SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_]  Preliminary Proxy Statement            [_]  Soliciting Material Under Rule
[_]  Confidential, For Use of the                 14a-12
      Commission Only (as permitted
      by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials



BOUNDLESS CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)



--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)


Payment of Filing Fee (Check the appropriate box):

[X]  No fee required.

[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

1)   Title of each class of securities to which transaction applies:


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2)   Aggregate number of securities to which transaction applies:


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3)   Per unit price or other underlying value of transaction computed pursuant
     to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
     calculated and state how it was determined):




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4)   Proposed maximum aggregate value of transaction:


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5)   Total fee paid:


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[_] Fee paid previously with preliminary materials:

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[_]      Check box if any part of the fee is offset as provided by Exchange Act
         Rule 0-11(a)(2) and identify the filing for which the offsetting fee
         was paid previously. Identify the previous filing by registration
         statement number, or the form or schedule and the date of its filing.

     1)   Amount previously paid:

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     2)   Form, Schedule or Registration Statement No.:

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     3)   Filing Party:

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     4)   Date Filed:

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                              BOUNDLESS CORPORATION
                              100 Marcus Boulevard
                            Hauppauge, New York 11788


                                                                January 31, 2002


TO OUR STOCKHOLDERS:


     You are cordially invited to attend our 2001 Annual  Stockholders'  Meeting
to be held at our principal offices located at 100 Marcus Boulevard,  Hauppauge,
New York, on February 28, 2002 at 10:00 a.m.  local time. You are being asked to
elect  directors,  to approve  the  adoption of our 2001  Incentive  Plan and to
ratify the appointment of independent auditors.

     We have  enclosed  a Notice of annual  meeting  of  stockholders  and Proxy
Statement  that  discuss the matters to be  presented  at the  meeting.  For the
reasons set forth in the accompanying  Proxy Statement,  your Board of Directors
unanimously   recommends  that  you  vote  for  (i)  Management's  nominees  for
directors,  (ii)  the  adoption  of  our  2001  Incentive  Plan  and  (iii)  the
ratification of the appointment of BDO Seidman, LLP as our independent auditors.

     In addition to acting on the matters listed in the Notice of annual meeting
of  stockholders,  we will  discuss  our  progress,  and you  will be  given  an
opportunity to ask questions of general interest to all stockholders.

     We have also enclosed a copy of a letter to you regarding year 2000 results
and recent developments and our Form 10-K for our fiscal year ended December 31,
2000.

     We hope that you will come to the annual  meeting in person.  Those who are
interested in attending may contact Diane Metcalf  (212-949-5600)  to RSVP or to
make local hotel reservations at the preferred Boundless rate. Even if you don't
plan to come,  we strongly  encourage  you to complete  the  enclosed  proxy and
return it to us in the enclosed business reply envelope.  Instructions are shown
on your  proxy.  If you are a  stockholder  of record  and later find you can be
present or, if for any reason you desire to revoke your proxy,  you can do so at
any  time  before  the  voting.  Your  vote is  important  and  will be  greatly
appreciated.



                                                Joseph V. Joy, Jr.
                                                Chief Executive Officer




                              BOUNDLESS CORPORATION
                       -----------------------------------


                  NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS

       TIME..................   o  10:00 a.m., local time, on Thursday, February
                                   28, 2002.

       PLACE.................   o  Our principal  offices  located at 100 Marcus
                                   Boulevard, Hauppauge, New York

       PURPOSES..............   o  To elect  directors  to serve  until the next
                                   stockholders' meeting.

                                o  To approve the adoption of our 2001 Incentive
                                   Plan,   permitting  the  issuance  of  up  to
                                   284,000  shares of our common stock  pursuant
                                   to grants of stock  options and stock  awards
                                   to our employees, directors and others.

                                o  To ratify the appointment of BDO Seidman, LLP
                                   as our  independent  auditors  for  the  2001
                                   fiscal year.

                                o  To transact any other  business that properly
                                   comes  before the meeting or any  adjournment
                                   of the meeting.

       RECORD DATE...........   o  You can  vote if you  were a  stockholder  of
                                   record at the close of  business  on  January
                                   15, 2002.


                                   By order of the  board of directors,

                                   Joseph Gardner
                                   Vice President, Chief Financial Officer


January 31, 2002
Hauppauge, New York



                             YOUR VOTE IS IMPORTANT

          Whether or not you plan to attend the meeting, we urge you to vote
                                as soon as possible.




                                 PROXY STATEMENT

                   GENERAL INFORMATION ABOUT THE SOLICITATION

     We  are  sending  you  these  proxy   materials  in  connection   with  the
solicitation by the board of directors of Boundless  Corporation  (Amex: BND) of
proxies to be used at the annual meeting of  stockholders to be held on February
28, 2002, and at any adjournment or postponement  of the meeting.  "We",  "our",
"us",  the "Company" and  "Boundless"  all refer to Boundless  Corporation.  The
proxy materials are first being mailed on or about January 31, 2002.

Who may vote

     You will be entitled to vote at the annual meeting only if our records show
that you held your shares on January 15,  2002.  On January 15, 2002, a total of
5,688,037 shares of our common stock were outstanding and entitled to vote. Each
share of common stock has one vote.

Voting by proxy

     If your shares are held by a broker,  bank or other  nominee,  it will send
you  instructions  that you must follow to have your shares  voted at the annual
meeting.  If you hold your shares in your own name as a record  holder,  you may
instruct  the proxy  agents  how to vote your  shares  by  completing,  signing,
dating, and mailing the proxy card in the enclosed  postage-paid  envelope.  You
can always come to the meeting and vote your shares in person.

     The proxy  agents  will vote your shares as you  instruct.  If you sign and
return your proxy card without giving  instructions,  the proxy agents will vote
your shares:

     o    FOR each  person  named  in this  Proxy  Statement  as a  nominee  for
          election to the board of directors;

     o    FOR the  adoption  of the  2001  Incentive  Plan,  a copy of  which is
          attached to this Proxy Statement as Appendix B; and

     o    FOR  ratification  of  the  appointment  of  BDO  Seidman,  LLP as our
          independent auditors for the fiscal year ending December 31, 2001.

How to revoke your proxy

     You may  revoke  your  proxy at any time  before it is voted.  If you are a
record stockholder, you may revoke your proxy in any of the following ways:

     o    by giving notice of revocation at the annual meeting,

     o    by  delivering  to the Chief  Financial  Officer of the  Company,  100
          Marcus  Boulevard,  Hauppauge,  New York 11788,  written  instructions
          revoking your proxy,

     o    by delivering to the Chief Financial Officer an executed proxy bearing
          a later date, or

     o    by voting in person at the annual meeting.

How votes will be counted

     The annual  meeting will be held if a quorum,  consisting  of a majority of
the  outstanding  shares of common stock entitled to vote, is represented at the
meeting.  If you have  returned a valid  proxy or attend the  meeting in person,
your shares will be counted for the purpose of  determining  whether  there is a
quorum,  even if you  wish  to  abstain  from  voting  on  some  or all  matters
introduced. Abstentions and broker "non-votes" will be included in the number of
shares represented at the meeting for the purpose of


                                       3



determining  whether a quorum is  present.  A "broker  non-vote"  occurs  when a
broker,  bank or nominee that holds shares for a beneficial  owner does not vote
on a particular proposal because the nominee does not have discretionary  voting
power  for that  proposal  and has not  received  voting  instructions  from the
beneficial owner.

     If a quorum is not present at the annual meeting,  a majority of the shares
present,  in person or by proxy,  has the power to adjourn the meeting from time
to time until a quorum is present.  Other than  announcing at the annual meeting
the time and place of the adjourned  meeting,  no notice of the adjournment will
be  given  to  stockholders  unless  required  because  of  the  length  of  the
adjournment.

     In the election of directors, votes may be cast in favor or withheld. Votes
that are withheld will be excluded entirely from the vote count and will have no
effect on the  election of directors or on the outcome of any other matter voted
on. Directors will be elected by a plurality of the votes cast.

     The affirmative vote of a majority of the votes cast is required to approve
all other matters voted on at the meeting.  Abstentions and broker non-votes are
not counted for any purpose in determining whether a matter has been approved.

Cost of this proxy solicitation

     We will  pay the  cost  of the  proxy  solicitation.  In  addition,  we may
reimburse  brokerage firms and other persons  representing  beneficial owners of
shares  for  their  expenses  in  forwarding   solicitation  materials  to  such
beneficial owners. We expect that some of our officers and regular employees may
solicit proxies by telephone,  facsimile,  e-mail, or personal contact.  None of
these officers or employees will receive any additional or special  compensation
for doing this.

Deadline for receipt of stockholder proposals

     Proposals  that our  stockholders  would like to present at our 2002 annual
meeting of stockholders  must be received by us no later than October 2, 2002 in
order to be considered for possible inclusion in the Proxy Statement and form of
Proxy  relating to that  meeting.  However,  if we hold our annual  stockholders
meeting for 2002 prior to January 30,  2003,  or after March 30,  2003,  we will
announce in one of our quarterly  reports on Form 10-Q or in another  report the
deadline for the submission of stockholder proposals.



                                       4



                            1. ELECTION OF DIRECTORS
                           AND MANAGEMENT INFORMATION

General

     Our Board of Directors has 7 members and each of whom serves until the next
annual meeting and until his successor is elected and qualifies.  Of our current
Board members,  J. Gerald Combs,  J. Frank Stephens and Oscar L. Smith have been
nominated for  re-election to the Board and Daniel  Matheson,  Jeffrey K. Moore,
Jack Murphy and Gary Wood will not stand for re-election.

     Your  proxy will be voted FOR the  election  of the 9  management  nominees
named  below  unless  you  withhold  authority  to  vote  for  all or any of the
nominees.  Management  has no reason to believe that a nominee will be unwilling
or unable to serve as a director.  However,  if a nominee is unwilling or unable
to serve,  your proxy will be voted for any nominee  designated  by our board of
directors.

Director Nominees

     The following table lists management's director nominees.

    Name                             Age                   Director Since
    -----                            ---                   --------------

    Richard Bowman                    41                   Not Applicable

    Gary Brooks                       67                   Not Applicable

    J. Gerald Combs                   52                      May 1997

    Anthony Giovaniello               46                   Not Applicable

    Joseph V. Joy, Jr.                48                   Not Applicable

    Safwan M. Masri                   39                   Not Applicable

    John J. McGovern                  46                   Not Applicable

    Oscar L. Smith                    65                    January 2002

    J. Frank Stephens                 50                      July 2001

     Richard  Bowman is an executive  consultant  with  extensive  experience in
agribusiness,   technology   development   and  the   financing  of   commercial
agri-processing  projects in lesser developed countries.  He presently serves as
an adviser to select  agribusiness  and  environmental  firms in North  America,
consulting in the areas of production management,  environmental compliance, and
options  for  environmentally  based  financing.  He  has  traveled  and  worked
extensively  outside of North America,  primarily in South  America,  Africa and
Asia.  From  November 1998 to March 2000,  Mr.  Bowman served as the  President,
Chief Executive  Officer,  and Corporate Director of the Global Livestock Group,
Inc.  ("GLG").  The GLG is a world  leader  in the  design,  implementation  and
marketing  of carbon  offset  projects.  Building on  experience  as a livestock
development  program  within its parent  company,  the GLG offers  carbon offset
capabilities with pioneering feed and genetics technology. From May 1993 through
October  1998 Mr.  Bowman  served as the Director of the  Livestock  Division of
Appropriate  Technology  International  ("ATI"),  now  known as  EnterpriseWorks
Worldwide,  Inc. ATI is a Washington D.C. based,  non-governmental  organization
which promotes  commercially  viable and  environmentally  sound applications of
innovative  technology.   The  organization  focuses  on  small  scale  producer
technology applications in lesser developed countries. Mr. Bowman graduated with
a Bachelor of Science degree in Animal  Science/Agribusiness from the University
of Idaho in 1982.

     Since 1998,  Gary  Brooks has served as the  Chairman  and Chief  Executive
Officer  of  Allomet  Partners,  Ltd.  Mr.  Brooks is a  Co-founder  of  Allomet
Partners,  Ltd., a professional  services firm providing


                                       5


consulting and interim management services to under-performing  businesses. From
1985 until 1998,  Mr. Brooks served as the President of Allomet  Partners,  Ltd.
Nationally recognized as one of the most experienced practitioners in the field,
he has recently served as interim Chief Operating Officer at Ampco Metals, Inc.,
where he facilitated the analysis and implemented the program that served as the
basis for the company's financial and strategic direction.  He has over 35 years
of diversified executive management and consulting experience.  He served as the
National  Chair  of the  Institute  of  Management  Consultants  (IMC).  He is a
founding member of the Turnaround  Management  Association (TMA) and served as a
member of its Board of Directors for 8 years.  His career  affiliations  include
the  General  Electric  Company,  Eastman  Kodak,  and as a  Division  Executive
managing a subsidiary of Scott Paper Company.  Prior to the formation of Allomet
Partners,  he managed the New York office of an international  firm specializing
in strategic planning and technological  forecasting,  and served for 8 years as
Managing  Principal of a major New England based turnaround  consulting firm. He
lectures  often  on  the  many  aspects  of  turnaround  management  and  crisis
intervention.  Gary  Brooks has an MS in  Chemical  Engineering  and  Operations
Research from the  University of Rochester and a BS in  Biochemical  Engineering
and Industrial Management from MIT.

     J. Gerald Combs has served as Chairman of the Company since May 9, 1997 and
as Chief Executive  Officer of the Company and its  subsidiaries  from such date
and until January 2002.  From April 1997 to December 1999 Mr. Combs had been the
Chairman and CEO of Morgan Kent Group, which had been the largest shareholder of
the Company until  approximately  December 2000 or January 2001.  Since 1992 Mr.
Combs  has been  Chairman  and CEO of  Merrico  Corporation,  a  privately  held
financial  consulting  firm.  Mr. Combs also served as President of  All-Quotes,
Inc., the predecessor of the Company, from October 1993 to December 1994.

     Anthony  Giovaniello  has  served as  Executive  Vice  President,  Business
Development,  for Boundless Manufacturing Services, Inc. since August 1999; and,
since May 2001 as Vice President,  Business Development,  for the Company. Prior
to this,  from April 1998  until  August  1999,  Mr.  Giovaniello  served as the
Director,  Business Development,  for Solectron Corporation.  From February 1998
through April 1998 he was an independent  consultant for the NCR Corporation and
Solectron  Corporation.  From February 1986 until February 1998, Mr. Giovaniello
held   numerous   executive   and  sales   management   positions  at  Boundless
Technologies,  Inc.  Mr.  Giovaniello  has  been  a  professional  in  the  high
technology  area for over 20 years.  Over that period he has  amassed  extensive
sales and sales  management  experience,  both in corporate  and indirect  sales
activities.

     Joseph V. Joy, Jr. was named CEO of Boundless Corporation effective January
7, 2002.  Previously  he has served as President  and Chief  Operating  Officer,
Boundless Manufacturing Services, Inc. since September 1999; and, since March 9,
2001, as President and Chief Operating Officer of the Company.  Mr. Joy has over
twenty-five   years   experience  in  the  computer  and  computer   peripherals
industries.  Mr.  Joy's  experience  includes  general  management,  supply-base
management,  marketing,  quality  assurance  and  engineering.  He has extensive
experience in contract manufacturing from both the OEM customer and EMS provider
perspective.  From  March  1998 to  September  1999 Mr.  Joy was Vice  President
Business and Supplier  Development,  Systems and  Services  Division,  Solectron
Corp.  Prior to that he served as the Vice President of Supplier  Management and
Logistics  for NCR's  Computer  Systems  Group from March 1995 to March 1998. He
received his MBA from Columbia University and BA from Georgetown University.

     Professor  Safwan M. Masri  joined the  Management  Science and  Operations
Management  Faculty at Columbia  Business School in July 1988, and was appointed
Vice Dean of  Columbia  Business  School in  January  1993.  He has  served as a
Professor and Vice Dean of Columbia  Business School since that time.  Professor
Masri  earned his  Bachelor of Science  degree in  Industrial  Engineering  from
Purdue University in 1982; his Master of Science in Industrial  Engineering also
from Purdue in 1984;  and his Ph.D. in Industrial  Engineering  and  Engineering
Management  from Stanford  University in 1988.  Professor Masri was honored with
the Singhvi  Professor of the Year for  Scholarship  in the  Classroom  Award in
1990.  He has recently been awarded the Robert W. Lear Service Award in 1998 and
the Dean's Award for  Teaching  Excellence  in a Core Course in 2000.  Professor
Masri was a Visiting  Professor at INSEAD in 1990 and in 1991.  In addition,  he
has held teaching  positions at Stanford  University and Santa Clara University.


                                       6



Professor  Masri is active in consulting  and  executive  education in the U.S.,
Latin  America,  Europe,  and the Middle  East.  His  consulting  and  executive
training clients have included Merrill Lynch, PaineWebber, Bristol-Myers Squibb,
Salomon Brothers,  Deutsche Bank, Thomson Publishing,  Bankers Trust,  Citibank,
Ford Motor Company,  NCR, Pfizer, IBM, Bahrain Institute of Banking and Finance,
and the United Nations.  Professor Masri advises, and is a director of, a number
of international  corporations,  start-up ventures,  and charitable  foundations
that  include  ARAMEX  International,  the  Nuqul  Group,  Aregon,  Sage  Global
Ventures, the Arab Bankers Association of North America, the Colbert Foundation,
and Friends for Life.  He is Advisor to Her Majesty Queen Rania  Al-Abdullah  of
Jordan on education and information  technology,  and serves on the e-Government
and on the Human Resources Development Committees of His Majesty King Abdullah's
Economic Consultative Council. He is also a member of the Advisory Board for the
United  Nations  Development  Programme  Project  for  the  Assessment  of  Arab
Universities.  His most  recent  research  interests  concern  the impact of the
Internet on the structure  and  efficiency  of supply  chains,  focussing on the
emergence of e-commerce  business-to-business  trade  relationships and industry
and market  exchanges.  Professor  Masri has  conducted  extensive  research  in
technological  change  management and  reengineering  in the financial  services
industry. His other research activities have included the study of manufacturing
flexibility and its impact on firm performance.

     John J. McGovern is currently  forming his own firm specializing in working
with troubled  companies.  Mr. McGovern previously has served as the Senior Vice
President & Chief  Financial  Officer of  Multex.Com,  Inc.,  from November 1999
until December 2001. Mr.  McGovern was  responsible  for finance,  legal,  human
resources, strategic development,  investor relations and administration of this
NASDAQ listed,  industry  leading  internet  based  investment  information  and
technology  provider to the financial  services  industry.  Prior to this,  from
August 1997 until November 1997, as Chief Financial  Officer,  and from December
1997 until April 1999, as President & Chief Executive Officer,  Mr. McGovern was
employed by  Northsound  Music Group,  Inc., a producer and marketer of C.D. and
cassette audio products to retailers, where he was responsible for the executive
management  of the company  reporting to the Board of  Directors.  From December
1995 until August  1997,  Mr.  McGovern  was the Managing  Director and founding
member  of JJM  Group,  L.L.C.,  an  investment  banking  firm  specializing  in
corporate financial advisory services in capital formation, financing and crisis
management to public and private emerging growth companies.  Prior to JJM Group,
L.L.C.,  Mr.  McGovern  was  President  and  Chief  Executive  Officer  of  Axel
Electronics  Inc./Sigmapower,  Inc.  subsidiaries  of FPBSM  Industries  Inc., a
defense  electronics design and manufacturing firm. Mr. McGovern has also worked
for Merrill Lynch & Co. Inc. and Coopers & Lybrand.  Mr.  McGovern has served on
the  Board  of  Directors  of 15  companies  and  has  extensive  experience  in
turnaround  and crisis  management,  as well as  experience  in raising debt and
equity  financing.  He received  his MBA from  Columbia  University  and BS from
Monmouth College.

     Oscar L. Smith is the sole director and shareholder of Unique  Co-Operative
Solutions, Inc. ("UCSI"). Founded in 1988 by Mr. Smith, President & CEO, UCSI is
a value-added  distributor of technology  solutions  addressing the needs of the
enterprise  server-based computing  environment.  Mr. Smith has over 43 years of
various educational and work experiences in the electronics industry,  beginning
in 1959, when Mr. Smith managed an engineering and consulting  group that worked
on  government  contracts  for the Atlas  Missile  and  Gemini  Space  programs.
Following his experiences with working on government military contracts,  in the
early 1970's,  Mr. Smith founded two companies,  Datamation and Circuit Analyzer
Test System,  that provided programs and electronic  systems to the aircraft and
aerospace  industries.  These  products  were sold to such  companies as General
Dynamics,  Lockheed, Grumman, Boeing, and McDonnell-Douglas as well as others in
the electronic industry. In 1976, Mr. Smith sold his interest in these companies
and joined the Savin Corporation,  a leader in word processing  equipment as the
director for their Kansas City operation.  When the Savin division was sold, Mr.
Smith  became a partner for a Kansas City company  that  specialized  in selling
office automation systems. In 1987, he sold his partnership and started UCSI.

     J. Frank  Stephens  has been a member of the Board  since  July  2001.  Mr.
Stephens  has  over  28  years  domestic  and  international  experience  in the
consumer,  food service, and industrial  ingredients channels.  Since April 1997
Mr.  Stephens  has held the  office  of  President,  Capital  Sigma  Investments
("CSI"),  a privately  funded  equity  group  focused in the health and soyfoods
category.  Since April 1998,  concurrent  with CSI's  acquisition of Quong Hop &
Co.,  a  regional  soy  foods  company,  Mr.  Stephens  has



                                       7


served as the Chief Executive Officer of Quong Hop & Co. Prior to this, and from
August 1996 until March 1997, Mr.  Stephens  served as the Director of Strategic
Planning  for Global  Consumer  Products,  Inc., a company  specializing  in new
product development and branding for consumer-oriented companies.

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.

Directors and Executive Officers

     The following table lists our directors and executive officers.

     Name                     Age      Positions with Boundless
     ----                     ---      ------------------------

     Joseph V. Joy, Jr.       48       President and Chief Executive Officer

     Anthony Giovaniello      46       Executive Vice President - Boundless
                                       Manufacturing Services, Inc. Services,
                                       Inc.

     Joseph Gardner           42       Vice President - Finance, Chief Financial
                                       Officer

     J. Gerald Combs          52       Director and Chairman of the Board of
                                       Directors

     Daniel Matheson          52       Director

     Jeffrey K. Moore         32       Director

     Jack Murphy              73       Director

     J. Frank Stephens        50       Director

     Oscar L. Smith           65       Director

     Gary Wood                58       Director

     Joseph Joy - See "Director Nominees".

     Anthony Giovaniello - See "Director Nominees".

     Joseph Gardner has served as Vice  President-  Finance and Chief  Financial
Officer of the Company since October 31, 1997.  Mr. Gardner has been employed by
Boundless Technologies, Inc. since April of 1990. Prior to October 31, 1997, Mr.
Gardner  served as the  Controller  and Vice  President-  Quality  Assurance  of
Boundless Technologies.

     Gary E. Wood has been a member of the  Company's  Board of Directors  since
November  1996.  Since  January,  2001,  Mr. Wood has been  President of Collins
Financial  Services,  Inc.  Since  April 1997 he has been an officer of Collins,
serving as  Executive  Vice  President  prior to his recent  promotion.  Collins
purchases nationwide  portfolios of consumer debt and either resells or collects
the accounts.  Prior to joining  Collins,  and from April 1988 to December 1995,
Mr. Wood was  Executive  Vice  President  of the Texas  Taxpayers  and  Research
Association.  He has served as Staff Economist for Senator John Tower and as the
Chief Economist of the Republican  Policy Committee of the U.S.  Senate.  He was
elected to two three-year terms on the Board of Directors of the Federal Reserve
Bank of  Dallas,  and served on the  Regional  Advisory  Oversight  Board of the
Resolution Trust Corporation.  He has been a member of the Boards of The Capital
Network  and the  Mental  Health  Association  of Texas.  Mr.  Wood has a PhD in
Finance from the University of Texas at Austin.

     J. Gerald Combs - See "Director Nominees".


                                       8



     Jeffrey K. Moore has served as a member of the  Company's  Board and a Vice
President  of the  Company  from  January  1997 to January  2002.  He joined the
Company in May 1996 as a financial  analyst  reporting  to the  Company's  Chief
Financial Officer and President. From September 1996 to April 1997, he served as
President and Chairman of the Board, and from February 1999 to December 1999 had
served as  Assistant  Secretary  and as a director,  of Morgan  Kent  Group.  In
December  1999 Mr.  Moore was named  Chairman of Morgan  Kent Group,  and during
January 2000 was named President of Merinta Inc..

     Jack Murphy has served on the Board of Directors of the Company  since June
2001.  Mr.  Murphy  also  served  on the  Board  of  Directors  of the  American
Physicians  Service  ("APS")  Group,  Inc.  until  2001 and  currently  provides
consulting services to the American Physicians  Insurance Exchange- a subsidiary
of the APS Group,  Inc. From 1974 until his  retirement in 1993,  Mr. Murphy was
the founder,  Chairman of the Board of Directors and Chief Executive  Officer of
APS Group, Inc., a public company with subsidiaries  providing various financial
services including medical and professional liability insurance, data processing
and facilities  management  for medical  clinics,  physician  groups and medical
schools, and fixed income financial trading for banks and insurance companies.

     J. Frank Stephens - See "Director Nominees".

     Daniel Matheson has been a member of the Company's Board since August 1996.
Mr.  Matheson  received his JD with Honors from the  University of Texas in 1974
and his BA from the University of Texas at Austin in 1971. Mr.  Matheson's legal
experience has involved counseling and advice to emerging companies on choice of
entity structuring,  venture financing, and corporate governance. He is a member
of the American,  Texas and Travis County Bar Associations.  Mr. Matheson is the
Past  Chairman and a Member of the Board of  Directors  of The Capital  Network,
Inc.;  Immediate  Past-Chairman  and a Member of the Board of  Directors  of the
Mental Health  Association of Texas;  and a Member of the Board of Directors and
Executive  committee of the Paramount Theater,  Inc. He also serves as a Trustee
of the Texas Mental Health  Foundation and is a member of the Austin  Leadership
Council of the University of Texas "We're Texas" Capital Campaign.

     Oscar L. Smith - See "Director Nominees".

Board Meetings and Committees

     During  2000,  our  board  of  directors  met ten  times  and had an  audit
committee and a compensation committee.

     Audit  Committee.  Our Board of Directors has adopted a written charter for
its audit  committee,  a copy of which is  attached to this Proxy  Statement  as
Appendix  A.  The  Audit  Committee  has  the  responsibility,  under  delegated
authority  from our Board of  Directors,  for providing  independent,  objective
oversight of our accounting functions and internal controls. The Audit Committee
is composed of non-employee  directors who are deemed to be "independent"  under
American Stock Exchange  rules.  The Audit  Committee  consisted of two members,
Daniel Matheson and Gary Wood, during 2000 and four members as of July 2001 with
the addition of Jack Murphy and Frank  Stephens.  The audit  committee  met four
times during 2000.

                          Report of the Audit Committee

     In connection  with  inclusion of the audited  financial  statements in our
2000 Annual Report on form 10-K, the audit committee:

     o    reviewed the audited financial statements with management;

     o    discussed with our independent  auditors the materials  required to be
          discussed by SAS 61 (Communication with Audit Committees);


                                       9



     o    reviewed the written  disclosures  and the letter from our independent
          auditors  required by  Independence  Standards  Board  Standard  No. 1
          (Independence  Discussions  with Audit  Committees) and discussed with
          our independent auditors their independence; and

     o    based on the foregoing review and discussion, recommended to the board
          of directors that the audited financial  statements be included in our
          2000 Annual Report on form 10-K.

                                            AUDIT COMMITTEE

                                            Daniel Matheson
                                            Gary Wood
                                            Jack Murphy (Joined in June 2001)
                                            Frank Stephens (Joined in July 2001)




        Report Of The Compensation Committee Of The Board Of Directors On
                             Executive Compensation

     Our executive  compensation  program is  administered  by the  Compensation
Committee of the Board of Directors. As of October 2001, the Committee consisted
of Daniel  Matheson,  Chairman of the Committee,  Gary Wood,  Frank Stephens and
Jack  Murphy,  none of whom are  employees of the  Company.  Messrs.  Murphy and
Stephens  were  named to the  Compensation  Committee  in June and  July,  2001,
respectively.  The Compensation Committee is responsible for establishing,  with
the  approval  of the Board of  Directors,  our  compensation  programs  for all
employees,   including  executives.   We  apply  a  consistent   methodology  of
compensation for all employees, including executive officers. It is based on the
premise that our results are  achieved  through the  coordinated  efforts of all
individuals working towards meeting customer and stockholder expectations.

     The  goals  of our  compensation  program  are to align  compensation  with
business  objectives and  performance  while enabling us to attract,  retain and
reward  employees  who  contribute  to our  long-term  success.  In  all  cases,
attention  is given to fairness in the  administration  of  compensation  and to
assuring that all employees  understand the related  performance  evaluation and
administrative  process.  We have  taken  careful  steps  in an  effort  to make
executive  compensation  consistent with that of other similar  companies in the
industrial manufacturing  industries and, when appropriate,  contingent upon our
achievement of near- and long-term  objectives  and goals.  For fiscal 2000, the
principal  measures  the  Compensation  Committee  looked to in  evaluating  our
progress towards these objectives and goals were (1) achieving certain financial
performance   levels,  (2)  increasing  our  economic  value  added  ("EVA")  in
accordance with the EVA program established by the Company and (3) the launch of
our subsidiaries, Merinta Inc. and Boundless Manufacturing Services, Inc..

     For  2000,  our  executive  compensation  program  included  the  following
components:  (i) base salary,  (ii) merit increases,  (iii) annual incentives in
the form of cash  bonuses  and (iv)  options  to  purchase  shares of our Common
Stock.

Base Salary

     Base  salary is  targeted  toward  the middle of the range  established  by
surveys of comparable companies in the industrial manufacturing industries. Base
salaries are reviewed to ensure that our  salaries  are  competitive  within the
target range.


                                       10


Merit Increase

     Merit  increases  are  designed  to  encourage  management  to  perform  at
consistently   high  levels.   Salaries  for  executives  are  reviewed  by  the
Compensation  Committee  on an annual  basis and may be  increased  at that time
based on the Compensation  Committee's  conclusion that the individual's overall
contribution to our success deserves recognition.  The base salaries paid to our
executive  officers  were  increased in 2000 by amounts  ranging from 0% to 30%,
reflecting  primarily changed  responsibilities  and their  contributions to our
near- and long-term strategic objectives set forth above.

Cash Bonuses

     Bonuses for  executives  are considered to be "pay at risk" and as such are
used as an incentive to  encourage  management  to perform at a high level or to
recognize  a  particular  contribution  by an employee  or  exceptional  Company
performance.  Generally,  the higher the employee's level of job responsibility,
the  larger  the  portion  of the  individual's  compensation  package  that  is
represented  by a bonus.  Whether a bonus  will be given,  and the amount of any
such bonus,  is determined  on a yearly basis.  Any bonus earned in a particular
fiscal year is normally paid sometime after that fiscal year has expired.

     For 2000,  the  Compensation  Committee's  objectives  for the  awarding of
bonuses to  executives  were to recognize and reward  performance,  to encourage
executives to exert  maximum  efforts to enable us to meet and exceed our or his
objectives,  as well as to ensure that our compensation  remains  competitive to
enable us to hire and retain  top-performing  executives.  At the  beginning  of
2000,  the  Compensation  Committee  and the  Board of  Directors  reviewed  and
approved our annual performance objectives. The actual cash bonus earned in 2000
by an executive  officer  depended upon the extent to which our objectives  were
achieved.

     For 2000, in awarding cash bonuses to executive officers,  the Compensation
Committee  evaluated our  performance  against the objectives set forth above as
follows:  in fiscal 2000,  we 1) launched  two new  operating  subsidiaries,  2)
completed the acquisition of the manufacturing assets of Boca Research, Inc. and
secured a supply  agreement from Boca Research,  3) completed the development of
the internet  appliance  software and began  shipments to a large  customer,  4)
negotiated an extension to the company's revolving line of credit with the Chase
Manhattan  Bank,  and 5) secured a  $5,000,000  investment  in our Merinta  Inc.
subsidiary  from  National  Semiconductor.  In light of our success in achieving
important objectives in fiscal 2000, the Compensation Committee decided to award
bonuses to executives at 50% of their target levels,  prorated for the time each
executive had been with us during the year. During 2000, our executive  officers
were  paid  bonuses,  earned  in 1999,  ranging  from  18% to 48% of their  base
salaries.  Bonus  awards  are  approved  by the  Chief  Executive  Officer,  the
Compensation  Committee  and the Board of  Directors  in the case of  executives
other than the Chief Executive  Officer,  and by the Compensation  Committee and
the Board alone in the case of the Chief Executive Officer.

Stock Options

     The Compensation  Committee  believes that stock ownership by management is
beneficial in aligning the interests of management and stockholders with respect
to enhancing stockholder value. Stock options are also used to retain executives
and motivate  them to improve  long-term  stockholder  value,  Stock options are
granted at the  prevailing  market  value and will only have future value if our
stock price increases.  Generally,  stock option grants vest 25% after the first
year and monthly thereafter in 36 equal amounts over three years.

     The Compensation  Committee  determines the number of options to be granted
based upon the competitive  marketplace,  with a particular focus on determining
what level of equity  incentive is necessary to retain a particular  individual.
The  Compensation  Committee's  recommendations  in this regard are reviewed and
approved by the Board.  Outstanding  historical  performance by an individual is
additionally  recognized through larger than normal option grants. For 2000, our
executive  officers  received options to purchase Common Stock at levels ranging
from 40,000 to 125,000 shares.


                                       11


Chief Executive Officer

     The  Compensation  Committee used the same philosophy  described above with
respect to other executive  officers in setting the  compensation for Mr. Combs,
who served as our Chief Executive Officer until January 2002. The base salary of
Mr. Combs was unchanged in 2000 as compared to 1999.  Mr. Combs received a bonus
for 1999,  payable in 2000,  equal to 46% of his base  salary . Despite  missing
certain financial objectives in 2000, Mr. Combs did achieve other objectives, in
particular  successfully  raising  $5,000,000 of equity  funding for our Merinta
Inc.  subsidiary;  and, as a result, Mr. Combs was awarded a bonus of 23% of his
base salary for 2000. In addition,  the Compensation  Committee approved a grant
of options to Mr.  Combs in fiscal  2000 to  purchase  125,000  shares of Common
Stock.


                                            COMPENSATION COMMITTEE

                                            Daniel Matheson, Chairman
                                            Gary Wood
                                            Jack Murphy (Joined in June 2001)
                                            Frank Stephens (Joined in July 2001)


Compensation Committee Interlocks and Insider Participation

         Mr. Combs and Mr.  Jeffrey Moore,  who served as executive  officers of
our company during 2000, were also members of our Board of Directors during such
times  and   participated  in   deliberations   concerning   executive   officer
compensation.  Their joint  deliberations  gave rise to  conflicts  of interest,
which could have affected  their  compensation,  and the number of stock options
granted to them  individually and as a group. Mr. Moore was also a member of the
board  and an  officer  of Morgan  Kent  Group  during  2000  which had  certain
relationships, and entered into certain transactions, with us during 2000.

Executive Compensation

         The table below discloses all cash  compensation  awarded to, earned by
or paid to our Chief  Executive  Officer  and our four most  highly  compensated
executive  officers who earned more than  $100,000 for services  rendered in all
capacities to us during the fiscal year ended  December 31, 2000  (collectively,
the "named  executive  officers").  In addition,  it provides  information  with
respect to the  compensation  paid by us to the named executive  officers during
1999 and 1998.

                           Summary Compensation Table



                                                                                            Long-Term
                                                       Annual Compensation               Compensation
                                            ----------------------------------------     ------------
Name and Principal                                                      Other Annual                         All Other
Position                       Year         Salary         Bonus        Compensation      Options(#)(4)     Compensation
--------                       ----         ------         -----        ------------      -----------       ------------
                                                                                                
J. Gerald Combs(1)          12/31/00         $325,000       $150,000            -          125,000                 -
Chairman and Former CEO     12/31/99         $325,000        $50,000            -           50,000                 -
                            12/31/98         $291,462       $150,000            -          150,000                 -

Jeffrey K. Moore(2)         12/31/00         $145,198        $70,000       $9,500          105,000                 -
Former Vice President,      12/31/99         $112,500        $25,000            -           50,000                 -
Corporate Development       12/31/98          $90,719              -            -                -                 -

Kenneth East(3)  Former     12/31/00         $167,887        $50,000            -                -                 -
CTO, Merinta Inc.           12/31/99         $164,640        $50,000            -           20,000                 -
                            12/31/98         $137,489        $35,000      $17,130           30,000                 -


                                       12




                                                                                            Long-Term
                                                       Annual Compensation               Compensation
                                            ----------------------------------------     ------------
Name and Principal                                                      Other Annual                         All Other
Position                       Year         Salary         Bonus        Compensation      Options(#)(4)     Compensation
--------                       ----         ------         -----        ------------      -----------       ------------
                                                                                               
Joseph Gardner              12/31/00         $155,196        $62,500                  -    40,000                 -
Vice President-Finance      12/31/99         $140,193        $40,000                  -    20,000                 -
Chief Financial Officer     12/31/98         $140,962        $25,000                  -         -                 -

Joseph V. Joy (5)            12/31/00        $158,702        $25,000                  -         -                 -
President, Chief
Operating Officer


------------------
(1)  Options  representing  10% of the  outstanding  capital  stock of Boundless
     Manufacturing  Services,  Inc. and 6.5% of the outstanding capital stock of
     Merinta  Inc.  were  granted  in  1999 to Mr.  Combs,  which  options  were
     exercised  by Mr.  Combs  during  1999.  Mr.  Combs  resigned  as our Chief
     Executive Officer in January 2002.

(2)  Other  Annual  Compensation  includes  a car  allowance  of $9,500 in 2000.
     Options  representing  10% of the  outstanding  capital  stock of Boundless
     Manufacturing  Services,  Inc. and 6.5% of the outstanding capital stock of
     Merinta  Inc.  were  granted  in  1999 to Mr.  Moore,  which  options  were
     exercised  by Mr.  Moore  during  1999.  Mr.  Moore  resigned  as our  Vice
     President in January 2002.

(3)  Other annual compensation consisted of relocation expense reimbursement.

(4)  Options  granted  in July 2000 to each of  Messrs.  Combs and Moore for the
     purchase of 65,000  shares of Common  Stock have a exercise  price of $4.50
     per share of Common Stock. All other grants to the named executive officers
     in 2000 have a strike price of $1.50 per share of Common Stock. All options
     granted  in 1999 to the named  executive  officers  have a strike  price of
     $5.00 per share of Common Stock.  With the exception of the 150,000 options
     granted to Mr. Combs in 1998,  which have a strike price of $4.88 per share
     of Common Stock, we repriced the exercise price of all outstanding employee
     options on May 18, 1998 to $5.63 per share of Common Stock.

(5)  Mr. Joy has been our Chief Executive Officer since January 17, 2002.

                        1995/ 1997/ 2000 Incentive Plans

     Our 1995  Incentive  Plan covered the  issuance of up to 600,000  shares of
Common  Stock.  The Board  adopted  the 1997  Incentive  Plan in July 1997 which
covers the issuance of up to 1,000,000  shares of Common Stock. In December 2000
the Board created the 2000 Incentive Plan which covers up to 1,000,000 shares of
Common Stock. The number of option shares granted on a calendar year basis under
the 2000 Incentive Plan is limited to 5% of the total number of shares of Common
Stock outstanding, or 10% in any five-year period.

                        Option Grants in 2000 Fiscal Year

     The  following  table sets forth  information,  as of  December  31,  2000,
regarding the  outstanding  options to purchase our Common Stock granted in 2000
under  either  our 1995,  1997 or 2000  Incentive  Plans to the named  executive
officers:


                                       13




                           Number of                                                      Potential Realizable
                           Securities     Percent of Total                                  Value at Assumed
                           Underlying       Options/SARs     Exercise or                  Annual Rates of Stock
                          Options/SARs     Granted under     Base Price     Expiration   Price Appreciation for
          Name            Granted (#)     Incentive Plans      ($/Sh)          Date            Option Term
          ----            -----------     ---------------      ------          ----            -----------
                                                                                           5% ($)     10% ($)
                                                                                           ------     -------
                                                                                    
J. Gerald Combs (1)          65,000            15.6%            $4.50         7/13/05      80,812     178,574
Jeffrey K. Moore(1)          65,000            15.6%            $4.50         7/13/05      80,812     178,574
J. Gerald Combs(2)           60,000            14.4%            $1.50        12/27/05      24,865      54,946
Jeffrey K. Moore(2)          40,000             9.6%            $1.50        12/27/05      16,577      36,631
Joseph Gardner(2)            40,000             9.6%            $1.50        12/27/05      16,577      36,631


---------------
(1)  Options were granted 7/13/00 and vest over a three-year period at a rate of
     50%, 25% and 25% respectively,  per year, on the anniversary of the date of
     grant.

(2)  Options were granted 12/28/00 and vest immediately.


                 Aggregated Option Exercises in 2000 Fiscal Year
                        and Fiscal Year-End Option Values
                        ---------------------------------

     The  following  table  provides  information  on the  value  of  the  named
executive  officers'  unexercised  options to purchase shares of Common Stock at
December 31, 2000.



                                                                                               Value of Unexercised
                                                    Number of Unexercised Options at         In-the-Money Options at
                                                          December 31, 2000 (#)              December 31, 2000 ($)(1)
                                                          ---------------------              ------------------------
                             Shares
                          Acquired on      Value
         Name             Exercise(#)    Realized      Exercisable      Unexercisable      Exercisable      Unexercisable
         ----             -----------    --------      -----------      -------------      -----------      -------------
                                                                                               
J. Gerald Combs                0            $0           340,000           140,000             $-                $-
Kenneth East                   0             0           29,166            20,834               -                 -
Jeffrey K. Moore               0             0           115,000           90,000               -                 -
Joseph Gardner               4,500        $10,688        65,248            26,252               -                 -


---------------
(1)  The last sale price of our Common Stock on December  29, 2000,  as reported
     by The American Stock Exchange, was $1.44.


Director Compensation

     During 2000, non-employee members of our Board of Directors received $1,000
per  month,  and $500 for each  Board  meeting  attended,  as  compensation  for
services  rendered  to us in  their  capacity  as our  directors.  In  addition,
non-employee  members  of our  Board of  Directors  received  $6,500 in 2000 for
services provided as a member of either the Audit or Compensation Committees. On
December  28, 2000,  we granted to each of Messrs.  Matheson and Wood options to
purchase  40,000 shares of Common Stock.  The options vest  immediately,  expire
December  27,  2005,  and have an  exercise  price of $1.50  per share of Common
Stock.


                                       14



Employment Agreements and Change-in-Control Arrangements

     We had  entered  into  employment  agreements  with Mr.  Combs,  our former
Chairman of the Board and Chief  Executive  Officer,  Mr. Jeffrey K. Moore,  our
former Vice  President,  Corporate  Development,  and Mr. East, the former Chief
Technology Officer of Merinta Inc.. The employment agreements with Mr. Combs and
Mr.  Moore  were  terminated  effective  January  2002 as part of our  severance
arrangement with each of them. Mr. East's employment agreement was terminated as
of June 2001.

     With respect to Mr. Combs, the agreement was entered into March 1, 2000 and
had an expiration date of February 27, 2003. The agreement  called for an annual
salary of $325,000, subject to an annual review by the Compensation Committee of
the  Board of  Directors,  as well as the grant of 65,000  options  to  purchase
shares of our Common Stock, such shares to vest pro rata on an annual basis over
a three-year  period.  Should Mr. Comb's employment with us have been terminated
without cause, Mr. Combs would have been entitled to deferred  payments totaling
thirty-six  month's salary and bonus.  In the event of a  change-in-control,  as
defined in the  agreement,  Mr.  Combs  would have been  entitled  to  immediate
payments totaling the annual base salary,  plus the previous year's annual bonus
multiplied by three, as well as immediate vesting of all options.

     Mr. Moore's employment  agreement was entered into March 1, 2000 and had an
expiration date of February 27, 2003. The agreement  called for an annual salary
of $150,000,  subject to an annual review by the  Compensation  Committee of the
Board of Directors, as well as the grant of 65,000 options to purchase shares of
our  Common  Stock,  such  shares  to vest pro rata on an  annual  basis  over a
three-year  period.  Should Mr. Moore's  employment with us have been terminated
without cause, Mr. Moore would have been entitled to deferred  payments totaling
thirty-six  month's salary and bonus.  In the event of a  change-in-control,  as
defined in the  agreement,  Mr.  Moore  would have been  entitled  to  immediate
payments totaling the annual base salary,  plus the previous year's annual bonus
multiplied by three, as well as immediate vesting of all options.

     We and  Boundless  Manufacturing  Services,  Inc.  entered into  employment
agreements  with Messrs.  Joseph Joy and Anthony  Giovaniello,  the President of
Boundless Manufacturing  Services,  Inc. and Executive Vice President,  Business
Development of Boundless Manufacturing Services, Inc.,  respectively.  The terms
and  conditions of the agreements for each of Messrs.  Joy and  Giovaniello  are
substantially  similar,  having an initial term of approximately  four years and
expiring July 1, 2003,  unless sooner  extended or terminated as provided for in
the agreements.

     The  agreements  call  for  the  purchase,  by  each  of  Messrs.  Joy  and
Giovaniello,  of 12.5% of  Boundless  Manufacturing  Services,  Inc.  issued and
outstanding  common stock which  purchases have been made by them.  These shares
may be  repurchased  by Boundless  Manufacturing  Services,  Inc. in a manner as
defined in the  agreements,  should that company  fail to meet  defined  minimum
performance standards.  The agreements call for annual salaries of approximately
$155,000,  subject  to an  annual  review;  and a cash  bonus of up to  $100,000
annually  determined by achievement of specified  objectives.  Pursuant to their
employment  agreements,  Mr. Joy and Mr.  Giovaniello will each have the option,
upon attainment of certain defined performance standards,  to convert his shares
of  Boundless  Manufacturing  Services,  Inc.  into up to 300,000  shares of our
Common Stock.

     In the event either of Messrs. Joy or Giovaniello is terminated for failure
to attain the minimum performance standards, as defined, he would be entitled to
continuation of base salary for a period not to exceed six months.  In the event
of termination without cause, or if either Messrs. Joy or Giovaniello resigns as
a result  of a change  of  control  of our  company,  he  would be  entitled  to
continuation  of base salary for a period not to exceed 18 months.  In addition,
in the event of termination without cause or resignation resulting from a change
of control,  the  employee is entitled to payment of the pro rata portion of the
cash bonus the employee would have been entitled to had he remained continuously
employed through the end of the year within which termination occurs.


                                       15



Certain Transactions

     During April 1999,  we entered into a one-year  consulting  agreement  with
CrossRoads  Capital  Corporation  ("Cross  Roads") for  financial  advisory  and
investment banking services. The President of CrossRoads,  Mr. Fred Schulman, is
also the President of the Morgan Kent Group.  Fees associated with this contract
were $10,000 per month. During March 2000 the consulting  agreement was extended
for an  additional  one-year  period.  In June 2000,  we retained  CrossRoads to
provide investor relations services. This second agreement, which was terminated
on December 31, 2000,  called for aggregate fees of $150,000 plus  expenses.  We
paid to CrossRoads  $120,000 in 2000 under the financial advisory and investment
banking  services  agreement  and $133,500 in 2000 under the investor  relations
services agreement.

     In 1999, Morgan Kent Group paid us $2,000 in interest accruing on a $50,000
loan from us to Morgan Kent  Group.  The note  evidencing  such loan was entered
into July 18, 1997 and had been extended but has not been repaid.

     On March 6, 2001, Unique Co-Operative  Solutions,  Inc., an entity entirely
owned by Oscar L.  Smith,  who  became a member  of our  Board of  Directors  in
January 2002,  filed a Schedule 13D with the Securities and Exchange  Commission
in connection with its acquisition,  over a period of time ending March 6, 2001,
of  233,200  shares  of our  Common  Stock.  This  company  has  since  acquired
additional  securities of Boundless.  During the past years Unique  Co-Operative
Solutions,  Inc.  has acted as a reseller of our thin client  products.  For the
year ended  December 31, 2000, we recorded  sales of  approximately  $128,000 to
Unique Co-Operative Solutions,  Inc. on terms substantially similar to our terms
with other sellers of our products.

Section 16(a) Beneficial Ownership Reporting Compliance

     A  review  of the  Forms  3 and 4  filed  or due in  2000  relating  to our
securities indicates that the filings made with the Commission were submitted on
time.

Security Ownership Of Certain Beneficial Owners And Management

     The following table sets forth certain information regarding the beneficial
ownership of the Company's  outstanding  Common Stock as of January 15, 2002, by
(i)  each of the  Company's  directors  and  "named  executive  officers,"  (ii)
directors and executive officers of the Company as a group and (iii) each person
believed  by the  Company to own  beneficially  more than 5% of its  outstanding
shares of Common Stock. Except as indicated each such person has sole voting and
investment  powers with respect to his and her shares.  The address of Goldplate
Holdings,  LTD. is 241 Fifth  Avenue,  Suite 302,  New York,  NY. The address of
Unique Co-Operative  Solutions Inc./ Oscar L. Smith is 9185 Bond, Overland Park,
KS 66214.  The address of Neoware  Systems,  Inc. is 400  Feheley  Dr.,  King of
Prussia, PA 19406.

                                       Number of Shares        Percentage of
Name of Beneficial Owner              Beneficially Owned     Outstanding Shares
------------------------              ------------------     ------------------

Unique Co-Operative Solutions,             977,389(1)             17.1%
Inc./ Oscar L. Smith
J. Gerald Combs                            525,923(2)(3)           8.5%
Neoware Systems, Inc.                      383,335(4)              6.7%
Goldplate Holdings, LTD                    307,502(5)              5.1%
Jeffrey K. Moore                           205,000(3)(6)           3.5%
Gary Wood                                  141,188(3)              2.4%
Joseph Gardner                              97,074(3)              1.7%
Daniel Matheson                             92,291(3)              1.6%
Joseph V. Joy, Jr                           66,393(3)              1.2%
Anthony Giovaniello                         39,022(3)                *


                                       16


                                       Number of Shares        Percentage of
Name of Beneficial Owner              Beneficially Owned     Outstanding Shares
------------------------              ------------------     ------------------

Frank Stephens                              30,485(3)                *
Kenneth East                                     0(7)                *
All current directors and
executive officers as a group            2,174,765(3)(5)          31.8%
 (nine individuals)

*    Less than 1%.

(1)  Includes 41,667 shares issuable upon the exercise of a warrant. The warrant
     was granted June 4, 2001,  in  connection  with a sale of our common stock.
     The common shares underlying the warrant vest immediately, have an exercise
     price per share of common stock of $1.30,  and expire five years  following
     the date of grant. Prior to our sale of the Windows-based  terminal product
     line in June 2001, Unique Co-operative Solutions,  Inc. had been a reseller
     of our products.  Sales of products to Unique Co-operative Solutions,  Inc.
     during  the past  three  years  were not  material  to the  results  of our
     operations.

(2)  Resigned as the Chief Executive  Officer of the Company  effective  January
     2002.

(3)  Includes or consists of shares of Common Stock  issuable  upon  exercise of
     options as follows:  Mr. Combs:  480,000;  Mr. Wood:  82,291; Mr. Matheson:
     92,291; Mr. Moore:  205,000;  Mr. Gardner:  77,666; Mr. Joy: 1,000; and Mr.
     Giovaniello: 1,000. Includes or consists of shares of Common Stock issuable
     upon exercise of warrants as follows:  Mr. Combs:  5,834; Mr. Wood:  3,473;
     Mr. Gardner: 1,945; Mr. Joy: 8,042; Mr. Ryan: 19,195; Mr. Stephens:  6,097;
     and Mr. Giovaniello: 2,917.

(4)  Includes 50,001 shares issuable upon the exercise of a warrant. The warrant
     was issued June 29, 2001,  in  connection  with a sale of our common stock.
     The common shares underlying the warrant,  have an exercise price per share
     of common stock of $1.10,  and the warrant expires five years following the
     date  of  grant.   In  June  2001  Neoware   Systems  Inc.   purchased  our
     Windows-based  terminal  product  line  for  $1,600,000.  As  part  of  the
     transaction,  we secured an agreement to manufacture  certain  products for
     Neoware Systems, Inc.

(5)  Includes 307,502 shares underlying the warrants held by Goldplate Holdings,
     LTD. to purchase  shares of Common Stock at an exercise  price of $7.50 per
     share

(6)  Excludes 217,500 shares  beneficially  owned by Morgan Kent Group.  Under a
     stockholders agreement, holders of the majority of Series B Preferred stock
     of Morgan  Kent Group have the power to elect  three of the five  directors
     constituting  Morgan Kent Group's  entire board of directors  which has the
     sole voting power and, with the  stockholders of Morgan Kent Group,  shares
     the investment  power with respect to the Common Stock owned by Morgan Kent
     Group. Messrs. Jeffrey K. Moore and Matthew R. Moore (the "Moore Brothers")
     together  own a  majority  of  the  outstanding  shares  of  the  Series  B
     Preferred. Each of the Moore Brothers disclaims beneficial ownership of the
     other's shares of Morgan Kent Group's Series B Preferred.

(7)  Employment terminated June 2001, with respect to Mr. East.


                                       17



Date                    Boundless        Amex U.S.     Amex Industrial Mfg.
----                    ---------        ---------     --------------------

12/31/95                     100              100                100
12/31/96                   55.27           101.55              93.20
12/31/97                   22.31           127.26             113.11
12/31/98                   17.01           136.58              89.53
12/31/99                   28.49           179.36             114.83
12/31/00                    4.89           168.46             141.44


                                       18


                          2. ADOPTION OF THE COMPANY'S
                               2001 INCENTIVE PLAN

     The Board  believes  that the 2001  Incentive  Plan (the "2001  Plan") will
benefit our company by (i) assisting in the recruiting  and retaining  employees
and non-employee  directors,  advisors and independent  consultants with ability
and  initiative,   (ii)  providing  greater  incentive  for  the  employees  and
consultants  of our company  and related  entities,  and (iii)  associating  the
interest of employees and consultants  with the interests of our company and our
stockholders through opportunities for increased stock ownership.

Summary of the 2001 Plan

     The Board will  administer the 2001 Plan. The Board may, but has no current
intention to,  delegate its authority to administer the 2001 Plan to a committee
of the Board or to one or more of our  officers.  As used in this  summary,  the
term "Administrator" means the Board and any delegate, as appropriate.

     Each employee,  director,  advisor or independent consultant of our company
or  a  related  entity  is  eligible  to  participate  in  the  2001  Plan.  The
Administrator  will select the individuals who will participate in the 2001 Plan
("Participants").  The Administrator may, from time to time, grant stock options
or stock awards to Participants.

     Options  granted  under  the 2001  Plan may be  qualified  incentive  stock
options  ("ISOs")  or  non-qualified  stock  options  ("NSOs").  A stock  option
entitles  the  Participant  to  purchase  shares of Common  Stock from us at the
option price.  The option price will be fixed by the  Administrator  at the time
the option is granted,  but the price  cannot be less than the fair market value
of the stock on the date of grant in the case of an ISO,  or 75% of that  amount
in the case of a  non-qualified  stock  option.  The option price may be paid in
cash, with shares of Common Stock,  with a combination of cash and Common Stock,
in  installments  or by "cashless  exercise" (i.e. by allowing us to deduct from
the number of shares of Common Stock, deliverable upon exercise of the option, a
number of such shares  which has an  aggregate  fair market value on the date of
exercise of the option equal to the aggregate option exercise price).  Grants of
a  non-qualified  stock option may  constitute  compensation  expense to us, and
therefore, negatively affect our earnings.

     Participants may also be awarded shares of Common Stock pursuant to a stock
award. The Administrator,  in its discretion, may prescribe that a Participant's
rights in a stock award shall be  nontransferable  or forfeitable or both unless
certain conditions are satisfied.  These conditions may include,  for example, a
requirement that the Participant continue employment with us or a related entity
for a specified  period or that we, a related entity or the Participant  achieve
stated objectives.

     The 2001 Plan provides that in certain  circumstances  outstanding  options
will become  exercisable and outstanding stock awards will be earned in full and
nonforfeitable  in the event of a "change in control" of our company (as defined
in the 2001 Plan).

     All stock  options  and stock  awards  granted  under the 2001 Plan will be
evidenced by written agreements  between the Company and the Participant.  Under
the 2001 Plan, the maximum  aggregate number of shares of Common Stock which may
be issued is  284,000  which is less than 5% of the total  shares of our  Common
Stock  outstanding  as of January 15,  2002.  Common stock issued under the 2001
Plan,  other than on  exercise  of an ISO with an option  price equal to or less
than the  fair  market  value of the  Common  Stock on the date of  grant,  will
constitute compensation expense to us and will negatively affect our earnings.

     No option or stock award may be granted and no stock  awards may be awarded
under the 2001 Plan more than ten years  after the 2001 Plan is  adopted  by the
Board of Directors. The Board may terminate the 2001 Plan sooner without further
action by stockholders.  The Board also may amend the 2001 Plan,  except that no
amendment may adversely affect the rights of Participants without their consent.


                                       19


     No options or shares have yet been granted under the 2001 Plan.

Federal Income Tax Consequences

     The  following  is a general and brief  summary of the  federal  income tax
treatment of stock options and stock awards  granted  under the 2001 Plan.  This
discussion  is  not  complete  and  its   application  may  vary  in  particular
circumstances  or as a  result  of  changes  in  federal  income  tax  laws  and
regulations.

     A  Participant  generally  will not  incur  any  U.S.  federal  income  tax
liability as a result of the grant of an ISO,  NSO or stock award,  if the stock
subject to the award is forfeitable.

     ISOs. A  Participant  generally  will not  recognize any income for federal
income tax purposes upon exercise of an ISO,  although certain  Participants may
be subject to the federal  alternative  minimum  tax upon  exercise of an ISO. A
Participant  will recognize  income (or loss) upon the subsequent sale of shares
of our common stock acquired upon exercise of an ISO. If the  Participant  sells
the shares  before the later of one year after  exercise  or two years after the
grant of the ISO (a disqualifying  disposition),  the Participant will recognize
ordinary  income  in an  amount  equal to the  fair  market  value of the  stock
determined on the date of exercise of the ISO (or, if lower, the amount received
upon sale of the  stock)  reduced by the  amount  the  Participant  paid for the
stock. The difference between the amount received upon the sale of the stock and
the amount treated as ordinary  income in a  disqualifying  disposition  will be
considered a capital  gain. If the  Participant  does not sell the shares within
one year after  exercise or two years after grant,  the  difference  between the
amount received upon the sale of the stock and the amount the  Participant  paid
for the stock will be considered a capital gain or loss.

     Although  designated as ISOs, options will be deemed NSOs to the extent the
shares, underlying all ISOs granted to the same person and that become initially
exercisable  during  a  calendar  year,  have an  aggregate  fair  market  value
exceeding $100,000 as of the date such options were granted.

     NSOs. A Participant  will recognize  ordinary income for federal income tax
purposes when the Participant  exercises an NSO. The amount of income recognized
upon  exercise  of an NSO is the fair  market  value of the shares of our common
stock acquired upon exercise  (determined as of the date of exercise) reduced by
the amount the Participant paid for the shares.  The  Participant's tax basis in
the  shares  will  equal  the fair  market  value of the  shares  on the date of
exercise and  Participant's  holding period will begin on the day after the date
of  exercise.  Any gain or loss upon sale of the  shares  will be  treated  as a
capital  gain or loss.  The capital  gain or loss will  generally  be treated as
long-term gain or loss if the shares are held for more than one year.

     Stock Awards.  Unless a Participant  makes an election  pursuant to Section
83(b) of the Internal  Revenue Code, a Participant  generally will not recognize
income upon the grant of the stock  award.  The fair  market  value of the stock
award at the time the  restrictions  on such stock  lapse and the stock  becomes
non-forfeitable  is taxed as ordinary income.  The holding period of the awarded
stock  will  begin the day after the shares  become  non-forfeitable.  When such
shares are later sold, the difference  between the amount  received upon sale of
the shares and the amount previously  included in the Participant's  income when
the shares became  non-forfeitable,  is considered  capital gain or loss. If the
shares are held for more than one year after they  become  non-forfeitable,  the
long-term  capital gain rate will apply;  if the shares are held for one year or
less after  they  become  non-forfeitable,  the  ordinary  income tax rates will
apply.

     A Section  83(b)  election  will result in  ordinary  income on the date of
grant in an amount  equal to the fair market  value of the stock award as of the
date  of  grant  (determined   without  regard  to  the  restrictions)  and  the
Participant's  holding  period  will begin the day after the date of grant.  The
Participant's  tax basis in such stock will be the amount included in his or her
ordinary income.

     Company  Deductions.  We  are  generally  entitled  to a  business  expense
deduction  on our federal  income tax return with  respect to stock  options and
stock  awards  in the  same  amount  and at the  same  time


                                       20



that a Participant  recognizes  ordinary income with respect to the stock option
or stock  award.  Amounts  treated as capital  gain to the  Participant  are not
deductible by us.

     THE  BOARD OF  DIRECTORS  RECOMMENDS  A VOTE FOR THE  ADOPTION  OF THE 2001
     INCENTIVE PLAN.

                       3. RATIFICATION OF APPOINTMENT OF
                              INDEPENDENT AUDITORS

     With the  approval  of the  audit  committee,  our Board of  Directors  has
appointed BDO Seidman,  LLP,  independent  auditors,  to audit our  consolidated
financial  statements for our fiscal year ending  December 31, 2001. BDO Seidman
has served as our  independent  auditors since January 1997. You are being asked
to  ratify  this  appointment  at  the  annual  meeting.   Notwithstanding  this
appointment,  the  Board  of  Directors,  in its  discretion,  may  appoint  new
independent  auditors  at any time  during the year,  if the Board of  Directors
feels that such a change  would be in the best  interests of our company and its
stockholders.

     Audit fees. We were billed a total of approximately $268,000 by BDO Seidman
for its  services  rendered  for the audit of our  fiscal  year  2000  financial
statements and for reviewing our financial statements included in our forms 10-Q
during 2000 and for other services relating to our filings with the SEC.

     Financial  information systems design and implementation  fees. No services
were  billed to us by BDO  Seidman  during  2000  relating to direct or indirect
services for financial implementation systems design or implementation.

     All other fees. The fees billed by BDO Seidman for services rendered to us,
other than the  services  described  above under "Audit Fees" for the 2000 year,
were $77,000,  which included  $61,000 for tax preparation  services and $16,000
for the  audit of the  Company's  401K  Deferred  Compensation  Plan.  The audit
committee has determined that the provision of these  non-audit  services by BDO
Seidman is compatible with maintaining the independence of BDO Seidman.

     Representatives  of BDO  Seidman  are  expected to be present at the annual
meeting  with the  opportunity  to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.

     THE  BOARD  OF  DIRECTORS  RECOMMENDS  A VOTE FOR THE  RATIFICATION  OF BDO
     SEIDMAN AS OUR INDEPENDENT AUDITORS.

                                  OTHER MATTERS

     We know of no other matters to be submitted to the annual  meeting.  If any
other matters  properly come before the annual  meeting,  it is the intention of
the  persons  named  in the  enclosed  form of proxy  to vote  the  shares  they
represent as the Board of Directors recommends.




                                      By order of the Board of Directors,

                                         Joseph Gardner
                                         Vice President, Chief Financial Officer

January 31, 2002


                                       21


                                                                      APPENDIX A

                              BOUNDLESS CORPORATION
                             Audit Committee Charter


1.0  Organization

     This charter governs the operations of the audit  committee.  The committee
shall review and reassess the charter at least  annually and obtain the approval
of the Board of Directors (sometimes referred to as the "Board").  The committee
shall be appointed by the Board of Directors annually with membership coinciding
with the  shareholder  vote electing such directors to the Board.  The committee
shall be comprised of at least three directors,  each of whom are independent of
management  and the  Company.  Members  of the  committee  shall  be  considered
independent if, in the view of the Board,  they have no relationship  that would
interfere  with the  exercise  of their  independence  from  management  and the
Company.  All committee members shall be financially  literate,  or shall become
financially literate within a reasonable period of time after appointment to the
committee. At least one member of the committee shall have accounting expertise,
a professional certification in accounting or any other comparable experience or
background which results in the person's financial sophistication.

2.0  Statement of Policy

     The audit committee shall exist as a committee of the Board of Directors to
assist  it in  fulfilling  its  oversight  responsibility  to the  shareholders,
potential  shareholders,  the investment  community and others,  relating to the
Company's  financial  statements  and the  financial  reporting  process and the
systems of internal  accounting and financial  controls.  In so doing, it is the
responsibility of the committee to maintain free and open communication  between
the committee,  the Company's  independent  auditors,  the internal auditors and
management  of the Company and in  discharging  its  oversight  role,  take such
actions as it deems  appropriate  including  retaining  outside counsel or other
experts to assist the committee.

3.0  Responsibilities and Processes

     The  primary  responsibilities  of the audit  committee  are to oversee the
Company's  financial  reporting process on behalf of the Board and to report the
results  of  their  activities  to the  Board.  Management  is  responsible  for
preparing the Company's financial  statements,  and the independent auditors are
responsible for auditing those financial  statements.  The committee should take
appropriate  actions to set the overall  corporate "tone" for quality  financial
reporting,  sound business risk practices, and ethical behavior. In carrying out
its responsibilities,  the committee believes its policies and procedures should
remain   flexible,   in  order  to  best  react  to  changing   conditions   and
circumstances.

     The  following  shall be the  principal  recurring  processes  of the audit
committee in carrying out its oversight responsibilities.  The processes are set
forth as a guide and the  committee  may change them,  from time to time,  as it
deems appropriate.

o The committee  shall have a clear  understanding  with both management and the
independent auditors that the independent auditors are ultimately accountable to
the  Board  and  the  audit  committee,  as  representatives  of  the


                                       22


Company's  shareholders.  The  committee  shall  discuss  with the  auditors the
auditor's  independence  from  management  and the Company and shall  review and
discuss  with the  independent  auditors  the formal  written  statement  of the
auditors  delineating all relationships  between the auditors and the company as
required by the  Independence  Standards  Board Standard 1. The committee  shall
take such appropriate  action, or recommend that the full Board take appropriate
action, to oversee the independence of the outside auditors.

o Annually,  the committee shall review  financial  management's  recommendation
with respect to changes in external auditors and bring a full  recommendation to
the Board regarding the selection of the Company's independent  auditors,  which
shall be  subject  to  shareholders'  approval.  The  committee  shall  have the
ultimate  authority  and  responsibility  to evaluate  and,  where  appropriate,
recommend to the Board the replacement of the independent auditors.

o The committee  shall discuss with  financial  management  and the  independent
auditors  the  overall  scope  and  plans for  their  respective  annual  audits
including the adequacy of staffing and compensation.

o The committee  shall discuss with  financial  management  and the  independent
auditors  the  adequacy  and  effectiveness  of  the  Company's  accounting  and
financial  controls,  including  the  Company's  system to  monitor  and  manage
business risk where material financial exposure exists.

o The committee shall review and discuss the results of the annual audit and any
other matters  required to be  communicated  to the committee by the independent
auditors  under  generally  accepted  standards  including SAS 61. The committee
shall meet at least annually with the independent  auditors in a private session
without management present to discuss the results of its annual audit.

o The committee  shall review the interim  financial  statements with management
and the  independent  auditors  prior to the filing of the  Company's  Quarterly
Reports on Form 10-Q.  Also,  the  committee  shall  discuss  the results of the
quarterly  review  and any other  matters  required  to be  communicated  to the
committee  by  the  independent   auditors  under  generally  accepted  auditing
standards. The chair of the committee may represent the entire committee for the
purpose of this review.

o The committee shall review with  management and the  independent  auditors the
financial  statements to be included in the Company's Annual Report on Form 10-K
(or the annual report to shareholders if distributed prior to the filing of Form
10-K),  including their judgment about the quality,  not just acceptability,  of
accounting  principals,  the  reasonableness of significant  judgments,  and the
clarity of the disclosures in the financial statements.



                                       23


                                                                      Appendix B

                              BOUNDLESS CORPORATION
                               2001 INCENTIVE PLAN

                                   ARTICLE I.
                                   DEFINITIONS

     Section 1.01.  Administrator  means the Board and any delegate of the Board
that is appointed in accordance with Article III.

     Section 1.02.  Agreement means a written agreement (including any amendment
or supplement thereto) between the Corporation and a Participant  specifying the
terms and conditions of a Stock Award or Option granted to such Participant.

     Section 1.03. Board means the Board of Directors of the Corporation.

     Section  1.04.  Change in  Control  shall mean an event or series of events
that would be required to be described as a change in control of the Corporation
in a proxy or information  statement  distributed by the Corporation pursuant to
Section  14 of the  Exchange  Act in  response  to  Item  6(e) of  Schedule  14A
promulgated  thereunder or otherwise adopted. The determination whether and when
a change in control has occurred or is about to occur shall be made by the Board
in office  immediately  prior to the occurrence of the event or series of events
constituting such change in control.

     Section  1.05.  Code  means  the  Internal  Revenue  Code of 1986,  and any
amendments thereto.

     Section 1.06.  Common Stock means the common stock,  $.01 per value, of the
Corporation.

     Section 1.07. Corporation means Boundless Corporation.

     Section  1.08.  Control  Change Date means the  occurrence  of the event or
series of events constituting a Change in Control as determined by the Board.

     Section 1.09.  Exchange Act means the  Securities  Exchange Act of 1934, as
amended and as in effect on the date of this Plan.

     Section 1.10. Fair Market Value means,  (i) if the Common Stock is publicly
traded,  the closing price (or, if there is none, the average of the closing bid
and asked price) of the Common Stock, on any given day, on such quotation system
or  principal  securities  exchange on which the Common  Stock is traded on such
day,  or, if the  Common  Stock is not so  traded on such day,  then on the next
preceding  day that the Common Stock was traded,  all as reported by such source
as the  Administrator  may select and (ii) if the Common  Stock is not  publicly
traded,  as determined in the sole and absolute  discretion of the Corporation's
Board.

     Section  1.11.  Forfeitable  Shares  shall  have the  meaning  set forth in
Section 9.04 of this Plan.

     Section 1.12.  Non-Employee Director means a member of the Board who is not
an employee of the Corporation or a Related Entity.


     Section  1.13.  Option  means a stock  option that  entitles  the holder to
purchase  from the  Corporation a stated number of shares of Common Stock at the
price set forth in an Agreement.

     Section  1.14.  Option  Exchange  Program  shall  mean  a  program  whereby
outstanding  Options  are  surrendered  in  exchange  for  Options  with a lower
exercise price.

     Section 1.15.  Participant means an employee of and non-employee  director,
advisor and  independent  consultant  to the  Corporation  or a Related  Entity,
including  an  employee  who  is a  member  of  the  Board,  who  satisfies  the
requirements  of Article IV and is  selected by the  Administrator  to receive a
Stock Award, an Option or a combination thereof.

     Section 1.16. Plan means the Corporation's 2001 Incentive Plan.

     Section 1.17.  Related Entity means any entity that directly or indirectly,
through one or more intermediaries,  controls,  or is controlled by, or is under
common control with, the Corporation.

     Section 1.18. Stock Award means Common Stock awarded to a Participant under
Article IX.

     Section 1.19. Stockholders means the stockholders of the Corporation.

                                  ARTICLE II.
                                    PURPOSES

     Section 2.01.  General.  The Plan is intended to assist the Corporation and
Related Entities (i) in recruiting and retaining employees, directors, officers,
consultants and advisors,  and in compensating such individuals by enabling such
individuals  to participate  in the future  success of the  Corporation  and the
Related  Entities  and  (ii) to  associate  their  interests  with  those of the
Corporation  and its  Stockholders.  The Plan is intended to permit the grant of
Stock Awards and the grant of non-qualified  Options.  In the event this Plan is
approved by the  Stockholders  in  accordance  with  Article XV hereof,  Options
qualifying  under  Section  422 of the  Code  ("incentive  stock  options"),  as
determined by the  Administrator at the time of grant, may also be granted.  The
terms in this Plan relating to incentive stock options shall not be effective or
applicable  unless and until such  Stockholder  approval is obtained.  No Option
that is intended to be an incentive stock option shall be invalid for failure to
qualify as an incentive stock option.  The proceeds  received by the Corporation
from the sale of Common  Stock  pursuant  to this Plan shall be used for general
corporate purposes.

     Section 2.02. Payment of Salaries or Fees in Securities.  A Participant may
elect  to  receive  all or a  portion  of his or her  salary  or fees  from  the
Corporation  in the  form of cash,  Options  or Stock  Awards  or a  combination
thereof, as determined by the Administrator. Such Options and Stock Awards shall
be issued  under the Plan.  The number of Options and Stock Awards to be granted
to  Participants in lieu of salary and fees that would otherwise be paid in cash
shall be calculated in a manner  determined by the  Administrator.  The terms of
such Options or Stock Awards shall also be determined by the Administrator.  Any
reference  in this Plan to a "grant" or "award" of Options or Stock Awards shall
include  the  issuance  for   consideration   of  Options  or  Stock  Awards  as
contemplated in this Section 2.02.


                                       2



                                  ARTICLE III.
                                 ADMINISTRATION

     The Plan shall be  administered  by the  Administrator.  The  Administrator
shall have  authority  to grant Stock  Awards and  Options  upon such terms (not
inconsistent with the provisions of this Plan) as the Administrator may consider
appropriate.  Such terms may include  conditions (in addition to those contained
in this  Plan) on the  exercisability  of all or any part of an Option or on the
transferability or forfeitability of a Stock Award,  including by way of example
and not  limitation,  conditions  on which  Participants  may defer  receipt  of
benefits under the Plan,  requirements that the Participant complete a specified
period of employment  with or service to the  Corporation  or a Related  Entity,
that the Corporation achieve a specified level of financial  performance or that
the Corporation  achieve a specified level of financial return.  Notwithstanding
any such conditions,  the Administrator  may, in its discretion,  accelerate the
time at which any Option may be  exercised,  or the time at which a Stock  Award
may become transferable or nonforfeitable.  In addition, the Administrator shall
have  complete  authority  to determine  Fair Market  Value,  to  interpret  all
provisions of this Plan, to institute an Option Exchange  Program,  to prescribe
the form of  Agreements,  to adopt,  amend,  and rescind  rules and  regulations
pertaining   to  the   administration   of  the  Plan  and  to  make  all  other
determinations  necessary or advisable for the  administration of this Plan. The
express grant in the Plan of any specific power to the  Administrator  shall not
be  construed  as limiting  any power or  authority  of the  Administrator.  Any
decision made, or action taken, by the  Administrator  or in connection with the
administration  of  this  Plan  shall  be  final  and  conclusive.  Neither  the
Administrator  nor any  member of the Board  shall be liable for any act done in
good faith with  respect to this Plan or any  Agreement,  Option or Stock Award.
All expenses of administering this Plan shall be borne by the Corporation.

     The Board,  in its  discretion,  may appoint a  committee  of the Board and
delegate to such committee all or part of the Board's  authority and duties with
respect to the Plan.  The Board may revoke or amend the terms of a delegation at
any time but such action shall not  invalidate  any prior actions of the Board's
delegate or delegates that were consistent with the terms of the Plan.

                                   ARTICLE IV.
                                   ELIGIBILITY

     Section 4.01.  General.  Any  employee,  director,  officer,  consultant or
advisor to the  Corporation  or a Related Entity  (including a corporation  that
becomes a Related  Entity  after  the  adoption  of this  Plan) is  eligible  to
participate  in  this  Plan  if  the  Administrator,  in  its  sole  discretion,
determines that such person has contributed  significantly or can be expected to
contribute  significantly  to the  profits  or  growth of the  Corporation  or a
Related Entity. Directors of the Corporation or a Related Entity may be selected
to participate in this Plan.

     Section 4.02. Grants. The Administrator will designate  individuals to whom
Stock Awards and Options are to be granted and will specify the number of shares
of Common  Stock  subject to each award or grant.  All Stock  Awards and Options
granted under this Plan shall be evidenced by Agreements  which shall be subject
to the  applicable  provisions of this Plan and to such other  provisions as the
Administrator  may adopt. No Participant may be granted  incentive stock options
(under all  incentive  stock  option  plans of the  Corporation  and any Related
Entity)  which are first  exercisable  in any calendar  year for stock having an
aggregate  Fair Market  Value  (determined  as of the date an Option is granted)
that exceed the  limitation  prescribed  by Code section  422(d).  The preceding
annual limitation shall not apply with respect to Options that are not incentive
stock options.




                                   ARTICLE V.
                              STOCK SUBJECT TO PLAN

     Section  5.01.  Shares  Issued.  Upon the award of  shares of Common  Stock
pursuant to a Stock Award, the Corporation may issue shares of Common Stock from
its authorized but unissued  Common Stock or reacquired  Common Stock.  Upon the
exercise of any Option,  the  Corporation may deliver to the Participant (or the
Participant's broker if the Participant so directs), shares of Common Stock from
its authorized but unissued Common Stock or reacquired Common Stock.

     Section 5.02.  Aggregate Limit.  The maximum  aggregate number of shares of
Common Stock that may be issued under this Plan shall not exceed 284,000 shares.

     Section 5.03. Reallocation of Shares. If an Option is terminated,  in whole
or in part,  for any reason  other  than its  exercise,  or if a Stock  Award is
forfeited in whole or in part, the number of shares of Common Stock allocated to
the Option or Stock Award or portion thereof may be reallocated to other Options
and Stock Awards to be granted under this Plan.  Such  reallocated  shares shall
not be included in calculating the percentages set forth in Section 5.02.

                                  ARTICLE VI.
                              OPTION EXERCISE PRICE

     The price per share for Common Stock purchased on the exercise of an Option
shall  be  determined  by the  Administrator  on the  date of  grant;  provided,
however,  that the price per share for Common Stock purchased on the exercise of
an Option  shall not be less than 75% of the Fair  Market  Value on the date the
Option is granted and provided further that the price per share for Common Stock
purchased on the  exercise of an Option that is an incentive  stock option shall
not be less than the Fair Market Value on the date the Option is granted.

                                  ARTICLE VII.
                               EXERCISE OF OPTIONS

     Section 7.01.  Maximum Option Period. The maximum period in which an Option
may be exercised shall be determined by the  Administrator on the date of grant,
except that no Option that is an incentive  stock  option  shall be  exercisable
after the  expiration  of ten years from the date such Option was  granted.  The
terms of any Option that is an  incentive  stock  option may provide  that it is
exercisable for a period less than such maximum period.

     Section 7.02. Nontransferability.  Any Option granted under this Plan shall
be nontransferable  except by will or by the laws of descent and distribution or
with  the  written  consent  of the  Administrator.  In the  event  of any  such
transfer, the entire Option must be transferred to the same person or person(s).
During the lifetime of the Participant to whom the Option is granted, the Option
may be exercised  only by the  Participant or his transferee if such transfer is
approved by the  Administrator.  No right or interest  of a  Participant  in any
Option shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.

     Section  7.03.   Employee   Status.   For  purposes  of   determining   the
applicability  of Section 422 of the Code (relating to incentive stock options),
or in the event that the terms of any Option  provide  that it may be  exercised
only during employment or within a specified period of time after termination of
employment,  the  Administrator  may decide to what extent leaves of absence for
governmental  or  military  service,  illness,  temporary  disability,  or other
reasons shall not be deemed interruptions of continuous employment.


                                       4


     Section 7.04. Change in Control.  If not sooner exercisable under the terms
of the applicable  Agreement,  a Participant's Option shall be fully exercisable
(i) as of his  termination  of employment if his employment  terminates  after a
Control  Change Date and he is  terminated  without cause or (ii) as of the date
that there is a material  reduction in the Participant's  compensation or duties
if such  reduction  occurs  after a Control  Change  Date.  For  purposes of the
preceding sentence the term "cause" means a willful neglect of  responsibilities
to the Corporation or a Related Entity.

                                 ARTICLE VIII.
                               METHOD OF EXERCISE

     Section 8.01.  Exercise.  Subject to the provisions of Articles VII and XI,
an Option may be  exercised in whole at any time or in part from time to time at
such times and in compliance with such requirements as the  Administrator  shall
determine.  An Option  granted under this Plan may be exercised  with respect to
any number of whole  shares less than the full number for which the Option could
be  exercised.  A partial  exercise  of an Option  shall not affect the right to
exercise  the  Option  from  time to time in  accordance  with this Plan and the
applicable Agreement with respect to the remaining shares subject to the Option.

     Section 8.02. Payment. Unless otherwise provided by the Agreement,  payment
of the Option  exercise price shall be made in cash. If the Agreement  provides,
or in the  discretion  of the Board,  payment of all or part of the Option price
may be made by surrendering shares of Common Stock to the Corporation, including
by allowing the  Corporation to deduct from the number of shares of Common Stock
deliverable  upon  exercise of the Option,  a number of such shares which has an
aggregate  Fair Market  Value,  determined  as of the day  preceding the date of
exercise of the Option,  equal to the aggregate Option exercise price. If Common
Stock is used to pay all or part of the Option  price,  the  shares  surrendered
must have a Fair Market Value  (determined  as of the day  preceding the date of
exercise) that is not less than such price or part thereof.

     Section 8.03.  Installment  Payment. If the Agreement provides,  and if the
Participant is employed by the  Corporation on the date the Option is exercised,
payment of all or part of the Option price may be made in installments.  In that
event the  Corporation  may, if so  determined  by the  Administrator,  lend the
Participant  an  amount  equal to not more than 90% of the  Option  price of the
shares acquired by the exercise of the Option. This amount shall be evidenced by
the  Participant's  promissory  note and shall be  payable in not more than five
equal  annual  installments,  unless the amount of the loan  exceeds the maximum
loan value for the shares purchased,  which value shall be established from time
to time in the sole and exclusive  discretion of the Board.  In that event,  the
note shall be payable in equal quarterly  installments over a period of time not
to exceed five years.

     The  Participant  shall pay  interest on the unpaid  balance at the minimum
rate  necessary to avoid imputed  interest or original  issue discount under the
Code.  All shares  acquired  with cash borrowed  from the  Corporation  shall be
pledged  to the  Corporation  as  security  for the  repayment  thereof.  In the
discretion  of the  Administrator,  shares  of stock may be  released  from such
pledge  proportionately  as payments on the note  (together  with  interest) are
made.  While shares are so pledged,  and so long as there has been no default in
the installment payments, such shares shall remain registered in the name of the
Participant, and the Participant shall have the right to vote such shares and to
receive all dividends thereon.

     Section 8.04. Shareholder Rights. No Participant shall have any rights as a
stockholder  with  respect  to shares  subject  to an  Option  until the date of
exercise of such Option.


                                       5


                                  ARTICLE IX.
                                  STOCK AWARDS

     Section 9.01.  Awards. In accordance with the provisions of Article IV, the
Administrator will designate each individual to whom a Stock Award is to be made
and will specify the number of shares of Common Stock covered by such awards.

     Section 9.02.  Vesting.  The  Administrator,  on the date of the award, may
prescribe that a Participant's rights in the Stock Award shall be forfeitable or
otherwise restricted for a period of time set forth in the Agreement.  By way of
example and not of limitation,  the restrictions may postpone transferability of
the shares or may provide that the shares will be  forfeited if the  Participant
separates from the service of the  Corporation  and its Related  Entities before
the expiration of a stated term or if the Corporation  and its Related  Entities
or the Participant fails to achieve stated objectives.

     Section   9.03.   Change  in  Control.   Section   9.02  to  the   contrary
notwithstanding,  after a Control  Change  Date each  Stock  Award  will  become
transferable and  nonforfeitable  in accordance with the terms of the applicable
Agreement.  If not sooner transferable and nonforfeitable under the terms of the
applicable  Agreement,  a  Participant's  interest  in a Stock  Award  shall  be
transferable and  nonforfeitable  (i) as of his termination of employment if his
employment  terminates after a Control Change Date and he is terminated  without
cause  or  (ii)  as of the  date  that  there  is a  material  reduction  in the
Participant's  compensation  or duties if such reduction  occurs after a Control
Change Date.  For purposes of the  preceding  sentence the term "cause"  means a
willful neglect of responsibilities to the Corporation or a Related Entity.

     Section 9.04. Stockholder Rights. If all or any portion of a Stock Award is
forfeitable  pursuant  to the  Agreement,  at all  times  prior to a  forfeiture
thereof,  a Participant  will have all rights of a  Stockholder  with respect to
forfeitable shares of the Stock Award (the "Forfeitable Shares"),  including the
right to receive dividends and vote the Forfeitable Shares;  provided,  however,
that (i) a Participant may not sell, transfer, pledge, exchange, hypothecate, or
otherwise dispose of the Forfeitable  Shares,  (ii) the Corporation shall retain
custody of the  certificates  evidencing the Forfeitable  Shares,  and (iii) the
Participant  will deliver to the  Corporation a stock power,  endorsed in blank,
with  respect  to the  Forfeitable  Shares.  The  limitations  set  forth in the
preceding  sentence shall not apply after the  Forfeitable  Shares are no longer
forfeitable.

                                   ARTICLE X.
                     ADJUSTMENT UPON CHANGE IN COMMON STOCK

     The maximum  number of shares as to which Options may be granted under this
Plan  shall be  proportionately  adjusted,  and the terms of  outstanding  Stock
Awards  and  Options  shall be  adjusted,  as the Board  shall  determine  to be
equitably required in the event that (a) the Corporation (i) effects one or more
stock dividends,  stock split-ups,  subdivisions or  consolidations of shares or
(ii) engages in a  transaction  to which  Section 424 of the Code applies or (b)
there  occurs any other event which,  in the judgment of the Board  necessitates
such action.  Any determination  made under this Article X by the Board shall be
final and conclusive.

     The  issuance  by the  Corporation  of  shares  of stock of any  class,  or
securities  convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe  therefor,  or upon conversion of shares or obligations
of the Corporation  convertible into such shares or other securities,  shall not
affect,  and no  adjustment  by reason  thereof  shall be made with  respect to,
outstanding Stock Awards or Options.


                                       6



     The Board may make Stock Awards and may grant Options in  substitution  for
performance  shares,   phantom  shares,  stock  awards,  stock  options,   stock
appreciation  rights,  or similar  awards held by an  individual  who becomes an
employee of the Corporation or a Related Entity in connection with a transaction
described   in  clause  (ii)  of  the  first   paragraph   of  this  Article  X.
Notwithstanding  any provision of the Plan (other than the limitation of Article
V), the terms of such substituted  Stock Award(s) or Option grant(s) shall be as
the Board, in its discretion,  determines is appropriate.

                                  ARTICLE XI.
                            COMPLIANCE WITH LAW AND
                         APPROVAL OF REGULATORY BODIES

     No  Option  shall be  exercisable,  no Common  Stock  shall be  issued,  no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in  compliance  with all  applicable  federal and
state laws and  regulations  (including,  without  limitation,  withholding  tax
requirements),  any listing  agreement to which the Corporation is a party,  and
the rules of all domestic stock exchanges on which the Corporation's  shares may
be  listed.  The  Corporation  shall have the right to rely on an opinion of its
counsel as to such compliance.  Any share certificate  issued to evidence Common
Stock when a Stock Award is granted or for which an Option is exercised may bear
such legends and  statements as the  Administrator  may deem advisable to assure
compliance with federal and state laws and regulations. No Common Stock shall be
issued,  no  certificate  for shares shall be delivered  and no payment shall be
made under this Plan until the Corporation has obtained such consent or approval
as  the   Administrator   may  deem  advisable  from  regulatory  bodies  having
jurisdiction over such matters.

                                  ARTICLE XII.
                               GENERAL PROVISIONS

     Section 12.01. Effect on Employment. Neither the adoption of this Plan, its
operation,  nor any documents  describing or referring to this Plan (or any part
thereof) shall confer upon any individual any right to continue in the employ or
service of the  Corporation  or a Related  Entity or in any way affect any right
and power of the  Corporation or a Related Entity to terminate the employment or
service  of any  individual  at any  time  with or  without  assigning  a reason
therefor.

     Section  12.02.  Disposition  of Stock.  A  Participant  shall  notify  the
Administrator of any sale or other disposition of Common Stock acquired pursuant
to an Option  that was an  incentive  stock  option if such sale or  disposition
occurs (i) within two years of the grant of an Option or (ii) within one year of
the  issuance of the Common  Stock to the  Participant.  Such notice shall be in
writing and directed to the Secretary of the Corporation.

     Section 12.03.  Rules of  Construction.  Headings are given to the articles
and sections of this Plan solely as a convenience to facilitate  reference.  The
reference  to any  statute,  regulation,  or  other  provision  of law  shall be
construed to refer to any amendment to or successor of such provision of law.

     Section 12.04. Limitation on Awards. Notwithstanding any other provision of
the Plan,  if any award under this Plan,  either alone or together with payments
that a Participant  has the right to receive from the  Corporation  or a Related
Entity,  would  constitute a "parachute  payment" (as defined in section 280G of
the Code),  all such payments  shall be reduced to the largest  amount that will
result in no portion  being subject to the excise tax imposed by section 4999 of
the Code.


                                        7



                                  ARTICLE XIII.
                                    AMENDMENT

     The  Board may amend or  terminate  this Plan from time to time;  provided,
however,  that no amendment shall,  without a Participant's  consent,  adversely
affect  any  rights  of  such  Participant  under  any  Stock  Award  or  Option
outstanding at the time such amendment is made.

                                  ARTICLE XIV.
                                DURATION OF PLAN

     No Stock Award or Option may be granted under this Plan more than ten years
after the date the Plan is adopted by the Board.

                                  ARTICLE XV.
                             EFFECTIVE DATE OF PLAN

     Stock  Awards and Options may be granted  under this Plan upon its adoption
by the Board, provided that no incentive stock option may be granted unless this
Plan  is  approved  by a  majority  of the  votes  entitled  to be  cast  by the
Stockholders,  voting either in person or by proxy, at a duly held Stockholders'
meeting or by the consent of stockholders  owning more than 50% of shares of the
Common Stock within twelve months of such adoption.

                                        8