Document:

EXHIBIT 10.32
                                                                   -------------

                              AMENDED AND RESTATED
                                STOCK OPTION PLAN
                                       OF
                               PALWEB CORPORATION
                            (EFFECTIVE MAY 11, 2001)
             (AS AMENDED BY THE BOARD OF DIRECTORS JANUARY 7, 2002)
                  (APPROVED BY THE SHAREHOLDERS APRIL 22, 2002)
         (AS REVISED TO SHOW CHANGE IN PAR VALUE DUE TO REDOMICILIATION
                           IN OKLAHOMA ON MAY 2, 2002)
                 (AS ADJUSTED TO REFLECT REVERSE STOCK SPLIT OF
                      COMMON STOCK EFFECTIVE JUNE 25, 2002)

1.       PURPOSE OF THE PLAN

         This Stock Option Plan (the "Plan") is intended as an incentive to
managerial and other key employees of PalWeb Corporation (the "Company"), and
its subsidiaries. Its purposes are to retain employees with a high degree of
training, experience, and ability, to attract new employees whose services are
considered unusually valuable, to encourage the sense of proprietorship of such
persons, and to stimulate the active interest of such persons in the development
and financial success of the Company. Options granted under the Plan may be
either "incentive stock options" as provided by Section 422 of the Internal
Revenue Code of 1986, as amended, and as may be further amended from time to
time ( the "Internal Revenue Code" or "Code") or options which do not qualify as
incentive stock options.

2.       ADMINISTRATION OF THE PLAN

         (a) Administration. The Plan shall be administered by the Board of
Directors of the Company, or if the Board so authorizes, by a committee (the
"Committee") of the Board of Directors consisting of not less than two (2)
members of the Board of Directors. Unless the context otherwise requires,
references herein to the Committee shall be references to the Board of Directors
or the Committee. Members of the Committee shall serve at the pleasure of the
Board, and the Board may from time to time remove members from, or add members
to, the Committee. A majority of the members of the Committee shall constitute a
quorum for the transaction of business. Action approved in writing by a majority
of the members of the Committee then serving shall be fully effective as if the
action had been taken by unanimous vote at a meeting duly called and held.

         (b) Authority. The Committee is authorized to construe and interpret
the Plan, to promulgate, amend and rescind rules and regulations relating to the
implementation of the Plan and to make all other determinations necessary or
advisable for the administration of the Plan. The Committee may designate
persons other than members of the Committee to carry out its responsibilities
<PAGE>
under such conditions and limitations as it may prescribe, except that the
Committee may not delegate its authority with regard to selection for
participation of, and the granting of options to, persons subject to Sections
16(a) and 16(b) of the Exchange Act. Any determination, decision or action of
the Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive and
binding upon all persons participating in the Plan and any person validly
claiming under or through persons participating in the Plan. The Company shall
effect the granting of options under the Plan in accordance with the
determinations made by the Committee, by execution of instruments in writing in
such form as approved by the Committee.

3.       DESIGNATION OF PARTICIPANTS

         Persons eligible for options under the Plan shall consist of managerial
and other key employees of the Company and/or its subsidiaries who hold
positions of significant responsibilities or whose performance or potential
contribution, in the sole judgment of the Committee, will benefit the future
success of the Company. In addition, all Non-employee Directors of the Company
shall be eligible for options under the plan in accordance solely with the
provisions of Section 7 hereof.

4.       SHARES SUBJECT TO THE PLAN

         Subject to adjustment as provided in Paragraph 9 hereof, there shall be
subject to the Plan two million (2,000,000) shares of common stock of the
Company, par value $0.0001 per share. The shares subject to the Plan shall
consist of authorized but unissued shares or treasury shares held by the
Company. Any of such shares that may remain unsold and that are not subject to
outstanding options at the termination of the Plan shall cease to be subject to
the Plan. Should any option expire or be canceled prior to its exercise in full,
or a portion of an option is surrendered in payment for the exercise of an
option or satisfaction of any tax withholding obligations, the shares
theretofore subject to such options may again be subjected to an option under
the Plan. Any shares not subject to outstanding options at the expiration of the
Plan or at any time during the life of the Plan may be dedicated to other plans
that the Company may adopt and to the extent so dedicated, such shares shall not
be subject to this Plan.

5.       OPTION PRICE

         (a) Price. The purchase price for each share placed under option
pursuant to the Plan shall be determined by the Committee, but shall in no event
be less than 100% of the Fair Market Value (as defined below) of such share on
the date the option is granted.

         (b) Fair Market Value. "Fair Market Value" means the average of the
high and low sales prices of the shares of Common Stock on any national
securities exchange on which the shares are listed on the day on which such
value is to be determined or, if no shares were traded on such day, on the next
preceding day on which shares were traded, as reported by such exchange, by
National Quotation Bureau, Inc. or other national quotation service. If the
Common Stock is not listed on a national securities exchange, Fair Market Value
means the average of the reported high and low sales prices of the shares of
Common Stock in the over-the-counter market on the date on which such value is
to be determined as reported by a widely followed quotation service such as
Yahoo Finance, MSN Investor, Raging Bull or similar sites, or, if such prices
are not available, the last sales price on such day or, if no shares were traded
<PAGE>
on such day, on the next preceding day on which the shares were traded, as
reported by the National Association of Securities Dealers Automatic Quotation
System (NASDAQ) or other national quotation service. If at any time shares of
Common Stock are not traded on an exchange or in the over-the-counter market,
Fair Market Value shall be the value determined by the Committee, taking into
consideration those factors affecting or reflecting value that they deem
appropriate. For purposes of determining the purchase price of an incentive
stock option, Fair Market Value shall in any event be determined in accordance
with Section 422 of the Code.

6.       TERMS AND EXERCISE OF OPTIONS

         (a) General. The Committee, in granting options hereunder, shall have
discretion to determine the times when, and the terms upon which, options shall
be exercisable, including such provisions as deemed advisable to permit
qualification as "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code, as the same may from time to time be amended for
options intended to qualify as such, and incentive stock options outstanding
under the Plan may be amended, if necessary, to permit such qualification. The
Committee shall designate at the time of granting of any option whether such
option or any portion thereof shall be an "incentive stock option." Each option
shall be evidenced by an agreement between the Company and the optionee
containing provisions consistent with this Plan and such other provisions as the
Committee may determine as provided herein. Unless otherwise determined by the
Committee at the time of grant, all options shall become exercisable at the rate
of 25% of the total shares subject to the option on each of the first four (4)
anniversary dates of the date of grant. The Committee shall also be entitled to
accelerate the date any outstanding option becomes exercisable at any time.

         (b) Right to Exercise. If at the time of any exercise of an option
either (i) there are insufficient authorized shares or treasury shares of Common
Stock of the Company available for issuance upon the exercise of the option, or
(ii) the exercise price is less than the par value of the shares (if the only
shares available for exercise are authorized but unissued shares, as opposed to
treasury shares), the right of the optionee to exercise such option shall be
suspended and deferred until such time as either or both of such circumstances
shall have been cured prior to the time that any such option would otherwise
expire.

         (c) Term. In the event of the death of an optionee while in the employ
of the Company, any unvested portion of the option as of the date of death shall
be vested as of the date of death and the option shall be exercisable in full by
the heirs or other legal representatives of the optionee within twelve (12)
months following the date of death. In the event of termination of employment
for any reason other than death or termination for cause (and except as
otherwise provided in subsection (e) below) such option shall be exercisable by
the employee or his legal representative within three (3) months of the date of
termination as to all then vested portions. In addition, the Committee may in
its sole discretion, approve acceleration of the vesting of any unvested
portions of the option. If an optionee's employment with the Company is
terminated for cause, the option shall terminate as of the date of such
termination of employment and the optionee shall have no further rights to
exercise any portion of the option. "Termination for cause" means any discharge
for violation of the policies and procedures of the Company or for other job
performance or conduct that is detrimental to the best interests of the Company,
as determined by the Committee in its sole discretion. Notwithstanding any of
the foregoing, in no event may an option be exercised more than ten (10) years
after the date of its grant.
<PAGE>
         (d) Method of Exercise. Options may be exercised, whether in whole or
in part, by written notification to the Company accompanied by cash or a
certified check for the aggregate purchase price of the number of shares being
purchased, or upon exercise of an option, the optionee shall be entitled (unless
otherwise provided in the agreement evidencing the option), without the
requirement of further approval or other action by the Committee, to pay for the
shares (i) by tendering stock of the Company that has been owned by the optionee
for at least six (6) months with such stock to be valued at the Fair Market
Value (as determined under Section 5) on the date immediately preceding the date
of exercise or (ii) with a combination of cash and stock that has been owned by
the optionee for at least six (6) months as provided above.

         In addition, upon exercise of an option, the optionee may, with the
prior approval of the Committee, pay for the shares (a) by tendering stock of
the Company already owned by the optionee but that has not been held by the
optionee for at least six (6) months with such stock to be valued at the Fair
Market Value (as determined under Section 5) on the date immediately preceding
the date of exercise, (b) surrendering a portion of the option with such
surrendered option to be valued based on the difference between the Fair Market
Value (as determined under Section 5) of the shares surrendered on the date
immediately preceding the date of exercise and the aggregate option purchase
price of the shares surrendered ("Surrender Value"), or (c) with a combination
of cash, stock of the Company that has not been held by the optionee for at
least six (6) months or surrender of options.

         The Committee may also permit optionees, either on a selective or
aggregate basis, to simultaneously exercise options and sell the shares of
common stock thereby acquired, pursuant to a brokerage or similar arrangement,
approved in advanced by the Committee, and use the proceeds from such sale as
payment of the purchase price of the shares being acquired upon exercise of any
option.

         (e) Limitations Applicable To Incentive Options. To the extent the
aggregate Fair Market Value of stock (determined as of the date of grant) with
respect to which incentive stock options are exercisable for the first time by
any individual during any calendar year (under all Company plans) exceeds one
hundred thousand dollars ($100,000), such options shall be treated as options
that are not incentive stock options. Options intended to be incentive options
shall have such additional terms and provisions as required by the Internal
Revenue Code.

         The grant of any incentive stock options shall be subject to the Plan
being approved by the shareholders of the Company within twelve months after the
Plan is adopted by the Board. However, the failure of the shareholders of the
Company to approve the Plan shall only affect an option's status as an incentive
stock option and not the validity of any options granted under the Plan.

         (f) Continued Service as a Director. Any provisions of the Plan to the
contrary notwithstanding, for purposes of Section 6(b) above, in the event an
optionee who is also a director of the Company ceases to be employed by the
Company but continues to serve as a director of the Company, the Committee, in
<PAGE>
its sole discretion, may determine that all or a portion of such optionee's
options shall not expire three (3) months following the date of termination of
employment with the Company as is provided in Section 6(b) above, but instead
shall continue in full force and effect until the such optionee ceases to be a
director of the Company, but in no event beyond the stated expiration date of
the options as set forth in the applicable option agreement. Termination of any
such option in connection with the optionee's termination of service as a
director shall be in accordance with the provisions of Section 6(b) above;
provided, however, that (i) the terms "employ" and "employment" as used therein
shall be replaced with the terms "service" and "service on the Board of
Directors," respectively, and (ii) the phrase "termination for cause" shall mean
any removal from the Board of Directors for cause in accordance with applicable
law and the Certificate of Incorporation and By-Laws of the Company.

7.       NON-EMPLOYEE DIRECTOR OPTIONS

         Notwithstanding anything elsewhere in the Plan to the contrary, each
person who is a member of the Board of Directors of the Company but who is not
an employee of the Company (a "Non-employee Director") shall be eligible for
grants of stock options under the Plan solely in accordance with the provisions
of this Section 7. The following provisions of this Section 7 shall apply to the
granting of stock options to Non-employee Directors:

         (a) Exercise Price. The purchase price for each share placed under an
option for a Non-employee Director shall be equal to 100% of the Fair Market
Value of such share on the date the option is granted.

         (b) Vesting and Term. Unless otherwise determined by the Committee at
the time of grant, all options shall become exercisable at the rate of 25% of
the total shares subject to the option on each of the first four (4) anniversary
dates of the date of grant. The Committee shall also be entitled to accelerate
the date any outstanding option becomes exercisable at any time. The period
during which a Non-employee Director option may be exercised shall be ten (10)
years from the date of grant, subject to earlier termination in accordance with
the provisions of Section 6(b) hereof; provided, however that (i) the terms
"employ" and "employment" as used therein shall be replaced with the terms
"service" and "service on the Board of Directors," respectively, and (ii) the
phrase "termination for cause" shall mean any removal from the Board of
Directors for cause in accordance with applicable law and the Certificate of
Incorporation and By-Laws of the Company.

         (c) Method of Exercise. Options granted to Non-employee Directors may
be exercised in the manner provided in Section 6(d) hereof.

         (d) Other Provisions. All options granted to Non-employee Directors
shall be subject to the other provisions of general applicability to options
granted under the Plan, including without limitation, the provisions of Section
8 ("Assignability") , Section 9 ("Changes in Capitalization") and Section 10
("Change in Control") hereof.
<PAGE>
8.       ASSIGNABILITY

         During an optionee's lifetime, an option may be exercisable only by the
optionee and options granted under the Plan and the rights and privileges
conferred thereby shall not be subject to execution, attachment or similar
process and may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than by will or by the
applicable laws of descent and distribution. Notwithstanding the foregoing or
any other provisions of the Plan, to the extent permitted by applicable law, the
Committee may, in its sole discretion, permit recipients of options that do not
qualify as incentive stock options under Section 422 of the Internal Revenue
Code to transfer such non-incentive options by gift or other means pursuant to
which no consideration is given for such transfer. The Committee shall impose in
connection with any non-incentive options transferred pursuant to the foregoing
sentence such limitations and restrictions as it deems appropriate. Any other
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of any
option under the Plan or of any right or privilege conferred thereby, contrary
to the provisions of the Plan, or the sale or levy or any attachment or similar
process upon the rights and privileges conferred thereby, shall be null and void
ab initio.

9.       CHANGES IN CAPITALIZATION

         (a) No Effect on Company Rights. Subject to the other provisions of
this Plan, the existence of the Plan and the options granted hereunder shall not
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Company's capital stock or the rights thereof, any issue of shares of Common
Stock or shares of any other class of capital stock or warrants or rights to
acquire such shares, the dissolution or liquidation of the Company or any sale
or transfer of all or any part of its assets or business, or any other corporate
act or proceeding.

         (b) Changes in Capitalization; Reorganizations. In the event of any
change in capitalization affecting the common stock of the Company, such as a
stock dividend, stock split, recapitalization, merger, consolidation, split-up,
combination or exchange of shares or other form of reorganization, liquidation,
or any other change affecting the common stock (including a merger or
reorganization in which the Company is not the surviving entity or survives only
as a subsidiary of another entity) ("Change in Capitalization"), such
proportionate adjustments, shall be made with respect to the aggregate number
and type of securities for which options may be granted under the Plan, the
number and type of securities (including securities of a surviving or acquiring
entity or cash, property or other consideration) covered by each outstanding
option, and the exercise price of outstanding options, in each case to the end
that optionees shall be entitled upon exercise of options to receive the same
number and kind of stock, securities, cash, property or other consideration that
the optionee would have receive in connection with the Change in Capitalization
if such option had been exercised immediately preceding such Change in
Capitalization.

         (c) Other Distributions. The Committee may also make such adjustments
in the number of shares covered by, and the price or other value of any
outstanding options in the event of a spin-off or other distribution (other than
normal cash dividends) of Company assets to shareholders.
<PAGE>
10.      CHANGE IN CONTROL

         (a) Effect on Options. In the event of a Change in Control (as defined
below) of the Company, in addition to any adjustments required by Section 9(b):

                  (i) all options outstanding on the date of such Change in
         Control shall become immediately and fully exercisable, and

                  (ii) an optionee will be permitted to surrender for
         cancellation within sixty (60) days after such Change in Control, any
         option or portion of such option to the extent not yet exercised and
         the optionee will be entitled to receive a cash payment in an amount
         equal to the excess, if any, of (A) the Fair Market Value on the date
         preceding the date of surrender, of the shares subject to the option or
         portion thereof surrendered, over (B) the aggregate exercise price for
         the shares under the option or portion thereof surrendered.

         (b) Change in Control. A "Change in Control" of the Company shall mean
the occurrence after the effective date of the Plan of:

                  (i) An acquisition (other than directly from the Company) of
         any voting securities of the Company (the "Voting Securities") by any
         "Person" (as the term person is used for purposes of Section 13(d) or
         14(d) of the Exchange Act) immediately after which such Person has
         "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
         under the Exchange Act) of fifty percent (50%) or more of the combined
         voting power of the Company's then outstanding Voting Securities;
         provided, however, this subsection (i) shall not apply to acquisitions
         of Voting Securities by Paul Kruger or his affiliates.

                  (ii) The individuals who, as of the date of adoption of the
         Plan by the Board, are members of the Board (the "Incumbent Board"),
         cease for any reason to constitute at least two-thirds of the members
         of the Board; provided, however, that if the election, or nomination
         for election by the Company's common stockholders, of any new director
         was approved by a vote of at least two-thirds of the Incumbent Board,
         such new director shall, for purposes of this Plan, be considered as a
         member of the Incumbent Board; provided further, however, that no
         individual shall be considered a member of the Incumbent Board if such
         individual initially assumed office as a result of either an actual or
         threatened 'election contest' (as described in Rule 14A-11 promulgated
         under the Exchange Act) or other actual or threatened solicitation of
         proxies or consents by or on behalf of a Person other than the Board (a
         "Proxy Contest") including by reason of any agreement intended to avoid
         or settle any Election Contest or Proxy Contest; or

                  (iii)  The consummation of:

                         (A) A merger, consolidation or reorganization involving
                  the Company, unless
<PAGE>
                             (1) the stockholders of the Company, immediately
                         before such merger, consolidation or reorganization,
                         own, directly or indirectly immediately following such
                         merger, consolidation or reorganization, at least sixty
                         percent (60%) of the combined voting power of the
                         outstanding voting securities of the corporation
                         resulting from such merger or consolidation or
                         reorganization (the "Surviving Corporation") in
                         substantially the same proportion as their ownership of
                         the Voting Securities immediately before such merger,
                         consolidation or reorganization,

                             (2) the individuals who were members of the
                         Incumbent Board immediately prior to the execution of
                         the agreement providing for such merger, consolidation
                         or reorganization constitute at least two-thirds of the
                         members of the board of directors of the Surviving
                         Corporation, and

                             (3) no Person, other than the Company, any
                         Subsidiary, any employee benefit plan (or any trust
                         forming a part thereof) maintained by the Company, the
                         Surviving Corporation, or any Subsidiary or any Person
                         who, immediately prior to such merger, consolidation or
                         reorganization had Beneficial Ownership of fifty
                         percent (50%) or more of the then outstanding Voting
                         Securities, has Beneficial Ownership of fifty percent
                         (50%) or more of the combined voting power of the
                         Surviving Corporation's then outstanding voting
                         securities;

                  (B) A complete liquidation or dissolution of the Company; or

                  (C) An agreement for the sale or other disposition of all or
         substantially all of the assets of the Company to any Person (other
         than a transfer to a Subsidiary).

         Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Company that, by
reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Voting Securities which increases the percentage of the
then outstanding Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.

11.      EFFECTIVE AND EXPIRATION DATES OF PLAN

         This Plan became effective as of May 11, 2001, the date of its approval
by the Board of Directors of the Company. No options shall be granted pursuant
to this Plan after May 11, 2011.
<PAGE>
12.      AMENDMENTS OR TERMINATION

         The Committee may at any time amend, alter or discontinue the Plan in
such manner as it may deem advisable. Any such amendment or alteration may be
effected without the approval of the shareholders of the Company, except to the
extent such approval may be required by applicable laws or by the rules of any
securities exchange upon which the Company's outstanding shares are admitted to
listed trading.

         No amendment, alteration or discontinuation of the Plan shall adversely
affect any stock option grants made prior to the time of such amendment,
alteration or discontinuation, except with the consent of the holder of the
affected options.

13.      GOVERNMENTAL REGULATIONS

         Notwithstanding any provision hereof, or any option granted hereunder,
the obligation of the Company to sell and deliver shares under any such option
shall be subject to all applicable laws, rules and regulations and to such
approvals by any governmental agencies or national securities exchange as may be
required, and the optionee shall agree that he will not exercise any option
granted hereunder, and that the Company will not be obligated to issue any
shares under any such option, if the exercise thereof or if the issuance of such
shares shall constitute a violation by the optionee or the Company of any
applicable law or regulation. If the shares of Common Stock have not been
registered, the Company may require that as a condition to exercise any option,
the optionee execute an investment letter. The Company shall be entitled to
require as a condition to the issuance of any shares of Common Stock upon
exercise of an option that the optionee remit an amount sufficient, in the
Company's opinion, to satisfy all FICA, federal, state or other withholding tax
requirements related thereto. Unless otherwise provided in the Agreement
evidencing the option, an optionee shall be entitled, without the requirement of
further approval or other action by the Committee, to satisfy such obligation in
whole or in part (i) by tendering stock of the Company already owned by the
optionee with such stock to be valued at the Fair Market Value (as determined
under Section 5) on the date immediately preceding the date of exercise of the
options, (ii) by surrendering a portion of his or her option with such
surrendered option to be valued at the Surrender Value (as determined under
Section 6(c)), or (iii) by a combination of cash, stock of the Company and
surrender of options.

14.      GOVERNING LAW

         The Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the state of incorporation of the
company and applicable federal law.

15.      SEVERABILITY

         If any provision of this Plan is determined to be invalid or
unenforceable for any reason, the remaining provisions of the Plan shall remain
in effect and be interpreted to reasonably effect the intent of the Plan.EXHIBIT 10.36
                                                                   -------------

                               PALWEB CORPORATION
                        INCENTIVE STOCK OPTION AGREEMENT

         This Agreement made and entered into effective _____________, by and
between PalWeb Corporation, a Delaware corporation ("Company"), and
______________, an employee of the Company, or a subsidiary of the Company
("Optionee").

                                   WITNESSETH:

         WHEREAS, the PalWeb Corporation Stock Option Plan ("Option Plan"),
provides that the Company may grant to the Optionee options to purchase shares
of its common stock, par value $.10 per share ("Common Stock").

         NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the parties agree as follows:

         1. GRANT OF OPTION. Subject to the terms contained herein, the Company
hereby grants to the Optionee as of the date set forth above, the right and
option, herein called the "Option," to purchase all or any part of an aggregate
number of __________ shares of the Common Stock covered by the Option. The
Option shall be an "incentive stock option" within the meaning of Section 422 of
the Internal Revenue Code so long as the Optionee remains an employee.

         2. PURCHASE PRICE. The purchase price of the shares of Common Stock
covered by the Option shall be $_______ per share, subject to adjustment as
provided in Paragraph 6 hereof, which price shall be equal to 100% of the Fair
Market Value (as defined below) of such shares on the date hereof.

         3. TERM OF OPTION. The Option granted hereunder shall become vested and
exercisable as set forth below:

         NUMBER OF SHARES                       DATE EXERCISABLE

After the Option becomes exercisable, it may thereafter be exercised, as to the
number of shares becoming exercisable, at any time and from time to time until
ten (10) years after the effective date hereof, or for such other period set
forth in Paragraph 5 hereof. Except as provided in Paragraph 5 hereof, the
Option may not be exercised at any time unless the Optionee shall have been in
continuous employment with the Company or a subsidiary or in continuous service
on the Board from the effective date hereof to the date of the exercise of the
Option.
<PAGE>
         4. TRANSFERABILITY. Except as otherwise provided below, neither the
Option nor any other right under this Agreement shall be assignable or
transferable by the Optionee, other than by will or the laws of descent and
distribution, and any attempted assignment, transfer, pledge, hypothecation or
other disposition of the Option, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.

         Notwithstanding the restrictions on transfer set forth above, the
Optionee may, with the prior consent of the Board of Directors or Compensation
Committee of the Board of Directors (either referred to as the "Committee"),
transfer all or any portion of the Option to "Permitted Transferees" (as defined
below), provided that there may be no consideration paid for any such transfer.
Subsequent transfer of any transferred Option shall be prohibited except (i)
transfers by a transferee in accordance with the first paragraph of this Section
by will or the laws of descent and distribution and (ii) transfers by a
transferee, conducted in accordance with the procedures and limitations of this
paragraph applicable to transfers by the Optionee to another person or entity
that is also a Permitted Transferee of the Optionee. Following transfer, the
events of termination of service set forth elsewhere herein shall continue to be
applied with respect to the original Optionee, and, following the occurrence of
any such event, the transferred Option shall be exercisable by the transferee
only to the extent, and for the periods, specified elsewhere herein. The
Optionee shall remain responsible for the payment of federal, state and local
taxes and other amounts as may be required to be withheld by the Company in
connection with the exercise of any transferred portion of the Option. In
connection with any transfer of the Option pursuant to this paragraph, the
Optionee shall surrender this Agreement to the Secretary of the Company, and the
Company shall furnish to the transferee, and, if the transfer relates to less
than all of the Option, to the Optionee, a new option agreement of like tenor as
this Agreement representing the right to acquire the appropriate number of
shares.

         For purposes of the foregoing, the term "Permitted Transferees" means
(i) the spouse, children or grandchildren of the Optionee ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of Immediate Family
Members, (iii) a partnership in which Immediate Family Members are the only
permitted partners, or (iv) a limited liability company in which Immediate
Family Members are the only permitted members and managers.

         5. TERMINATION OF SERVICE; DEATH OF OPTIONEE. In the event of
termination of employment for any reason other than death or termination for
cause, any vested portion of the Option shall be exercisable by Optionee or his
legal representative within three (3) months of the date of termination as to
all then vested portions; provided, however, the Board of Directors may, in its
sole discretion, approve acceleration of the vesting of any unvested portions of
the Option.

         If the Optionee's employment with the Company or service on the Board
is terminated for cause, the Option shall terminate as of the date of such
termination of employment or service on the Board, and the Optionee shall have
no further rights to exercise any portion of the Option. "Termination for Cause"
means any discharge for violation or the policies and the procedures of the
Company or for other job performance or conduct that is detrimental to the best
interests of the Company, as determined by the Committee in its sole discretion,
or removal from the Board for cause in accordance with applicable law and the
Certificate of Incorporation and By-Laws of the Company. In no event may the
Option be exercised more than ten (10) years after the effective date hereof.
<PAGE>
         In the event of the death of Optionee while employed or in service on
the Board, the Option shall be exercisable in full by the heirs or other legal
representatives of the Optionee at any time within twelve (12) months following
the date of death. In the event of termination of service on the Board, for any
reason other than death or termination for cause, the Option shall be
exercisable by the Optionee or his legal representative within three months of
the date of termination.

         Notwithstanding the foregoing, in the event Optionee ceases to be
employed by the Company but continues to serve as a director of the Company, all
of such Optionee's options shall not expire three (3) months following the date
of termination of employment with the Company, but instead shall continue in
full force and effect until the Optionee ceases to be a director of the Company,
but in no event beyond the stated expiration date of the options as set forth in
Section 2 above. Termination of any such option in connection with the
Optionee's termination of service as a director shall be in accordance with the
applicable provisions of the Option Plan; provided, however, that (i) the terms
"employ" and "employment" as used therein shall be replaced with the terms
"service" and "service on the Board of Directors," respectively, and (ii) the
phrase "termination for cause" shall mean any removal from the Board of
Directors for cause in accordance with applicable law and the Certificate of
Incorporation and By-Laws of the Company.

         6.       REORGANIZATIONS AND RECAPITALIZATIONS OF THE COMPANY.

                  a. Subject to the other provisions of this Agreement, the
         existence of the Option granted hereunder shall not affect or restrict
         in any way the right or power of the Company or its stockholders to
         make or authorize any or all adjustments, recapitalizations,
         reorganizations or other changes in the Company's capital structure or
         its business or any merger or consolidation of the Company, or any
         issue of bonds, debentures, preferred or prior preference stocks ahead
         of or affecting the Common Stock or the rights thereof, any issue of
         shares of Common Stock or shares of any other class of capital stock or
         warrants or rights to acquire such shares, or the dissolution or
         liquidation of the Company, or any sale or transfer of all or any part
         of its assets or business, or any corporate act or proceeding, whether
         of a similar character or otherwise.

                  b. In the event of any change in capitalization affecting the
         Common Stock of the Company, such as a stock dividend, stock split,
         recapitalization, merger, consolidation, split-up, combination or
         exchange of shares or other form of reorganization, liquidation, sale
         of assets or any other change affecting the Common Stock ("Change in
         Capitalization") a proportionate adjustment shall be made with respect
         to the aggregate number of shares of Common Stock covered by this
         Option and the price per share to the end that the Optionee shall be
         entitled to receive the same number and kind of stock, securities,
         cash, property or other consideration as if this Option had been
         exercised immediately preceding such Change in Capitalization.
<PAGE>
                  c. In the event of a Change in Control (as defined below) of
         the Company, the Optionee will be permitted to surrender for
         cancellation within sixty (60) days after such Change in Control, the
         Option or portion of the Option to the extent not yet exercised and the
         Optionee will be entitled to receive a cash payment in an amount equal
         to the excess, if any, of (A) the Fair Market Value (as defined below)
         on the date preceding the date of surrender, of the shares subject to
         the Option or portion thereof surrendered, over (B) the aggregate
         exercise price for the shares under the Option or portion thereof
         surrendered.

                  d. A "Change in Control" of the Company shall mean the
         consummation of an occurrence after the effective date of the Plan of:

                         i.   An acquisition (other than directly from the
                  Company) of any voting securities of the Company (the "Voting
                  Securities") by any "Person" (as the term person is used for
                  purposes of Section 13(d) or 14(d) of the Securities Exchange
                  Act of 1934 (the "Exchange Act")) immediately after which such
                  Person has "Beneficial Ownership" (within the meaning of Rule
                  13d-3 promulgated under the Exchange Act) of fifty percent
                  (50%) or more of the combined voting power of the Company's
                  then outstanding Voting Securities;

                         ii.   The individuals who, as of the date of adoption
                  of the Plan by the Board, are members of the Board (the
                  "Incumbent Board"), cease for any reason to constitute at
                  least two-thirds of the members of the Board; provided,
                  however, that if the election, or nomination for election by
                  the Company's common stockholders, of any new director was
                  approved by a vote of at least two-thirds of the Incumbent
                  Board, such new director shall, for purposes of this Plan, be
                  considered as a member of the Incumbent Board; provided
                  further, however, that no individual shall be considered a
                  member of the Incumbent Board if such individual initially
                  assumed office as a result of either an actual or threatened
                  "election contest" (as described in Rule 14A-11 promulgated
                  under the Exchange Act) or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a
                  Person other than the Board (a "Proxy Contest") including by
                  reason of any agreement intended to avoid or settle any
                  Election Contest or Proxy Contest; or

                         iii.   The consummation of:

                                (1)   A merger, consolidation or reorganization
                         involving the Company, unless

                                      (a) the stockholders of the Company,
                                immediately before such merger, consolidation or
                                reorganization, own, directly or indirectly
                                immediately following such merger, consolidation
<PAGE>
                                or reorganization, at least sixty percent (60%)
                                of the combined voting power of the outstanding
                                voting securities of the corporation resulting
                                from such merger or consolidation or
                                reorganization (the "Surviving Corporation") in
                                substantially the same proportion as their
                                ownership of the Voting Securities immediately
                                before such merger, consolidation or
                                reorganization,

                                      (b) the individuals who were members of
                                the Incumbent Board immediately prior to the
                                execution of the agreement providing for such
                                merger, consolidation or reorganization
                                constitute at least two-thirds of the members of
                                the board of directors of the Surviving
                                Corporation, and

                                      (c) no Person other than (a) the Company,
                                any Subsidiary, any employee benefit plan (or
                                any trust forming a part thereof) maintained by
                                the Company, the Surviving Corporation, or any
                                Subsidiary or (b) any Person who, immediately
                                prior to such merger, consolidation or
                                reorganization had Beneficial Ownership of fifty
                                percent (50%) or more of the then outstanding
                                Voting Securities has Beneficial Ownership of
                                fifty percent (50%) or more of the combined
                                voting power of the Surviving Corporation's then
                                outstanding voting securities;

                                (2) A complete liquidation or dissolution of the
                         Company; or

                                (3) An agreement for the sale or other
                         disposition of all or substantially all of the assets
                         of the Company to any Person (other than a transfer to
                         a Subsidiary).

                         Notwithstanding the foregoing, a Change in Control
                  shall not be deemed to occur solely because any Person (the
                  "Subject Person") acquired Beneficial Ownership of more than
                  the permitted amount of the outstanding Voting Securities as a
                  result of the acquisition of Voting Securities by the Company
                  which, by reducing the number of Voting Securities
                  outstanding, increases the proportional number of shares
                  Beneficially Owned by the Subject Person, provided that if a
                  Change in Control would occur (but for the operation of this
                  sentence) as a result of the acquisition of Voting Securities
                  by the Company, and after such share acquisition by the
                  Company, the Subject Person becomes the Beneficial Owner of
                  any additional Voting Securities which increases the
                  percentage of the then outstanding Voting Securities
                  Beneficially Owned by the Subject Person, then a Change in
                  Control shall occur.

         7. METHOD OF EXERCISING OPTION. The Option may be exercised, in whole
or in part, by written notification to the Company accompanied by cash or a
certified check for the aggregate purchase price of the number of shares being
purchased, or upon exercise of the Option, the Optionee shall be entitled,
without the requirement of further approval or other action by the Committee, to
<PAGE>
pay for the shares (i) by tendering stock of the Company that has been owned by
the Optionee for at least six (6) months with such stock to be valued at the
Fair Market Value (as defined below) on the date immediately preceding the date
of exercise or (ii) with a combination of cash and stock that has been owned by
the Optionee for at least six (6) months as provided above.

         In addition, upon exercise of the Option, the Optionee may, with the
prior approval of the Committee, pay for the shares (a) by tendering stock of
the Company already owned by the Optionee but that has not been held by the
Optionee for at least six (6) months with such stock to be valued at the Fair
Market Value (as defined below) on the date immediately preceding the date of
exercise, (b) surrendering a portion of the Option with such surrendered portion
to be valued based on the difference between the Fair Market Value (as defined
below) of the shares surrendered on the date immediately preceding the date of
exercise and the aggregate option purchase price of the shares surrendered
("Surrender Value"), or (c) with a combination of cash, stock of the Company
that has not been held by the Optionee for at least six (6) months or surrender
of options.

         The Committee may also permit the Optionee simultaneously to exercise
the Option and sell the shares of Common Stock thereby acquired, pursuant to a
brokerage or similar arrangement, approved in advanced by the Committee, and use
the proceeds from such sale as payment of the purchase price of the shares being
acquired upon exercise of the Option.

         Notwithstanding any provision hereof, the obligation of the Company to
sell and deliver shares under the Option shall be subject to all applicable
laws, rules and regulations and to such approvals by any governmental agencies
or national securities exchange as may be required. The Optionee shall not
exercise any portion of the Option and the Company will not be obligated to
issue any shares under the Option if the exercise thereof or if the issuance of
the shares shall constitute a violation by the Optionee or the Company of any
applicable law or regulation. If the shares of Common Stock have not been
registered, the Company may require that as a condition to exercise any option,
the optionee execute an investment letter. The Company may require as a
condition to the issuance of any shares of Common Stock upon exercise of the
Option that the Optionee remit an amount sufficient, in the Company's opinion,
to satisfy all FICA, federal, state or other withholding tax requirements
related to the exercise of the Option. The Optionee shall be entitled, without
the requirement of further approval or other action by the Committee, to satisfy
such obligation in whole or in part (i) by tendering stock of the Company
already owned by the Optionee with such stock to be valued at the Fair Market
Value (as defined below) on the date immediately preceding the date of exercise
of the Option, (ii) by surrendering a portion of the Option with such
surrendered Option covering shares having a Surrender Value equal to the amount
of such requirement, or (iii) by a combination of cash, stock of the Company or
surrender of a portion of the Option.

         8. RIGHTS AS A STOCKHOLDER. The Optionee shall have no rights as a
stockholder with respect to any shares covered by the Option until the date of
issuance of a stock certificate to him for such shares.
<PAGE>
         9. SUBSIDIARY. As used herein, the term "Subsidiary" shall mean any
present or future corporation in which the Company has a proprietary interest
(but only if the Company owns, directly or indirectly, stock possessing not less
than fifty percent (50%) of the total combined voting power of all classes of
stock in such corporation), as the Board shall determine from time to time.

         10. FAIR MARKET VALUE. "Fair Market Value" means the average of the
high and low sales prices of the shares of Common Stock on any national
securities exchange on which the shares are listed on the day on which such
value is to be determined or, if no shares were traded on such day, on the next
preceding day on which shares were traded, as reported by such exchange, by
National Quotation Bureau, Inc. or other national quotation service. If the
Common Stock is not listed on a national securities exchange, Fair Market Value
means the average of the reported high and low sales prices of the shares of
Common Stock in the over-the-counter market on the date on which such value is
to be determined as reported by a widely followed quotation service such as
Yahoo Finance, MSN Investor, Raging Bull or similar sites, or, if such prices
are not available, the last sales price on such day or, if no shares were traded
on such day, on the next preceding day on which the shares were traded, as
reported by the National Association of Securities Dealers Automatic Quotation
System (NASDAQ) or other national quotation service. If at any time shares of
Common Stock are not traded on an exchange or in the over-the-counter market,
Fair Market Value shall be the value determined by the Committee, taking into
consideration those factors affecting or reflecting value that they deem
appropriate. For purposes of determining the purchase price of an incentive
stock option, Fair Market Value shall in any event be determined in accordance
with Section 422 of the Code.

         11. OPTION PLAN. The terms of the Option and the rights and
responsibilities of the parties hereto shall be governed by the Option Plan. In
the event of any inconsistency between the terms of the Agreement and the Option
Plan, the terms of the Option Plan shall control.

         IN WITNESS WHEREOF the parties hereto have executed this Stock Option
Agreement as of the day and year first above written.

COMPANY:                                    PALWEB CORPORATION

                                            By: _________________________

OPTIONEE:

                                                _________________________

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