EXHIBIT 99.1


                          HASTINGS ENTERTAINMENT, INC.
                            2002 INCENTIVE STOCK PLAN


I.       PURPOSE

         This 2002 Incentive Stock Plan (the "Plan") is intended to attract,
retain and provide incentives to Employees, officers, Directors and consultants
of the Company, and to thereby increase overall shareholders' value. The Plan
generally provides for the granting of stock, stock options, stock appreciation
rights, restricted shares, other stock-based awards or any combination of the
foregoing to the eligible participants.

II.      DEFINITIONS

         (a) "Award" includes, without limitation, stock options (including
incentive stock options within the meaning of Section 422(b) of the Code), stock
appreciation rights, stock awards, restricted share awards, dividend equivalent
rights, or other awards that are valued in whole or in part by reference to, or
are otherwise based on, the Common Stock ("other Common Stock-based Awards"),
all on a stand alone, combination or tandem basis, as described in or granted
under this Plan.

         (b) "Award Agreement" means a written agreement setting forth the terms
and conditions of each Award made under this Plan.

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

         (d) "Change in Control" means:

                  (i) An acquisition by any person (as the term "person" is used
         in Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
         (the "Exchange Act")) who is not as of the effective date of the Plan
         the beneficial holder of at least 10 % of the Company's then
         outstanding common stock, of beneficial ownership (as defined in Rule
         13d-3 promulgated under the Exchange Act) of 30 % or more of either (x)
         the then outstanding common stock (the "Outstanding Company Common
         Stock") or (y) the combined voting power of the then outstanding
         capital stock entitled to vote generally in the election of directors
         (the "Outstanding Company Voting Securities"); excluding, however, the
         following: (1) any acquisition of Outstanding Company Common Stock and
         Outstanding Company Voting Securities by the Company, (2) any
         acquisition of Outstanding Company Common Stock and Outstanding Company
         Voting Securities by any employee benefit plan (or related trust)
         sponsored or maintained by the Company or any corporation controlled by
         the Company or (3) any acquisition of Outstanding Company Common Stock
         and Outstanding Company Voting Securities by any person pursuant to a
         transaction which complies with clauses (1), (2) and (3) of subsection
         (iii) of this definition; or

                  (ii) A change in the composition of the Board such that the
         individuals who, as of the effective date of the Plan, constitute the
         Board (such Board shall be hereinafter referred to as the "Incumbent
         Board") ceased for any reason to constitute at least a






         majority of the Board; provided, however, for purposes of this
         definition, that any individual who becomes a Director subsequent to
         such effective date whose election, or nomination for election by the
         Company's stockholders was approved by a vote of at least a majority of
         those individuals who are Directors and who were also members of the
         Incumbent Board (or deemed to be such pursuant to this proviso) shall
         be considered as though such individual were a member of the Incumbent
         Board; but, provided further, that any such individual whose initial
         assumption of office occurs as a result of either an actual or
         threatened election contest (as such terms are used in Rule 14a-11 of
         Regulation 14A promulgated under the Exchange Act) or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         person or legal entity other than the Board shall not be so considered
         as a member of the Incumbent Board; or

                  (iii) The approval by the stockholders of the Company of a
         reorganization, merger or consolidation or sale or other disposition of
         all or substantially all of the assets of the Company ("Corporate
         Transaction"); excluding, however, a Corporate Transaction pursuant to
         which (1) all or substantially all of the individuals and entities who
         are the Beneficial Owners, respectively, of the Outstanding Company
         Common Stock and Outstanding Company Voting Securities immediately
         prior to such Corporate Transaction will beneficially own, directly or
         indirectly, more than 60% of, respectively, the outstanding common
         stock, and the combined voting power of the then outstanding capital
         stock entitled to vote generally in the election of directors, as the
         case may be, of the company resulting from such Corporate Transaction
         (including, without limitation, a corporation which as a result of such
         transaction owns the Company or all or substantially all of the
         Company's subsidiaries) in substantially the same proportions as their
         ownership, immediately prior to such Corporate Transaction, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities, as the case may be, (2) no person (other then the Company,
         any employee benefit plan (or related trust) sponsored or maintained by
         the Company or any corporation controlled by the Company or such
         corporation resulting from such Corporate Transaction) will
         beneficially own, directly or indirectly, 30% or more of, respectively,
         the outstanding shares of common stock of the corporation resulting
         from such Corporate Transaction or the combined voting power of the
         outstanding voting securities of such corporation entitled to vote
         generally in the election of directors except to the extent that such
         ownership existed with respect to the Company prior to the Corporate
         Transaction and (3) individuals who were members of the Incumbent Board
         will constitute at least a majority of the board of directors of the
         company resulting from such Corporate Transaction; or

                  (iv) The approval by the stockholders of the Company of a
         complete liquidation or dissolution of the Company.

         (e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.

         (f) "Committee" means the Compensation Committee of the Board or such
other committee of the Board as may be designated by the Board from time to time
to administer this Plan. All members of the Compensation Committee or such other
committee, which in either case may not be less than two Directors, are intended
at all times to qualify as "outside directors" within the meaning of Section
162(m) of the Code and as "Non-Employee Directors" within the


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meaning of Rule 16b-3 under Section 16 of the Exchange Act; provided, however,
that the failure of a member of such Committee to so qualify shall not be deemed
to invalidate any Award made by such Committee.

         (g) "Common Stock" means the $.01 par value Class A Common Stock of the
Company.

         (h) "Company" means Hastings Entertainment, Inc., a Texas corporation.

         (i) "Director" means a member of the Board.

         (j) "Employee" means an employee of the Company or a Subsidiary.

         (k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (l) "Fair Market Value" shall mean (i) if Hastings' common stock is
publicly traded on a national market on the date in question, the average of the
high and low sale price for Hastings' common stock on the date in question (or
the most recent date prior thereto that sales take place), or (ii) if Hastings'
common stock is not publicly traded on a national market on the date in
question, the price as determined in the most recent valuation prepared for the
Company's Associates' Stock Ownership Plan..

         (m) "Participant" means an Employee, officer, Director or consultant
who has been granted an Award under the Plan.

         (n) "Plan Year" means a calendar year.

         (o) "Subsidiary" means any corporation or other entity, whether
domestic or foreign, in which the Company has or obtains, directly or
indirectly, a proprietary interest of more than 50% by reason of stock ownership
or otherwise.

III.     ELIGIBILITY

         Any Employee, officer, Director or consultant of the Company or
Subsidiary selected by the Committee is eligible to receive an Award pursuant to
Section VI hereof.

IV.      PLAN ADMINISTRATION

         (a) Except as otherwise determined by the Board, the Plan shall be
administered by the Committee. For purposes of any action taken by the
Committee, a majority of the members will constitute a quorum, and the actions
of the members present at a meeting at which a quorum is present, or actions
unanimously approved in writing, will be the acts of the Committee. The Board or
the Committee shall periodically make determinations with respect to the
participation of Employees, officers, Directors and consultants in the Plan and,
except as otherwise required by law or this Plan, the grant terms of Awards,
including vesting schedules, retirement and termination rights, payment
alternatives such as cash, stock, contingent award or other means of payment
consistent with the purposes of this Plan, and such other terms and conditions
as the Board or the Committee deems appropriate which shall be contained in an
Award Agreement



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with respect to a Participant; provided, however, that only the Committee may
make Awards intended to qualify as performance-based compensation within the
meaning of Section 162(m) of the Code.

         (b) The Committee shall have authority to interpret and construe the
provisions of the Plan and any Award Agreement and make determinations pursuant
to any Plan provision or Award Agreement which shall be final and binding on all
persons. No member of the Committee shall be liable for any action or
determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner provided in the Company's
Certificate of Incorporation, as it may be amended from time to time.

         (c) The Committee shall have the authority at any time to provide for
the conditions and circumstances under which Awards shall be forfeited. The
Committee shall have the authority to accelerate the vesting of any Award and
the time at which any Award becomes exercisable.

V.       CAPITAL STOCK SUBJECT TO THE PROVISIONS OF THIS PLAN

         (a) The capital stock subject to the provisions of this Plan shall be
shares of authorized but unissued Common Stock and shares of Common Stock held
as treasury stock. Subject to adjustment in accordance with the provisions of
Section X, and subject to Section V(c) below, the maximum number of shares of
Common Stock that shall be available for grants of Awards under this Plan shall
be 500,000.

         (b) The grant of a restricted share Award shall be deemed to be equal
to the maximum number of shares which may be issued under the Award. Awards
payable only in cash will not reduce the number of shares available for Awards
granted under the Plan.

         (c) There shall be carried forward and be available for Awards under
the Plan, in addition to shares available for grant under paragraph (a) of this
Section V, all of the following: (i) any unused portion of the limit set forth
in paragraph (a) of this Section V; (ii) shares represented by Awards which are
cancelled, forfeited, surrendered, terminated, paid in cash or expire
unexercised; and (iii) the excess amount of variable Awards which become fixed
at less than their maximum limitations.

         (d) No Participant may be awarded options for more than 50,000 shares
of Common Stock in any Plan Year.

VI.      AWARDS UNDER THIS PLAN

         As the Board or Committee may determine, the following types of Awards
and other Common Stock-based Awards may be granted under this Plan on a stand
alone, combination or tandem basis:

         (a) Stock Option. A right to buy a specified number of shares of Common
Stock at a fixed exercise price during a specified time. Unless otherwise
specifically provided in an Award Agreement, (i) the exercise price of each
share of Common Stock covered by a stock option shall not be less than the Fair
Market Value of the Common Stock on the date of the grant of such


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stock option and (ii) 20% of the shares covered by the stock option shall become
exercisable on the first anniversary of its grant and an additional 20% of such
shares shall become exercisable on each of the second, third, fourth and fifth
anniversary of its grant.

         (b) Incentive Stock Option. An Award which may be granted only to
Employees in the form of a stock option which shall comply with the requirements
of Code Section 422 or any successor section as it may be amended from time to
time. The exercise price of any incentive stock option shall not be less than
100 % of the Fair Market Value of the Common Stock on the date of grant of the
incentive stock option Award. An Employee who owns stock representing 10% of the
voting power or value of all classes of stock of the Company or a Subsidiary
shall only be granted an incentive stock option (i) with an exercise price of at
least 110% of the Fair Market Value of the Common Stock on the date of the grant
of such option and (ii) that expires 5 years from the date of its grant. Subject
to adjustment in accordance with the provisions of Section X, the aggregate
number of shares which may be subject to incentive stock option Awards under
this Plan shall not exceed the maximum number of shares provided in paragraph
(a) of Section V above. To the extent that Code Section 422 requires certain
provisions to be set forth in a written plan, said provisions are incorporated
herein by this reference. Award agreements intended to be incentive stock
options shall expressly (i) include the limitations on assignability referred to
in Section VIII(a) and (ii) provide that the option shall expire no later than
the earlier of (A) 10 years after the date the option is granted, (B) one year
after the Participant's termination of employment due to disability and (C)
three months following the Participant's termination of employment for any other
reason, except death.

         (c) Stock Option in Lieu of Compensation Election. A right given to a
Director, officer or key Employee to elect to exchange annual retainers, fees or
compensation for stock options.

         (d) Stock Appreciation Right. A right which may or may not be contained
in the grant of a stock option or incentive stock option to receive the excess
of the Fair Market Value of a share of Common Stock on the date the option is
surrendered over the option exercise price or other specified amount contained
in the Award Agreement.

         (e) Restricted Shares. A transfer of Common Stock to a Participant
subject to forfeiture until such restrictions, terms and conditions as the
Committee may determine are fulfilled.

         (f) Dividend Equivalent Right. A right to receive dividends or their
equivalent in value in Common Stock, cash or in a combination of both with
respect to any new or previously existing Award.

         (g) Stock Award. An unrestricted transfer of Common Stock to a
Participant.

         (h) Other Stock-Based Awards. Other Common Stock-Based Awards which are
related to or serve a similar function to those Awards set forth in this
Section.

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VII.     AWARD AGREEMENTS

         Each Award under the Plan shall be evidenced by an Award Agreement
setting forth the terms and conditions of the Award and executed by the Company
and Participant.

VIII.    OTHER TERMS AND CONDITIONS

         (a) Assignability. Unless provided to the contrary in any Award
Agreement, no Award of a stock option, stock appreciation right, dividend
equivalent right or other similar right and no Award of restricted shares
(unless the restriction has expired or been satisfied) (collectively, an
"Outstanding Award") shall be assignable or transferable except by will, by the
laws of descent and distribution and during the lifetime of a Participant. The
Outstanding Award shall be exercisable by and accrue to the benefit of, only
such Participant. No Outstanding Award granted under the Plan shall be subject
to execution, attachment or process.

         (b) Termination of Employment or Other Relationship. Except as
otherwise expressly provided in this Plan, the Committee shall determine the
disposition of the grant of each Outstanding Award in the event of the
retirement, disability, death or other termination of a Participant's employment
or other relationship with the Company or a Subsidiary.

         (c) Rights as a Stockholder. A Participant shall have no rights as a
stockholder with respect to shares covered by an Award until the date the
Participant is the holder of record of such shares. No adjustment will be made
for dividends or other rights for which the record date is prior to the date
upon which the Participant becomes the holder of record of such shares.

         (d) No Obligation to Exercise. The grant of an Award shall impose no
obligation upon the Participant to exercise any rights under the Award.

         (e) Payments by Participants. The Committee may determine that Awards
for which a payment is due from a Participant may be payable: (i) in U.S.
dollars by personal check, bank draft or money order payable to the order of the
Company, by money transfers or direct account debits; (ii) pursuant to a
broker-assisted "cashless exercise" program if established by the Company; (iii)
by a combination of the methods described in (i) and (ii) above; or (iv) by such
other methods as the Committee may deem appropriate.

         (f) Withholding. Except as otherwise provided by the Committee, (i) the
deduction of withholding and any other taxes required by law will be made from
all amounts paid in cash and (ii) in the case of payments of Awards in shares of
Common Stock, the Participant shall be required to pay the amount of any taxes
required to be withheld prior to receipt of such stock, or alternatively, a
number of shares the Fair Market Value of which equals the amount required to be
withheld may be deducted from the payment.

         (g) Change in Control. In the event of a Change in Control, all
unvested, unexercisable or potentially forfeitable Awards shall vest, become
immediately exercisable and/or cease to be subject to any risk of forfeiture, as
the case may be.


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         (h) Payment of Taxes. Except to the extent withholding obligations are
met pursuant to subsection (f) above, Participants shall pay to Hastings, in
cash, any federal, state or local taxes of any kind required by law to be
withheld with respect to any Shares granted hereunder.

IX.      TERMINATION, MODIFICATION AND AMENDMENTS

         (a) The Board may at any time terminate the Plan or from time to time
make such modifications or amendments of the Plan as it may deem advisable;
provided, however, that the Board shall not make any material amendments to the
Plan which require stockholder approval under applicable law, rule or regulation
unless the same shall be approved by the requisite vote of the Company's
stockholders.

         (b) No termination, modification or amendment of the Plan may adversely
affect the rights conferred by an Award prior to such termination, modification
or amendment without the consent of the recipient thereof.

X.       RECAPITALIZATION

         The aggregate number of shares of Common Stock as to, or upon the basis
of, which Awards may be granted to Participants under the Plan, the number of
shares thereof covered by each outstanding Award, and the price per share
thereof in each such Award, shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares or other capital adjustment, or
the payment of a stock dividend or other increase or decrease in such shares,
effected without receipt of consideration by the Company, or other change in
corporate or capital structure; provided, however, that any fractional shares
resulting from any such adjustment shall be eliminated. The Committee may also
make the foregoing changes and any other changes, including changes in the
classes of securities available, to the extent it is deemed necessary or
desirable to preserve the intended benefits of the Plan for the Company and the
Participants in the event of any other reorganization, recapitalization, merger,
consolidation, spin-off, extraordinary dividend or other distribution or similar
transaction.

XI.      NO RIGHT TO EMPLOYMENT

         No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to be
retained in the employ of, or in the other relationship with, the Company or a
Subsidiary. Further, the Company and each Subsidiary expressly reserve the right
at any time to dismiss a Participant free from any liability, or any, claim
under the Plan, except as provided herein or in any Award Agreement issued
hereunder.

XII.     GOVERNING LAW

         To the extent that federal laws do not otherwise control, the Plan
shall be construed in accordance with and governed by the laws of the State of
Texas.


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XIII.    SAVINGS CLAUSE

         This Plan is intended to comply in all respects with applicable laws
and regulations, including, with respect to those Employees who are officers or
directors, Section 16 of the Exchange Act and Rule 16b-3 under the Exchange Act.
In case any one more of the provisions of this Plan shall not so comply, and the
remaining provisions of this Plan shall not be affected or impaired thereby, the
non-complying provision shall be deemed null and void; however, to the extent
permissible by law, any provision which could be deemed null and void shall
first be construed, interpreted or revised retroactively to permit this Plan to
be construed in compliance with all applicable laws (including Rule 16b-3) so as
to foster the intent of this Plan.

XIV.     EFFECTIVE DATE AND TERM

         The Plan shall become effective June 19, 2002, subject to approval of
the Plan by the affirmative vote of the holders of a majority of the outstanding
shares of the capital stock of the Company entitled to vote thereon within one
year following adoption of the Plan by the Board. All Awards granted prior to
such approval by the stockholders shall be subject to such approval and shall
not be exercisable and/or transferable prior thereto. In the event such approval
is not obtained within such one-year period, the Plan and all Awards granted
thereunder shall be null and void. The Plan shall terminate on the tenth
anniversary of the date on which it becomes effective. No Award shall be granted
after the termination of the Plan.


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