Document:

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
            NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
            THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
            IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
            NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
            TO BRAVO! FOODS INTERNATIONAL CORP. THAT SUCH REGISTRATION IS NOT
            REQUIRED.

                                CONVERTIBLE NOTE

      FOR VALUE RECEIVED, BRAVO! FOODS INTERNATIONAL CORP., a Delaware
corporation (hereinafter called "Borrower"), hereby promises to pay to
______________, ________________________ (the "Holder") or order, without
demand, the sum of _________ Dollars ($_____________) ("Principal"), with simple
interest accruing at the annual rate of ten percent (10%).

      This Note has been entered into pursuant to the terms of a subscription
agreement between the Borrower and the Holder, dated of even date herewith (the
"Subscription Agreement"), and shall be governed by the terms of such
Subscription Agreement. Unless otherwise separately defined herein, all
capitalized terms used in this Note shall have the same meaning as is set forth
in the Subscription Agreement. The following terms shall apply to this Note:

                                    ARTICLE I

                               GENERAL PROVISIONS

      1.1 Interest Rate. Simple interest payable on this Note shall accrue at
the annual rate of ten percent (10%).

      1.2 Monthly Payments. Monthly payments will be due and payable in equal
monthly installments on the first day of each month commencing May 1, 2005 until
April 30, 2006 ("Maturity Date"). Each monthly payment will be accompanied by an
amount equal to one-fifth of the Principal portion of that monthly payment
("Premium"). On the Maturity Date, all outstanding principal, interest and
Premium will be due and payable. In the event the Company's $.001 par value
common stock ("Common Stock") has closing prices of higher than $0.15 as
reported by Bloomberg L.P. for the OTC Bulletin Board for the five (5) trading
days preceding a monthly payment due date ("Lookback Period"), and a
Non-Registration Event has not occurred, then the monthly payment first due
after the Lookback Period shall be deferred, at the Company's option, until the
Maturity Date.

      1.3 Manner of Payment. Borrower may elect to pay sums due on this Note on
a monthly due date or the Maturity Date by delivering registered Common Stock in
lieu of cash. Such Common Stock will be valued at the average closing price of
the Common Stock during the Lookback Period immediately preceding the relevant
payment due date.

                                       1
<PAGE>

      1.4 Conversion Privileges. The Conversion Privileges set forth in Article
II shall remain in full force and effect immediately from the date hereof and
until the Note is paid in full regardless of the occurrence of an Event of
Default. The Note shall be payable in full on the Maturity Date, unless
previously converted into Common Stock in accordance with Article II hereof;
provided, that if an Event of Default has occurred (whether or not such Event of
Default is continuing), the Borrower may not pay this Note on or after the
Maturity Date, without the consent of the Holder.

      1.5 Payment Grace Period. The Borrower shall have a ten (10) day grace
period to pay any monetary amounts due under this Note, after which grace period
a default interest rate of fifteen percent (15%) per annum shall apply to the
amounts owed hereunder.

                                   ARTICLE II

                                CONVERSION RIGHTS

      The Holder shall have the right to convert the principal due under this
Note into Shares of the Borrower's Common Stock as set forth below.

      2.1. Conversion into the Borrower's Common Stock.

            (a) The Holder shall have the right from and after the date of the
issuance of this Note and then at any time until this Note is fully paid, to
convert any outstanding and unpaid Principal portion of this Note, accrued
interest and Premium, at the election of the Holder (the date of giving of such
notice of conversion being a "Conversion Date") into fully paid and
nonassessable shares of Common Stock as such stock exists on the date of
issuance of this Note, or any shares of capital stock of Borrower into which
such Common Stock shall hereafter be changed or reclassified, at the conversion
price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined
as provided herein. Upon delivery to the Borrower of a Notice of Conversion as
described in Section 7 of the Subscription Agreement of the Holder's written
request for conversion, Borrower shall issue and deliver to the Holder within
three business days from the Conversion Date ("Delivery Date") that number of
shares of Common Stock for the portion of the Note converted in accordance with
the foregoing. At the election of the Holder, the Borrower will deliver accrued
but unpaid interest on the Note and Premium in the manner provided in Section
1.2 through the Conversion Date directly to the Holder on or before the Delivery
Date (as defined in the Subscription Agreement). The number of shares of Common
Stock to be issued upon each conversion of this Note shall be determined by
dividing that portion of the principal of the Note, interest and/or Premium to
be converted, by the Conversion Price.

            (b) Subject to adjustment as provided in Section 2.1(c) hereof, the
Conversion Price per share shall be $0.10 ("Maximum Base Price").

            (c) The Maximum Base Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to Section 2.1(a),
shall be subject to adjustment from time to time upon the happening of certain
events while this conversion right remains outstanding, as follows:

                  A. Merger, Sale of Assets, etc. If the Borrower at any time
shall consolidate with or merge into or sell or convey all or substantially all
its assets to any other corporation, this Note, as to the unpaid principal
portion thereof and accrued interest thereon, shall thereafter be deemed to
evidence the right to purchase such number and kind of shares or other
securities and property as would have been issuable or distributable on account
of such consolidation, merger, sale or conveyance, upon or with respect to the
securities subject to the conversion or purchase right immediately prior to such
consolidation, merger, sale or conveyance. The foregoing provision shall
similarly apply to successive transactions of a similar nature by any such
successor or purchaser. Without limiting the generality of the foregoing, the
anti-dilution provisions of this Section shall apply to such securities of such
successor or purchaser after any such consolidation, merger, sale or conveyance.

                                       2
<PAGE>

                  B. Reclassification, etc. If the Borrower at any time shall,
by reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes that may be issued or
outstanding, this Note, as to the unpaid principal portion thereof and accrued
interest thereon, shall thereafter be deemed to evidence the right to purchase
an adjusted number of such securities and kind of securities as would have been
issuable as the result of such change with respect to the Common Stock
immediately prior to such reclassification or other change.

                  C. Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock in shares
of Common Stock, the Conversion Price shall be proportionately reduced in case
of subdivision of shares or stock dividend or proportionately increased in the
case of combination of shares, in each such case by the ratio which the total
number of shares of Common Stock outstanding immediately after such event bears
to the total number of shares of Common Stock outstanding immediately prior to
such event..

                  D. Share Issuance. So long as this Note is outstanding, if the
Borrower shall issue any shares of Common Stock except for the Excepted
Issuances (as defined in the Subscription Agreement) for a consideration less
than the Conversion Price in effect at the time of such issue, then, and
thereafter successively upon each such issue, the Conversion Price shall be
reduced to such other lower issue price. For purposes of this adjustment, the
issuance of any security carrying the right to convert such security into shares
of Common Stock or of any warrant, right or option to purchase Common Stock
shall result in an adjustment to the Conversion Price upon the issuance of
security and again upon the issuance of shares of Common Stock upon exercise of
such conversion or purchase rights if such issuance is at a price lower than the
then applicable Conversion Price.

            (d) Whenever the Conversion Price is adjusted pursuant to Section
2.1(c) above, the Borrower shall promptly mail to the Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

            (e) During the period the conversion right exists, Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. Borrower represents that upon issuance, such shares will be duly and
validly issued, fully paid and non-assessable. Borrower agrees that its issuance
of this Note shall constitute full authority to its officers, agents, and
transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.

      2.2 Method of Conversion. This Note may be converted by the Holder in
whole or in part as described in Section 2.1(a) hereof and the Subscription
Agreement. Upon partial conversion of this Note, a new Note containing the same
date and provisions of this Note shall, at the request of the Holder, be issued
by the Borrower to the Holder for the principal balance of this Note and
interest which shall not have been converted or paid.

                                       3
<PAGE>

      2.3 Maximum Conversion. The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares
of Common Stock which would be in excess of the sum of (i) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 9.99% of the
outstanding shares of Common Stock of the Borrower on such Conversion Date. For
the purposes of the provision to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to
the foregoing, the Holder shall not be limited to aggregate conversions of only
9.99% and aggregate conversion by the Holder may exceed 9.99%. The Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section 2.3 will limit any conversion hereunder and to the extent that
the Holder determines that the limitation contained in this Section applies, the
determination of which portion of the Notes are convertible shall be the
responsibility and obligation of the Holder. The Holder may void the conversion
limitation described in this Section 2.3 upon and effective after 61 days prior
written notice to the Borrower. The Holder may allocate which of the equity of
the Borrower deemed beneficially owned by the Holder shall be included in the
9.99% amount described above and which shall be allocated to the excess above
9.99%.

                                   ARTICLE III

                                EVENT OF DEFAULT

      The occurrence of any of the following events of default ("Event of
Default") shall, at the option of the Holder hereof, make all sums of Principal,
interest and Premium then remaining unpaid hereon and all other amounts payable
hereunder immediately due and payable, upon demand, without presentment, or
grace period, all of which hereby are expressly waived, except as set forth
below:

      3.1 Failure to Pay Principal or Interest. The Borrower fails to pay any
installment of Principal, interest, Premium or other sum due under this Note
when due and such failure continues for a period of ten (10) days after the due
date. The ten (10) day period described in this Section 3.1 is the same ten (10)
day period described in Section 1.1 hereof.

      3.2 Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of the Subscription Agreement or this Note in any
material respect and such breach, if subject to cure, continues for a period of
ten (10) business days after written notice to the Borrower from the Holder.

      3.3 Breach of Representations and Warranties. Any material representation
or warranty of the Borrower made herein, in the Subscription Agreement, or in
any agreement, statement or certificate given in writing pursuant hereto or in
connection therewith shall be false or misleading in any material respect as of
the date made and the Closing Date.

      3.4 Receiver or Trustee. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.

      3.5 Judgments. Any money judgment, writ or similar final process shall be
entered or filed against Borrower or any of its property or other assets for
more than $50,000, and shall remain unvacated, unbonded or unstayed for a period
of forty-five (45) days.

                                       4
<PAGE>

      3.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law,
or the issuance of any notice in relation to such event, for the relief of
debtors shall be instituted by or against the Borrower and if instituted against
Borrower are not dismissed within 45 days of initiation.

      3.7 Delisting. Delisting of the Common Stock from the OTC Bulletin Board
("OTCBB") or such other principal exchange on which the Common Stock is listed
for trading; failure to comply with the requirements for continued listing on
the OTCBB for a period of three consecutive trading days; or notification from
the OTC Bulletin Board or any Principal Market that the Borrower is not in
compliance with the conditions for such continued listing on the OTCBB or other
Principal Market.

      3.8 Stop Trade. An SEC or judicial stop trade order or Principal Market
trading suspension that lasts for five or more consecutive trading days.

      3.9 Failure to Deliver Common Stock or Replacement Note. Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note and Sections 7 and 11 of the Subscription Agreement, or,
if required, a replacement Note.

      3.10 Non-Registration Event. The occurrence of a Non-Registration Event as
described in Section 11.4 of the Subscription Agreement.

      3.11 Reverse Splits. The Borrower effectuates a reverse split of its
common stock without ten days prior written notice to the Holder.

      3.12 Cross Default. A default by the Borrower first occurring after the
date of this Note of a material term, covenant, warranty or undertaking of any
other agreement to which the Borrower and Holder are parties, or the initial
occurrence after the date of this Note of a material event of default under any
such other agreement, in each case, which is not cured after any required notice
and/or cure period.

                                   ARTICLE IV

                                  MISCELLANEOUS

      4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

      4.2 Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number

                                       5
<PAGE>

designated below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours
where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be: (i) if to the Borrower to:
Bravo! Foods International Corp., 11300 U.S. Highway 1, Suite 202, North Palm
Beach, Florida 33408, Attn: Roy D. Toulan, Jr., Esq., telecopier: (561)
625-1413, and (ii) if to the Holder, to the name, address and telecopy number
set forth on the front page of this Note, with a copy by telecopier only to
Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176,
telecopier number: (212) 697-3575.

      4.3 Amendment Provision. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

      4.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.

      4.5 Cost of Collection. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys' fees.

      4.6 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York. Any action brought by either
party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York. Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts. The prevailing party shall be entitled to recover
from the other party its reasonable attorney's fees and costs.

      4.7 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

      4.8 Redemption. This Note may not be redeemed or paid before or after the
Maturity Date except as described in the Subscription Agreement.

      4.9 Shareholder Status. The Holder shall not have rights as a shareholder
of the Borrower with respect to unconverted portions of this Note. However, the
Holder will have the right of a shareholder of the Borrower with respect to the
Shares of Common Stock to be received after delivery by the Holder of a
Conversion Notice to the Borrower.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

                                       6
<PAGE>

      IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name
by an authorized officer on this ____ day of December, 2004.

                                           BRAVO! FOODS INTERNATIONAL CORP.

                                           By:________________________________
                                                Name:
                                                Title:

WITNESS:

--------------------------------------

                                       7
<PAGE>

                              NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

      The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Note issued by BRAVO! FOODS INTERNATIONAL
CORP. on December ___, 2004 into Shares of Common Stock of BRAVO! FOODS
INTERNATIONAL CORP. (the "Borrower") according to the conditions set forth in
such Note, as of the date written below.

Date of Conversion:____________________________________________________________

Conversion Price:______________________________________________________________

Shares To Be Delivered:________________________________________________________

Signature:_____________________________________________________________________

Print Name:____________________________________________________________________

Address:_______________________________________________________________________

         ______________________________________________________________________

                                       8Exhibit 10.1
                                                                    ------------

                         COMPETITIVE TECHNOLOGIES, INC.

                        1997 EMPLOYEES' STOCK OPTION PLAN
                           As Amended January 14, 2005

1. Purpose of the 1997 Employees' Stock Option Plan.

         The purpose of the Plan is to enable the Company to attract, retain and
motivate its employees by providing for or increasing the proprietary interests
of such employees in the Company through increased stock ownership.

         The Plan provides for options which either (i) qualify as incentive
stock options ("Incentive Options") within the meaning of that term in Section
422 of the Internal Revenue Code of 1986, as amended, or (ii) do not so qualify
under Section 422 of the Code ("Nonstatutory Options") (collectively "Options").
Any Option granted under this Plan will be clearly identified at the time of
grant as to whether it is intended to be either an Incentive Option or a
Nonstatutory Option.

2. Definitions.

         The following terms, when appearing in the text of this Plan in
capitalized form, will have the meanings set out below:

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

                  (b) "Code" means the Internal Revenue Code of 1986, as
                  heretofore or hereafter amended.

                  (c) "Committee" means the committee appointed by the Board
                  pursuant to Section 3 below.

                  (d) "Company" means Competitive Technologies, Inc. or any
                  parent or "subsidiary corporation," as that term is defined by
                  Section 424(f) of the Code, thereof, unless the context
                  requires it to be limited to Competitive Technologies, Inc.

                  (e) "Disabled Grantee" means a Grantee who is disabled within
                  the meaning of Section 422(c)(6) of the Code.

                  (f) "Employees" means the class of employees consisting of
                  individuals regularly employed by the Company on a full-time
                  salaried basis who are identified as key employees, or such
                  other employees as the Committee shall so determine.

                                     Page 1

<PAGE>

                  (g) "Executive Officer" means those individuals who, on the
                  last day of the taxable year at issue: (i) served as the
                  Company's chief executive officer or was acting in a similar
                  capacity, regardless of compensation level; and (ii) the four
                  most highly compensated executive officers (other than the
                  chief executive officer) all as determined pursuant to
                  Treasury Regulation ss.1.162-27(c)(2).

                  (h) "Fair Market Value" means, with respect to the common
                  stock of the Company, the price at which the stock would
                  change hands between an informed, able and willing buyer and
                  seller, neither of which is under a compulsion to enter into
                  the transaction. Fair Market Value will be determined in good
                  faith by the Committee in accordance with a valuation method
                  which is consistent with the guidelines set forth in Treasury
                  Regulation 1.421-7 (e) (2) or any applicable regulations
                  issued pursuant to Section 422(a) of the Code. Fair Market
                  Value will be determined without regard to any restriction
                  other than a restriction which, by its terms, will never
                  lapse.

                  (i) "Grantee" means an eligible Employee under this Plan who
                  has been granted an Option.

                  (j) "Incentive Option" means an Option that qualifies for the
                  benefit described in Section 421 of the Code, by virtue of
                  compliance with the provisions of Section 422 of the Code.

                  (k) "Nonstatutory Option" means an Option that is not an
                  Incentive Option.

                  (l) "Option" means either an Incentive Option or a
                  Nonstatutory Option granted under this Plan.

                  (m) "Option Agreement" means the agreement entered into
                  between the Company and an individual Grantee and specifying
                  the terms and conditions of the Option granted to the Grantee,
                  which terms and conditions will recite or incorporate by
                  reference: (i) the provisions of this Plan which are not
                  subject to variation; and (ii) the variable terms and
                  conditions of each Option granted hereunder which will apply
                  to that Grantee.

                  (n) "Optionee" means a Grantee, and, under the appropriate
                  circumstances, his guardian, representative, heir,
                  distributee, legatee or successor in interest, including any
                  transferee.

                  (o) "Plan" means this 1997 Employees' Stock Option Plan, as
                  the same may from time to time be amended.

                  (p) "Stock" means the Company's common stock.

                                     Page 2

<PAGE>

3. Administration of the Plan.
   ---------------------------

                  (a) Committee Membership. The Plan shall be administered by a
                  committee appointed by the Board, to be known as the
                  Compensation Committee (the "Committee"). The Committee shall
                  be not less than two members and comprised solely of
                  Non-employee Directors, as defined by Rule 16b-3(b)(3)(i) of
                  the Securities Exchange Act of 1934 ("1934 Act"), or any
                  successor definition adopted by the Securities and Exchange
                  Commission, and who shall each also qualify as an Outside
                  Director for purposes of Section 162(m) of the Code. Any
                  vacancy occurring on the Committee may be filled by
                  appointment by the Board. The Board at its discretion may from
                  time to time appoint members to the Committee in substitution
                  of members previously appointed, may remove members of the
                  Committee and may fill vacancies, however caused, in the
                  Committee.

                  (b) Committee Procedures. The Committee shall select one of
                  its members as chairman and shall hold meetings at such times
                  and places as it may determine. A quorum of the Committee
                  shall consist of a majority of its members, and the Committee
                  may act by vote of a majority of its members present at a
                  meeting at which there is a quorum, or without a meeting by
                  written consent signed by all members of the Committee. If any
                  powers of the Committee hereunder are limited or denied by the
                  Board or under applicable law, the same powers may be
                  exercised by the Board.

                  (c) Committee Powers and Responsibilities. The Committee will
                  interpret the Plan, prescribe, amend and rescind any rules or
                  regulations necessary or appropriate for the administration of
                  the Plan, and make such other determinations and take such
                  other actions it deems necessary or advisable, except as
                  otherwise expressly reserved for the Board. Subject to the
                  limitations imposed by the Board or under applicable law and
                  the terms of the Plan, the Committee may periodically
                  determine which Employees should receive Options under the
                  Plan, whether the options shall be Incentive Options or
                  Nonstatutory Options, the number of shares covered by such
                  Options, the per share purchase price for such shares, and the
                  terms thereof, including but not limited to transferability of
                  such Options, and shall have full power to grant such Options.
                  In making its determinations, the Committee shall consider,
                  among other relevant factors, the importance of the duties of
                  the Grantee to the Company, his or her experience with the
                  Company, and his or her future value to the Company. All
                  decisions, interpretations and other actions of the Committee
                  shall be final and binding on all Grantees, Optionees and all
                  persons deriving their rights from a Grantee or Optionee. No
                  member of the Board or the Committee shall be liable for any
                  action taken or failed to be taken in good faith or for any
                  determination made pursuant to the Plan.

<PAGE>

4. Stock Subject to Plan.
   ----------------------

         This Plan authorizes the Committee to grant Options to Employees up to
the aggregate amount of 1,525,000 shares of Stock, subject to eligibility and
any limitations specified herein. Adjustment in the shares subject to the Plan
shall be made as provided in Section 9. Any shares covered by an Option which,
for any reason, expires, terminates or is canceled may be reoptioned under the
Plan.

5. Eligibility
   -----------

                  (a) General Rule. All Employees defined in Section 2(f) shall
                  be eligible.

                  (b) Ten Percent Stockholders. An employee who owns more than
                  ten percent (10%) of the total combined voting power of all
                  classes of outstanding Stock shall not be eligible for
                  designation as a Grantee of an Incentive Option unless (i) the
                  exercise price for each share of Stock subject to such
                  Incentive Option is at least one hundred ten percent (110%) of
                  the Fair Market Value of a share of Stock on the date of
                  grant, and (ii) such Incentive Option, by its terms, is not
                  exercisable after the expiration of five (5) years from the
                  date of grant.

                  (c) Attribution Rules. For purposes of Subsection (b) above,
                  in determining stock ownership, an Employee shall be deemed to
                  own the Stock owned, directly or indirectly, by or for his
                  brothers, sisters (whether by whole or half blood), spouse,
                  ancestors and lineal descendants. Stock owned, directly or
                  indirectly, by or for a corporation, partnership, estate or
                  trust shall be deemed to be owned proportionately by or for
                  its stockholders, partners or beneficiaries.

                  (d) Outstanding Stock. For purposes of Subsection (b) above,
                  "Outstanding Stock" shall include all Stock actually issued
                  and outstanding immediately after the grant. "Outstanding
                  Stock" shall not include shares authorized for issuance
                  under outstanding options held by the Employee or by any
                  other person.

                  (e) Individual Limits of Executive Officers. Subject to the
                  provisions of Section 9 hereof, the number of option shares
                  granted in a fiscal year to any Executive Officer shall not
                  exceed 300,000 shares for the first fiscal year during which
                  such person becomes an Executive Officer and shall not exceed
                  100,000 shares for any subsequent fiscal year during which
                  such person serves as an Executive Officer.

                  (f) Incentive Option Limitation. The aggregate Fair Market
                  Value of the stock for which Incentive Options granted to any
                  one eligible Employee under this Plan and under all incentive
                  stock option plans of the Company, its parent(s) and
                  subsidiaries, may by their terms first become exercisable
                  during any calendar year shall not exceed $100,000,
                  determining Fair Market Value of the stock subject to any
                  Option as of the time that Option is granted. If the date on
                  which one or more Incentive Options could be first exercised
                  would be accelerated pursuant to any other provision of the
                  Plan or any Stock Option Agreement referred to in Section
                  6(a), or an amendment thereto, and the acceleration of such
                  exercise date would result in a violation of the restriction
                  set forth in the preceding sentence, then notwithstanding any
                  such other provision the exercise date of such Incentive
                  Options shall be accelerated only to the extent, if any, that
                  is permitted under Section 422 of the Code and the exercise
                  date of the Incentive Options with the lowest option prices
                  shall be accelerated first. Any exercise date which cannot be
                  accelerated without violating the $100,000 restriction of this
                  section shall nevertheless be accelerated, and the portion of
                  the Option becoming exercisable thereby shall be treated as a
                  Nonstatutory Option.

                                     Page 4

<PAGE>

6. Terms and Conditions of All Options Under the Plan.
   ---------------------------------------------------

                  (a) Option Agreement. All Options granted under the Plan shall
                  be evidenced by a written Option Agreement and shall be
                  subject to all applicable terms and conditions of the Plan and
                  may be subject to any other terms and conditions which are not
                  inconsistent with the Plan and which the Committee deems
                  appropriate for inclusion in an Option Agreement.

                  (b) Number of Shares. Each Option Agreement shall specify the
                  number of shares of the Stock each such Employee will be
                  entitled to purchase pursuant to the Option and shall provide
                  for the adjustment of such number in accordance with Section
                  9. Each Option Agreement shall state the minimum number of
                  shares which must be exercised at any time, if any.

                  (c) Nature of Option. Each Option Agreement shall specify the
                  intended nature of the Option as an Incentive Option, a
                  Nonstatutory Option or partly of each type.

                  (d) Exercise Price. Each Option Agreement shall specify the
                  exercise price. The exercise price of either the Incentive
                  Option or the Nonstatutory Option shall not be less than one
                  hundred percent (100%) of the Fair Market Value of a share of
                  Stock on the date of grant. Subject to the foregoing, the
                  exercise price under any Option shall be determined by the
                  Committee in its sole discretion. The exercise price shall be
                  payable in the form described in Section 7.

                  (e) Term of Option. The Option Agreement shall specify the
                  term of the Option. The term of any Option granted under this
                  Plan is subject to expiration, termination, and cancellation
                  as set forth within this Plan.

                  (f) Exercisability. Each Option Agreement shall specify the
                  date when all or any installment of the Option is to become
                  exercisable. Such Option shall not be exercisable after the
                  expiration of such term which shall be fixed by the Committee,
                  but in any event not later than ten years from the date such
                  Option is granted. Subject to the provisions of the Plan, the
                  Committee may grant Options which are vested, or which become
                  vested upon the happening of an event or events as specified
                  by the Committee.

                  (g) Withholding Taxes. Upon exercise of any Nonstatutory
                  Option (or any Incentive Option which is treated as a
                  Nonstatutory Option because it fails to meet the requirements
                  set forth in the Code for Incentive Options), the Optionee
                  must tender full payment to the Company for any federal income
                  tax withholding required under the Code in connection with
                  such exercise ("Withholding Tax"). If the Optionee fails to
                  tender to the Company the Withholding Tax, the Committee, at
                  its discretion, shall withhold from the Optionee any and all
                  shares subject to such Option, and accordingly, subject to
                  Withholding Tax until such time as either of the following
                  events has occurred:

                                     Page 5

<PAGE>

                      (i) the Employee tenders to the Company payment in cash to
                      pay the Withholding Tax; or

                      (ii) the Company withholds from the Employee's wages an
                      amount sufficient to pay the Withholding Tax.

                  (h) Termination and Acceleration of Option.

                      For Incentive Options:
                      ---------------------

                     (i) If the employment of a Grantee who is not a Disabled
                         Grantee is terminated without cause, or such Grantee
                         voluntarily quits or retires under any retirement plan
                         of the Company, any then outstanding and exercisable
                         stock option held by such a Grantee shall be
                         exercisable, in accordance with the provisions of the
                         Option Agreement, by such Grantee at any time prior to
                         the expiration date of such Option or within three
                         months after the date of termination of employment or
                         service, whichever is the shorter period.

                    (ii) If the employment of a Grantee who is a Disabled
                         Grantee is terminated without cause, any then
                         outstanding and exercisable Option held by such a
                         Grantee shall be exercisable, in accordance with the
                         provisions of the Option Agreement, by such a Grantee
                         at any time prior to the expiration date of such Option
                         or within one year after the date of such termination
                         of employment or service, whichever is the shorter
                         period.

                      For all Options issued hereunder:
                      --------------------------------

                    (i)  If the Company terminates the employment of a Grantee
                         for cause, all outstanding stock options held by the
                         Grantee at the time of such termination shall
                         automatically terminate unless the Committee notifies
                         the Grantee that his or her options will not terminate.
                         A termination "for cause" shall be defined under each
                         written Option Agreement. The Company assumes no
                         responsibility and is under no obligation to notify a
                         Permitted Transferee (as hereafter defined in section
                         13) of early termination of an Option on account of a
                         Grantee's termination of employment.

                    (ii) Whether termination of employment or other service is a
                         termination "for cause" or whether a Grantee is a
                         Disabled Grantee shall be determined in each case, in
                         its discretion, by the Committee and any such
                         determination by the Committee shall be final and
                         binding.

                                     Page 6

<PAGE>

                   (iii) Following the death of a Grantee during employment,
                         any outstanding and exercisable Options held by such
                         Grantee at the time of death shall be exercisable, in
                         accordance with the provisions of the Option Agreement,
                         by the person or persons entitled to do so under the
                         Will of the Grantee, or, if the Grantee shall fail to
                         make testamentary disposition of the stock option or
                         shall die intestate, by the legal representative of the
                         Grantee at any time prior to the expiration date of
                         such Option or within one year after the date of death,
                         whichever is the shorter period.

                    (iv) The Committee may grant Options, or amend Options
                         previously granted, to provide that such Options
                         continue to be exercisable up to ten years after the
                         date of grant irrespective of the termination of the
                         Grantee's employment with the Company, and which vest
                         upon grant or become vested upon the happening of an
                         event or events specified by the Committee, although
                         the exercise of such vested Options in the case of
                         Incentive Options more than three months after
                         termination of employment may convert such Options to
                         Nonstatutory Options with respect to the income tax
                         consequences of such exercise.

7.   Payment for Shares
     ------------------

     (a)  Cash. Payment in full for shares purchased under an Option shall be
          made in cash (including check, bank draft or money order) at the time
          that the Option is exercised.

     (b)  Stock. In lieu of cash an Optionee may, with the consent of the
          Committee, make payment for Stock purchased under an Option, in whole
          or in part, by tendering to the Company in good form for transfer,
          shares of Stock valued at Fair Market Value on the date the Option is
          exercised. Such shares will have been owned by the Optionee or the
          Optionee's representative for the time specified by the Committee but
          in no case shall the Optionee or his representative have held a
          beneficial interest in such tendered shares for a period less than six
          months prior to the exercise of the Option.

8.   Use of Proceeds from Stock.
     --------------------------

         Cash proceeds from the sale of Stock pursuant to Options granted under
the Plan shall constitute general funds of the Company.

                                     Page 7

<PAGE>

9.   Adjustments.
     -----------

         Changes or adjustments in the Option price, number of shares subject to
an Option or other specifics as the Committee should decide will be considered
or made pursuant to the following rules:

          (a)  Upon Changes in Stock. If the outstanding Stock is increased or
               decreased, or is changed into or exchanged for a different number
               or kinds of shares or securities, as a result of one or more
               reorganizations, recapitalization, stock splits, reverse stock
               splits, split-up, combination of shares, exchange of shares,
               change in corporate structure, or otherwise, appropriate
               adjustments will be made in the exercise price and/ or the number
               and/or kind of shares or securities for which Options may
               thereafter be granted under this Plan and for which Options then
               outstanding under this Plan may thereafter be exercised. The
               Committee will make such adjustments as it may deem fair, just
               and equitable to prevent substantial dilution or enlargement of
               the rights granted to or available for Optionees. No adjustment
               provided for in this Section 9 will require the Company to issue
               or sell a fraction of a share or other security. Nothing in this
               Section will be construed to require the Company to make any
               specific or formula adjustment.

          (b)  Prohibited Adjustment. If any such adjustment provided for in
               this Section 9 requires the approval of stockholders in order to
               enable the Company to grant or amend Options, then no such
               adjustment will be made without the required stockholder
               approval. Notwithstanding the foregoing, if the effect of any
               such adjustment would be to cause an Incentive Option to fail to
               continue to qualify under Section 422 of the Code or to cause a
               modification, extension or renewal of such stock option within
               the meaning described in Section 424 of the Code, the Committee
               may elect that such adjustment not be made but rather shall use
               reasonable efforts to effect such other adjustment of each then
               outstanding Option as the Committee, in its sole discretion,
               shall deem equitable and which will not result in any
               disqualification, modification, extension or renewal (within the
               meaning of Section 424 of the Code) of such Incentive Option.

                                     Page 8

<PAGE>

          (c)  Further Limitations. Nothing in this Section will entitle the
               Optionee to adjustment of his Option in the following
               circumstances:

                  (i)      The issuance or sale of additional shares of the
                           Stock, through public offering or otherwise;

                  (ii)     The issuance or authorization of an additional class
                           of capital stock of the Company;

                  (iii)    The conversion of convertible preferred stock or debt
                           of the Company into Stock; and

                  (iv)     The payment of dividends except as provided in
                           Section 9 (a).

The grant of an Option shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.

10.  Legal Requirements:
     ------------------

     (a)  Compliance with All Laws. The Company will not be required to issue or
          deliver any certificates for shares of Stock prior to (a) the listing
          of any such Stock to be acquired pursuant to the exercise of any
          Option on any stock exchange on which the Stock may then be listed,
          and (b) the compliance with any registration requirements or
          qualification of such shares under any federal securities laws,
          including without limitation the Securities Act of 1933, as amended
          ("1933 Act"), the rules and regulations promulgated thereunder, or
          state securities laws and regulations, the regulations of any stock
          exchange or interdealer quotation system on which the Company's
          securities may then be listed, or obtaining any ruling or waiver from
          any government body which the Company may, in its sole discretion,
          determine to be necessary or advisable, or which, in the opinion of
          counsel to the Company, is otherwise required.

     (b)  Compliance with Specific Code Provisions. It is the intent of the
          Company that the Plan and its administration conform strictly to the
          requirements of Section 422 of the Code with respect to Incentive
          Options. Therefore, notwithstanding any other provision of this Plan,
          nothing herein will contravene any requirement set forth in Section
          422 of the Code with respect to Incentive Options and if inconsistent
          provisions are otherwise found herein, they will be deemed void and
          unenforceable or automatically amended to conform, as the case may be.

     (c)  Plan Subject to Delaware Law. All questions arising with respect to
          the provisions of the Plan will be determined by application of the
          Code and the laws of the state of Delaware except to the extent that
          Delaware laws are preempted by any federal law.

                                     Page 9

<PAGE>

11. Rights as a Stockholder.
    -----------------------

         An Optionee shall have no rights as a stockholder with respect to any
Stock covered by his Option until the date of issuance of the stock certificate
to him after receipt of the consideration in full set forth in the Option
Agreement. Except as provided in Section 9 hereof, no adjustments will be made
for dividends, whether ordinary or extraordinary, whether in cash, securities,
or other property, or for distributions for which the record date is prior to
the date on which the Option is exercised.

12. Restrictions on Shares.
    ----------------------

         Prior to the issuance or delivery of any shares of the Stock under the
Plan, the person exercising the Option may be required to:

          (a)  represent and warrant that the shares of the Stock to be acquired
               upon exercise of the Option are being acquired for investment for
               the account of such person and not with a view to resale or other
               distribution thereof;

          (b)  represent and warrant that such person will not, directly or
               indirectly, sell, transfer, assign, pledge, hypothecate or
               otherwise dispose of any such shares unless the sale, transfer,
               assignment, pledge, hypothecation or other disposition of the
               shares is pursuant to the provisions of this Plan and effective
               registrations under the 1933 Act and any applicable state or
               foreign securities laws or pursuant to appropriate exemptions
               from any such registrations; and

          (c)  execute such further documents as may reasonably be required by
               the Committee upon exercise of the Option or any part thereof,
               including but not limited to any stock restriction agreement that
               the Committee may choose to require.

         Nothing in this Plan shall assure any Optionee that shares issuable
under this Option are registered on a Form S-8 under the 1933 Act or on any
other Form. The certificate or certificates representing the shares of the Stock
to be issued or delivered upon exercise of an Option may bear a legend
evidencing the foregoing and other legends required by any applicable securities
laws. Furthermore, nothing herein or any Option granted hereunder will require
the Company to issue any Stock upon exercise of any Option if the issuance
would, in the opinion of counsel for the Company, constitute a violation of the
1933 Act, applicable state securities laws, or any other applicable rule or
regulation then in effect. The Company shall have no liability for failure to
issue shares upon any exercise of Options because of a delay pending the meeting
of any such requirements.

13. Transferability.
    ---------------

         The Committee shall retain the authority and discretion to permit a
Nonstatutory Option, but in no case an Incentive Option, to be transferable as
long as such transfers are made only to one or more of the following: family
members, limited to children of Grantee, spouse of Grantee, or grandchildren of
Grantee, or trusts for the benefit of Grantee and/or such family members
("Permitted Transferee"), provided that such transfer is a bona fide gift and
accordingly, the Grantee receives no consideration for the transfer, and that
the Options transferred continue to be subject to the same terms and conditions
that were applicable to the Options immediately prior to the transfer. Options
are also subject to transfer by will or the laws of descent and distribution.
Options granted pursuant to this Plan shall not be otherwise transferred,
assigned, pledged, hypothecated or disposed of in any way, whether by operation
of law or otherwise. A Permitted Transferee may not subsequently transfer an
Option. The designation of a beneficiary shall not constitute a transfer.

                                    Page 10

<PAGE>

14. No Right to Continued Employment.
    --------------------------------

         This Plan and any Option granted under this Plan will not confer upon
any Optionee any right with respect to continued employment by the Company nor
shall they alter, modify, limit or interfere with any right or privilege of the
Company under any employment agreement heretofore or hereafter executed with any
Optionee, including the right to terminate any Optionee's employment at any time
for or without cause, to change his level of compensation or to change his
responsibilities or position.

15. Corporate Reorganizations.
    -------------------------

         Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of which the
outstanding securities of the class then subject to Options hereunder are
changed into or exchanged for cash or property or securities not of the
Company's issue, or upon a sale of substantially all the property of the Company
to, or the acquisition of stock representing more than eighty percent (80%) of
the voting power of the stock of the Company then outstanding by another
corporation or person, the Plan will terminate and all Options will lapse. The
result described above will not occur if provision is made in writing in
connection with such transaction for the continuance of the Plan and/or for the
assumption of Options earlier granted, or the substitution for such Options of
options covering the stock of a successor employer corporation, or a parent or a
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices, in which event the Plan and Options theretofore granted will
continue in the manner and under the terms so provided. If the Plan and
unexercised Options shall terminate pursuant to the foregoing, all persons
holding any unexercised portions of Options then outstanding shall have the
right, at such time prior to the consummation of the transaction causing the
termination as the Company shall designate, to exercise the unexercised portions
of their options, including the portions thereof which would but for this
Section 15 not yet be exercisable.

                                    Page 11

<PAGE>

16. Modification, Extension and Renewal.
    -----------------------------------

     (a)  Options. Subject to the conditions of and within the limitations
          prescribed in the Plan herein, the Committee may modify, extend,
          cancel or renew outstanding Options. Notwithstanding the foregoing, no
          modification will, without the prior written consent of the Optionee,
          alter, impair or waive any rights or obligations associated with any
          Option earlier granted under the Plan.

     (b)  Plan. The Board may at any time and from time to time interpret, amend
          or discontinue the Plan, subject to the limitation, however, that,
          except as provided in Section 9 (relating to adjustments upon changes
          in stock), no amendment shall be made, except upon stockholder
          approval, which will:

          (1)  Increase the number of shares reserved for Options under the
               Plan; or

          (2)  Reduce the Option price below 100% of Fair Market Value at the
               time an Option is granted; or

          (3)  Change the requirements for eligibility for participation under
               the Plan.

17. Plan Date and Duration.
    ----------------------

         The Plan shall take effect on the date it is adopted by the Board
subject to approval by the stockholders. Options may not be granted under this
Plan after September 30, 2007.

                                    Page 12

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