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<p align="center"><font size="2" face="Times New Roman"><b>Registration
Statement<br>
Under the<br>
Securities Act of 1933<br>
</b><br>
<br>
<b>PTS, INC.<br>
</b>(Exact name of registrant as specified in its charter)<br>
&nbsp;</font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="33%" align="center">
    <p align="center"><font size="2" face="Times New Roman">Nevada</font></td>
    <td width="33%" align="center">
    <p align="center"><font size="2" face="Times New Roman">7389</font></td>
    <td width="34%" align="center">
    <p align="center"><font size="2" face="Times New Roman">042392188</font></td>
  </tr>
  <tr>
    <td width="33%" align="center"><font size="2" face="Times New Roman">(State
    or jurisdiction of incorporation or organization)</font></td>
    <td width="33%" align="center"><font size="2" face="Times New Roman">
    (Primary Standard Industrial Classification Code Number)</font></td>
    <td width="34%" align="center"><font size="2" face="Times New Roman">(I.R.S.
    Employer Identification No.)</font></td>
  </tr>
</table>
<p align="center"><font size="2" face="Times New Roman">3355 Spring Mountain
Road # 66, Las Vegas, Nevada 89102; (702) 380-3811<br>
(Address and telephone number of Registrant's principal executive offices and<br>
principal place of business)<br>
<br>
<b>Employee Stock Incentive Plan for the Year 2004 No. 2<br>
</b>(Full title of the Plan)<br>
<br>
Peter Chin, 3355 Spring Mountain Road # 66, Las Vegas, Nevada 89102<br>
(Name and address of agent for service)<br>
<br>
(702) 380-3811<br>
(Telephone number, including area code, of agent for service)<br>
<br>
<b>Calculation of Registration Fee<br>
&nbsp;</b></font></p>
<table border="1" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" height="97">
  <tr>
    <td width="23%" valign="top" height="37"><font face="Times New Roman" size="2">Title of
    securities <br>
    to be registered</font></td>
    <td width="16%" valign="top" align="center" height="37"><font face="Times New Roman" size="2">Amount to be
    <br>
    registered</font></td>
    <td width="21%" valign="top" align="center" height="37"><font face="Times New Roman" size="2">Proposed
    offering <br>
    price per share (1)</font></td>
    <td width="23%" valign="top" align="center" height="37"><font face="Times New Roman" size="2">Proposed
    maximum <br>
    aggregate offering price  </font></td>
    <td width="17%" valign="top" align="center" height="37"><font face="Times New Roman" size="2">Amount of
    <br>
    registration fee</font></td>
  </tr>
  <tr>
    <td width="23%" valign="top" height="41"><font size="2" face="Times New Roman">Options
    to Purchase
    Common Stock, <br>
    Common Shares
    Underlying Options </font></td>
    <td width="16%" valign="top" align="center" height="41">
    <font face="Times New Roman" size="2">500,000,000</font></td>
    <td width="21%" valign="top" align="center" height="41">
    <font face="Times New Roman" size="2">$0.001 (2)</font></td>
    <td width="23%" valign="top" align="center" height="41">
    <font face="Times New Roman" size="2">$500,000</font></td>
    <td width="17%" valign="top" align="center" height="41">
    <font face="Times New Roman" size="2">$63.35</font></td>
  </tr>
  <tr>
    <td width="23%" valign="top" height="19"><font face="Times New Roman" size="2">Total</font></td>
    <td width="16%" valign="top" align="center" height="19">
    <font face="Times New Roman" size="2">500,000,000</font></td>
    <td width="21%" valign="top" align="center" height="19">&nbsp;</td>
    <td width="23%" valign="top" align="center" height="19">
    <font face="Times New Roman" size="2">$500,000</font></td>
    <td width="17%" valign="top" align="center" height="19">
    <font face="Times New Roman" size="2">$63.35</font></td>
  </tr>
</table>
<blockquote>
  <p align="justify"><font size="2" face="Times New Roman">(1) The Offering
  Price is used solely for purposes of estimating the registration fee pursuant
  to Rule 457(h) promulgated pursuant to the Securities Act of 1933.<br>
  (2) This Offering Price per Share is established pursuant to the option
  exercise price set forth in the Employee Stock Incentive Plan for the Year
  2004 No. 2, set forth in Exhibit 4.1 to this Form S-8.<br>
&nbsp;</font></p>
</blockquote>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="center"><font face="Times New Roman"><b><font size="2">Part I<br>
  </font></b><font size="2">Information Required in the Section 10(a) Prospectus</font></font></p>
<p align="justify"><font size="2" face="Times New Roman"><br>
<b>Item 1. Plan Information.<br>
</b><br>
&nbsp;&nbsp;&nbsp; See Item 2 below.<br>
<br>
<b>Item 2. Registrant Information and Employee Plan Annual Information.<br>
</b><br>
&nbsp;&nbsp;&nbsp; The documents containing the information specified in Part I,
Items 1 and 2, will be delivered to each of the participants in accordance with
Form S-8 and Rule 428 promulgated under the Securities Act of 1933. The
participants shall be provided a written statement notifying them that upon
written or oral request they will be provided, without charge, (i) the documents
incorporated by reference in Item 3 of Part II of the registration statement,
and (ii) other documents required to be delivered pursuant to Rule 428(b). The
statement will inform the participants that these documents are incorporated by
reference in the Section 10(a) prospectus, and shall include the address (giving
title or department) and telephone number to which the request is to be
directed.<br>
&nbsp;</font></p>
<p align="center"><font face="Times New Roman"><b><font size="2">Part II<br>
</font></b><font size="2">Information Required in the Registration Statement<br>
&nbsp;</font></font></p>
<p align="justify"><font face="Times New Roman"><b><font size="2">Item 3.
Incorporation of Documents by Reference.<br>
</font></b><font size="2"><br>
&nbsp;&nbsp;&nbsp; The following are hereby incorporated by reference:<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) The
Registrant's latest annual report on Form 10-KSB for the fiscal year ended
December 31, 2003, filed on April 30, 2004.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) All other
reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 since the end of the fiscal year covered by the Form 10-KSB referred to
in (a) above.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) A
description of the Registrant's securities contained in the Registration
Statement on Form 10SB12G filed by the Registrant's predecessor, Elast
Technologies, Inc., to register the common stock under the Exchange Act,
including all amendments filed for the purpose of updating such common stock
description.<br>
<br>
&nbsp;&nbsp;&nbsp; All documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in the registration statement and to be
part thereof from the date of filing of such documents.<br>
<br>
<b>Item 4. Description of Securities.<br>
</b><br>
&nbsp;&nbsp;&nbsp; Not applicable.<br>
<br>
<b>Item 5. Interest of Named Experts and Counsel.<br>
</b><br>
&nbsp;&nbsp;&nbsp; Other than as set forth below, no named expert or counsel was
hired on a contingent basis, will receive a direct or indirect interest in the
small business issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the Registrant.<br>
<br>
</font><b><font size="2">Item 6. Indemnification of Directors and Officers.<br>
<br>
&nbsp;&nbsp;&nbsp; </font></b></font><font size="2" face="Times New Roman">Our
bylaws do not contain a provision entitling any director or executive officer to
indemnification against its liability under the Securities Act. The Nevada
Revised Statutes allow a company to indemnify our officers, directors,
employees, and agents from any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, except
under certain circumstances. Indemnification may only occur if a determination
has been made that the officer, director, employee, or agent acted in good faith
and in a manner, which such person believed to be in the best interests of the
Registrant. A determination may be made by the stockholders; by a majority of
the directors who were not parties to the action, suit, or proceeding confirmed
by opinion of independent legal counsel; or by opinion of independent legal
counsel in the event a quorum of directors who were not a party to such action,
suit, or proceeding does not exist.</font></p>
<p align="center"><font size="2" face="Times New Roman">2</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;
  <br>
&nbsp;&nbsp;&nbsp; Provided the terms and conditions of these provisions under
  Nevada law are met, officers, directors, employees, and agents of the
  Registrant may be indemnified against any cost, loss, or expense arising out
  of any liability under the Securities Act. Insofar as indemnification for
  liabilities arising under the Securities Act may be permitted to directors,
  officers and controlling persons of the Registrant, we have been advised that
  in the opinion of the Securities and Exchange Commission, such indemnification
  is against public policy and is, therefore, unenforceable.<br>
  <br>
&nbsp;&nbsp;&nbsp; The Nevada Revised Statutes, stated herein, provide further
  for permissive indemnification of officers and directors.<br>
  <br>
&nbsp;&nbsp;&nbsp; "A. <u>NRS 78.7502.</u> Discretionary and mandatory
  indemnification of officers, directors, employees and agents: General
  provisions.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "1. A corporation may indemnify any person who was or is a party or is
  threatened to be made a party to any threatened, pending or completed action,
  suit or proceeding, whether civil, criminal, administrative or investigative,
  except an action by or in the right of the corporation, by reason of the fact
  that he is or was a director, officer, employee or agent of the corporation,
  or is or was serving at the request of the corporation as a director, officer,
  employee or agent of another corporation, partnership, joint venture, trust or
  other enterprise, against expenses, including attorneys' fees, judgments,
  fines and amounts paid in settlement actually and reasonably incurred by him
  in connection with the action, suit or proceeding if he acted in good faith
  and in a manner which he reasonably believed to be in or not opposed to the
  best interests of the corporation, and, with respect to any criminal action or
  proceeding, had no reasonable cause to believe his conduct was unlawful. The
  termination of any action, suit or proceeding by judgment, order, settlement,
  conviction or upon a plea of nolo contendere or its equivalent, does not, of
  itself, create a presumption that the person did not act in good faith and in
  a manner which he reasonably believed to be in or not opposed to the best
  interests of the corporation, and that, with respect to any criminal action or
  proceeding, he had reasonable cause to believe that his conduct was unlawful.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "2. A corporation may indemnify any person who was or is a party or is
  threatened to be made a party to any threatened, pending or completed action
  or suit by or in the right of the corporation to procure a judgment in its
  favor by reason of the fact that he is or was a director, officer, employee or
  agent of the corporation, or is or was serving at the request of the
  corporation as a director, officer, employee or agent of another corporation,
  partnership, joint venture, trust or other enterprise against expenses,
  including amounts paid in settlement and attorneys' fees actually and
  reasonably incurred by him in connection with the defense or settlement of the
  action or suit if he acted in good faith and in a manner which he reasonably
  believed to be in or not opposed to the best interests of the corporation.
  Indemnification may not be made for any claim, issue or matter as to which
  such a person has been adjudged by a court of competent jurisdiction, after
  exhaustion of all appeals therefrom, to be liable to the corporation or for
  amounts paid in settlement to the corporation, unless and only to the extent
  that the court in which the action or suit was brought or other court of
  competent jurisdiction determines upon application that in view of all the
  circumstances of the case, the person is fairly and reasonably entitled to
  indemnity for such expenses as the court deems proper.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "3. To the extent that a director, officer, employee or agent of a corporation
  has been successful on the merits or otherwise in defense of any action, suit
  or proceeding referred to in subsections 1 and 2, or in defense of any claim,
  issue or matter therein, the corporation shall indemnify him against expenses,
  including attorneys' fees, actually and reasonably incurred by him in
  connection with the defense.<br>
  <br>
&nbsp;&nbsp;&nbsp; "B. <u>NRS 78.751.</u> Authorization required for
  discretionary indemnification; advancement of expenses; limitation on
  indemnification and advancement of expenses.</font></p>
<p align="center"><font size="2" face="Times New Roman">3</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "1. Any discretionary indemnification
  under NRS 78.7502 unless ordered by a court or advanced pursuant to subsection
  2, may be made by the corporation only as authorized in the specific case upon
  a determination that indemnification of the director, officer, employee or
  agent is proper in the circumstances. The determination must be made:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(a) By the stockholders;<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(b) By the board of directors by majority vote of a quorum consisting of
  directors who were not parties to the action, suit or proceeding; <br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(c) If a majority vote of a quorum consisting of directors who were not
  parties to the action, suit or proceeding so orders, by independent legal
  counsel in a written opinion; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(d) If a quorum consisting of directors who were not parties to the action,
  suit or proceeding cannot be obtained, by independent legal counsel in a
  written opinion.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "2. The articles of incorporation,
  the bylaws or an agreement made by the corporation may provide that the
  expenses of officers and directors incurred in defending a civil or criminal
  action, suit or proceeding must be paid by the corporation as they are
  incurred and in advance of the final disposition of the action, suit or
  proceeding, upon receipt of an undertaking by or on behalf of the director or
  officer to repay the amount if it is ultimately determined by a court of
  competent jurisdiction that he is not entitled to be indemnified by the
  corporation. The provisions of this subsection do not affect any rights to
  advancement of expenses to which corporate personnel other than directors or
  officers may be entitled under any contract or otherwise by law.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "3. The indemnification and
  advancement of expenses authorized in NRS 78.7502 or ordered by a court
  pursuant to this section:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(a) Does not exclude any other rights to which a person seeking
  indemnification or advancement of expenses may be entitled under the articles
  of incorporation or any bylaw, agreement, vote of stockholders or
  disinterested directors or otherwise, for either an action in his official
  capacity or an action in another capacity while holding his office, except
  that indemnification, unless ordered by a court pursuant to or for the
  advancement of expenses made pursuant to subsection 2, may not be made to or
  on behalf of any director or officer if a final adjudication establishes that
  his acts or omissions involved intentional misconduct, fraud or a knowing
  violation of the law and was material to the cause of action.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(b) Continues for a person who has ceased to be a director, officer, employee
  or agent and inures to the benefit of the heirs, executors and administrators
  of such a person.<br>
  <br>
&nbsp;&nbsp;&nbsp; "C. <u>NRS 78.752.</u> Insurance and other financial
  arrangements against liability of directors, officers, employees and agents.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "1. A corporation may purchase and
  maintain insurance or make other financial arrangements on behalf of any
  person who is or was a director, officer, employee or agent of the
  corporation, or is or was serving at the request of the corporation as a
  director, officer, employee or agent of another corporation, partnership,
  joint venture, trust or other enterprise for any liability asserted against
  him and liability and expenses incurred by him in his capacity as a director,
  officer, employee or agent, or arising out of his status as such, whether or
  not the corporation has the authority to indemnify him against such liability
  and expenses.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "2. The other financial arrangements
  made by the corporation pursuant to subsection 1 may include the following:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(a) The creation of a trust fund.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(b) The establishment of a program of self-insurance.</font></p>
<p align="center"><font size="2" face="Times New Roman">4</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(c) The securing of its obligation of indemnification by granting a security
  interest or other lien on any assets of the corporation.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(d) The establishment of a letter of credit, guaranty or surety. No financial
  arrangement made pursuant to this subsection may provide protection for a
  person adjudged by a court of competent jurisdiction, after exhaustion of all
  appeals therefrom, to be liable for intentional misconduct, fraud or a knowing
  violation of law, except with respect to the advancement of expenses or
  indemnification ordered by a court.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "3. Any
  insurance or other financial arrangement made on behalf of a person pursuant
  to this section may be provided by the corporation or any other person
  approved by the board of directors, even if all or part of the other person's
  stock or other securities is owned by the corporation.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "4. In the
  absence of fraud:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(a) The decision of the board of directors as to the propriety of the terms
  and conditions of any insurance or other financial arrangement made pursuant
  to this section and the choice of the person to provide the insurance or other
  financial arrangement is conclusive; and<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "(b) The insurance or other financial arrangement:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "1. Is not void or voidable; and<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  "2. Does not subject any director approving it to personal liability for his
  action, even if a director approving the insurance or other financial
  arrangement is a beneficiary of the insurance or other financial arrangement.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; "5. A
  corporation or its subsidiary which provides self-insurance for itself or for
  another affiliated corporation pursuant to this section is not subject to the
  provisions of Title 57 of the Nevada Revised Statutes."<br>
  <br>
&nbsp;&nbsp;&nbsp; The Registrant, with approval of the Registrant's Board of
  Directors, may obtain directors' and officers' liability insurance.<br>
  <b><br>
  Item 7. Exemption from Registration Claimed.<br>
  </b><br>
&nbsp;&nbsp;&nbsp; Not applicable.<br>
  <br>
  <b>Item 8. Exhibits.<br>
  </b><br>
&nbsp;&nbsp;&nbsp; The Exhibits required by Item 601 of Regulation S-B, and an
  index thereto, are attached.<br>
  <br>
  <b>Item 9. Undertakings.<br>
  </b><br>
&nbsp;&nbsp;&nbsp; The undersigned registrant hereby undertakes:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) (1) To file, during any period in
  which offers or sales are being made, a post-effective amendment to this
  registration statement: (iii) To include any material information with respect
  to the plan of distribution not previously disclosed in the registration
  statement or any material change to such information in the registration
  statement;<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2) That, for the purpose of determining any liability under the Securities
  Act of 1933, each such post-effective amendment shall be deemed to be a new
  registration statement relating to the securities offered therein, and the
  offering of such securities at that time shall be deemed to be the initial
  bona fide offering thereof.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3) To remove from registration by means of a post-effective amendment any of
  the securities being registered which remain unsold at the termination of the
  offering.</font></p>
<p align="center"><font size="2" face="Times New Roman">5</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) That, for
  purposes of determining any liability under the Securities Act of 1933, each
  filing of the registrant's annual report pursuant to section 13(a) or section
  15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
  filing of an employee benefit plan's annual report pursuant to section 15(d)
  of the Securities Exchange Act of 1934) that is incorporated by reference in
  the registration statement shall be deemed to be a new registration statement
  relating to the securities offered therein, and the offering of such
  securities at that time shall be deemed to be the initial bona fide offering
  thereof.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) To
  deliver or cause to be delivered with the prospectus, to each person to whom
  the prospectus is sent or given, the latest annual report to security holders
  that is incorporated by reference in the prospectus and furnished pursuant to
  and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
  Exchange Act of 1934; and, where interim financial information required to be
  presented by Article 3 of Regulation S-X are not set forth in the prospectus,
  to deliver, or cause to be delivered to each person to whom the prospectus is
  sent or given, the latest quarterly report that is specifically incorporated
  by reference in the prospectus to provide such interim financial information.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) That
  insofar as indemnification for liabilities arising under the Securities Act of
  1933 may be permitted to directors, officers and controlling persons of the
  registrant pursuant to the foregoing provisions, or otherwise, the registrant
  has been advised that in the opinion of the Securities and Exchange Commission
  such indemnification is against public policy as expressed in the Act and is,
  therefore, unenforceable. In the event that a claim for indemnification
  against such liabilities (other than the payment by the registrant of expenses
  incurred or paid by a director, officer or controlling person of the
  registrant in the successful defense of any action, suit or proceeding) is
  asserted by such director, officer or controlling person in connection with
  the securities being registered, the registrant will, unless in the opinion of
  its counsel the matter has been settled by controlling precedent, submit to a
  court of appropriate jurisdiction the question whether such indemnification by
  it is against public policy as expressed in the Act and will be governed by
  the final adjudication of such issue.</font></p>
<p align="center"><b><font size="2" face="Times New Roman">SIGNATURES</font></b></p>
<p align="left"><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, Nevada on December 29, 2004.<br>
&nbsp;</font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%"><font size="2" face="Times New Roman">PTS, INC.<br>
    <br>
    <br>
    By <u>/s/ Peter Chin <br>
    </u>Peter Chin, Chief Executive Officer</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="Times New Roman"><br>
&nbsp;</font></p>
<p align="center"><font size="2" face="Times New Roman">6</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="left"><font size="2" face="Times New Roman"><br>
  Pursuant to the requirements of the Securities Act of 1933, this registration
  statement has been signed by the following person in the capacities and on the
  date indicated.</font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="33%" align="center" valign="top">
    <p align="center"><u><font size="2" face="Times New Roman">Signature</font></u></td>
    <td width="33%" align="center" valign="top">
    <p align="center"><u><font size="2" face="Times New Roman">Title</font></u></td>
    <td width="34%" align="center" valign="top">
    <p align="center"><u><font size="2" face="Times New Roman">Date</font></u></td>
  </tr>
  <tr>
    <td width="33%" align="center" valign="top"><font face="Times New Roman"><u>
    <font size="2">/s/ Peter Chin </font></u><font size="2"><br>
    Peter Chin</font></font></td>
    <td width="33%" align="center" valign="top">
    <font size="2" face="Times New Roman">Chief Executive Officer and Chairman
    of the Board of Directors</font></td>
    <td width="34%" align="center" valign="top">
    <font size="2" face="Times New Roman">December 29, 2004</font></td>
  </tr>
</table>
<p align="left"><font size="2" face="Times New Roman"><br>
&nbsp; <br>
&nbsp;</font></p>
<p align="left">&nbsp;</p>
<p align="left">&nbsp;</p>
<p align="left">&nbsp;</p>
<p align="center"><font size="2" face="Times New Roman">7</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="center"><font face="Times New Roman"><font size="2"><br>
  </font><b><font size="2">EXHIBIT INDEX<br>
&nbsp;</font></b></font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="13%" align="left" valign="top"><u><b>
    <font size="2" face="Times New Roman">Exhibit No.</font></b></u></td>
    <td width="87%" align="left" valign="top"><u><b>
    <font size="2" face="Times New Roman">Description</font></b></u></td>
  </tr>
  <tr>
    <td width="13%" align="left" valign="top">
    <font size="2" face="Times New Roman">4.1</font></td>
    <td width="87%" align="left" valign="top">
    <font size="2" face="Times New Roman">Employee Stock Incentive Plan for the
    Year 2004 No. 2</font></td>
  </tr>
  <tr>
    <td width="13%" align="left" valign="top">
    <font size="2" face="Times New Roman">5</font></td>
    <td width="87%" align="left" valign="top">
    <font size="2" face="Times New Roman">Opinion Re: Legality</font></td>
  </tr>
  <tr>
    <td width="13%" align="left" valign="top">
    <font size="2" face="Times New Roman">23.1</font></td>
    <td width="87%" align="left" valign="top">
    <font size="2" face="Times New Roman">Consent of Accountants</font></td>
  </tr>
  <tr>
    <td width="13%" align="left" valign="top">
    <font size="2" face="Times New Roman">23.2</font></td>
    <td width="87%" align="left" valign="top">
    <font size="2" face="Times New Roman">Consent of Counsel</font></td>
  </tr>
</table>
<p align="justify">&nbsp;</p>
<p align="justify">&nbsp;</p>
<p align="justify">&nbsp;</p>
<p align="justify">&nbsp;</p>
<p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;</font></p>
<p align="center"><font size="2" face="Times New Roman">8</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="right"><b><font size="2" face="Times New Roman">Exhibit 4.1</font></b></p>
<p align="center"><font face="Times New Roman"><b><font size="2">PTS, INC.<br>
EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004 NO. 2</font></b><font size="2"><br>
&nbsp;</font></font></p>
<p align="justify">&nbsp;&nbsp;&nbsp; <font size="2" face="Times New Roman">1.
<u>General Provisions.</u><br>
<br>
&nbsp;&nbsp;&nbsp; 1.1 <u>Purpose.</u> This Stock Incentive Plan (the "Plan") is
intended to allow designated officers and employees (all of whom are sometimes
collectively referred to herein as the "Employees," or individually as the
"Employee") of PTS, Inc., a Nevada corporation (the "Company") and its
Subsidiaries (as that term is defined below) which they may have from time to
time (the Company and such Subsidiaries are referred to herein as the "Company")
to receive certain options (the "Stock Options") to purchase common stock of the
Company, par value $0.001 per share (the "Common Stock"), and to receive grants
of the Common Stock subject to certain restrictions (the "Awards"). As used in
this Plan, the term "Subsidiary" shall mean each corporation which is a
"subsidiary corporation" of the Company within the meaning of Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code"). The purpose of this
Plan is to provide the Employees, who make significant and extraordinary
contributions to the long-term growth and performance of the Company, with
equity-based compensation incentives, and to attract and retain the Employees.<br>
<br>
&nbsp;&nbsp;&nbsp; 1.2 <u>Administration.</u><br>
<br>
&nbsp;&nbsp; 1.2.1 The Plan shall be administered by the Compensation Committee
(the "Committee") of, or appointed by, the Board of Directors of the Company
(the "Board"). The Committee shall select one of its members as Chairman and
shall act by vote of a majority of a quorum, or by unanimous written consent. A
majority of its members shall constitute a quorum. The Committee shall be
governed by the provisions of the Company's Bylaws and of Nevada law applicable
to the Board, except as otherwise provided herein or determined by the Board.<br>
<br>
&nbsp;&nbsp;&nbsp; 1.2.2 The Committee shall have full and complete authority,
in its discretion, but subject to the express provisions of this Plan (a) to
approve the Employees nominated by the management of the Company to be granted
Awards or Stock Options; (b) to determine the number of Awards or Stock Options
to be granted to an Employee; (c) to determine the time or times at which Awards
or Stock Options shall be granted; (d) to establish the terms and conditions
upon which Awards or Stock Options may be exercised; (e) to remove or adjust any
restrictions and conditions upon Awards or Stock Options; (f) to specify, at the
time of grant, provisions relating to exercisability of Stock Options and to
accelerate or otherwise modify the exercisability of any Stock Options; and (g)
to adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of this Plan. All interpretations
and constructions of this Plan by the Committee, and all of its actions
hereunder, shall be binding and conclusive on all persons for all purposes.<br>
<br>
&nbsp;&nbsp;&nbsp; 1.2.3 The Company hereby agrees to indemnify and hold
harmless each Committee member and each Employee, and the estate and heirs of
such Committee member or Employee, against all claims, liabilities, expenses,
penalties, damages or other pecuniary losses, including legal fees, which such
Committee member or Employee, his estate or heirs may suffer as a result of his
responsibilities, obligations or duties in connection with this Plan, to the
extent that insurance, if any, does not cover the payment of such items. No
member of the Committee or the Board shall be liable for any action or
determination made in good faith with respect to this Plan or any Award or Stock
Option granted pursuant to this Plan.<br>
<br>
&nbsp;&nbsp;&nbsp; 1.3 <u>Eligibility and Participation.</u> The Employees
eligible under this Plan shall be approved by the Committee from those Employees
who, in the opinion of the management of the Company, are in positions which
enable them to make significant contributions to the long-term performance and
growth of the Company. In selecting the Employees to whom Award or Stock Options
may be granted, consideration shall be given to factors such as employment
position, duties and responsibilities, ability, productivity, length of service,
morale, interest in the Company and recommendations of supervisors.<br>
<br>
&nbsp;&nbsp;&nbsp; 1.4 <u>Shares Subject to this Plan.</u> The maximum number of
shares of the Common Stock that may be issued pursuant to this Plan shall be
500,000,000 subject to adjustment pursuant to the provisions of Paragraph 4.1.
If shares of the Common Stock awarded or issued under this Plan are reacquired
by the Company due to a forfeiture or for any other reason, such shares shall be
cancelled and thereafter shall again be available for purposes of this Plan. If
a Stock Option expires, terminates or is cancelled for any reason without having
been exercised in full, the shares of the Common Stock not purchased thereunder
shall again be available for purposes of this Plan.</font></p>
<p align="center"><font size="2" face="Times New Roman">1</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp; 2. <u>Provisions Relating to Stock Options.</u><br>
  <br>
&nbsp;&nbsp;&nbsp; 2.1 <u>Grants of Stock Options.</u> The Committee may grant
  Stock Options in such amounts, at such times, and to the Employees nominated
  by the management of the Company as the Committee, in its discretion, may
  determine. Stock Options granted under this Plan shall constitute "incentive
  stock options" within the meaning of Section 422 of the Code, if so designated
  by the Committee on the date of grant. The Committee shall also have the
  discretion to grant Stock Options which do not constitute incentive stock
  options, and any such Stock Options shall be designated non-statutory stock
  options by the Committee on the date of grant. The aggregate Fair Market Value
  (determined as of the time an incentive stock option is granted) of the Common
  Stock with respect to which incentive stock options are exercisable for the
  first time by any Employee during any one calendar year (under all plans of
  the Company and any parent or subsidiary of the Company) may not exceed the
  maximum amount permitted under Section 422 of the Code (currently,
  $100,000.00). Non-statutory stock options shall not be subject to the
  limitations relating to incentive stock options contained in the preceding
  sentence. Each Stock Option shall be evidenced by a written agreement (the
  "Option Agreement") in a form approved by the Committee, which shall be
  executed on behalf of the Company and by the Employee to whom the Stock Option
  is granted, and which shall be subject to the terms and conditions of this
  Plan. In the discretion of the Committee, Stock Options may include provisions
  (which need not be uniform), authorized by the Committee in its discretion,
  that accelerate an Employee's rights to exercise Stock Options following a
  "Change in Control," upon termination of the Employee's employment by the
  Company without "Cause" or by the Employee for "Good Reason," as such terms
  are defined in Paragraph 3.1 hereof. The holder of a Stock Option shall not be
  entitled to the privileges of stock ownership as to any shares of the Common
  Stock not actually issued to such holder.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.2 <u>Purchase Price.</u> The purchase price (the "Exercise
  Price") of shares of the Common Stock subject to each Stock Option (the
  "Option Shares") shall not be less than 85 percent of the Fair Market Value of
  the Common Stock on the date of the grant of the option. For an Employee
  holding greater than 10 percent of the total voting power of all stock of the
  Company, either Common or Preferred, the Exercise Price of an incentive stock
  option shall be at least 110 percent of the Fair Market Value of the Common
  Stock on the date of the grant of the option. As used herein, "Fair Market
  Value" means the mean between the highest and lowest reported sales prices of
  the Common Stock on the New York Stock Exchange Composite Tape or, if not
  listed on such exchange, on any other national securities exchange on which
  the Common Stock is listed or on The Nasdaq Stock Market, or, if not so listed
  on any other national securities exchange or The Nasdaq Stock Market, then the
  average of the bid price of the Common Stock during the last five trading days
  on the OTC Bulletin Board immediately preceding the last trading day prior to
  the date with respect to which the Fair Market Value is to be determined. If
  the Common Stock is not then publicly traded, then the Fair Market Value of
  the Common Stock shall be the book value of the Company per share as
  determined on the last day of March, June, September, or December in any year
  closest to the date when the determination is to be made. For the purpose of
  determining book value hereunder, book value shall be determined by adding as
  of the applicable date called for herein the capital, surplus, and undivided
  profits of the Company, and after having deducted any reserves theretofore
  established; the sum of these items shall be divided by the number of shares
  of the Common Stock outstanding as of said date, and the quotient thus
  obtained shall represent the book value of each share of the Common Stock of
  the Company.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.3 <u>Option Period.</u> The Stock Option period (the
  "Term") shall commence on the date of grant of the Stock Option and shall be
  10 years or such shorter period as is determined by the Committee. Each Stock
  Option shall provide that it is exercisable over its term in such periodic
  installments as the Committee may determine, subject to the provisions of
  Paragraph 2.4.1. Section 16(b) of the Securities Exchange Act of 1934, as
  amended (the "Exchange Act") exempts persons normally subject to the reporting
  requirements of Section 16(a) of the Exchange Act (the "Section 16 Reporting
  Persons") pursuant to a qualified employee stock option plan from the normal
  requirement of not selling until at least six months and one day from the date
  the Stock Option is granted.<br>
&nbsp;</font></p>
<p align="center"><font size="2" face="Times New Roman">2</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
  <br>
&nbsp;&nbsp;&nbsp; 2.4 <u>Exercise of Options.</u><br>
  <br>
&nbsp;&nbsp;&nbsp; 2.4.1 Each Stock Option may be exercised in whole or in part
  (but not as to fractional shares) by delivering it for surrender or
  endorsement to the Company, attention of the Corporate Secretary, at the
  principal office of the Company, together with payment of the Exercise Price
  and an executed Notice and Agreement of Exercise in the form prescribed by
  Paragraph 2.4.2. Payment may be made (a) in cash, (b) by cashier's or
  certified check, (c) by surrender of previously owned shares of the Common
  Stock valued pursuant to Paragraph 2.2 (if the Committee authorizes payment in
  stock in its discretion), (d) by withholding from the Option Shares which
  would otherwise be issuable upon the exercise of the Stock Option that number
  of Option Shares equal to the exercise price of the Stock Option, if such
  withholding is authorized by the Committee in its discretion, or (e) in the
  discretion of the Committee, by the delivery to the Company of the optionee's
  promissory note secured by the Option Shares, bearing interest at a rate
  sufficient to prevent the imputation of interest under Sections 483 or 1274 of
  the Code, and having such other terms and conditions as may be satisfactory to
  the Committee. Subject to the provisions of this Paragraph 2.4 and Paragraph
  2.5, the Employee has the right to exercise his or her Stock Options at the
  rate of at least 20 percent per year over five years from the date the Stock
  Option is granted.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.4.2 Exercise of each Stock Option is conditioned upon the
  agreement of the Employee to the terms and conditions of this Plan and of such
  Stock Option as evidenced by the Employee's execution and delivery of a Notice
  and Agreement of Exercise in a form to be determined by the Committee in its
  discretion. Such Notice and Agreement of Exercise shall set forth the
  agreement of the Employee that (a) no Option Shares will be sold or otherwise
  distributed in violation of the Securities Act of 1933, as amended (the
  "Securities Act") or any other applicable federal or state securities laws,
  (b) each Option Share certificate may be imprinted with legends reflecting any
  applicable federal and state securities law restrictions and conditions, (c)
  the Company may comply with said securities law restrictions and issue "stop
  transfer" instructions to its Transfer Agent and Registrar without liability,
  (d) if the Employee is a Section 16 Reporting Person, the Employee will
  furnish to the Company a copy of each Form 4 or Form 5 filed by said Employee
  and will timely file all reports required under federal securities laws, and
  (e) the Employee will report all sales of Option Shares to the Company in
  writing on a form prescribed by the Company.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.4.3 No Stock Option shall be exercisable unless and until
  any applicable registration or qualification requirements of federal and state
  securities laws, and all other legal requirements, have been fully complied
  with. At no time shall the total number of securities issuable upon exercise
  of all outstanding options under this Plan, and the total number of securities
  provided for under any bonus or similar plan or agreement of the Company
  exceed a number of securities which is equal to 30 percent of the then
  outstanding securities of the Company, unless a percentage higher than 30
  percent is approved by at least two-thirds of the outstanding securities
  entitled to vote. The Company will use reasonable efforts to maintain the
  effectiveness of a Registration Statement under the Securities Act for the
  issuance of Stock Options and shares acquired thereunder, but there may be
  times when no such Registration Statement will be currently effective. The
  exercise of Stock Options may be temporarily suspended without liability to
  the Company during times when no such Registration Statement is currently
  effective, or during times when, in the reasonable opinion of the Committee,
  such suspension is necessary to preclude violation of any requirements of
  applicable law or regulatory bodies having jurisdiction over the Company. If
  any Stock Option would expire for any reason except the end of its term during
  such a suspension, then if exercise of such Stock Option is duly tendered
  before its expiration, such Stock Option shall be exercisable and exercised
  (unless the attempted exercise is withdrawn) as of the first day after the end
  of such suspension. The Company shall have no obligation to file any
  Registration Statement covering resales of Option Shares.</font></p>
<p align="center"><font size="2" face="Times New Roman">3</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font face="Times New Roman"><font size="2"><br>
&nbsp;&nbsp;&nbsp; 2.5 <u>Continuous Employment.</u> Except as provided in
  Paragraph 2.7 below, an Employee may not exercise a Stock Option unless from
  the date of grant to the date of exercise the Employee remains continuously in
  the employ of the Company. For purposes of this Paragraph 2.5, the period of
  continuous employment of an Employee with the Company shall be deemed to
  include (without extending the term of the Stock Option) any period during
  which the Employee is on leave of absence with the consent of the Company,
  provided that such leave of absence shall not exceed three months and that the
  Employee returns to the employ of the Company at the expiration of such leave
  of absence. If the Employee fails to return to the employ of the Company at
  the expiration of such leave of absence, the Employee's employment with the
  Company shall be deemed terminated as of the date such leave of absence
  commenced. The continuous employment of an Employee with the Company shall
  also be deemed to include any period during which the Employee is a member of
  the Armed Forces of the United States, provided that the Employee returns to
  the employ of the Company within 90 days (or such longer period as may be
  prescribed by law) from the date the Employee first becomes entitled to a
  discharge from military service. If an Employee does not return to the employ
  of the Company within 90 days (or such longer period as may be prescribed by
  law) from the date the Employee first becomes entitled to a discharge from
  military service, the Employee's employment with the Company shall be deemed
  to have terminated as of the date the Employee's military service ended.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.6 <u>Restrictions on Transfer.</u> Each Stock Option
  granted under this Plan shall be transferable only by will or the laws of
  descent and distribution. No interest of any Employee under this Plan shall be
  subject to attachment, execution, garnishment, sequestration, the laws of
  bankruptcy or any other legal or equitable process. Each Stock Option granted
  under this Plan shall be exercisable during an Employee's lifetime only by the
  Employee or by the Employee's legal representative.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.7 <u>Termination of Employment.</u><br>
  <br>
&nbsp;&nbsp;&nbsp; 2.7.1 Upon an Employee's Retirement, Disability (both terms
  being defined below) or death, (a) all Stock Options to the extent then
  presently exercisable shall remain in full force and effect and may be
  exercised pursuant to the provisions thereof, and (b) unless otherwise
  provided by the Committee, all Stock Options to the extent not then presently
  exercisable by the Employee shall terminate as of the date of such termination
  of employment and shall not be exercisable thereafter. Unless employment is
  terminated for cause, as defined by applicable law, the right to exercise in
  the event of termination of employment, to the extent that the optionee is
  entitled to exercise on the date the employment terminates as follows:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) At least
  six months from the date of termination if termination was caused by death or
  disability.<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) At least
  30 days from the date of termination if termination was caused by other than
  death or disability.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.7.2 Upon the termination of the employment of an Employee
  for any reason other than those specifically set forth in Paragraph 2.7.1, (a)
  all Stock Options to the extent then presently exercisable by the Employee
  shall remain exercisable only for a period of 90 days after the date of such
  termination of employment (except that the 90 day period shall be extended to
  12 months if the Employee shall die during such 90 day period), and may be
  exercised pursuant to the provisions thereof, including expiration at the end
  of the fixed term thereof, and (b) unless otherwise provided by the Committee,
  all Stock Options to the extent not then presently exercisable by the Employee
  shall terminate as of the date of such termination of employment and shall not
  be exercisable thereafter.<br>
  <br>
&nbsp;&nbsp;&nbsp; 2.7.3 For purposes of this Plan:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)
  "Retirement" shall mean an Employee's retirement from the employ of the
  Company on or after the date on which the Employee attains the age of 65
  years; and<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)
  "Disability" shall mean total and permanent incapacity of an Employee, due to
  physical impairment or legally established mental incompetence, to perform the
  usual duties of the Employee's employment with the Company, which disability
  shall be determined (i) on medical evidence by a licensed physician designated
  by the Committee, or (ii) on evidence that the Employee has become entitled to
  receive primary benefits as a disabled employee under the Social Security Act
  in effect on the date of such disability.<br>
  <br>
&nbsp;&nbsp;&nbsp; 3. </font><u><font size="2">Provisions Relating to Awards.</font></u></font></p>
<p align="center"><font size="2" face="Times New Roman">4</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp; 3.1 <u>Grant of Awards.</u> Subject to the provisions of this
  Plan, the Committee shall have full and complete authority, in its discretion,
  but subject to the express provisions of this Plan, to (1) grant Awards
  pursuant to this Plan, (2) determine the number of shares of the Common Stock
  subject to each Award (the "Award Shares"), (3) determine the terms and
  conditions (which need not be identical) of each Award, including the
  consideration (if any) to be paid by the Employee for such Common Stock, which
  may, in the Committee's discretion, consist of the delivery of the Employee's
  promissory note meeting the requirements of Paragraph 2.4.1, (4) establish and
  modify performance criteria for Awards, and (5) make all of the determinations
  necessary or advisable with respect to Awards under this Plan. Each Award
  under this Plan shall consist of a grant of shares of the Common Stock subject
  to a restriction period (after which the restrictions shall lapse), which
  shall be a period commencing on the date the Award is granted and ending on
  such date as the Committee shall determine (the "Restriction Period"). The
  Committee may provide for the lapse of restrictions in installments, for
  acceleration of the lapse of restrictions upon the satisfaction of such
  performance or other criteria or upon the occurrence of such events as the
  Committee shall determine, and for the early expiration of the Restriction
  Period upon an Employee's death, Disability or Retirement as defined in
  Paragraph 2.7.3, or, following a Change of Control, upon termination of an
  Employee's employment by the Company without "Cause" or by the Employee for
  "Good Reason," as those terms are defined herein. For purposes of this Plan:
  <br>
  <br>
&nbsp;&nbsp;&nbsp; "Change of Control" shall be deemed to occur (a) on the date
  the Company first has actual knowledge that any person (as such term is used
  in Sections 13(d) and 14(d)(2) of the Exchange Act) has become the beneficial
  owner (as defined in Rule 13(d)-3 under the Exchange Act), directly or
  indirectly, of securities of the Company representing 80 percent or more of
  the combined voting power of the Company's then outstanding securities, or (b)
  on the date the stockholders of the Company approve (i) a merger of the
  Company with or into any other corporation in which the Company is not the
  surviving corporation or in which the Company survives as a subsidiary of
  another corporation, (ii) a consolidation of the Company with any other
  corporation, or (iii) the sale or disposition of all or substantially all of
  the Company's assets or a plan of complete liquidation.<br>
  <br>
&nbsp;&nbsp;&nbsp; "Cause," when used with reference to termination of the
  employment of an Employee by the Company for "Cause," shall mean:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) The
  Employee's continuing willful and material breach of his duties to the
  Company, which will result or results in material harm to the Company, after
  he receives a demand from the Chief Executive of the Company specifying the
  manner in which he has willfully and materially breached such duties, other
  than any such failure resulting from Disability of the Employee or his
  resignation for "Good Reason," as defined herein; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) The
  conviction of the Employee of a felony; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) The Employee's
  commission of fraud in the course of his employment with the Company, such as
  embezzlement or other material and intentional violation of law against the
  Company; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) The
  Employee's gross misconduct causing material harm to the Company.<br>
  <br>
&nbsp;&nbsp;&nbsp; "Good Reason" shall mean any one or more of the following,
  occurring following or in connection with a Change of Control and within 90
  days prior to the Employee's resignation, unless the Employee shall have
  consented thereto in writing:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) The
  assignment to the Employee of duties inconsistent with his executive status
  prior to the Change of Control or a substantive change in the officer or
  officers to whom he reports from the officer or officers to whom he reported
  immediately prior to the Change of Control; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) The
  elimination or reassignment of a majority of the duties and responsibilities
  that were assigned to the Employee immediately prior to the Change of Control;
  or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) A
  reduction by the Company in the Employee's annual base salary as in effect
  immediately prior to the Change of Control; or</font></p>
<p align="center"><font size="2" face="Times New Roman">5</font></p>
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  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) The
  Company requiring the Employee to be based anywhere outside a 35-mile radius
  from his place of employment immediately prior to the Change of Control,
  except for required travel on the Company's business to an extent
  substantially consistent with the Employee's business travel obligations
  immediately prior to the Change of Control; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e) The
  failure of the Company to grant the Employee a performance bonus reasonably
  equivalent to the same percentage of salary the Employee normally received
  prior to the Change of Control, given comparable performance by the Company
  and the Employee; or<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f) The
  failure of the Company to obtain a satisfactory Assumption Agreement (as
  defined in Paragraph 4.13 of this Plan) from a successor, or the failure of
  such successor to perform such Assumption Agreement. <br>
  <br>
&nbsp;&nbsp;&nbsp; 3.2 <u>Incentive Agreements.</u> Each Award granted under
  this Plan shall be evidenced by a written agreement (an "Incentive Agreement")
  in a form approved by the Committee and executed by the Company and the
  Employee to whom the Award is granted. Each Incentive Agreement shall be
  subject to the terms and conditions of this Plan and other such terms and
  conditions as the Committee may specify.<br>
  <br>
&nbsp;&nbsp;&nbsp; 3.3 <u>Amendment, Modification and Waiver of Restrictions.</u>
  The Committee may modify or amend any Award under this Plan or waive any
  restrictions or conditions applicable to the Award; provided, however, that
  the Committee may not undertake any such modifications, amendments or waivers
  if the effect thereof materially increases the benefits to any Employee, or
  adversely affects the rights of any Employee without his consent.<br>
  <br>
&nbsp;&nbsp;&nbsp; 3.4 <u>Terms and Conditions of Awards.</u> Upon receipt of an
  Award of shares of the Common Stock under this Plan, even during the
  Restriction Period, an Employee shall be the holder of record of the shares
  and shall have all the rights of a stockholder with respect to such shares,
  subject to the terms and conditions of this Plan and the Award.<br>
  <br>
&nbsp;&nbsp;&nbsp; 3.4.1 Except as otherwise provided in this Paragraph 3.4, no
  shares of the Common Stock received pursuant to this Plan shall be sold,
  exchanged, transferred, pledged, hypothecated or otherwise disposed of during
  the Restriction Period applicable to such shares. Any purported disposition of
  such Common Stock in violation of this Paragraph 3.4 shall be null and void.<br>
  <br>
&nbsp;&nbsp;&nbsp; 3.4.2 If an Employee's employment with the Company terminates
  prior to the expiration of the Restriction Period for an Award, subject to any
  provisions of the Award with respect to the Employee's death, Disability or
  Retirement, or Change of Control, all shares of the Common Stock subject to
  the Award shall be immediately forfeited by the Employee and reacquired by the
  Company, and the Employee shall have no further rights with respect to the
  Award. In the discretion of the Committee, an Incentive Agreement may provide
  that, upon the forfeiture by an Employee of Award Shares, the Company shall
  repay to the Employee the consideration (if any) which the Employee paid for
  the Award Shares on the grant of the Award. In the discretion of the
  Committee, an Incentive Agreement may also provide that such repayment shall
  include an interest factor on such consideration from the date of the grant of
  the Award to the date of such repayment.<br>
  <br>
&nbsp;&nbsp;&nbsp; 3.4.3 The Committee may require under such terms and
  conditions as it deems appropriate or desirable that (a) the certificates for
  the Common Stock delivered under this Plan are to be held in custody by the
  Company or a person or institution designated by the Company until the
  Restriction Period expires, (b) such certificates shall bear a legend
  referring to the restrictions on the Common Stock pursuant to this Plan, and
  (c) the Employee shall have delivered to the Company a stock power endorsed in
  blank relating to the Common Stock.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4. <u>Miscellaneous Provisions.<br>
  </u><br>
&nbsp;&nbsp;&nbsp; 4.1 <u>Adjustments Upon Change in Capitalization.</u><br>
&nbsp;</font></p>
<p align="center"><font size="2" face="Times New Roman">6</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman">&nbsp;&nbsp;&nbsp;
  4.1.1 The number and class of shares subject to each outstanding Stock Option,
  the Exercise Price thereof (and the total price), the maximum number of Stock
  Options that may be granted under this Plan, the minimum number of shares as
  to which a Stock Option may be exercised at any one time, and the number and
  class of shares subject to each outstanding Award, shall not be
  proportionately adjusted in the event of any increase or decrease in the
  number of the issued shares of the Common Stock which results from a split-up
  or consolidation of shares, payment of a stock dividend or dividends exceeding
  a total of five percent for which the record dates occur in any one fiscal
  year, a recapitalization (other than the conversion of convertible securities
  according to their terms), a combination of shares or other like capital
  adjustment, so that (a) upon exercise of the Stock Option, the Employee shall
  receive the number and class of shares the Employee would have received prior
  to any such capital adjustment becoming effective, and (b) upon the lapse of
  restrictions of the Award Shares, the Employee shall receive the number and
  class of shares the Employee would have received prior to any such capital
  adjustment becoming effective.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.1.2 Upon a reorganization, merger or consolidation of the
  Company with one or more corporations as a result of which the Company is not
  the surviving corporation or in which the Company survives as a wholly-owned
  subsidiary of another corporation, or upon a sale of all or substantially all
  of the property of the Company to another corporation, or any dividend or
  distribution to stockholders of more than 10 percent of the Company's assets,
  proportionate adjustment or other provisions shall be made by the Company or
  other party to such transaction so that there shall remain and/or be
  substituted for the Option Shares and Award Shares provided for herein, the
  shares, securities or assets which would have been issuable or payable in
  respect of or in exchange for such Option Shares and Award Shares then
  remaining, as if the Employee had been the owner of such shares as of the
  applicable date. Any securities so substituted shall be subject to similar
  successive adjustments.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.2 <u>Withholding Taxes</u>. The Company shall have the
  right at the time of exercise of any Stock Option, the grant of an Award, or
  the lapse of restrictions on Award Shares, to make adequate provision for any
  federal, state, local or foreign taxes which it believes are or may be
  required by law to be withheld with respect to such exercise (the "Tax
  Liability"), to ensure the payment of any such Tax Liability. The Company may
  provide for the payment of any Tax Liability by any of the following means or
  a combination of such means, as determined by the Committee in its sole and
  absolute discretion in the particular case (1) by requiring the Employee to
  tender a cash payment to the Company, (2) by withholding from the Employee's
  salary, (3) by withholding from the Option Shares which would otherwise be
  issuable upon exercise of the Stock Option, or from the Award Shares on their
  grant or date of lapse of restrictions, that number of Option Shares or Award
  Shares having an aggregate Fair Market Value (determined in the manner
  prescribed by Paragraph 2.2) as of the date the withholding tax obligation
  arises in an amount which is equal to the Employee's Tax Liability or (4) by
  any other method deemed appropriate by the Committee. Satisfaction of the Tax
  Liability of a Section 16 Reporting Person may be made by the method of
  payment specified in clause (3) above only if the following two conditions are
  satisfied:<br>
  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) The
  withholding of Option Shares or Award Shares and the exercise of the related
  Stock Option occur at least six months and one day following the date of grant
  of such Stock Option or Award; and<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) The
  withholding of Option Shares or Award Shares is made either (i) pursuant to an
  irrevocable election (the "Withholding Election") made by the Employee at
  least six months in advance of the withholding of Options Shares or Award
  Shares, or (ii) on a day within a 10-day "window period" beginning on the
  third business day following the date of release of the Company's quarterly or
  annual summary statement of sales and earnings.<br>
  <br>
&nbsp;&nbsp;&nbsp; Anything herein to the contrary notwithstanding, a
  Withholding Election may be disapproved by the Committee at any time.<br>
  <br>
&nbsp;&nbsp; 4.3 <u>Relationship to Other Employee Benefit Plans.</u> Stock
  Options and Awards granted hereunder shall not be deemed to be salary or other
  compensation to any Employee for purposes of any pension, thrift,
  profit-sharing, stock purchase or any other employee benefit plan now
  maintained or hereafter adopted by the Company.<br>
&nbsp;&nbsp;&nbsp; <br>
&nbsp;&nbsp;&nbsp; 4.4 <u>Amendments and Termination.</u> The Board of Directors
  may at any time suspend, amend or terminate this Plan. No amendment, except as
  provided in Paragraph 3.3, or modification of this Plan may be adopted, except
  subject to stockholder approval, which would (1) materially increase the
  benefits accruing to the Employees under this Plan, (2) materially increase
  the number of securities which may be issued under this Plan (except for
  adjustments pursuant to Paragraph 4.1 hereof), or (3) materially modify the
  requirements as to eligibility for participation in this Plan.<br>
&nbsp;</font></p>
<p align="center"><font size="2" face="Times New Roman">7</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman"><br>
&nbsp;&nbsp;&nbsp; 4.5 <u>Successors in Interest.</u> The provisions of this
  Plan and the actions of the Committee shall be binding upon all heirs,
  successors and assigns of the Company and of the Employees.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.6 <u>Other Documents.</u> All documents prepared, executed
  or delivered in connection with this Plan (including, without limitation,
  Option Agreements and Incentive Agreements) shall be, in substance and form,
  as established and modified by the Committee; provided, however, that all such
  documents shall be subject in every respect to the provisions of this Plan,
  and in the event of any conflict between the terms of any such document and
  this Plan, the provisions of this Plan shall prevail.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.7 <u>Fairness of the Repurchase Price</u>. In the event
  that the Company repurchases securities upon termination of employment
  pursuant to this Plan, either: (a) the price will not be less than the fair
  market value of the securities to be repurchased on the date of termination of
  employment, and the right to repurchase will be exercised for cash or
  cancellation of purchase money indebtedness for the securities within 90 days
  of termination of the employment (or in the case of securities issued upon
  exercise of options after the date of termination, within 90 days after the
  date of the exercise), and the right terminates when the Company's securities
  become publicly traded, or (b) Company will repurchase securities at the
  original purchase price, provided that the right to repurchase at the original
  purchase price lapses at the rate of at least 20 percent of the securities per
  year over five years from the date the option is granted (without respect to
  the date the option was exercised or became exercisable) and the right to
  repurchase must be exercised for cash or cancellation of purchase money
  indebtedness for the securities within 90 days of termination of employment
  (or in case of securities issued upon exercise of options after the date of
  termination, within 90 days after the date of the exercise).<br>
&nbsp;&nbsp;&nbsp; <br>
&nbsp;&nbsp;&nbsp; 4.8 <u>No Obligation to Continue Employment.</u> This Plan
  and the grants which might be made hereunder shall not impose any obligation
  on the Company to continue to employ any Employee. Moreover, no provision of
  this Plan or any document executed or delivered pursuant to this Plan shall be
  deemed modified in any way by any employment contract between an Employee (or
  other employee) and the Company.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.9 <u>Misconduct of an Employee</u>. Notwithstanding any
  other provision of this Plan, if an Employee commits fraud or dishonesty
  toward the Company or wrongfully uses or discloses any trade secret,
  confidential data or other information proprietary to the Company, or
  intentionally takes any other action which results in material harm to the
  Company, as determined by the Committee, in its sole and absolute discretion,
  the Employee shall forfeit all rights and benefits under this Plan.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.10 <u>Term of Plan.</u> No Stock Option shall be
  exercisable, or Award granted, unless and until the Directors of the Company
  have approved this Plan and all other legal requirements have been met. This
  Plan was adopted by the Board effective December 29, 2004. No Stock Options or
  Awards may be granted under this Plan after December 29, 2014.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.11 <u>Governing Law</u>. This Plan and all actions taken
  thereunder shall be governed by, and construed in accordance with, the laws of
  the State of Nevada.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.12 <u>Assumption Agreements</u>. The Company will require
  each successor, (direct or indirect, whether by purchase, merger,
  consolidation or otherwise), to all or substantially all of the business or
  assets of the Company, prior to the consummation of each such transaction, to
  assume and agree to perform the terms and provisions remaining to be performed
  by the Company under each Incentive Agreement and Stock Option and to preserve
  the benefits to the Employees thereunder. Such assumption and agreement shall
  be set forth in a written agreement in form and substance satisfactory to the
  Committee (an "Assumption Agreement"), and shall include such adjustments, if
  any, in the application of the provisions of the Incentive Agreements and
  Stock Options and such additional provisions, if any, as the Committee shall
  require and approve, in order to preserve such benefits to the Employees.
  Without limiting the generality of the foregoing, the Committee may require an
  Assumption Agreement to include satisfactory undertakings by a successor:<br>
&nbsp;</font></p>
<p align="center"><font size="2" face="Times New Roman">8</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="justify"><font size="2" face="Times New Roman">&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp; (a) To provide liquidity to the Employees at the end of
  the Restriction Period applicable to the Common Stock awarded to them under
  this Plan, or on the exercise of Stock Options;<br>
  <br>
&nbsp;&nbsp;&nbsp; (b) If the succession occurs before the expiration of any
  period specified in the Incentive Agreements for satisfaction of performance
  criteria applicable to the Common Stock awarded thereunder, to refrain from
  interfering with the Company's ability to satisfy such performance criteria or
  to agree to modify such performance criteria and/or waive any criteria that
  cannot be satisfied as a result of the succession; <br>
  <br>
&nbsp;&nbsp;&nbsp; (c) To require any future successor to enter into an
  Assumption Agreement; and<br>
  <br>
&nbsp;&nbsp;&nbsp; (d) To take or refrain from taking such other actions as the
  Committee may require and approve, in its discretion.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.12 <u>Compliance with Rule 16b-3. </u>Transactions under
  this Plan are intended to comply with all applicable conditions of Rule 16b-3
  promulgated under the Exchange Act. To the extent that any provision of this
  Plan or action by the Committee fails to so comply, it shall be deemed null
  and void, to the extent permitted by law and deemed advisable by the
  Committee.<br>
  <br>
&nbsp;&nbsp;&nbsp; 4.13 <u>Information to Shareholders.</u> The Company shall
  furnish to each of its stockholders financial statements of the Company at
  least annually.<br>
  <br>
  IN WITNESS WHEREOF, this Plan has been executed effective as of December 29,
  2004.<br>
  <br>
&nbsp;</font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%"><font size="2" face="Times New Roman">PTS, INC.<br>
    <br>
    <br>
    By <u>/s/ Peter Chin </u><br>
    Peter Chin, Chief Executive Officer</font></td>
  </tr>
</table>
<p align="center"><font size="2" face="Times New Roman"><br>
9</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="right"><b><font size="2" face="Times New Roman">Exhibit 5</font></b></p>
<p align="center"><font size="2" face="Times New Roman"><br>
Glast, Phillips &amp; Murray, P.C.<br>
815 Walker Street, Suite 1250<br>
Houston, Texas 77002<br>
(713) 237-3135</font></p>
<p align="left"><font size="2" face="Times New Roman"><br>
<br>
December 29, 2004<br>
<br>
U.S. Securities and Exchange Commission <br>
Division of Corporation Finance<br>
450 Fifth Street, N.W. <br>
Washington, D.C. 20549<br>
<br>
Re: PTS, Inc.- Form S-8<br>
<br>
Gentlemen:<br>
<br>
&nbsp;&nbsp;&nbsp; I have acted as counsel to PTS, Inc., a Nevada corporation
(the "Company"), in connection with its Registration Statement on Form S-8
relating to the registration of 500,000,000 shares of its common stock
("Incentive Shares"), par value $0.001 per Incentive Share, which are issuable
pursuant to the Company's Employee Stock Incentive Plan for the Year 2004 No. 2.<br>
<br>
&nbsp;&nbsp;&nbsp; In my representation I have examined such documents,
corporate records, and other instruments as have been provided to me for the
purposes of this opinion, including, but not limited to, the Articles of
Incorporation, and all amendments thereto, and Bylaws of the Company.<br>
<br>
&nbsp;&nbsp;&nbsp; Based upon and in reliance on the foregoing, and subject to
the qualifications and assumptions set forth below, it is my opinion that the
Company is duly organized and validly existing as a corporation under the laws
of the State of Nevada, and that the Incentive Shares, when issued and sold,
will be validly issued, fully paid, and non-assessable.<br>
&nbsp;&nbsp;&nbsp; <br>
&nbsp;&nbsp;&nbsp; My opinion is limited by and subject to the following:<br>
<br>
&nbsp;&nbsp;&nbsp; (a) In rendering my opinion I have assumed that, at the time
of each issuance and sale of the Shares, the Company will be a corporation
validly existing and in good standing under the laws of the State of Nevada.<br>
<br>
&nbsp;&nbsp;&nbsp; (b) In my examination of all documents, certificates and
records, I have assumed without investigation, the authenticity and completeness
of all documents submitted to me as originals, the conformity to the originals
of all documents submitted to me as copies and the authenticity and completeness
of the originals of all documents submitted to me as copies. I have also assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authority of all persons executing documents on behalf of the parties thereto
other than the Company, and the due authorization, execution and delivery of all
documents by the parties thereto other than the Company. As to matters of fact
material to this opinion, I have relied upon statements and representations of
representatives of the Company and of public officials and have assumed the same
to have been properly given and to be accurate.<br>
<br>
&nbsp;&nbsp;&nbsp; (c) My opinion is based solely on and limited to the federal
laws of the United States of America and the laws of Nevada. I express no
opinion as to the laws of any other jurisdiction.<br>
&nbsp;</font></p>
<p>&nbsp;</p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%"><font size="2" face="Times New Roman">Very truly yours,<br>
    <br>
    <u>/s/ Norman T. Reynolds<br>
    </u>Norman T. Reynolds</font></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman"><br>
&nbsp;</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="right"><font face="Times New Roman"><font size="2"><br>
  </font><b><font size="2">Exhibit 23.1</font></b></font></p>
<p align="center"><font face="Times New Roman"><font size="2"><br>
</font><b><font size="2">Consent of Independent Auditors<br>
&nbsp;</font></b></font></p>
<p><font size="2" face="Times New Roman"><br>
To the Board of Directors of<br>
PTS, Inc.<br>
Las Vegas, Nevada<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
December 29, 2004<br>
<br>
&nbsp;</font></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p align="right"><font face="Times New Roman"><font size="2"><br>
  </font><b><font size="2">Exhibit 23.2</font></b></font></p>
<p align="center"><font size="2" face="Times New Roman"><br>
<br>
Glast, Phillips &amp; Murray, P.C.<br>
815 Walker Street, Suite 1250<br>
Houston, Texas 77002<br>
(713) 237-3135</font></p>
<p><font size="2" face="Times New Roman"><br>
December 29, 2004<br>
<br>
U.S. Securities and Exchange Commission <br>
Division of Corporation Finance<br>
450 Fifth Street, N.W. <br>
Washington, D.C. 20549<br>
<br>
Re: PTS, Inc.- Form S-8<br>
<br>
Gentlemen:<br>
<br>
&nbsp;&nbsp;&nbsp; I have acted as counsel to PTS, Inc., a Nevada corporation
(the "Company"), in connection with its Registration Statement on Form S-8
relating to the registration of 500,000,000 shares of its common stock,
("Incentive Shares"), par value $0.001 per Incentive Share, which are issuable
pursuant to the Company's Employee Stock Incentive Plan for the Year 2004 No. 2.
I hereby consent to all references to my firm included in this Registration
Statement, including the opinion of legality.<br>
<br>
&nbsp;</font></p>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%">
  <tr>
    <td width="50%">&nbsp;</td>
    <td width="50%"><font size="2" face="Times New Roman">Very truly yours,<br>
    <br>
    <u>/s/ Norman T. Reynolds<br>
    </u>Norman T. Reynolds</font></td>
  </tr>
</table>
<p><font size="2" face="Times New Roman"><br>
&nbsp;</font></p>
  <HR NOSHADE ALIGN="left" COLOR="#000000">
  <p><font size="2" face="Times New Roman"><br>
&nbsp;</font></p>

</body>

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{"company-data": {"conformed-name": "PTS INC/NV/", "cik": "0001080924", "assigned-sic": "6770", "irs-number": "880380544", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-121713", "film-number": "041230004"}, "business-address": {"street1": "3355 SPRING MOUNTAIN ROAD", "street2": "SUITE 63", "city": "LAS VEGAS", "state": "NV", "zip": "89102", "phone": "7028788310"}, "mail-address": {"street1": "3355 SPRING MOUNTAIN ROAD.", "street2": "SUITE 63", "city": "LAS VEGAS", "state": "NV", "zip": "89102"}, "former-company": {"former-conformed-name": "ELAST TECHNOLOGIES INC", "date-changed": "19990302"}}
PTS, Inc.
Registration
Statement
Under the
Securities Act of 1933
PTS, INC.
(Exact name of registrant as specified in its charter)
Nevada
7389
042392188
(State
    or jurisdiction of incorporation or organization)
(Primary Standard Industrial Classification Code Number)
(I.R.S.
    Employer Identification No.)
3355 Spring Mountain
Road # 66, Las Vegas, Nevada 89102; (702) 380-3811
(Address and telephone number of Registrant's principal executive offices and
principal place of business)
Employee Stock Incentive Plan for the Year 2004 No. 2
(Full title of the Plan)
Peter Chin, 3355 Spring Mountain Road # 66, Las Vegas, Nevada 89102
(Name and address of agent for service)
(702) 380-3811
(Telephone number, including area code, of agent for service)
Calculation of Registration Fee
Title of
    securities
to be registered
Amount to be
registered
Proposed
    offering
price per share (1)
Proposed
    maximum
aggregate offering price
Amount of
registration fee
Options
    to Purchase
    Common Stock,
Common Shares
    Underlying Options
500,000,000
$0.001 (2)
$500,000
$63.35
Total
500,000,000
$500,000
$63.35
(1) The Offering
  Price is used solely for purposes of estimating the registration fee pursuant
  to Rule 457(h) promulgated pursuant to the Securities Act of 1933.
(2) This Offering Price per Share is established pursuant to the option
  exercise price set forth in the Employee Stock Incentive Plan for the Year
  2004 No. 2, set forth in Exhibit 4.1 to this Form S-8.
Part I
Information Required in the Section 10(a) Prospectus
Item 1. Plan Information.
See Item 2 below.
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in Part I,
Items 1 and 2, will be delivered to each of the participants in accordance with
Form S-8 and Rule 428 promulgated under the Securities Act of 1933. The
participants shall be provided a written statement notifying them that upon
written or oral request they will be provided, without charge, (i) the documents
incorporated by reference in Item 3 of Part II of the registration statement,
and (ii) other documents required to be delivered pursuant to Rule 428(b). The
statement will inform the participants that these documents are incorporated by
reference in the Section 10(a) prospectus, and shall include the address (giving
title or department) and telephone number to which the request is to be
directed.
Part II
Information Required in the Registration Statement
Item 3.
Incorporation of Documents by Reference.
The following are hereby incorporated by reference:
(a) The
Registrant's latest annual report on Form 10-KSB for the fiscal year ended
December 31, 2003, filed on April 30, 2004.
(b) All other
reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 since the end of the fiscal year covered by the Form 10-KSB referred to
in (a) above.
(c) A
description of the Registrant's securities contained in the Registration
Statement on Form 10SB12G filed by the Registrant's predecessor, Elast
Technologies, Inc., to register the common stock under the Exchange Act,
including all amendments filed for the purpose of updating such common stock
description.
All documents subsequently filed by the Registrant pursuant
to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in the registration statement and to be
part thereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Other than as set forth below, no named expert or counsel was
hired on a contingent basis, will receive a direct or indirect interest in the
small business issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the Registrant.
Item 6. Indemnification of Directors and Officers.
Our
bylaws do not contain a provision entitling any director or executive officer to
indemnification against its liability under the Securities Act. The Nevada
Revised Statutes allow a company to indemnify our officers, directors,
employees, and agents from any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, except
under certain circumstances. Indemnification may only occur if a determination
has been made that the officer, director, employee, or agent acted in good faith
and in a manner, which such person believed to be in the best interests of the
Registrant. A determination may be made by the stockholders; by a majority of
the directors who were not parties to the action, suit, or proceeding confirmed
by opinion of independent legal counsel; or by opinion of independent legal
counsel in the event a quorum of directors who were not a party to such action,
suit, or proceeding does not exist.
2
Provided the terms and conditions of these provisions under
  Nevada law are met, officers, directors, employees, and agents of the
  Registrant may be indemnified against any cost, loss, or expense arising out
  of any liability under the Securities Act. Insofar as indemnification for
  liabilities arising under the Securities Act may be permitted to directors,
  officers and controlling persons of the Registrant, we have been advised that
  in the opinion of the Securities and Exchange Commission, such indemnification
  is against public policy and is, therefore, unenforceable.
The Nevada Revised Statutes, stated herein, provide further
  for permissive indemnification of officers and directors.
"A.
NRS 78.7502.
Discretionary and mandatory
  indemnification of officers, directors, employees and agents: General
  provisions.
"1. A corporation may indemnify any person who was or is a party or is
  threatened to be made a party to any threatened, pending or completed action,
  suit or proceeding, whether civil, criminal, administrative or investigative,
  except an action by or in the right of the corporation, by reason of the fact
  that he is or was a director, officer, employee or agent of the corporation,
  or is or was serving at the request of the corporation as a director, officer,
  employee or agent of another corporation, partnership, joint venture, trust or
  other enterprise, against expenses, including attorneys' fees, judgments,
  fines and amounts paid in settlement actually and reasonably incurred by him
  in connection with the action, suit or proceeding if he acted in good faith
  and in a manner which he reasonably believed to be in or not opposed to the
  best interests of the corporation, and, with respect to any criminal action or
  proceeding, had no reasonable cause to believe his conduct was unlawful. The
  termination of any action, suit or proceeding by judgment, order, settlement,
  conviction or upon a plea of nolo contendere or its equivalent, does not, of
  itself, create a presumption that the person did not act in good faith and in
  a manner which he reasonably believed to be in or not opposed to the best
  interests of the corporation, and that, with respect to any criminal action or
  proceeding, he had reasonable cause to believe that his conduct was unlawful.
"2. A corporation may indemnify any person who was or is a party or is
  threatened to be made a party to any threatened, pending or completed action
  or suit by or in the right of the corporation to procure a judgment in its
  favor by reason of the fact that he is or was a director, officer, employee or
  agent of the corporation, or is or was serving at the request of the
  corporation as a director, officer, employee or agent of another corporation,
  partnership, joint venture, trust or other enterprise against expenses,
  including amounts paid in settlement and attorneys' fees actually and
  reasonably incurred by him in connection with the defense or settlement of the
  action or suit if he acted in good faith and in a manner which he reasonably
  believed to be in or not opposed to the best interests of the corporation.
  Indemnification may not be made for any claim, issue or matter as to which
  such a person has been adjudged by a court of competent jurisdiction, after
  exhaustion of all appeals therefrom, to be liable to the corporation or for
  amounts paid in settlement to the corporation, unless and only to the extent
  that the court in which the action or suit was brought or other court of
  competent jurisdiction determines upon application that in view of all the
  circumstances of the case, the person is fairly and reasonably entitled to
  indemnity for such expenses as the court deems proper.
"3. To the extent that a director, officer, employee or agent of a corporation
  has been successful on the merits or otherwise in defense of any action, suit
  or proceeding referred to in subsections 1 and 2, or in defense of any claim,
  issue or matter therein, the corporation shall indemnify him against expenses,
  including attorneys' fees, actually and reasonably incurred by him in
  connection with the defense.
"B.
NRS 78.751.
Authorization required for
  discretionary indemnification; advancement of expenses; limitation on
  indemnification and advancement of expenses.
3
"1. Any discretionary indemnification
  under NRS 78.7502 unless ordered by a court or advanced pursuant to subsection
  2, may be made by the corporation only as authorized in the specific case upon
  a determination that indemnification of the director, officer, employee or
  agent is proper in the circumstances. The determination must be made:
"(a) By the stockholders;
"(b) By the board of directors by majority vote of a quorum consisting of
  directors who were not parties to the action, suit or proceeding;
"(c) If a majority vote of a quorum consisting of directors who were not
  parties to the action, suit or proceeding so orders, by independent legal
  counsel in a written opinion; or
"(d) If a quorum consisting of directors who were not parties to the action,
  suit or proceeding cannot be obtained, by independent legal counsel in a
  written opinion.
"2. The articles of incorporation,
  the bylaws or an agreement made by the corporation may provide that the
  expenses of officers and directors incurred in defending a civil or criminal
  action, suit or proceeding must be paid by the corporation as they are
  incurred and in advance of the final disposition of the action, suit or
  proceeding, upon receipt of an undertaking by or on behalf of the director or
  officer to repay the amount if it is ultimately determined by a court of
  competent jurisdiction that he is not entitled to be indemnified by the
  corporation. The provisions of this subsection do not affect any rights to
  advancement of expenses to which corporate personnel other than directors or
  officers may be entitled under any contract or otherwise by law.
"3. The indemnification and
  advancement of expenses authorized in NRS 78.7502 or ordered by a court
  pursuant to this section:
"(a) Does not exclude any other rights to which a person seeking
  indemnification or advancement of expenses may be entitled under the articles
  of incorporation or any bylaw, agreement, vote of stockholders or
  disinterested directors or otherwise, for either an action in his official
  capacity or an action in another capacity while holding his office, except
  that indemnification, unless ordered by a court pursuant to or for the
  advancement of expenses made pursuant to subsection 2, may not be made to or
  on behalf of any director or officer if a final adjudication establishes that
  his acts or omissions involved intentional misconduct, fraud or a knowing
  violation of the law and was material to the cause of action.
"(b) Continues for a person who has ceased to be a director, officer, employee
  or agent and inures to the benefit of the heirs, executors and administrators
  of such a person.
"C.
NRS 78.752.
Insurance and other financial
  arrangements against liability of directors, officers, employees and agents.
"1. A corporation may purchase and
  maintain insurance or make other financial arrangements on behalf of any
  person who is or was a director, officer, employee or agent of the
  corporation, or is or was serving at the request of the corporation as a
  director, officer, employee or agent of another corporation, partnership,
  joint venture, trust or other enterprise for any liability asserted against
  him and liability and expenses incurred by him in his capacity as a director,
  officer, employee or agent, or arising out of his status as such, whether or
  not the corporation has the authority to indemnify him against such liability
  and expenses.
"2. The other financial arrangements
  made by the corporation pursuant to subsection 1 may include the following:
"(a) The creation of a trust fund.
"(b) The establishment of a program of self-insurance.
4
"(c) The securing of its obligation of indemnification by granting a security
  interest or other lien on any assets of the corporation.
"(d) The establishment of a letter of credit, guaranty or surety. No financial
  arrangement made pursuant to this subsection may provide protection for a
  person adjudged by a court of competent jurisdiction, after exhaustion of all
  appeals therefrom, to be liable for intentional misconduct, fraud or a knowing
  violation of law, except with respect to the advancement of expenses or
  indemnification ordered by a court.
"3. Any
  insurance or other financial arrangement made on behalf of a person pursuant
  to this section may be provided by the corporation or any other person
  approved by the board of directors, even if all or part of the other person's
  stock or other securities is owned by the corporation.
"4. In the
  absence of fraud:
"(a) The decision of the board of directors as to the propriety of the terms
  and conditions of any insurance or other financial arrangement made pursuant
  to this section and the choice of the person to provide the insurance or other
  financial arrangement is conclusive; and
"(b) The insurance or other financial arrangement:
"1. Is not void or voidable; and
"2. Does not subject any director approving it to personal liability for his
  action, even if a director approving the insurance or other financial
  arrangement is a beneficiary of the insurance or other financial arrangement.
"5. A
  corporation or its subsidiary which provides self-insurance for itself or for
  another affiliated corporation pursuant to this section is not subject to the
  provisions of Title 57 of the Nevada Revised Statutes."
The Registrant, with approval of the Registrant's Board of
  Directors, may obtain directors' and officers' liability insurance.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibits required by Item 601 of Regulation S-B, and an
  index thereto, are attached.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in
  which offers or sales are being made, a post-effective amendment to this
  registration statement: (iii) To include any material information with respect
  to the plan of distribution not previously disclosed in the registration
  statement or any material change to such information in the registration
  statement;
(2) That, for the purpose of determining any liability under the Securities
  Act of 1933, each such post-effective amendment shall be deemed to be a new
  registration statement relating to the securities offered therein, and the
  offering of such securities at that time shall be deemed to be the initial
  bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
  the securities being registered which remain unsold at the termination of the
  offering.
5
(b) That, for
  purposes of determining any liability under the Securities Act of 1933, each
  filing of the registrant's annual report pursuant to section 13(a) or section
  15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
  filing of an employee benefit plan's annual report pursuant to section 15(d)
  of the Securities Exchange Act of 1934) that is incorporated by reference in
  the registration statement shall be deemed to be a new registration statement
  relating to the securities offered therein, and the offering of such
  securities at that time shall be deemed to be the initial bona fide offering
  thereof.
(c) To
  deliver or cause to be delivered with the prospectus, to each person to whom
  the prospectus is sent or given, the latest annual report to security holders
  that is incorporated by reference in the prospectus and furnished pursuant to
  and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
  Exchange Act of 1934; and, where interim financial information required to be
  presented by Article 3 of Regulation S-X are not set forth in the prospectus,
  to deliver, or cause to be delivered to each person to whom the prospectus is
  sent or given, the latest quarterly report that is specifically incorporated
  by reference in the prospectus to provide such interim financial information.
(d) That
  insofar as indemnification for liabilities arising under the Securities Act of
  1933 may be permitted to directors, officers and controlling persons of the
  registrant pursuant to the foregoing provisions, or otherwise, the registrant
  has been advised that in the opinion of the Securities and Exchange Commission
  such indemnification is against public policy as expressed in the Act and is,
  therefore, unenforceable. In the event that a claim for indemnification
  against such liabilities (other than the payment by the registrant of expenses
  incurred or paid by a director, officer or controlling person of the
  registrant in the successful defense of any action, suit or proceeding) is
  asserted by such director, officer or controlling person in connection with
  the securities being registered, the registrant will, unless in the opinion of
  its counsel the matter has been settled by controlling precedent, submit to a
  court of appropriate jurisdiction the question whether such indemnification by
  it is against public policy as expressed in the Act and will be governed by
  the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, Nevada on December 29, 2004.
PTS, INC.
By
/s/ Peter Chin
Peter Chin, Chief Executive Officer
6
Pursuant to the requirements of the Securities Act of 1933, this registration
  statement has been signed by the following person in the capacities and on the
  date indicated.
Signature
Title
Date
/s/ Peter Chin
Peter Chin
Chief Executive Officer and Chairman
    of the Board of Directors
December 29, 2004
7
EXHIBIT INDEX
Exhibit No.
Description
4.1
Employee Stock Incentive Plan for the
    Year 2004 No. 2
5
Opinion Re: Legality
23.1
Consent of Accountants
23.2
Consent of Counsel
8
Exhibit 4.1
PTS, INC.
EMPLOYEE STOCK INCENTIVE PLAN FOR THE YEAR 2004 NO. 2
1.
General Provisions.
1.1
Purpose.
This Stock Incentive Plan (the "Plan") is
intended to allow designated officers and employees (all of whom are sometimes
collectively referred to herein as the "Employees," or individually as the
"Employee") of PTS, Inc., a Nevada corporation (the "Company") and its
Subsidiaries (as that term is defined below) which they may have from time to
time (the Company and such Subsidiaries are referred to herein as the "Company")
to receive certain options (the "Stock Options") to purchase common stock of the
Company, par value $0.001 per share (the "Common Stock"), and to receive grants
of the Common Stock subject to certain restrictions (the "Awards"). As used in
this Plan, the term "Subsidiary" shall mean each corporation which is a
"subsidiary corporation" of the Company within the meaning of Section 424(f) of
the Internal Revenue Code of 1986, as amended (the "Code"). The purpose of this
Plan is to provide the Employees, who make significant and extraordinary
contributions to the long-term growth and performance of the Company, with
equity-based compensation incentives, and to attract and retain the Employees.
1.2
Administration.
1.2.1 The Plan shall be administered by the Compensation Committee
(the "Committee") of, or appointed by, the Board of Directors of the Company
(the "Board"). The Committee shall select one of its members as Chairman and
shall act by vote of a majority of a quorum, or by unanimous written consent. A
majority of its members shall constitute a quorum. The Committee shall be
governed by the provisions of the Company's Bylaws and of Nevada law applicable
to the Board, except as otherwise provided herein or determined by the Board.
1.2.2 The Committee shall have full and complete authority,
in its discretion, but subject to the express provisions of this Plan (a) to
approve the Employees nominated by the management of the Company to be granted
Awards or Stock Options; (b) to determine the number of Awards or Stock Options
to be granted to an Employee; (c) to determine the time or times at which Awards
or Stock Options shall be granted; (d) to establish the terms and conditions
upon which Awards or Stock Options may be exercised; (e) to remove or adjust any
restrictions and conditions upon Awards or Stock Options; (f) to specify, at the
time of grant, provisions relating to exercisability of Stock Options and to
accelerate or otherwise modify the exercisability of any Stock Options; and (g)
to adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of this Plan. All interpretations
and constructions of this Plan by the Committee, and all of its actions
hereunder, shall be binding and conclusive on all persons for all purposes.
1.2.3 The Company hereby agrees to indemnify and hold
harmless each Committee member and each Employee, and the estate and heirs of
such Committee member or Employee, against all claims, liabilities, expenses,
penalties, damages or other pecuniary losses, including legal fees, which such
Committee member or Employee, his estate or heirs may suffer as a result of his
responsibilities, obligations or duties in connection with this Plan, to the
extent that insurance, if any, does not cover the payment of such items. No
member of the Committee or the Board shall be liable for any action or
determination made in good faith with respect to this Plan or any Award or Stock
Option granted pursuant to this Plan.
1.3
Eligibility and Participation.
The Employees
eligible under this Plan shall be approved by the Committee from those Employees
who, in the opinion of the management of the Company, are in positions which
enable them to make significant contributions to the long-term performance and
growth of the Company. In selecting the Employees to whom Award or Stock Options
may be granted, consideration shall be given to factors such as employment
position, duties and responsibilities, ability, productivity, length of service,
morale, interest in the Company and recommendations of supervisors.
1.4
Shares Subject to this Plan.
The maximum number of
shares of the Common Stock that may be issued pursuant to this Plan shall be
500,000,000 subject to adjustment pursuant to the provisions of Paragraph 4.1.
If shares of the Common Stock awarded or issued under this Plan are reacquired
by the Company due to a forfeiture or for any other reason, such shares shall be
cancelled and thereafter shall again be available for purposes of this Plan. If
a Stock Option expires, terminates or is cancelled for any reason without having
been exercised in full, the shares of the Common Stock not purchased thereunder
shall again be available for purposes of this Plan.
1
2.
Provisions Relating to Stock Options.
2.1
Grants of Stock Options.
The Committee may grant
  Stock Options in such amounts, at such times, and to the Employees nominated
  by the management of the Company as the Committee, in its discretion, may
  determine. Stock Options granted under this Plan shall constitute "incentive
  stock options" within the meaning of Section 422 of the Code, if so designated
  by the Committee on the date of grant. The Committee shall also have the
  discretion to grant Stock Options which do not constitute incentive stock
  options, and any such Stock Options shall be designated non-statutory stock
  options by the Committee on the date of grant. The aggregate Fair Market Value
  (determined as of the time an incentive stock option is granted) of the Common
  Stock with respect to which incentive stock options are exercisable for the
  first time by any Employee during any one calendar year (under all plans of
  the Company and any parent or subsidiary of the Company) may not exceed the
  maximum amount permitted under Section 422 of the Code (currently,
  $100,000.00). Non-statutory stock options shall not be subject to the
  limitations relating to incentive stock options contained in the preceding
  sentence. Each Stock Option shall be evidenced by a written agreement (the
  "Option Agreement") in a form approved by the Committee, which shall be
  executed on behalf of the Company and by the Employee to whom the Stock Option
  is granted, and which shall be subject to the terms and conditions of this
  Plan. In the discretion of the Committee, Stock Options may include provisions
  (which need not be uniform), authorized by the Committee in its discretion,
  that accelerate an Employee's rights to exercise Stock Options following a
  "Change in Control," upon termination of the Employee's employment by the
  Company without "Cause" or by the Employee for "Good Reason," as such terms
  are defined in Paragraph 3.1 hereof. The holder of a Stock Option shall not be
  entitled to the privileges of stock ownership as to any shares of the Common
  Stock not actually issued to such holder.
2.2
Purchase Price.
The purchase price (the "Exercise
  Price") of shares of the Common Stock subject to each Stock Option (the
  "Option Shares") shall not be less than 85 percent of the Fair Market Value of
  the Common Stock on the date of the grant of the option. For an Employee
  holding greater than 10 percent of the total voting power of all stock of the
  Company, either Common or Preferred, the Exercise Price of an incentive stock
  option shall be at least 110 percent of the Fair Market Value of the Common
  Stock on the date of the grant of the option. As used herein, "Fair Market
  Value" means the mean between the highest and lowest reported sales prices of
  the Common Stock on the New York Stock Exchange Composite Tape or, if not
  listed on such exchange, on any other national securities exchange on which
  the Common Stock is listed or on The Nasdaq Stock Market, or, if not so listed
  on any other national securities exchange or The Nasdaq Stock Market, then the
  average of the bid price of the Common Stock during the last five trading days
  on the OTC Bulletin Board immediately preceding the last trading day prior to
  the date with respect to which the Fair Market Value is to be determined. If
  the Common Stock is not then publicly traded, then the Fair Market Value of
  the Common Stock shall be the book value of the Company per share as
  determined on the last day of March, June, September, or December in any year
  closest to the date when the determination is to be made. For the purpose of
  determining book value hereunder, book value shall be determined by adding as
  of the applicable date called for herein the capital, surplus, and undivided
  profits of the Company, and after having deducted any reserves theretofore
  established; the sum of these items shall be divided by the number of shares
  of the Common Stock outstanding as of said date, and the quotient thus
  obtained shall represent the book value of each share of the Common Stock of
  the Company.
2.3
Option Period.
The Stock Option period (the
  "Term") shall commence on the date of grant of the Stock Option and shall be
  10 years or such shorter period as is determined by the Committee. Each Stock
  Option shall provide that it is exercisable over its term in such periodic
  installments as the Committee may determine, subject to the provisions of
  Paragraph 2.4.1. Section 16(b) of the Securities Exchange Act of 1934, as
  amended (the "Exchange Act") exempts persons normally subject to the reporting
  requirements of Section 16(a) of the Exchange Act (the "Section 16 Reporting
  Persons") pursuant to a qualified employee stock option plan from the normal
  requirement of not selling until at least six months and one day from the date
  the Stock Option is granted.
2
2.4
Exercise of Options.
2.4.1 Each Stock Option may be exercised in whole or in part
  (but not as to fractional shares) by delivering it for surrender or
  endorsement to the Company, attention of the Corporate Secretary, at the
  principal office of the Company, together with payment of the Exercise Price
  and an executed Notice and Agreement of Exercise in the form prescribed by
  Paragraph 2.4.2. Payment may be made (a) in cash, (b) by cashier's or
  certified check, (c) by surrender of previously owned shares of the Common
  Stock valued pursuant to Paragraph 2.2 (if the Committee authorizes payment in
  stock in its discretion), (d) by withholding from the Option Shares which
  would otherwise be issuable upon the exercise of the Stock Option that number
  of Option Shares equal to the exercise price of the Stock Option, if such
  withholding is authorized by the Committee in its discretion, or (e) in the
  discretion of the Committee, by the delivery to the Company of the optionee's
  promissory note secured by the Option Shares, bearing interest at a rate
  sufficient to prevent the imputation of interest under Sections 483 or 1274 of
  the Code, and having such other terms and conditions as may be satisfactory to
  the Committee. Subject to the provisions of this Paragraph 2.4 and Paragraph
  2.5, the Employee has the right to exercise his or her Stock Options at the
  rate of at least 20 percent per year over five years from the date the Stock
  Option is granted.
2.4.2 Exercise of each Stock Option is conditioned upon the
  agreement of the Employee to the terms and conditions of this Plan and of such
  Stock Option as evidenced by the Employee's execution and delivery of a Notice
  and Agreement of Exercise in a form to be determined by the Committee in its
  discretion. Such Notice and Agreement of Exercise shall set forth the
  agreement of the Employee that (a) no Option Shares will be sold or otherwise
  distributed in violation of the Securities Act of 1933, as amended (the
  "Securities Act") or any other applicable federal or state securities laws,
  (b) each Option Share certificate may be imprinted with legends reflecting any
  applicable federal and state securities law restrictions and conditions, (c)
  the Company may comply with said securities law restrictions and issue "stop
  transfer" instructions to its Transfer Agent and Registrar without liability,
  (d) if the Employee is a Section 16 Reporting Person, the Employee will
  furnish to the Company a copy of each Form 4 or Form 5 filed by said Employee
  and will timely file all reports required under federal securities laws, and
  (e) the Employee will report all sales of Option Shares to the Company in
  writing on a form prescribed by the Company.
2.4.3 No Stock Option shall be exercisable unless and until
  any applicable registration or qualification requirements of federal and state
  securities laws, and all other legal requirements, have been fully complied
  with. At no time shall the total number of securities issuable upon exercise
  of all outstanding options under this Plan, and the total number of securities
  provided for under any bonus or similar plan or agreement of the Company
  exceed a number of securities which is equal to 30 percent of the then
  outstanding securities of the Company, unless a percentage higher than 30
  percent is approved by at least two-thirds of the outstanding securities
  entitled to vote. The Company will use reasonable efforts to maintain the
  effectiveness of a Registration Statement under the Securities Act for the
  issuance of Stock Options and shares acquired thereunder, but there may be
  times when no such Registration Statement will be currently effective. The
  exercise of Stock Options may be temporarily suspended without liability to
  the Company during times when no such Registration Statement is currently
  effective, or during times when, in the reasonable opinion of the Committee,
  such suspension is necessary to preclude violation of any requirements of
  applicable law or regulatory bodies having jurisdiction over the Company. If
  any Stock Option would expire for any reason except the end of its term during
  such a suspension, then if exercise of such Stock Option is duly tendered
  before its expiration, such Stock Option shall be exercisable and exercised
  (unless the attempted exercise is withdrawn) as of the first day after the end
  of such suspension. The Company shall have no obligation to file any
  Registration Statement covering resales of Option Shares.
3
2.5
Continuous Employment.
Except as provided in
  Paragraph 2.7 below, an Employee may not exercise a Stock Option unless from
  the date of grant to the date of exercise the Employee remains continuously in
  the employ of the Company. For purposes of this Paragraph 2.5, the period of
  continuous employment of an Employee with the Company shall be deemed to
  include (without extending the term of the Stock Option) any period during
  which the Employee is on leave of absence with the consent of the Company,
  provided that such leave of absence shall not exceed three months and that the
  Employee returns to the employ of the Company at the expiration of such leave
  of absence. If the Employee fails to return to the employ of the Company at
  the expiration of such leave of absence, the Employee's employment with the
  Company shall be deemed terminated as of the date such leave of absence
  commenced. The continuous employment of an Employee with the Company shall
  also be deemed to include any period during which the Employee is a member of
  the Armed Forces of the United States, provided that the Employee returns to
  the employ of the Company within 90 days (or such longer period as may be
  prescribed by law) from the date the Employee first becomes entitled to a
  discharge from military service. If an Employee does not return to the employ
  of the Company within 90 days (or such longer period as may be prescribed by
  law) from the date the Employee first becomes entitled to a discharge from
  military service, the Employee's employment with the Company shall be deemed
  to have terminated as of the date the Employee's military service ended.
2.6
Restrictions on Transfer.
Each Stock Option
  granted under this Plan shall be transferable only by will or the laws of
  descent and distribution. No interest of any Employee under this Plan shall be
  subject to attachment, execution, garnishment, sequestration, the laws of
  bankruptcy or any other legal or equitable process. Each Stock Option granted
  under this Plan shall be exercisable during an Employee's lifetime only by the
  Employee or by the Employee's legal representative.
2.7
Termination of Employment.
2.7.1 Upon an Employee's Retirement, Disability (both terms
  being defined below) or death, (a) all Stock Options to the extent then
  presently exercisable shall remain in full force and effect and may be
  exercised pursuant to the provisions thereof, and (b) unless otherwise
  provided by the Committee, all Stock Options to the extent not then presently
  exercisable by the Employee shall terminate as of the date of such termination
  of employment and shall not be exercisable thereafter. Unless employment is
  terminated for cause, as defined by applicable law, the right to exercise in
  the event of termination of employment, to the extent that the optionee is
  entitled to exercise on the date the employment terminates as follows:
(i) At least
  six months from the date of termination if termination was caused by death or
  disability.
(ii) At least
  30 days from the date of termination if termination was caused by other than
  death or disability.
2.7.2 Upon the termination of the employment of an Employee
  for any reason other than those specifically set forth in Paragraph 2.7.1, (a)
  all Stock Options to the extent then presently exercisable by the Employee
  shall remain exercisable only for a period of 90 days after the date of such
  termination of employment (except that the 90 day period shall be extended to
  12 months if the Employee shall die during such 90 day period), and may be
  exercised pursuant to the provisions thereof, including expiration at the end
  of the fixed term thereof, and (b) unless otherwise provided by the Committee,
  all Stock Options to the extent not then presently exercisable by the Employee
  shall terminate as of the date of such termination of employment and shall not
  be exercisable thereafter.
2.7.3 For purposes of this Plan:
(a)
  "Retirement" shall mean an Employee's retirement from the employ of the
  Company on or after the date on which the Employee attains the age of 65
  years; and
(b)
  "Disability" shall mean total and permanent incapacity of an Employee, due to
  physical impairment or legally established mental incompetence, to perform the
  usual duties of the Employee's employment with the Company, which disability
  shall be determined (i) on medical evidence by a licensed physician designated
  by the Committee, or (ii) on evidence that the Employee has become entitled to
  receive primary benefits as a disabled employee under the Social Security Act
  in effect on the date of such disability.
3.
Provisions Relating to Awards.
4
3.1
Grant of Awards.
Subject to the provisions of this
  Plan, the Committee shall have full and complete authority, in its discretion,
  but subject to the express provisions of this Plan, to (1) grant Awards
  pursuant to this Plan, (2) determine the number of shares of the Common Stock
  subject to each Award (the "Award Shares"), (3) determine the terms and
  conditions (which need not be identical) of each Award, including the
  consideration (if any) to be paid by the Employee for such Common Stock, which
  may, in the Committee's discretion, consist of the delivery of the Employee's
  promissory note meeting the requirements of Paragraph 2.4.1, (4) establish and
  modify performance criteria for Awards, and (5) make all of the determinations
  necessary or advisable with respect to Awards under this Plan. Each Award
  under this Plan shall consist of a grant of shares of the Common Stock subject
  to a restriction period (after which the restrictions shall lapse), which
  shall be a period commencing on the date the Award is granted and ending on
  such date as the Committee shall determine (the "Restriction Period"). The
  Committee may provide for the lapse of restrictions in installments, for
  acceleration of the lapse of restrictions upon the satisfaction of such
  performance or other criteria or upon the occurrence of such events as the
  Committee shall determine, and for the early expiration of the Restriction
  Period upon an Employee's death, Disability or Retirement as defined in
  Paragraph 2.7.3, or, following a Change of Control, upon termination of an
  Employee's employment by the Company without "Cause" or by the Employee for
  "Good Reason," as those terms are defined herein. For purposes of this Plan:
"Change of Control" shall be deemed to occur (a) on the date
  the Company first has actual knowledge that any person (as such term is used
  in Sections 13(d) and 14(d)(2) of the Exchange Act) has become the beneficial
  owner (as defined in Rule 13(d)-3 under the Exchange Act), directly or
  indirectly, of securities of the Company representing 80 percent or more of
  the combined voting power of the Company's then outstanding securities, or (b)
  on the date the stockholders of the Company approve (i) a merger of the
  Company with or into any other corporation in which the Company is not the
  surviving corporation or in which the Company survives as a subsidiary of
  another corporation, (ii) a consolidation of the Company with any other
  corporation, or (iii) the sale or disposition of all or substantially all of
  the Company's assets or a plan of complete liquidation.
"Cause," when used with reference to termination of the
  employment of an Employee by the Company for "Cause," shall mean:
(a) The
  Employee's continuing willful and material breach of his duties to the
  Company, which will result or results in material harm to the Company, after
  he receives a demand from the Chief Executive of the Company specifying the
  manner in which he has willfully and materially breached such duties, other
  than any such failure resulting from Disability of the Employee or his
  resignation for "Good Reason," as defined herein; or
(b) The
  conviction of the Employee of a felony; or
(c) The Employee's
  commission of fraud in the course of his employment with the Company, such as
  embezzlement or other material and intentional violation of law against the
  Company; or
(d) The
  Employee's gross misconduct causing material harm to the Company.
"Good Reason" shall mean any one or more of the following,
  occurring following or in connection with a Change of Control and within 90
  days prior to the Employee's resignation, unless the Employee shall have
  consented thereto in writing:
(a) The
  assignment to the Employee of duties inconsistent with his executive status
  prior to the Change of Control or a substantive change in the officer or
  officers to whom he reports from the officer or officers to whom he reported
  immediately prior to the Change of Control; or
(b) The
  elimination or reassignment of a majority of the duties and responsibilities
  that were assigned to the Employee immediately prior to the Change of Control;
  or
(c) A
  reduction by the Company in the Employee's annual base salary as in effect
  immediately prior to the Change of Control; or
5
(d) The
  Company requiring the Employee to be based anywhere outside a 35-mile radius
  from his place of employment immediately prior to the Change of Control,
  except for required travel on the Company's business to an extent
  substantially consistent with the Employee's business travel obligations
  immediately prior to the Change of Control; or
(e) The
  failure of the Company to grant the Employee a performance bonus reasonably
  equivalent to the same percentage of salary the Employee normally received
  prior to the Change of Control, given comparable performance by the Company
  and the Employee; or
(f) The
  failure of the Company to obtain a satisfactory Assumption Agreement (as
  defined in Paragraph 4.13 of this Plan) from a successor, or the failure of
  such successor to perform such Assumption Agreement.
3.2
Incentive Agreements.
Each Award granted under
  this Plan shall be evidenced by a written agreement (an "Incentive Agreement")
  in a form approved by the Committee and executed by the Company and the
  Employee to whom the Award is granted. Each Incentive Agreement shall be
  subject to the terms and conditions of this Plan and other such terms and
  conditions as the Committee may specify.
3.3
Amendment, Modification and Waiver of Restrictions.
The Committee may modify or amend any Award under this Plan or waive any
  restrictions or conditions applicable to the Award; provided, however, that
  the Committee may not undertake any such modifications, amendments or waivers
  if the effect thereof materially increases the benefits to any Employee, or
  adversely affects the rights of any Employee without his consent.
3.4
Terms and Conditions of Awards.
Upon receipt of an
  Award of shares of the Common Stock under this Plan, even during the
  Restriction Period, an Employee shall be the holder of record of the shares
  and shall have all the rights of a stockholder with respect to such shares,
  subject to the terms and conditions of this Plan and the Award.
3.4.1 Except as otherwise provided in this Paragraph 3.4, no
  shares of the Common Stock received pursuant to this Plan shall be sold,
  exchanged, transferred, pledged, hypothecated or otherwise disposed of during
  the Restriction Period applicable to such shares. Any purported disposition of
  such Common Stock in violation of this Paragraph 3.4 shall be null and void.
3.4.2 If an Employee's employment with the Company terminates
  prior to the expiration of the Restriction Period for an Award, subject to any
  provisions of the Award with respect to the Employee's death, Disability or
  Retirement, or Change of Control, all shares of the Common Stock subject to
  the Award shall be immediately forfeited by the Employee and reacquired by the
  Company, and the Employee shall have no further rights with respect to the
  Award. In the discretion of the Committee, an Incentive Agreement may provide
  that, upon the forfeiture by an Employee of Award Shares, the Company shall
  repay to the Employee the consideration (if any) which the Employee paid for
  the Award Shares on the grant of the Award. In the discretion of the
  Committee, an Incentive Agreement may also provide that such repayment shall
  include an interest factor on such consideration from the date of the grant of
  the Award to the date of such repayment.
3.4.3 The Committee may require under such terms and
  conditions as it deems appropriate or desirable that (a) the certificates for
  the Common Stock delivered under this Plan are to be held in custody by the
  Company or a person or institution designated by the Company until the
  Restriction Period expires, (b) such certificates shall bear a legend
  referring to the restrictions on the Common Stock pursuant to this Plan, and
  (c) the Employee shall have delivered to the Company a stock power endorsed in
  blank relating to the Common Stock.
4.
Miscellaneous Provisions.
4.1
Adjustments Upon Change in Capitalization.
6
4.1.1 The number and class of shares subject to each outstanding Stock Option,
  the Exercise Price thereof (and the total price), the maximum number of Stock
  Options that may be granted under this Plan, the minimum number of shares as
  to which a Stock Option may be exercised at any one time, and the number and
  class of shares subject to each outstanding Award, shall not be
  proportionately adjusted in the event of any increase or decrease in the
  number of the issued shares of the Common Stock which results from a split-up
  or consolidation of shares, payment of a stock dividend or dividends exceeding
  a total of five percent for which the record dates occur in any one fiscal
  year, a recapitalization (other than the conversion of convertible securities
  according to their terms), a combination of shares or other like capital
  adjustment, so that (a) upon exercise of the Stock Option, the Employee shall
  receive the number and class of shares the Employee would have received prior
  to any such capital adjustment becoming effective, and (b) upon the lapse of
  restrictions of the Award Shares, the Employee shall receive the number and
  class of shares the Employee would have received prior to any such capital
  adjustment becoming effective.
4.1.2 Upon a reorganization, merger or consolidation of the
  Company with one or more corporations as a result of which the Company is not
  the surviving corporation or in which the Company survives as a wholly-owned
  subsidiary of another corporation, or upon a sale of all or substantially all
  of the property of the Company to another corporation, or any dividend or
  distribution to stockholders of more than 10 percent of the Company's assets,
  proportionate adjustment or other provisions shall be made by the Company or
  other party to such transaction so that there shall remain and/or be
  substituted for the Option Shares and Award Shares provided for herein, the
  shares, securities or assets which would have been issuable or payable in
  respect of or in exchange for such Option Shares and Award Shares then
  remaining, as if the Employee had been the owner of such shares as of the
  applicable date. Any securities so substituted shall be subject to similar
  successive adjustments.
4.2
Withholding Taxes
. The Company shall have the
  right at the time of exercise of any Stock Option, the grant of an Award, or
  the lapse of restrictions on Award Shares, to make adequate provision for any
  federal, state, local or foreign taxes which it believes are or may be
  required by law to be withheld with respect to such exercise (the "Tax
  Liability"), to ensure the payment of any such Tax Liability. The Company may
  provide for the payment of any Tax Liability by any of the following means or
  a combination of such means, as determined by the Committee in its sole and
  absolute discretion in the particular case (1) by requiring the Employee to
  tender a cash payment to the Company, (2) by withholding from the Employee's
  salary, (3) by withholding from the Option Shares which would otherwise be
  issuable upon exercise of the Stock Option, or from the Award Shares on their
  grant or date of lapse of restrictions, that number of Option Shares or Award
  Shares having an aggregate Fair Market Value (determined in the manner
  prescribed by Paragraph 2.2) as of the date the withholding tax obligation
  arises in an amount which is equal to the Employee's Tax Liability or (4) by
  any other method deemed appropriate by the Committee. Satisfaction of the Tax
  Liability of a Section 16 Reporting Person may be made by the method of
  payment specified in clause (3) above only if the following two conditions are
  satisfied:
(a) The
  withholding of Option Shares or Award Shares and the exercise of the related
  Stock Option occur at least six months and one day following the date of grant
  of such Stock Option or Award; and
(b) The
  withholding of Option Shares or Award Shares is made either (i) pursuant to an
  irrevocable election (the "Withholding Election") made by the Employee at
  least six months in advance of the withholding of Options Shares or Award
  Shares, or (ii) on a day within a 10-day "window period" beginning on the
  third business day following the date of release of the Company's quarterly or
  annual summary statement of sales and earnings.
Anything herein to the contrary notwithstanding, a
  Withholding Election may be disapproved by the Committee at any time.
4.3
Relationship to Other Employee Benefit Plans.
Stock
  Options and Awards granted hereunder shall not be deemed to be salary or other
  compensation to any Employee for purposes of any pension, thrift,
  profit-sharing, stock purchase or any other employee benefit plan now
  maintained or hereafter adopted by the Company.
4.4
Amendments and Termination.
The Board of Directors
  may at any time suspend, amend or terminate this Plan. No amendment, except as
  provided in Paragraph 3.3, or modification of this Plan may be adopted, except
  subject to stockholder approval, which would (1) materially increase the
  benefits accruing to the Employees under this Plan, (2) materially increase
  the number of securities which may be issued under this Plan (except for
  adjustments pursuant to Paragraph 4.1 hereof), or (3) materially modify the
  requirements as to eligibility for participation in this Plan.
7
4.5
Successors in Interest.
The provisions of this
  Plan and the actions of the Committee shall be binding upon all heirs,
  successors and assigns of the Company and of the Employees.
4.6
Other Documents.
All documents prepared, executed
  or delivered in connection with this Plan (including, without limitation,
  Option Agreements and Incentive Agreements) shall be, in substance and form,
  as established and modified by the Committee; provided, however, that all such
  documents shall be subject in every respect to the provisions of this Plan,
  and in the event of any conflict between the terms of any such document and
  this Plan, the provisions of this Plan shall prevail.
4.7
Fairness of the Repurchase Price
. In the event
  that the Company repurchases securities upon termination of employment
  pursuant to this Plan, either: (a) the price will not be less than the fair
  market value of the securities to be repurchased on the date of termination of
  employment, and the right to repurchase will be exercised for cash or
  cancellation of purchase money indebtedness for the securities within 90 days
  of termination of the employment (or in the case of securities issued upon
  exercise of options after the date of termination, within 90 days after the
  date of the exercise), and the right terminates when the Company's securities
  become publicly traded, or (b) Company will repurchase securities at the
  original purchase price, provided that the right to repurchase at the original
  purchase price lapses at the rate of at least 20 percent of the securities per
  year over five years from the date the option is granted (without respect to
  the date the option was exercised or became exercisable) and the right to
  repurchase must be exercised for cash or cancellation of purchase money
  indebtedness for the securities within 90 days of termination of employment
  (or in case of securities issued upon exercise of options after the date of
  termination, within 90 days after the date of the exercise).
4.8
No Obligation to Continue Employment.
This Plan
  and the grants which might be made hereunder shall not impose any obligation
  on the Company to continue to employ any Employee. Moreover, no provision of
  this Plan or any document executed or delivered pursuant to this Plan shall be
  deemed modified in any way by any employment contract between an Employee (or
  other employee) and the Company.
4.9
Misconduct of an Employee
. Notwithstanding any
  other provision of this Plan, if an Employee commits fraud or dishonesty
  toward the Company or wrongfully uses or discloses any trade secret,
  confidential data or other information proprietary to the Company, or
  intentionally takes any other action which results in material harm to the
  Company, as determined by the Committee, in its sole and absolute discretion,
  the Employee shall forfeit all rights and benefits under this Plan.
4.10
Term of Plan.
No Stock Option shall be
  exercisable, or Award granted, unless and until the Directors of the Company
  have approved this Plan and all other legal requirements have been met. This
  Plan was adopted by the Board effective December 29, 2004. No Stock Options or
  Awards may be granted under this Plan after December 29, 2014.
4.11
Governing Law
. This Plan and all actions taken
  thereunder shall be governed by, and construed in accordance with, the laws of
  the State of Nevada.
4.12
Assumption Agreements
. The Company will require
  each successor, (direct or indirect, whether by purchase, merger,
  consolidation or otherwise), to all or substantially all of the business or
  assets of the Company, prior to the consummation of each such transaction, to
  assume and agree to perform the terms and provisions remaining to be performed
  by the Company under each Incentive Agreement and Stock Option and to preserve
  the benefits to the Employees thereunder. Such assumption and agreement shall
  be set forth in a written agreement in form and substance satisfactory to the
  Committee (an "Assumption Agreement"), and shall include such adjustments, if
  any, in the application of the provisions of the Incentive Agreements and
  Stock Options and such additional provisions, if any, as the Committee shall
  require and approve, in order to preserve such benefits to the Employees.
  Without limiting the generality of the foregoing, the Committee may require an
  Assumption Agreement to include satisfactory undertakings by a successor:
8
(a) To provide liquidity to the Employees at the end of
  the Restriction Period applicable to the Common Stock awarded to them under
  this Plan, or on the exercise of Stock Options;
(b) If the succession occurs before the expiration of any
  period specified in the Incentive Agreements for satisfaction of performance
  criteria applicable to the Common Stock awarded thereunder, to refrain from
  interfering with the Company's ability to satisfy such performance criteria or
  to agree to modify such performance criteria and/or waive any criteria that
  cannot be satisfied as a result of the succession;
(c) To require any future successor to enter into an
  Assumption Agreement; and
(d) To take or refrain from taking such other actions as the
  Committee may require and approve, in its discretion.
4.12
Compliance with Rule 16b-3.
Transactions under
  this Plan are intended to comply with all applicable conditions of Rule 16b-3
  promulgated under the Exchange Act. To the extent that any provision of this
  Plan or action by the Committee fails to so comply, it shall be deemed null
  and void, to the extent permitted by law and deemed advisable by the
  Committee.
4.13
Information to Shareholders.
The Company shall
  furnish to each of its stockholders financial statements of the Company at
  least annually.
IN WITNESS WHEREOF, this Plan has been executed effective as of December 29,
  2004.
PTS, INC.
By
/s/ Peter Chin
Peter Chin, Chief Executive Officer
9
Exhibit 5
Glast, Phillips & Murray, P.C.
815 Walker Street, Suite 1250
Houston, Texas 77002
(713) 237-3135
December 29, 2004
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: PTS, Inc.- Form S-8
Gentlemen:
I have acted as counsel to PTS, Inc., a Nevada corporation
(the "Company"), in connection with its Registration Statement on Form S-8
relating to the registration of 500,000,000 shares of its common stock
("Incentive Shares"), par value $0.001 per Incentive Share, which are issuable
pursuant to the Company's Employee Stock Incentive Plan for the Year 2004 No. 2.
In my representation I have examined such documents,
corporate records, and other instruments as have been provided to me for the
purposes of this opinion, including, but not limited to, the Articles of
Incorporation, and all amendments thereto, and Bylaws of the Company.
Based upon and in reliance on the foregoing, and subject to
the qualifications and assumptions set forth below, it is my opinion that the
Company is duly organized and validly existing as a corporation under the laws
of the State of Nevada, and that the Incentive Shares, when issued and sold,
will be validly issued, fully paid, and non-assessable.
My opinion is limited by and subject to the following:
(a) In rendering my opinion I have assumed that, at the time
of each issuance and sale of the Shares, the Company will be a corporation
validly existing and in good standing under the laws of the State of Nevada.
(b) In my examination of all documents, certificates and
records, I have assumed without investigation, the authenticity and completeness
of all documents submitted to me as originals, the conformity to the originals
of all documents submitted to me as copies and the authenticity and completeness
of the originals of all documents submitted to me as copies. I have also assumed
the genuineness of all signatures, the legal capacity of natural persons, the
authority of all persons executing documents on behalf of the parties thereto
other than the Company, and the due authorization, execution and delivery of all
documents by the parties thereto other than the Company. As to matters of fact
material to this opinion, I have relied upon statements and representations of
representatives of the Company and of public officials and have assumed the same
to have been properly given and to be accurate.
(c) My opinion is based solely on and limited to the federal
laws of the United States of America and the laws of Nevada. I express no
opinion as to the laws of any other jurisdiction.
Very truly yours,
/s/ Norman T. Reynolds
Norman T. Reynolds
Exhibit 23.1
Consent of Independent Auditors
To the Board of Directors of
PTS, Inc.
Las Vegas, Nevada
December 29, 2004
Exhibit 23.2
Glast, Phillips & Murray, P.C.
815 Walker Street, Suite 1250
Houston, Texas 77002
(713) 237-3135
December 29, 2004
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: PTS, Inc.- Form S-8
Gentlemen:
I have acted as counsel to PTS, Inc., a Nevada corporation
(the "Company"), in connection with its Registration Statement on Form S-8
relating to the registration of 500,000,000 shares of its common stock,
("Incentive Shares"), par value $0.001 per Incentive Share, which are issuable
pursuant to the Company's Employee Stock Incentive Plan for the Year 2004 No. 2.
I hereby consent to all references to my firm included in this Registration
Statement, including the opinion of legality.
Very truly yours,
/s/ Norman T. Reynolds
Norman T. Reynolds