of all or substantially all of its assets or the
merger or consolidation of the Corporation where it is not the survivor, of such
proposed sale, merger or consolidation and if, after such notice, the optionee
does not exercise the Option in its entirety on or prior to the effective date
of any such sale, merger or consolidation, then the Option, to the extent not so
exercised shall have no further force and effect unless the Board, in any such
merger or consolidation, has made provision for the corporation surviving the
merger or consolidation to assume the Option.

         For the purposes of this paragraph 10(c), "Person" shall mean an
individual, partnership, firm, trust, corporation or other similar entity. When
two or more Persons act as a partnership, limited partnership, syndicate, or
other group for the purpose of acquiring, holding, or disposing of securities of
the Corporation, such syndicate or group shall be deemed a "Person" within the
meaning of this paragraph 1 0(c). For the purpose of this paragraph 10(c),
"Affiliate" shall mean any Person that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, any Person.

11.      OTHER CONDITIONS

         (a) If at any time counsel to the Corporation shall be of the opinion
that any sale or delivery of shares of the Common Shares pursuant to the
exercise of any Option is or may be under the circumstances unlawful, the
Corporation shall have no obligation to make such sale or delivery, or to take
any action or refrain from taking any action to make such sale or delivery

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lawful, and the right to exercise any Option shall be suspended until, in the
opinion of counsel, such sale or delivery shall be lawful. Upon the termination
of any period of suspension under this paragraph, any Option affected by such
suspension which shall not then have expired or terminated shall be reinstated
as to all shares available for purchase before such suspension and as to shares
which would otherwise have become available for purchase during the period such
suspension, but no such suspension shall extend the term of any Option. If any
Option is deemed or declared void or unexercisable for any reason, no other
Options shall be thereby affected.

         (b) It shall also be a condition precedent to an optionee's right to
exercise an Option that he shall have entered into an arrangement with the
Corporation, in form and substance satisfactory to the Committee, or if
applicable, the Board, with respect to any applicable withholding tax
requirements.

12.      REPRESENTATIONS BY OPTIONEES

         (a) So long as a registration statement filed under the Act shall not
be effective with respect to the Plan, the optionee shall represent to the
Corporation, upon receipt of the Option, (i) that he is familiar with the
operations and financials status of the Corporation and, if hereinafter
incorporated or acquired, its Subsidiaries, (ii) that he is aware that the
Corporation is obligated to file periodic reports under Section 13 of the
Exchange Act and the copies thereof may be obtained from the Corporation or the
Securities and Exchange Commission upon request; (iii) that he understands the
financial and other information relating to the Corporation that has been
furnished, or made available, to him or has an advisor who has such
understanding, and has advised him, with respect thereto, (iv) that the Option
granted to him is being taken by him for investment and not with a view to, or
in connection with any distribution thereof and (v) all shares of the Common
Shares purchased upon exercise of such Option, whether by him or, in the case of
his death, by the person or persons to whom his rights under such Option are
transferred by will or by the laws of descent or distribution or by his legal
representative(s) are to be so taken shall be registered prior to the issuance
thereof under the Act, the optionee or the other person exercising the Option as
permitted by paragraph 7 hereof will be required to give a representation in
writing that he is acquiring such shares as an investment and not with a view
to, or in connection with, the sale or distribution of any thereof,

         (b) The Committee or, if applicable, the Board may require such
additional or alternative representations by the optionee, whether upon receipt
of the Option by the optionee and/or upon the exercise thereof, as the Committee
or, if applicable, the Board, acting upon the advice of counsel to the
Corporation, deems necessary or advisable (i) in order to comply with the Act or
any other applicable status, rule or regulation relating to stock options or
(ii) which is deemed to be in the best interests of the Corporation.

13.      TAX STATUS

         (a) The Corporation makes no representation as to the tax status of any
Option or the tax consequences (under federal laws of any state or other
jurisdiction) of the granting of any of the Options, any exercise thereof or of
any sale of shares acquired pursuant thereto.

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         (b) Whenever a reference is made in the Plan or in any instrument
delivered pursuant thereto to any section of the Code and such section is later
amended, superseded or redesignated under a new section number, the reference in
the Plan shall, unless the Board shall provide to the contrary, be automatically
amended to reflect such amendment, redesignation or other change,

14.      AMENDMENT OF PLAN

         The Board may suspend or terminate the Plan with respect to any shares
as to which Options have not been granted and may, at any time or from time to
time, amend the Plan in any respect, except that after this Plan has been
submitted to, and the Board has obtained the approval of, the shareholders of
the Corporation, then, without the approval of shareholders holding a majority
of the shares of stock of the Corporation then issued and outstanding and
entitled to vote, no amendment shall be made (a) increasing or decreasing the
number of 'shares reserved under paragraph 3(a) hereof (other than as provided
in paragraph 10 hereof), (b) changing the designation of the class of eligible
optionees, as provided in paragraph 4 hereof, to receive Options hereunder; and
(c) extending the term during which the Options may be granted or exercised.

15.      EFFECTIVENESS OF PLAN

         The Plan shall become effective, in accordance with the provisions of
the resolutions of the Board of Directors approving the Plan, which were adopted
on December 14, 2001, on January 1, 2002, subject to the approval of the Plan by
the holders of a majority of the outstanding shares of the Common Shares. The
Plan shall terminate and have no further force and effect, except as to Options
theretofore granted, at the close of business on the tenth anniversary of the
date that the Plan is adopted by the holders of a majority of the outstanding
shares of the Common Shares.

16.      TIME OF GRANTING OPTIONS

         The date of grant of an Option under the Plan shall, for all purposes,
be the date on which the Committee or, if applicable, the Board makes the
determination granting such Option; and no grant shall be deemed effective under
the Plan prior to such date. Notice of the determination shall be given to each
optionee to whom an Option is so granted within a reasonable time after the date
of such grant.

17.      TERMINATION OF RIGHTS OF ACTION

         Every right of action arising out of or in connection with, the Plan by
or on behalf of the Corporation or a Subsidiary, or by any shareholder of the
Corporation or a Subsidiary against any past, present or future member of the
Committee or, if applicable, the Board or against any employee, consultant or
advisor, or by any employee, consultant or advisor (past, present or future)
against the Company or a Subsidiary shall, irrespective of the place of
residence of any such shareholder, director, employee, consultant or advisor,
cease and be barred by the expiration

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of three (3) years from the date of the act or omission in respect of which such
right to action is alleged to have arisen.

18.      USE OF PROCEEDS

         The proceeds received by the Corporation from the sale of the Common
Shares pursuant to the Options will be used for general corporate purposes.

19.      DECLINING MARKET PRICE

         In the event the fair market value of a share of the Common Shares
declines below the Option Price set forth in any Non-Qualified Stock Option, the
Committee or, if applicable, the Board may, at any time, adjust reduce, cancel
and re-grant any unexercised Non-Qualified Stock Option or take any similar
action it deems to be for the benefit of the optionee in light of the declining
fair market value for the Common Shares; provided, however, that none of the
foregoing actions may be taken by the Committee without the prior approval of
the Board.

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