Document:

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                                                                    EXHIBIT 4.1

                             HA-LO INDUSTRIES, INC.
                                 1997 STOCK PLAN
                            (AMENDED AND RESTATED)*

1.       PREAMBLE.

         In 1997, HA-LO Industries, Inc. (the "Company") established the HA-LO
Industries, Inc. 1997 Stock Plan (the "Plan") as a means whereby the Company
may, through awards of (i) stock appreciation rights ("SARs"), (ii)
non-qualified stock options ("NSOs"), (iii) restricted stock ("Restricted
Stock"), and (iv) phantom stock ("Phantom Stock"):

         (a)      provide employees who have substantial responsibilities for
                  the direction and management of the Company and other
                  employees of the Company with additional incentive to promote
                  the success of the Company's business;

         (b)      enable such employees to acquire proprietary interests in the
                  Company;

         (c)      encourage such employees to remain in the employ of the
                  Company;

         (d)      provide Officers and Directors of the Company (who are not
                  otherwise employees of the Company) with additional incentive
                  to promote the success of the Company's business; and

         (e)      provide Sales Representatives with an incentive to remain
                  associated with the Company and to promote the success of the
                  Company's business.

         By action of the Board of Directors of the Company, the Plan was
approved. The terms of the Plan are contained herein.

         The provisions of this Plan do not apply to or affect any option, SAR,
or stock heretofore or hereafter granted under any other stock plan of the
Company, and all such options, SARs or stock continue to be governed by and
subject to the applicable provisions of the plan under which they were granted.
Restrictive provisions contained in any amendments to, or restatements of, this
Plan do not apply to or affect any option, SAR, or stock heretofore granted
under this Plan, and all such options, SARs or stock continue to be governed by
and subject to the applicable provisions of this Plan in effect at the time they
were granted.

----------------------
         *  Amended as of May 18, 2000.

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2.       DEFINITIONS.

         2.01     "BOARD" or "BOARD OF DIRECTORS" means the board of directors
of the Company.

         2.02     "CAUSE" means, as determined in the sole discretion of the
Board, a Participant's (1) commission of a felony; (2) dishonesty or
misrepresentation involving the Company; (3) serious misconduct in the
performance or non-performance of Participant's responsibilities to the Company;
(4) violation of a material condition of employment; (5) unauthorized use of
trade secrets or confidential information; (6) aiding a competitor of the
Company.

         2.03     "CHANGE IN CONTROL" means, the occurrence of any one of the
following events:

                  (a)      any consolidation or merger of the Company, if the
         Company is not the continuing or surviving corporation or which
         contemplates that all or substantially all of the business and/or
         assets of the Company shall be controlled by another corporation or a
         recapitalization in which the current controlling stockholders do not
         continue to be the controlling stockholders;

                  (b)      any sale, lease, exchange or transfer (in one
         transaction or series of related transactions) of all or substantially
         all of the assets of the Company;

                  (c)      approval by the stockholders of the Company of any
         plan or proposal for the liquidation or dissolution of the Company,
         unless such plan or proposal is abandoned within 60 days following such
         approval;

                  (d)      any "person" (as such term is used in Sections 13(d)
         and 14(d)(2) of the Exchange Act), other than a person who is a
         stockholder of the Company on the Option Date, who shall become the
         beneficial owner of securities of the Company representing more than
         50% of the combined voting power of the Company's then outstanding
         securities ordinarily having the right to vote in the election of
         directors;

                  (e)      any sale, exchange or transfer (other than transfers
         among affiliated entities, i.e. entities controlling, controlled by or
         under common control with, the transferor) of securities of the Company
         representing more than 50% of (i) the total fair market value of the
         Company's then outstanding equity securities, or (ii) the combined
         voting power of the Company's then outstanding securities ordinarily
         having the right to vote in the election of directors, whether pursuant
         to a tender or exchange offer, open market offering, purchase or sale,
         privately negotiated purchase and sale or otherwise; or

                  (f)      if during a period of two consecutive years from the
         Option Date, individuals who at the beginning of such period
         constituted the directors of the Company cease for any reason to
         constitute a majority thereof, unless the election, or nomination for
         election by the Company's stockholders, of each director of the Company
         first elected

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         during such period was approved by a vote of at least a majority of
         the directors then still in office who were directors at the
         beginning of any such period.

         2.04     "CODE" means the Internal Revenue Code of 1986, as it exists
now and as it may be amended from time to time.

         2.05     "COMMITTEE" means the Compensation Committee of the Board of
Directors. Each member of the Committee shall (a) be a "Non-Employee Director"
as determined under Rule 16b-3(b)(3)(i) of the Exchange Act and (b) be an
"Outside Director" as determined under Treasury Regulation 26 CFR Section
1.162-27(e)(3) or any successor regulation thereto. Once appointed, the members
of the Committee shall continue to serve until otherwise directed by the Board
of Directors.

         2.06     "COMMON STOCK" means the common stock of the Company, no par
value.

         2.07     "COMPANY" shall means HA-LO Industries, Inc., an Illinois
corporation, any successor thereto and any subsidiary thereof.

         2.08     "DIRECTOR" means a member of the Board.

         2.09     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as it exists now or from time to time may hereafter be amended.

         2.10     "FAIR MARKET VALUE" means, at the discretion of the Company in
each case, either (a) the mean between the bid and asked prices or (b) the last
sale price, as of the close of business on the day Fair Market Value is to be
determined, for Common Stock as reported by the NASDAQ System or any other stock
exchange on which the Common Stock is traded. If Common Stock is not traded on
that day, then the Fair Market Value shall be determined as of the next
preceding day on which such stock was traded. If trading of the Common Stock is
not reported by the NASDAQ System or on a stock exchange, Fair Market Value will
be determined by the Board based upon the best available data.

         2.11     "NAKED SAR" means a SAR issued not in connection with a ISO or
NSO.

         2.12     "NSO" means non-qualified stock options, which are NOT
intended to qualify under Section 422 of the Code.

         2.13     "OFFICER" means a corporate officer of the Company.

         2.14     "OPTION" means the right of a participant to purchase a
specified number of shares of Common Stock, subject to the terms and conditions
of the Plan.

         2.15     "OPTION DATE" means the date upon which an Option, SAR,
Restricted Stock or

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Phantom Stock is awarded to a Participant under the Plan.

         2.16     "OPTION PRICE" means the price per share at which an Option
may be exercised.

         2.17     "PARTICIPANT" means an individual to whom an Option, SAR,
Phantom Stock or Restricted Stock has been granted under the Plan.

         2.18     "PHANTOM STOCK" means a hypothetical share of Common Stock
issued as phantom stock under the Plan.

         2.19     "PLAN" means the HA-LO Industries, Inc. 1997 Stock Plan, as
set forth herein and as from time to time amended.

         2.20     "RESTRICTED STOCK" means Common Stock awarded to a Participant
pursuant to this Plan and subject to the restrictions contained in Section 8.

         2.21     "SALES REPRESENTATIVE" means an independent contractor who has
an arrangement with the Company, whether or not exclusively, to market, promote
and sell the Company's products.

         2.22     "SAR" means a stock appreciation right. A SAR may be a Naked
SAR or a Tandem SAR.

         2.23     "TANDEM SAR" means a SAR associated with and issued in
connection with an Option.

         2.24     RULES OF CONSTRUCTION.

         (a)      GOVERNING LAW. The construction and operation of this Plan are
                  governed by the laws of the State of Illinois.

         (b)      UNDEFINED TERMS. Unless the context requires another meaning,
                  any term not specifically defined in this Plan has the meaning
                  given to it by the Code.

         (c)      HEADINGS. All headings in this Plan are for reference only and
                  are not to be utilized in construing the Plan.

         (d)      GENDER. Unless clearly appropriate, all nouns of whatever
                  gender refer indifferently to persons or objects of any
                  gender.

         (e)      SINGULAR AND PLURAL. Unless clearly inappropriate, singular
                  terms refer also to the plural and VICE VERSA.

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         (f)      SEVERABILITY. If any provision of this Plan is determined to
                  be illegal or invalid for any reason, the remaining provisions
                  are to continue in full force and effect and to be construed
                  and enforced as if the illegal or invalid provision did not
                  exist, unless the continuance of the Plan in such
                  circumstances is not consistent with its purposes.

3.       STOCK SUBJECT TO THE PLAN.

         Except as otherwise provided in Section 12, the aggregate number of
shares of Common Stock that may be issued under Options or as Restricted Stock,
under this Plan may not exceed Twelve Million (12,000,000) shares. Reserved
shares may be either authorized but unissued shares or treasury shares, in the
Board's discretion. If any awards hereunder shall terminate or expire, as to any
number of shares, new NSOs and Restricted Stock may thereafter be awarded with
respect to such shares. The aggregate number of shares of Common Stock that may
be issued under Options, as Restricted Stock or upon which SARs or Phantom Stock
may be awarded to any one Participant may not exceed 500,000, as may be adjusted
pursuant to Section 12.

4.       ADMINISTRATION.

         The Plan is administered by the Committee. In addition to any other
powers set forth in this Plan, the Committee has the following powers:

         (a)      to construe and interpret the Plan, including the power to
                  remedy any ambiguities or inconsistencies in the Plan
                  document;

         (b)      to establish, amend and rescind appropriate rules and
                  regulations relating to the Plan;

         (c)      subject to the express provisions of the Plan, to determine
                  the individuals who will receive awards of Options, Restricted
                  Stock, Phantom Stock and/or SARs, the times when they will
                  receive them, the number of shares to be subject to each award
                  and the Option Price, payment terms, payment method, and
                  expiration date applicable to each award;

         (d)      to contest on behalf of the Company or Participants, at the
                  expense of the Company, any ruling or decision on any matter
                  relating to the Plan or to any awards of NSOs, Restricted
                  Stock, Phantom Stock and/or SARs;

         (e)      generally, to administer the Plan, and to take all such steps
                  and make all such determinations in connection with the Plan
                  and the awards of NSOs, Restricted Stock, Phantom Stock and/or
                  SARs granted thereunder as it may deem necessary or advisable;

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         (f)      to determine the form in which payment of a SAR or a Phantom
                  Stock award granted hereunder will be made (i.e., cash, Common
                  Stock or a combination thereof) or to approve a participant's
                  election to receive cash in whole or in part in settlement of
                  the SAR or Phantom Stock award; and

         (g)      to determine the form in which tax withholding under Section
                  15 of this Plan will be made.

         The Committee may delegate some or all of its power to the Chief
Executive Officer or other executive officer of the Company as the Committee
deems appropriate; provided, that (i) the Committee may not delegate its power
with regard to the grant of an award of an NSO, Restricted Stock, Phantom Stock
and/or an SAR to any person who is a "covered employee" within the meaning of
Section 162(m) of the Code or who, in the Committee's judgment, is likely to be
a covered employee at any time during the period such an award to such employee
would be outstanding and (ii) the Committee may not delegate its power with
regard to the selection for participation in this Plan of an officer or other
person subject to Section 16 of the Exchange Act or decisions concerning the
timing, pricing or amount of an award of an NSO, Restricted Stock, Phantom Stock
and/or an SAR to such an officer or other person.

5.       ELIGIBILITY.

         The Committee shall have the power to award Options, SARs, Restricted
Stock, and Phantom Stock. Subject to the provisions of the Plan, the Committee
shall determine from time to time those employees, Directors and Officers of the
Company and Sales Representatives who shall be designated as Participants and
the number, if any, of Options, SARs, Restricted Stock, and Phantom Stock, or
any combination thereof, to be awarded to each such participant.

6.       TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION.

         The Committee may, in its discretion, grant NSOs to any Participant
under the Plan. Each NSO shall be evidenced by an agreement between the Company
and the Participant. Unless the Committee (in its discretion) determines
otherwise, each NSO agreement, in such form as is approved by the Committee,
shall be subject to the following terms and conditions and to such other terms
and conditions as the Committee may deem appropriate:

         (a)      OPTION PERIOD. Each NSO will expire as of the earliest of:

                  (i)      the date on which it is forfeited under the
                           provisions of Section 11;

                  (ii)     the date three months after the Participant's
                           termination of employment, directorship or
                           relationship with the Company, as applicable, for any
                           reason other than death; or

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                  (iii)    the date six months after the Participant's death.

         (b)      OPTION PRICE. At the time of grant, the Committee will fix the
                  Option Price, which will be no less than eighty-five percent
                  (85%) of the Fair Market Value of the shares subject to the
                  NSO on the Option Date.

         (c)      OTHER OPTION PROVISIONS. The form of NSO authorized by the
                  Plan may contain such other provisions as the Committee may
                  from time to time determine.

7.       TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

         The Committee may, in its discretion, grant a SAR to any Participant
under the Plan. Each SAR shall be evidenced by an agreement between the Company
and the Participant, in such form as is approved by the Committee, and may be a
Naked SAR or a Tandem SAR. Unless the Committee (in its discretion) determines
otherwise, each SAR awarded to Participants under the Plan shall be subject to
the following terms and conditions and to such other terms and conditions as the
Committee may deem appropriate:

         (a)      TANDEM SARs. Tandem SARs shall terminate on the same date as
                  the related NSO. A Tandem SAR shall be exercisable only if the
                  Fair Market Value of a share of Common Stock on the date of
                  surrender exceeds the Fair Market Value of the Common Stock on
                  the Option Date, if related to an NSO, and then shall be
                  exercisable to the extent, and only to the extent, that the
                  related NSO is exercisable. A Tandem SAR shall entitle the
                  Participant to whom it is granted the right to elect, so long
                  as such Tandem SAR is exercisable and subject to such
                  limitations as the Committee shall have imposed, to surrender
                  any then exercisable portion of his related NSO, in whole or
                  in part, and receive from the Company in exchange, without any
                  payment of cash (except for applicable employee withholding
                  taxes), that number of shares of Common Stock having an
                  aggregate Fair Market Value on the date of surrender equal to
                  the product of (i) the excess of the Fair Market Value of a
                  share of Common Stock on the date of surrender over the per
                  share Option Price under such NSO or the Fair Market Value of
                  the Common Stock on the Option Date, if such SAR is related to
                  an NSO and (ii) the number of shares of Common Stock subject
                  to such NSO or portion thereof which is surrendered. Any NSO
                  or portion thereof which is surrendered shall no longer be
                  exercisable. The Committee, in its sole discretion, may allow
                  the Company to settle all or part of the Company's obligation
                  arising out of the exercise of a Tandem SAR by the payment of
                  cash equal to the aggregate Fair Market Value of the shares of
                  Common Stock which the Company would otherwise be obligated to
                  deliver.

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         (b)      NAKED SARs. Naked SARs shall terminate as provided in the
                  Participant's SAR agreement. The Committee may at the time of
                  granting any Naked SAR add such conditions and limitations to
                  the Naked SAR as it shall deem advisable, including but not
                  limited to, limitations on the period within which the Naked
                  SAR shall be exercisable and the maximum amount of
                  appreciation to be recognized with regard to such Naked SAR.

         (c)      OTHER CONDITIONS. If a Participant is subject to Section 16(a)
                  and Section 16(b) of the Exchange Act, the Committee may at
                  any time add such additional conditions and limitations to
                  such SAR which, in its discretion, the Committee deems
                  necessary or desirable in order to comply with such Section
                  16(a) or Section 16(b) and the rules and regulations issued
                  thereunder, or in order to obtain any exemption therefrom.

8.       TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

         The Committee, in its discretion, may grant Restricted Stock to any
Participant under the Plan. Each grant of Restricted Stock shall be evidenced by
an agreement between the Company and the Participant. Unless the Committee (in
its discretion) determines otherwise, all shares of Common Stock awarded to
Participants under the Plan as Restricted Stock shall be subject to the
following terms and conditions and to such other terms and conditions as the
Committee may deem appropriate:

         (a)      RESTRICTED PERIOD. Shares of Restricted Stock awarded to
                  Participants may not be sold, transferred, pledged or
                  otherwise encumbered before they vest. Subject to the
                  provisions of subparagraphs (b) and (c) below and any other
                  restrictions imposed by law, any shares of Restricted Stock
                  that vest will be transferred, to the Participant or, in the
                  event of his death, to the beneficiary or beneficiaries
                  designated by writing filed by the Participant with the
                  Committee for such purpose or, if none, to his estate.
                  Delivery of shares in accordance with the preceding sentence
                  shall be made within the thirty-day period after they vest.

         (b)      FORFEITURES. A Participant shall forfeit all unpaid
                  accumulated dividends and all shares of Restricted Stock which
                  have not vested prior to the date that his employment,
                  membership on the Board, if a Director, or relationship, if a
                  Sales Representative with the Company is terminated for any
                  reason.

         (c)      CERTIFICATES DEPOSITED WITH COMPANY. Each certificate issued
                  in respect of shares of Restricted Stock awarded under the
                  Plan shall be registered in the name of the Participant and
                  deposited with the Company. Each such certificate shall bear
                  the following (or a similar) legend:

                  "The transferability of this certificate and the shares of
                  stock represented hereby

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                  are subject to the terms and conditions (including
                  forfeiture) relating to Restricted Stock contained in the
                  HA-LO Industries, Inc. 1997 Stock Plan (Amended and Restated)
                  and an agreement entered into between the registered owner
                  and HA-LO Industries, Inc. Copies of such Plan and agreement
                  are on file at the principal office of HA-LO Industries, Inc."

         (d)      STOCKHOLDER RIGHTS. Subject to the foregoing restrictions,
                  each Participant shall have all the rights of a stockholder
                  with respect to his shares of Restricted Stock including, but
                  not limited to, the right to vote such shares.

         (e)      DIVIDENDS. On each Common Stock dividend payment date, each
                  Participant shall receive an amount equal to the dividend paid
                  on that date on a share of Common Stock, multiplied by his
                  number of shares of Restricted Stock.

9.       TERMS AND CONDITIONS OF PHANTOM STOCK.

         The Committee may, in its discretion, award Phantom Stock to any
Participant under the Plan. Each award of Phantom Stock shall be evidenced by an
agreement between the Company and the Participant. The Committee may at the time
of awarding any Phantom Stock add such additional conditions and limitations to
the Phantom Stock as it shall deem advisable, including, but not limited to, the
right for Participants to receive payments equivalent to dividends paid on
Common Stock, limitations on the period or periods within which the Phantom
Stock may be surrendered, and the maximum amount of appreciation to be
recognized with regard to such Phantom Stock. If a Participant is subject to
Section 16(a) and Section 16(b) of the Exchange Act, the Committee may at any
time add such additional conditions and limitations to such Phantom Stock which,
in its discretion, the Committee deems necessary or desirable in order to comply
with such Section 16(a) or Section 16(b) and the rules and regulations issued
thereunder, or in order to obtain any exemption therefrom. An award of Phantom
Stock shall entitle the Participant to whom it is awarded the right to elect, so
long as such Phantom Stock is vested and subject to such limitations as the
Committee shall have imposed, to surrender any then vested portion of the
Phantom Stock, in whole or in part, and receive from the Company in exchange
therefor the Fair Market Value on the date of surrender of the Common Stock to
which the surrendered Phantom Stock relates in cash or in shares of Common Stock
as the Committee may determine.

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10.      MANNER OF EXERCISE OF OPTIONS.

         To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the Committee,
stating the number of shares to which he intends to exercise the Option. The
Company will issue the shares with respect to which the Option is exercised upon
payment in full of the Option Price. Upon receipt of such notice, and prior to
issuance of shares, the Company may require the Participant (or after his death,
his executor or administrator) to pay to the Company any and all amounts which
the Participant may owe the Company on such date. The Option Price may be paid
in cash, certified bank check or by delivery of irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds
necessary to pay for all Common Stock acquired through such exercise and any tax
withholding obligations resulting from such exercise. At the discretion of the
Company, the Option Price may also be paid in shares of Common Stock having an
aggregate Fair Market Value, as determined on the date of delivery, equal to the
Option Price. At the discretion of the Company, the Option Price may be paid in
shares of Common Stock which were received by the Participant upon the exercise
of one or more Options, including shares which the Participant directs the
Company to withhold for the purpose of paying the Option Price from shares the
Participant would have received upon the exercise of the Option. At the
discretion of the Company, the Option Price may be paid in shares of Common
Stock which were received by the Participant as an award of Restricted Stock
under the Plan. The Option Price may be paid by surrender of Tandem SARs equal
to the Option Price.

11.      VESTING.

                  (a)      A Participant may not exercise an Option or surrender
         a SAR or Phantom Stock until it has become vested. The portion of an
         Option, SAR or Phantom Stock award that is vested depends upon the
         period that has elapsed since the Option Date. The following schedule
         applies to any Options granted under this Plan, to Restricted Stock,
         SARs, and Phantom Stock awarded under this Plan unless the Committee
         establishes a different vesting schedule (as set forth in the agreement
         between the Participant and the Company that governs such award) at the
         time when an Option is granted or the Restricted Stock, SAR or Phantom
         Stock is awarded:

<TABLE>
<CAPTION>
                    Number of Years
                    Since Option Date                          Vested Percentage
                    -----------------                          -----------------
<S>                                                            <C>
                    Fewer than one                                       0%
                    One but fewer than two                              20%
                    Two but fewer than three                   40%
                    Three but fewer than four                  60%
                    Four but fewer than five                   80%
                    Five or more                                       100%
</TABLE>

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         If a Participant's employment with, or if a Director, his membership on
         the Board of, or if a Sales Representative, his relationship with, the
         Company terminates for any reason, he will be deemed to have forfeited,
         as of the date of such termination, any Options, Restricted Stock, SARs
         and/or Phantom Stock that are not yet vested as of such date. A
         transfer from the Company to a subsidiary or affiliate, or VICE VERSA
         is not a termination of employment for purposes of this Plan.
         Notwithstanding the vesting schedule contained herein or in the
         Participant's agreement, if the Participant's employment, or if a
         Director, his membership on the Board, or if a Sales Representative,
         his relationship is terminated for Cause, the Participant's Vested
         Percentage shall be 0%, and he shall forfeit all Options, SARs,
         Restricted Stock and/or Phantom Stock, automatically and without any
         action being required on the part of the Company, effective as of
         delivery of notice that his termination was for Cause.

                  (b)      Notwithstanding the provisions of Section 11(a) or
         anything contained in a Participant's agreement to the contrary, upon a
         Change in Control all Options, Restricted Stock, SARs and/or Phantom
         Stock shall become 100% vested and immediately exercisable; PROVIDED,
         HOWEVER, that the terms of this Section 11(b) shall NOT apply to
         Options, Restricted Stock, SARs and/or Phantom Stock granted after May
         18, 2000.

12.      ADJUSTMENTS TO REFLECT CHANGES IN CAPITAL STRUCTURE.

         If there is any change in the corporate structure or shares of the
Company, the Board of Directors may make any adjustments necessary to prevent
accretion, or to protect against dilution, in the number and kind of shares
authorized by the Plan and, with respect to outstanding Options, Restricted
Stock, Phantom Stock and/or SARs, in the number and kind of shares covered
thereby and in the applicable Option Price. For the purpose of this Section 12,
a change in the corporate structure or shares of the Company includes, without
limitation, any change resulting from a recapitalization, stock split, stock
dividend, consolidation, rights offering, spin-off, reorganization, or
liquidation and any transaction in which shares of Common Stock are changed into
or exchanged for a different number or kind of shares of stock or other
securities of the Company or another corporation.

13.      LIMITED TRANSFERABILITY OF OPTIONS, SARS AND PHANTOM STOCK.

         The Options and SARs granted or Phantom Stock awarded under the Plan
are not transferable, voluntarily or involuntarily, other than by will, by
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in Section 414(p) of the Code; PROVIDED, HOWEVER,
that Options may be transferred in whole or in part during the Participant's
lifetime by gift to one or more members of the Participant's family, to a
trust in which the Participant's family members have more than fifty percent
of the beneficial interest, to a foundation in which the Participant or his
or her family

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members control the management of assets, or to any other entity in which
the Participant or his or her family members own more than fifty percent of the
voting interests. Notwithstanding the foregoing, Options may not be transferred
for value; PROVIDED, HOWEVER, that the following transactions are not prohibited
transfers for value:

         (i)      a transfer under a domestic relations order in settlement of
         marital property rights; and

         (ii)     a transfer to an entity in which more than fifty percent of
         the voting interests are owned by the Participant or his or her family
         members in exchange for an interest in that entity.

The assigned portion may only be exercised by the person or persons who acquire
a proprietary interest in the Option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the
Option immediately prior to such assignment and shall be set forth in such
documents issued to the assignee as the Committee may deem appropriate.

14.      RIGHTS AS STOCKHOLDER.

         No Common Stock may be delivered upon the exercise of any Option until
full payment has been made. A Participant has no rights whatsoever as a
stockholder with respect to any shares covered by an Option until the date of
the issuance of a stock certificate for the shares. A Participant who has been
granted SARs or Phantom Stock shall have no rights whatsoever as a stockholder
with respect to such SARs or Phantom Stock.

15.      WITHHOLDING TAX.

         The Company shall have the right to withhold in cash or shares of
Common Stock with respect to any payments made to Participants under the Plan
any taxes required by law to be withheld because of such payments.
Notwithstanding the foregoing, with respect to a Participant subject to Section
16(a) or 16(b) of the Exchange Act, all amounts required to be withheld upon
either (i) the vesting of Restricted Stock or (ii) the exercise of a SAR or
surrender of Phantom Stock which had a set duration and for which payment is
made in Common Stock, shall automatically be withheld in Common Stock otherwise
deliverable to the Participant and having a Fair Market Value determined on the
date the income is includable in the Participant's income equal to the amount of
taxes required to be withheld.

16.      NO RIGHT TO EMPLOYMENT.

         Participation in the Plan will not give any Participant a right to be
retained as an employee of the Company, or any right or claim to any benefit
under the Plan, unless the right or claim has specifically accrued under the
Plan.

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17.      AMENDMENT OF THE PLAN.

         The Board of Directors may from time to time amend or revise the terms
of this Plan in whole or in part and may without limitation, adopt any amendment
deemed necessary; provided, however, that no change in any award previously
granted to a Participant may be made that would impair the rights of the
Participant without the Participant's consent.

18.      CONDITIONS UPON ISSUANCE OF SHARES.

         An Option shall not be exercisable, a share of Common Stock shall not
be issued pursuant to the exercise of an Option, and Restricted Stock shall not
be awarded until such time as the award of Restricted Stock, exercise of such
Option and the issuance and delivery of such share pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares of Common stock may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such exercise
that the Common Stock is being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.

19.      EFFECTIVE DATE AND TERMINATION OF PLAN.

         19.1     EFFECTIVE DATE. This Plan is effective as of January 1, 1997.

         19.02    TERMINATION OF THE PLAN. The Board of Directors may terminate
the Plan at any time with respect to any shares that are not then subject to
Options or Restricted Stock. Termination of the Plan will not affect the rights
and obligations of any Participant with respect to Options, SARs, Phantom Stock
or Restricted Stock awarded before termination.

20.      DIRECTOR STOCK OPTIONS.

         (a)      Each Director who is not otherwise an employee of the Company
                  from and after the effective date of the Plan shall, at the
                  first regularly scheduled meeting of the Board held after
                  January 1 of each calendar year, automatically be granted NSOs
                  to purchase ten thousand (10,000) shares of Common Stock
                  having an exercise price per share equal to 100% of the Fair
                  Market Value of the Common Stock at the Option Date.

         (b)      Each Director's interest in any NSO granted pursuant to this
                  Section 20 shall vest ratably over a period of twelve months
                  from the Option Date; provided, however, such NSO may not be
                  exercised at any time prior to six months after the Option
                  Date. NSOs granted pursuant to this Section 20 shall expire
                  ten years from the

                                        13
<PAGE>

                  Option Date.

         (c)      In the event that the number of shares of Common Stock
                  available for future grant under the Plan is insufficient to
                  make all automatic grants required to be made on such date,
                  then all non-employee Directors entitled to a grant on such
                  date shall share ratably in the number of NSOs on shares
                  available for grant under the Plan.

         (d)      The provisions of paragraph (a) of this Section 20 may not be
                  amended more often than once every six months. Except as
                  expressly provided in this Section 20, any NSO granted
                  hereunder shall be subject to the terms and conditions of the
                  Plan if the grant were made pursuant to Section 6 hereof.

                                              14<PAGE>
                                                                   EXHIBIT 10.12

                              CONSULTING AGREEMENT

          THIS AGREEMENT is made and entered into as of the 22nd day of January,
1999, by and between IT/IS, INC., a Texas corporation, having its principal
office in Houston, Texas ("COMPANY"), and FRANKLIN C. FISHER, JR. AND STEVE L.
TEBO, individuals, having their principal office in Houston, Texas
("CONSULTANTS").

                                  WITNESSETH

          WHEREAS, Company provides certain litigation support and related
services to Fortune 500 corporations and law firms;

          WHEREAS, the services of Consultants, their experience and knowledge
of the affairs of the Company, and their reputation and contacts in the industry
are extremely valuable to the Company;

          WHEREAS, the Company desires to avail itself of Consultants'
experience and knowledge of the industry to receive the benefits of their
management ability, reputation and contacts in the industry, and Consultants are
willing to advise and consult with the Company on the terms and conditions
hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and Consultants hereby agree as follows:

          1. RECITALS PART OF AGREEMENT. The foregoing recitals are made a part
of this Agreement.

          2. CONSULTANTS TO ACT AS CONSULTANTS TO COMPANY FOR TERM ENDING
DECEMBER 31, 2000. The Company hereby retains Consultants and Consultants hereby
accept such retention as advisors to and consultants with the Company, and
Consultants agree to perform the services specified herein upon the terms and
conditions hereinafter set forth for a term beginning on the date above shown
(the "Effective Date") and ending on December 31, 2000, unless sooner terminated
as hereinafter provided.

<PAGE>

          3. CONSIDERATION. For the services rendered by Consultants pursuant to
this Agreement and as consideration for the agreements made by Consultants
herein, the Company shall compensate Consultants as follows:

               (a) The Company shall reimburse Consultants for reasonable
          out-of-pocket expenses incurred by Consultants on behalf of Company.

               (b) The Company hereby grants to Consultants an option
          ("Option") to acquire 520,000 shares of Company's common stock, $____
          par value ("Stock"), at an exercise price of $.12 per share
          ("Exercise Price"). The Option will commence on the Effective Date and
          will expire on May 22, 2000. The Option may be exercised by
          Consultants at any time prior to its expiration by the payment to
          Company of $62,400.00 by check or wire transfer to the account of
          Company. Consultants shall designate the exercise date ("Exercise
          Date"), method of payment and the number of shares to be issued to
          each Consultant in the notice of intent to exercise the Option,
          which notice must be written and delivered to Company within ten (10)
          days of the Exercise Date.

          4. DELIVERY OF STOCK. The Company shall cause the delivery of the
Stock to Consultants upon receipt of the Exercise Price. When received by
Consultants, the Stock shall be fully-paid, non-assessable and free of any liens
or encumbrances of any kind but restricted as to transferability under the
federal securities laws. No later than fifteen (15) days after the Option is
exercised, the Company shall file a SB-1, SB-2, S-8 (or other applicable form)
registration with the Securities and Exchange Commission pursuant to which the
Company will register or qualify the Stock to the extent requisite to permit the
public offering and sale of the Stock and will use its best efforts to cause
such registration statement to become effective as promptly as practicable. The
Company shall bear all expenses incurred in connection with such registration
statement. Failure by the

<PAGE>

Company to file a registration statement within the fifteen (15) days
described above shall entitle the Consultants to an additional Ten Thousand
(10,000) shares of Stock for each day the Company fails to file the appropriate
registration.

          5. DUTIES. Consultants shall, during the term of this Agreement and
subject to the provisions hereof, serve the Company as consultants with such
powers and duties as may be prescribed from time to time by the Chief Executive
Officer of the Company. Consultants shall, during the term of this Agreement,
strive to enhance the business and opportunities of the Company and to pursue
diligently their duties and assignments at all times, employing and following
such methods and techniques in connection therewith as might be suggested or
requested by the Chief Executive Officer of the Company.

          6. EXTENT OF SERVICE. During the term of this Agreement, Consultants
shall devote such time and efforts as necessary to the Company and to
performance of the services described in this Agreement. This Agreement does not
prohibit Consultants from participating in other business activities, provided
they are not in any way in competition with, or detrimental to, the Company.

          7. DISCLOSURE OF INFORMATION. Consultants recognize that as
consultants to the Company, Consultants will occupy a position of trust with
respect to business information of a secret or confidential nature which is the
property of the Company and which may be imparted to Consultants from time to
time in the course of Consultants' duties. Consultants therefore agree that:

                  (a) Consultants shall not at any time, whether in the course
         of Consultants serving as consultants hereunder or thereafter, use or
         disclose directly or indirectly to any person outside of the Company
         (or any affiliates thereof) any of such information;

                  (b) Consultants shall return promptly upon the termination of
         Consultants serving as consultants hereunder to the Company at its

<PAGE>

         discretion and expense any and all copies (either prepared by the
         Company or Consultants) of the records, drawings, materials, memoranda,
         customer lists and other data pertaining to such secret or confidential
         information; and

                  (c) The term "information of a secret or confidential nature"
         shall mean information of any nature and in any form which at the time
         or times concerned is not generally known to those persons engaged in
         businesses similar to those conducted or contemplated by the Company
         (other than by the act or acts of an employee not authorized by the
         Company to disclose such information) and which relates to any one or
         more of the aspects of the Company's business, including, but not
         limited to patents and patent applications; inventions or improvements,
         whether patentable or not; development projects; products; product
         designs and the materials for products, policies, processes, formulas,
         techniques, know-how and other facts relating to design, construction,
         manufacturing or servicing of products or relating to materials for
         products; policies, processes, formulas, techniques, know-how and other
         facts relating to the businesses in which the Company is engaged;
         advertising, promotions, financial matters, customers, customers'
         lists, customers' purchase requirements for products and services and
         other trade secrets.

          8. NOTICES. Any notice required or permitted hereunder shall be
sufficient if in writing and if sent by certified mail, postage prepaid, return
receipt requested, to the addresses set forth on the execution page hereof, or
to such other address as may be designated by written notice similarly given by
either party to the other.

          9. ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other.

<PAGE>

          10. AMENDMENTS. This Agreement may only be amended by a written
instrument captioned on its face as an "Amendment" hereto and duly executed by
the Company and Consultants.

          11. APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of Texas.

          12. BINDING EFFECT. This Agreement shall inure to the benefit of and
be enforceable against the Company and Consultants and their respective
successors, legal representatives, heirs and permitted assigns. This Agreement
shall specifically survive and be binding upon any entity into which Company may
be merged or combined, either upon agreement or by operation of law.

<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Consultants have executed this
Agreement as of the 22nd day of January, 1999.

                               COMPANY:
                               IT/IS, INC.

                               By:   /s/ Hunter Carr
                                  ----------------------------------------
                                     Hunter Carr
                                     Chief Executive Officer

                               Address for Notices:

                               4301 Windfern, Suite 200
                               Houston, Texas  77041

                               CONSULTANTS:

                                /s/ Steve L. Tebo
                               ----------------------------
                               Steve L. Tebo

                                /s/ Franklin  C. Fisher, Jr.
                               ----------------------------
                               Franklin  C. Fisher, Jr.

                               Address for Notices:

                               5433 Westheimer, Suite 500
                               Houston, Texas 77056

<PAGE>

                                    AMENDMENT

WHEREAS, IT/IS, Inc. and Frank C. Fisher, Jr. and Steve L. Tebo (hereafter
"Consultants") signed a Consulting Agreement on January 22, 2000 (the
"Contract"), and

WHEREAS, IT/IS, Inc. and Consultants now wish to amend the Contract by
eliminating a sentence therefrom, and

NOW THEREFORE in consideration of the premises and the mutual covenants herein
contained it is agreed between IT/IS, Inc. and Consultants as follows:

The last sentence in section 4 "Delivery of Stock" of the Contract which reads
"FAILURE BY THE COMPANY TO FILE A REGISTRATION STATEMENT WITHIN THE FIFTEEN (15)
DAYS DESCRIBED ABOVE SHALL ENTITLE THE CONSULTANTS TO AN ADDITIONAL TEN THOUSAND
(10,000) SHARES OF STOCK FOR EACH DAY THE COMPANY FAILS TO FILE THE APPROPRIATE
REGISTRATION." is hereby voided, deleted and eliminated from the Contract in its
entirety.

No other charges are made to the Contract.

Agreed and amended this 10th day of May 2000.

IT/IS, INC.

By       /s/ Kelley V. Kirker
     ---------------------------------------
         Kelley V. Kirker, CEO

CONSULTANTS:

         /s/ Steve L. Tebo
---------------------------------------------
         Steve L. Tebo

         /s/ Franklin C. Fisher, Jr.
---------------------------------------------
         Franklin C. Fisher, Jr.

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