<PAGE>

                             KLEENAIR SYSTEMS, INC.


                                STOCK OPTION PLAN



1.  Purpose of Plan.

         This 2000 Stock Option Plan (the "Plan") is designed to assist KleenAir
Systems, Inc. (the "Company") in attracting and retaining highly qualified
persons as employees of the Company and to provide such key employees with
incentives to contribute to the growth and development of the business of the
Company.

         This Plan will be effected through the granting of stock options on the
terms and conditions hereinafter provided, which options are intended to qualify
as "incentive stock options" within the meaning of section 422(b) of the
Internal Revenue Code of 1986, as amended.

2.  Definitions.

         Unless the context otherwise indicates, the following terms have the
following meanings:

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal Revenue Code of 1986, as the same may from
time to time be amended.

         "Committee" means a committee consisting of at least three (3) persons
appointed by the Board to administer the Plan and to perform the functions set
forth herein.

         "Common Stock" means the Common Stock of the Company.

         "Designated Beneficiary" means the person designated by an optionee to
be entitled on his death to any remaining rights arising out of an option, such
designation to be made by written notice from the optionee to the Company in
accordance with such regulations as the Committee may create.

         "Employee" means any employee (including any officer) of the Company or
any subsidiary of the Company.

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

         "Fair Market Value" means the fair market value of the shares of Common
Stock ("Fair

                                        1


<PAGE>


Market Value") shall be the last closing sale price on the principal exchange on
which the Common Stock is traded; or if not traded on any exchange, shall then
be the average of the last closing bid and asked price as reported for the
shares on the Over-the-Counter Bulletin Board ("OTCBB") or on the last date
preceding such date on which a sale was reported.

         "Incentive Stock Options" means stock options which constitute
incentive stock options within the meaning of Section 422(b), or any successor
section, of the Code having the provisions specified in the Plan for such
incentive stock options.

         "Parent" means "parent corporation" as defined in Section 425(e), or
any successor section, of the Code.

         "Stock Option Agreement" means a stock option agreement entered into
pursuant to the Plan substantially in the form of Exhibit A hereto.

         "Subsidiary" means "subsidiary corporation" as defined in Section 425
(f), or any successor section of the Code.

         "Ten Percent Stockholder" means any person who, immediately after any
option is granted to such person, owns within the meaning of Section 422 (b)(6),
or any successor section, of the Code more than 10% of the total combined voting
power of all classes of stock of the Company, its parent, if any, or its
Subsidiaries.

3.  Stock Subject to Plan

         The shares to be issued upon exercise of the options granted under the
Plan shall be Common Stock. The maximum number of shares of Common Stock for
which options may be granted under the Plan shall be 750,000 shares (subject to
adjustment as provided in Section 9 hereof). If any option granted under the
Plan shall expire or terminate for any reason whatsoever without having been
exercised in full, the unpurchased shares of Common Stock previously subject to
such option shall become available for new options.

4.  Administration.

         (a) The Plan shall be administered by the Committee. The Board shall
annually appoint the members of the Committee at the annual organizing meeting
of the Board.

         (b) The Board shall fill all vacancies on the Committee and may remove
any member of the Committee at any time with or without cause. The Committee
shall select its own chairman and shall adopt, alter or repeal such rules and
procedures as it may deem proper and shall hold its meetings at such times and
places as it may determine. The Committee shall keep minutes of its meetings.
Action by a majority of the Committee members present at any meeting at which a
quorum is present, or action approved in writing by all members of the Committee
without a meeting, shall constitute the acts of the Committee.

                                        2


<PAGE>




         (c) Subject to the provisions of the Plan, the Committee shall have the
full and final authority to (i) determine the eligible employees of the Company
and its Subsidiaries to whom, and the times at which, options shall be granted
and the number of shares subject to each option; (ii) prescribe, amend and
rescind rules and regulations relating to the Plan; (iii) determine the
provisions of options granted under the Plan (which need not be identical) and,
with the consent of the holder thereof, amend or modify any option; (iv)
interpret the Plan and the respective options; and (v) make all other
determinations necessary or advisable for administering the Plan. All
determinations and interpretations by the Committee shall be binding upon all
parties. No member of the Committee or the Board shall be liable for any action
or determination made in good faith in respect of the Plan or any option granted
under it.

         (d) The provisions of this Section 4 shall survive any termination of
the Plan.

5.  Eligibility for Award of Options.

         (a) Options may be granted only to officers and other key employees of
the Company and its Subsidiaries. Any reference in the Plan to "employment by
the Company" shall also be deemed to include employment by any Subsidiary of the
Company. Determination by the Committee or the Board as to who are eligible
employees shall be conclusive.

         (b) A person who is a director of the Company shall not be considered
an officer or employee for the purpose of the Plan solely because he or she is a
director. However, a person who otherwise is an eligible officer or employee
shall not be disqualified by virtue of being a director of the Company or any
Subsidiary.

         (c) More than one option may be granted to any eligible employee.

6.  Option Price.

         The purchase price of the Common Stock under each option shall be
determined by the Committee. The purchase price shall be at least 100 percent
(100%) of the Fair Market Value of the Common Stock on the date of grant of
option. The purchase price under an option granted to an officer or employee who
is a Ten Percent Stockholder shall be at least 110% of the Fair Market Value of
the Common Stock on the date of the grant of the option.

7.  Annual Limitation on Grants to One Officer or Employee.

         No option shall be granted during any calendar year to any individual
under the Plan if the aggregate fair market value (as of the time the option is
granted) of the Common Stock with respect to which incentive stock options are
exercisable for the first time by such individual during any calendar year
(under the Plan and any other plan of the Company, its Parent, if any, and its
Subsidiaries) exceeds $200,000.

8.  Terms and Exercise of Option.


                                        3


<PAGE>




         (a) Maximum Ten-Year Termination Date. Each option shall expire no
later than ten years after the date on which it shall have been granted, but the
Committee in its discretion may prescribe a shorter period for any individual
option or options. Any option granted to a person who is a Ten Percent
Stockholder shall terminate no later than five years after the date on which the
option was granted. The date of termination pursuant to this paragraph is
referred to hereinafter as the "termination date of the option."

         (b) Vesting. Options shall be exercisable at such times and in such
installments, if any, as the Committee may determine. In the event any option is
exercisable in installments, any shares which may be purchased during any year
or other period which are not purchased during such year or other period may be
purchased at any time or from time to time during any subsequent year or period
during the term of the option unless otherwise provided in the Stock Option
Agreement.

         (c) Means of Exercise of Option. An option shall be exercised by
written notice to the Secretary or Treasurer of the Company at its then
principal office which is received not later than 5:00 p.m. of the expiration
date. The notice shall specify the number of shares as to which the option is
being exercised and shall be accompanied by payment in full of the purchase
price for such shares. An optionee at his discretion may, in lieu of cash
payment, deliver Common Stock already owned, with a Fair Market Value (on the
date of exercise) equal to the purchase price for the shares being acquired
pursuant to the exercise of the option, as payment for the exercise of any
option. In the event an option is being exercised in whole or in part, pursuant
to Section 8 (f) or (g) hereof by any person other than the optionee, a notice
of election shall be accompanied by proof satisfactory to the Company of the
rights of such person to exercise said option. An optionee shall not, by virtue
of the granting of an option, be entitled to any rights of a shareholder in the
Company and he or she shall not be considered a record holder of shares
purchased by him until the date on which he shall actually be recorded as the
holder of such shares upon the stock records of the Company. The Company shall
not be required to pay to the person exercising the option the cash equivalent
of any fractional share interest unless so determined by the Committee.

         (d) Options are Nontransferable. No option may be transferred by the
optionee (except in connection with death or disability as provided in Sections
8(f) and (g)).

         (e) Options Lapse Three Months after Termination of Employment. In the
event of the termination of an optionee's employment by the Company and its
Subsidiaries at any time for any reason (excluding disability or death), the
optionee's options and all rights thereunder shall expire three months after the
date of termination of employment. The option shall be exercisable
by the optionee at any time within three months, but only to the extent
exercisable by the optionee on the date of termination of his or her employment.

         (f) Option Exercisable Six Months After Termination in Event of
Disability. In the event the optionee is permanently and totally disabled
(within the meaning of Section 105(d)(4), or any successor section, of the
Code), the optionee's option and all rights thereunder shall expire six


                                        4


<PAGE>




months after the date of termination of employment. The option shall be
exercisable by the optionee (or the optionee's legal representative) at any time
within such six months.

         (g) Option Exercisable Six Months after Date of Death. If an optionee
shall die while in the employ of the Company or any of its Subsidiaries, his
option may be exercised by his designated beneficiaries (or if none have been
effectively designated, by his executor, administrator or the person to whom
rights under his option shall pass by way of his will or by the laws of descent
and distribution) at any time within six (6) months after date of his death, but
only to the extent exercisable by the optionee at his death. The option shall
expire six months after the date of the optionee's death.

         (h) No Right to Continued Employment. Nothing in the Plan or in any
option granted pursuant hereto shall confer on any individual any right to
continue in the employ of the Company or any of its Subsidiaries or prevent or
interfere in any way with the right of the Company or its Subsidiaries to
terminate the optionee's employment at any time, with or without cause.

         (i) Options Must be Evidenced by Writing. Each option granted pursuant
to the Plan shall be evidenced by a written Stock Option Agreement, duly
executed by the Company and the optionee, in such form and containing such
provisions as the Committee or Board may from time to time authorize or approve.

9.  Adjustments.

         The Stock Option Agreement shall contain appropriate provisions for the
adjustment of the kind and number of shares subject to each outstanding option,
and for the adjustment of the exercise price per share, in the event of any
changes in the outstanding Common Stock of the Company by reason of stock
dividends, stock splits, recapitalization, reorganizations, mergers,
consolidations, combinations or exchanges of shares, and the like. In the event
of any such change or changes in the outstanding Common Stock, and as often as
the same shall occur, the kind and aggregate number of shares available under
the Plan shall be appropriately adjusted by the Committee or Board, whose
determination shall be binding and conclusive.

10.  Amendment and Termination.

         (a) Unless the Plan shall have been sooner terminated as provided
herein, it shall terminate on, and no option shall be granted thereunder after
July ___, 2010. The Board may at any time prior to that date alter, suspend or
terminate the Plan as it may deem advisable, except that it may not without
further shareholder approval: (i) increase the maximum number of shares subject
to the Plan (except for changes pursuant to Section 9); (ii) extend the period
during which


                                       5


<PAGE>



options may be granted or exercised; or (iii) make any other changes unless the
Board determines that the change would not materially increase the cost of the
Plan to the Company. Except as otherwise hereinafter provided, no alteration,
suspension or termination of the Plan may, without the consent of the employee
to whom any option shall have theretofore been granted (or the person or persons
entitled to exercise such option under Section 8(f) or (g) of the Plan),
terminate his option or adversely affect his rights thereunder.

         (b) Anything herein to the contrary notwithstanding, in the event that
the Board shall at any time declare it advisable to do so in connection with any
proposed sale or conveyance of all or substantially all of the assets of the
Company or of any proposed consolidation or merger of the Company, the Company
may give written notice to the holder of any option that his option may be
exercised only within thirty (30) days after the date of such notice but not
thereafter, and all rights under said option which shall have not been so
exercised shall terminate at the expiration of such thirty (30) days, provided
that the proposed sale, conveyance, consolidation or merger to which such notice
shall relate shall be consummated within six (6) months after the date of such
notice. In the event such notice shall have been given, any such option may be
exercised either in whole or in part notwithstanding the vested period required
under the terms of the option for the exercise thereof. If such proposed sale,
conveyance, consolidation or merger shall not be consummated within said time
period, no unexercised rights under any option shall be affected by such notice
except that such option may not be exercised between the date of expiration of
such thirty (30) days and the date of the expiration of such six (6) months.

11.  Indemnification.

         Any member of the Committee or the Board who is made, or threatened to
be made, a party to any action or proceeding, whether civil or criminal, by
reason of the fact that the member is or was a member is or was a member of the
Committee or the Board insofar as it relates to the Plan shall be indemnified by
the Company, and the Company may advance his related expenses, to the full
extent permitted by law or to any greater extent as provided in the Company's
Certificate of Incorporation or By-Laws or in any agreement between the Company
and the member.

12.  Effective Date of the Plan.

         The Plan shall become effective on, and options may be granted
thereunder after July ___, 2000, provided, however, that if the Plan shall not
be approved by the holders of a majority of the outstanding voting stock of the
Company within 12 months of said date, the Plan and all options granted
thereunder shall be and become null and void, and provided, further, that no
options granted by the Commission may be exercised prior to the approval of the
Plan by shareholders.

13.  Expenses.

         The Company shall pay all fees and expenses incurred in connection with
the

                                        6


<PAGE>



establishment and administration of the Plan.

14.  Government Regulations.  Registration and Listing of Stock.

         (a) The Plan, and the grant and exercise of options thereunder, and the
Company's obligation to sell and deliver stock under such options, shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any regulatory or governmental agency as may be required.

         (b) Unless a registration statement under the Securities Act of 1933,
as amended, and the applicable rules and regulations thereunder (collectively
the "Act") is then in effect with respect to shares issued upon exercise of any
option (which registration shall not be required), the Company shall require
that the offer and sale of such shares be exempt from the registration
provisions of said act. In furtherance of such exemption, the Company may
require, as a condition precedent to the exercise of any option, that the person
exercising the option give to the Company a written representation and
undertaking, satisfactory in the form and substance to the Company, that he or
she is acquiring the shares for his or her own account for investment and not
with a view to the distribution or resale thereof and otherwise establish to the
Company's satisfaction that the offer or sale of the shares issuable upon the
exercise of the option will not constitute or result in any breach or violation
of the Act or any similar state act or statute or any rules or regulations
thereunder. In the event a Registration Statement under the Act is not then in
effect with respect to the shares of Common Stock issued upon exercise of an
option, the Company shall place upon any stock certificate an appropriate legend
referring to the restrictions on disposition under the Act.

         (c) In the event the class of shares issuable upon the exercise of any
option is listed on any national securities exchange, the Company shall not be
required to issue or deliver any certificate for shares upon the exercise of any
options prior to the listing of the shares so issuable on such national
securities exchange and prior to the registration of the same under the Exchange
Act or any similar act or statute.

ATTEST:                                      KLEENAIR SYSTEMS, INC.


By:/s/ William H. Ward, Jr.                  By:     /s/ Lionel Simons
   ------------------------------                ------------------------------
William H. Ward, Jr., Director               Lionel Simons, President



                                        7