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                                                                    Exhibit 10.1

                  FORM OF AMERICA ONLINE LATIN AMERICA, INC.

                            2000 STOCK OPTION PLAN



1.  PURPOSES OF THE PLAN.
    --------------------

  The Plan is intended to encourage ownership of Shares by Key Employees and
directors of and certain consultants to the Company and its Affiliates in order
to attract such people, to induce them to work for the benefit of the Company or
of an Affiliate, and to provide additional incentive for them to promote the
success of the Company or of an Affiliate.  The Plan provides for the granting
of ISOs and Non-Qualified Options.


2.  DEFINITIONS.
    -----------

     Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this America OnLine Latin America, Inc. 2000 Stock
Option Plan, have the following meanings:

          Administrator means the Board of Directors, unless it has delegated
          -------------
          power to act on its behalf to the Committee, in which case the
          Administrator means the Committee; provided, however, that the
          ultimate authority to make determinations and to take actions in
          connection with the Plan shall be with the Board of Directors.

          Affiliate, with respect to ISOs means a corporation which, for
          ---------
          purposes of Section 424 of the Code, is a parent or subsidiary of the
          Company, direct or indirect, and with respect to Non-Qualified
          Options, means any corporation, company or other entity such that the
          Company directly or indirectly, through one or more intermediaries,
          owns or controls the greater of (i) 25% of the voting power or
          outstanding securities of such corporation, company or other entity,
          or (ii) such amount of voting or outstanding securities or has other
          controlling interest such that the Shares and the Options would
          qualify for registration on Form S-8, all as determined by the
          Administrator.

          Board of Directors or Board means the Board of Directors of the
          ------------------    -----
          Company.


          Cause shall have the meaning set forth in the Option Agreement with
          -----
          respect to the Option.

          Change in Control means any of the following transactions to which the
          -----------------
          Company is a party:
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          (1)  a Corporate Transaction, unless securities representing 30% or
          more of either the outstanding shares of common stock or the combined
          voting power of the then outstanding voting securities entitled to
          vote generally in the election of directors of the Company or the
          corporation resulting from such Corporate Transaction (or the parent
          of such corporation) are held subsequent to such transaction by the
          person or persons who were the beneficial holders of such outstanding
          company common stock and outstanding company voting securities
          immediately prior to such Corporate Transaction, in substantially the
          same proportions as their ownership immediately prior to such
          Corporate Transaction; or

          (2) the sale, transfer or other disposition of all or substantially
          all of the assets of the Company. For the purposes of this definition,
          all or substantially all of the assets of the Company means at least
          80% of the assets of the Company determined with reference to the
          value thereof on the most recent balance sheet.

          Code means the United States Internal Revenue Code of 1986, as
          ----
          amended.

          Committee means the committee of the Board of Directors to which the
          ---------
          Board of Directors has delegated power to act under or pursuant to the
          provisions of the Plan.

          Common Stock means shares of the Company's Class A common stock,
          ------------
          US$.01 par value per share.

          Company means America Online Latin America, Inc., a Delaware
          -------
          Corporation.

          Corporate Transaction means a reorganization, recapitalization, merger
          ---------------------
          or consolidation involving the Company.

          Disability or Disabled means permanent and total disability as defined
          ----------    --------
          in Section 22(e)(3) of the Code.

          Fair Market Value of a Share of Common Stock means:
          -----------------

          (1)  If the Common Stock is listed on a securities exchange or traded
          in the over-the-counter market and sales prices are regularly reported
          for the Common Stock, the reported closing or last price of the Common
          Stock on the Composite Tape or other comparable reporting system for
          the applicable date, or if the applicable date is not a trading day,
          the trading day immediately preceding the applicable date;

          (2)  If the Common Stock is not traded on a securities exchange but is
          traded on the over-the-counter market, if sales prices are not
          regularly reported for the Common Stock for the trading day referred
          to in clause (1), and if bid and asked prices for the Common Stock are
          regularly reported, the mean between the bid

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          and the asked price for the Common Stock at the close of trading in
          the over-the-counter market on the applicable date, or if the
          applicable date is not a trading day, on the trading day immediately
          preceding the applicable date; and

          (3)  If the Common Stock is neither listed on a securities exchange
          nor traded in the over-the-counter market, an amount determined in
          good faith by the Board of Directors (or the Administrator pursuant to
          authority delegated by the Board) taking into consideration (a) the
          Total Common Equity Value as of the most recent Valuation Date divided
          by the number of Shares outstanding as of the most recent Valuation
          Date on a fully diluted basis (including, without limitation and in
          accordance with U.S. generally accepted accounting principles,
          exercise of the Options), and (b) business developments subsequent to
          such Valuation Date.

          ISO means an option meant to qualify as an incentive stock option
          ---
          under Section 422 of the Code.

          Key Employee means an employee of the Company or of an Affiliate
          ------------
          (including, without limitation, an employee who is also serving as an
          officer or director of the Company or of an Affiliate), designated by
          the Administrator to be eligible to be granted one or more Options
          under the Plan.

          Non-Qualified Option means an option which is not intended to
          --------------------
          qualify as an ISO.

          Option means an ISO or Non-Qualified option granted under the Plan.
          ------

          Option Agreement means an agreement between the Company and a
          ----------------
          Participant delivered pursuant to the Plan, in such form as the
          Administrator shall approve.

          Participant means a Key Employee, director or consultant to whom one
          -----------
          or more Options are granted under the Plan.  As used herein,
          "Participant" shall include "Participant's Survivors" where the
          context requires.

          Plan means this America Online Latin America, Inc. 2000 Stock Option
          ----
          Plan, as it may be amended from time to time.

          Registration means the registration of shares of Common Stock for
          ------------
          trading, listing or quotation on a securities exchange or other
          market.

          Shares means shares of Common Stock as to which Options have been or
          ------
          may be granted under the Plan or any shares of capital stock into
          which the Shares are changed or for which they are exchanged within
          the provisions of Section 3 of the Plan. The Shares issued upon
          exercise of Options granted under the Plan may be authorized and
          unissued shares or shares held by the Company in its treasury, or
          both.

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          Survivors means a deceased Participant's legal representatives and/or
          ---------
          any person or persons who acquired the Participant's rights to an
          Option by will or by the laws of descent and distribution or such
          similar laws applicable to the deceased Participant.

          Total Common Equity Value means the aggregate fair value of all of
          -------------------------
          the Common Stock as determined pursuant to Section 19 of the Plan.

          Valuation Date means the date of the most recent valuation determined
          --------------
          pursuant to Section 20 of the Plan.


3.   SHARES SUBJECT TO THE PLAN.
     --------------------------

  The number of Shares which may be issued from time to time pursuant to this
Plan shall be ____ or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Section 17 of the Plan.

  If an Option ceases to be "outstanding", in whole or in part, the Shares which
were subject to such Option shall be available for the granting of other Options
under the Plan.  Any Option shall be treated as "outstanding" until such Option
is exercised in full, or terminates or expires under the provisions of the Plan,
or by agreement of the parties to the pertinent Option Agreement.


4.   ADMINISTRATION OF THE PLAN.
     --------------------------

  The Administrator of the Plan will be the Board of Directors, except to the
extent the Board delegates its authority to the Committee, in which case the
Committee shall be the Administrator.  Subject to the provisions of the Plan,
the Administrator is authorized, under the control and responsibility of the
Board of Directors, to:

     a.   Interpret the provisions of the Plan or of any Option or Option
          Agreement and to make all rules and determinations which it deems
          necessary or advisable for the administration of the Plan;

     b.   Determine which employees of the Company or of an Affiliate shall be
          designated as Key Employees and which of the Key Employees, directors
          and consultants of the Company or of an Affiliate shall be granted
          Options;

     c.   Determine the number of Shares for which an Option or Options shall be
          granted, provided, however, that in no event shall Options to purchase
          more than [_____] Shares be granted to any Participant in any fiscal
          year;

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     d.   Determine the Fair Market Value of a Share of Common Stock if the
          Common Stock is neither listed on a securities exchange nor traded in
          the over-the-counter market; and

     e.   Specify the terms and conditions upon which an Option or Options may
          be granted, including imposing conditions on the exercise or vesting
          of Options, on a jurisdiction by jurisdiction basis, as may in the
          judgment of the Administrator, be necessary or desirable in order to
          recognize differences in local law, tax policy or customs;

provided that the issuance of authorized but unissued shares of Common Stock of
the Company and the formalities relating thereto shall at all times be
effectuated by the Board of Directors, and provided further that all
interpretations, rules, determinations, terms and conditions shall be made and
prescribed in the context of preserving the tax status under Section 422 of the
Code of those Options which are designated as ISOs.

Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option granted under it
and the determination by the Administrator of Fair Market Value shall be final
and binding on all persons, unless otherwise determined by the Board of
Directors, if the Administrator is the Committee.  The Administrator's
determinations under the Plan need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, Options under
the Plan (whether or not such persons are similarly situated).  Without limiting
the generality of the foregoing, the Administrator shall be entitled, among
other things, to make non-uniform and selective determinations, and to enter
into non-uniform and selective Option Agreements, as to (a) the persons to
receive Options under the Plan, (b) the terms and provisions of Options under
the Plan, and (c) whether a termination of service with the Company and any
Affiliate has occurred.

  No member of the Board of Directors or the Administrator shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option.


5.  ELIGIBILITY FOR PARTICIPATION.
    -----------------------------

  The Administrator will, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be a Key Employee, director
or consultant of the Company or of an Affiliate at the time an Option is
granted.  Members of the Company's Board (who are not employees of the Company
or of an Affiliate may receive options pursuant to the Plan, pursuant to Section
6.A.g, but only pursuant thereto.  Notwithstanding any of the foregoing
provisions, the Administrator may authorize the grant of an Option to a person
not then an employee, director or consultant of the Company or of an Affiliate;
provided, however, that the actual grant of such Option shall be conditioned
upon such person becoming eligible to become a Participant at or prior to the
time of the execution of the Option Agreement evidencing such Option.  ISOs may
be granted only to Key Employees.  Non-Qualified Options may be granted to any
Key Employee, director or consultant of the Company or an Affiliate.  The
granting of

                                      -5-
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any Option to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Options.


6.  TERMS AND CONDITIONS OF OPTIONS.
    -------------------------------

  Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant.  Each Option shall be subject such terms and
conditions, consistent with the terms and conditions specifically required under
this Plan, as the Administrator may deem appropriate (including, without
limitation, subsequent approval by the stockholders of the Company of this Plan
or any amendments thereto).

     A.   Non-Qualified Options: Each Option intended to be a Non-Qualified
          ---------------------
     Option shall be subject to the terms and conditions which the Administrator
     determines to be appropriate and in the best interest of the Company,
     subject to the following minimum standards for any such Non-Qualified
     Options:

          a. Option Price:  The option price (per share) of the Shares covered
          by each Option shall be determined by the Administrator but shall not
          be less than one hundred percent (100%) of the Fair Market Value (per
          share) of the Shares on the date of grant of the Option, and provided
          that the Fair Market Value (per share) shall at all times at least be
          equal to the nominal or par value per share.

          b. Each Option Agreement shall state the number of Shares to which it
          pertains.

          c. Each Option Agreement shall state the date or dates on which it
          first is exercisable and the date after which it may no longer be
          exercised, and may provide that the Option rights accrue or become
          exercisable in installments over a period of months or years, or upon
          the occurrence of certain conditions or the attainment of stated goals
          or events; and

          d. Options may be exercised in accordance with Section 7 of the Plan
          and the applicable Option Agreement and subject to the restrictions on
          exercise set forth in Sections 10 through 14 of the Plan.

          e. Exercise of any Option may be conditioned upon the Participant's
          execution of a Share Purchase Agreement in a form satisfactory to the
          Administrator providing for certain protections for the Company and
          its other stockholders, including requirements that:

          i. Prior to the Registration of shares of the Common Stock and the
          termination of any applicable lock-up period agreed to by the Company
          and in effect following the Registration (the "Lock-up Period"), the
          Participant and the Participant's Survivors shall not sell or transfer
          the

                                      -6-
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               Shares issued upon exercise of the Option, other than to the
               Company or an Affiliate;

          ii.  The Participant and the Participant's Survivors grant to the
               Company or any third party designated by the Company, a right of
               first refusal to purchase all Shares that Participant may acquire
               pursuant to the Option Agreement, which right shall be
               exercisable for a period of ninety (90) days following written
               notice to the Company and which right of first refusal shall
               expire upon the date of Registration of Shares of Common Stock;

          iii. Prior to the Registration of shares of the Common Stock and the
               termination of the Lock-up Period, any financial or other
               information that the Participant or the Participant's Survivors
               receives from the Company in their capacity as shareholders will
               be deemed confidential and subject to nondisclosure obligations;
               and

          iv.  The Participant or the Participant's Survivors may be required to
               execute letters of investment intent and must also acknowledge
               that the Shares will bear legends noting any applicable
               restrictions.

          f.   Limitation on Grant of Options: No Option shall be granted after
               the date provided in Section 25 of the Plan.

          g.   Directors' Options: Each director of the Company who is not an
          employee of the Company or any Affiliate, upon first being elected or
          appointed to the Board of Directors, shall be granted a Non-Qualified
          Option to purchase [            ] Shares; provided, however, that the
          Board of Directors shall be entitled to grant an Option for such
          higher number of shares as may be appropriate (as determined by the
          Board of Directors) for recruitment purposes. Additional options may
          be granted to directors, annually or otherwise in the discretion of
          the Board of Directors.



<PAGE>

          Each Option granted pursuant to this Section 6.A.g shall (i) have an
          exercise price equal to the Fair Market Value (per share) of the
          Shares on the date of grant of the Option, (ii) have a term of eight
          (8) years, and (iii) to the extent a Registration shall have been
          effected, be immediately exercisable (subject to the securities and
          other laws of any jurisdiction which apply to such Option). The Board
          of Directors may amend this Section 6.A.g to increase, reduce,
          eliminate, or institute Option grants for Board, Committee, or other
          individual or collective service under this Plan.

     B.   ISOs:  Each Option intended to be an ISO shall so state and shall be
          ----
     issued only to a Key Employee and be subject to at least the following
     terms and conditions, with such additional restrictions or changes as the
     Administrator determines are appropriate but not in conflict with Section
     422 of the Code and relevant regulations and rulings of the Internal
     Revenue Service:

          a. Minimum standards: The ISO shall meet the minimum standards
          required of Non-Qualified Options, as described in Section 6.A above,
          except clauses (a) and (g) thereunder.

          b. Option Price:  Immediately before the Option is granted, if the
          Participant owns, directly or by reason of the applicable attribution
          rules in Section 424(d) of the Code:

               i.   Ten percent (10%) or less of the total combined voting power
                                      -------
                    of all classes of stock of the Company or an Affiliate, the
                    Option price per share of the Shares covered by each Option
                    shall not be less than one hundred percent (100%) of the
                    Fair Market Value per share of the Shares on the date of the
                    grant of the Option.

               ii.  More than ten percent (10%) of the total combined voting
                    power of all classes of stock of the Company or an
                    Affiliate, the Option price per share of the Shares covered
                    by each Option shall not be less than one hundred ten
                    percent (110%) of the Fair Market Value on the date of
                    grant.

          c. Term of Option:  For Participants who own

               i.   Ten percent (10%) or less of the total combined voting power
                                      -------
                    of all classes of stock of the Company or an Affiliate, each
                    Option shall terminate not more than ten (10) years from the
                    date of the grant or at such earlier time as the Option
                    Agreement may provide.

               ii.  More than ten percent (10%) of the total combined voting
                    power of all classes of stock of the Company or an
                    Affiliate, each Option shall terminate not more than five
                    (5) years from the date of the grant or at such earlier time
                    as the Option Agreement may provide.

                                      -8-
<PAGE>

          d. Limitation on Yearly Exercise: The Option Agreements shall restrict
          the amount of Options which may be exercisable in any calendar year
          (under this or any other ISO plan of the Company or an Affiliate) so
          that the aggregate Fair Market Value (determined at the time each ISO
          is granted) of the stock with respect to which ISOs are exercisable
          for the first time by the Participant in any calendar year does not
          exceed one hundred thousand dollars ($100,000), provided that this
          subsection (d) shall have no force or effect if its inclusion in the
          Plan is not necessary for Options issued as ISOs to qualify as ISOs
          pursuant to Section 422(d) of the Code.

          e. Limitation on Grant of ISOs:  No ISOs shall be granted after [
          ], the date which is the earlier of ten (10) years from the date of
                                   -------
          the adoption of the Plan by the Company and the date of the approval
          of the Plan by the stockholders of the Company.

          f. To the extent that an Option which is intended to be an ISO fails
          to so qualify, it shall be treated as a Non-Qualified Option.


7.   EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.
     ------------------------------------------

  An Option (or any part or installment thereof) shall be exercised by giving
written notice, in the form prescribed by the Administrator, to the Company at
its registered office address, together with provision for payment of the full
purchase price in accordance with this Section for the Shares as to which the
Option is being exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such written notice shall be signed by the person
exercising the Option, shall state the number of Shares with respect to which
the Option is being exercised and shall contain any representation required by
the Plan or the Option Agreement.  Payment of the purchase price for the Shares
as to which such Option is being exercised shall be made (a) in United States
dollars (or such other currency as may be designated by the Administrator) in
cash or by check (fees prepaid), or (b) at the discretion of the Administrator,
through delivery of shares of Common Stock having a Fair Market Value equal as
of the date of the exercise to the cash exercise price of the Option, or (c) at
the discretion of the Administrator, in accordance with a cashless exercise
program established with a securities brokerage firm, and approved by the
Administrator, or (d) at the discretion of the Administrator, through such other
method of payment approved by the Administrator, or (e) at the discretion of the
Administrator, by any combination of (a), (b), (c) and (d) above.

  The Company shall then reasonably promptly issue the Shares or, in the event
that the Shares are in bearer form, deliver the Shares, as to which such Option
was exercised to the Participant (or to the Participant's Survivors, as the case
may be).  In determining what constitutes "reasonably promptly," it is expressly
understood that the issuance of the Shares may be delayed by the Company as the
Company deems necessary or appropriate in order to comply with any law or
regulation (including, without limitation, applicable securities laws) which
requires the Company to take any action with respect to the Shares prior to
their issuance.  The

                                      -9-
<PAGE>

Shares shall, upon issuance, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.

  The Administrator shall have the right to accelerate the date of exercise of
any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Section 21) if such accelleration would violate the annual vesting
limitation contained in Section 422(d) of the Code as described in Section
6.B.d.

  The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, and (ii) if any amendment is materially adverse to the Participant,
any such amendment shall be made only with the consent of the Participant to
whom the Option was granted, or in the event of the death of the Participant,
the Participant's Survivors, and (iii) any such amendment of any ISO shall be
made only after the Administrator, after consulting with counsel for the
Company, determines whether such amendment would constitute a "modification" of
any Option which is an ISO (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holder of such ISO.


8.   RIGHTS AS A STOCKHOLDER.
     -----------------------

  No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise (and satisfaction of such other
conditions for the transfer of Shares as may be required pursuant to the Option)
and registration of the Shares in the Company's share register in the name of
the Participant.


9.   ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS.
     --------------------------------------------

  By its terms, an Option granted to a Participant shall not be transferable by
the Participant other than (i) by will or by the laws of descent and
distribution or such similar laws applicable to the deceased Participant, or
(ii) as otherwise determined by the Administrator and set forth in the
applicable Option Agreement.  The designation of a beneficiary of an Option by a
Participant in such form as the Administrator shall prescribe shall not be
deemed a transfer prohibited by this Section.  Except as provided above, an
Option shall be exercisable, during the Participant's lifetime, only by such
Participant (or, in the event of legal incapacity or incompetency, by his or her
guardian or legal representative) and shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process.  Any attempted transfer,
assignment, pledge, hypothecation or other disposition of any Option or of any
rights granted thereunder contrary to the provisions of this Plan, or the levy
of any attachment or similar process upon an Option, shall be null and void and
not enforceable against the Company.

                                      -10-
<PAGE>

10.  RESTRICTIONS ON EXERCISE.
     ------------------------

  A Participant, or the Participant's Survivors, shall not be entitled to
exercise an Option until the earlier of (i) the date that the Company completes
a Registration or (ii) five years following the date of grant of the Option.

  Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary or appropriate under any applicable
law, including but not limited to an effective registration under applicable
securities laws.


11.  EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
     -------------------------------------------------------------------
     DISABILITY.
     ----------

  Except as otherwise provided in the pertinent Option Agreement, in the event
of a termination of service (whether as an employee, director or consultant)
with the Company or an Affiliate before the Participant has exercised all
Options, the following rules apply:

     a.   A Participant who ceases to be an employee, director or consultant of
          the Company or of an Affiliate (for any reason other than termination
          for Cause, Disability, or death for which events there are special
          rules in Sections 12, 13, and 14, respectively), may exercise any
          Option granted to him or her to the extent that the Option is,
          pursuant to Section 10, exercisable on the date of such termination of
          service, but only within such term as the Administrator has designated
          in the pertinent Option Agreement. An Option that is not exercisable
          on the date of termination of service is cancelled on such date and
          may not be exercised.  An Option that is exercisable on the date of
          termination of service, but not exercised within the term as the
          Administrator has designated in the pertinent Option Agreement (or
          Notice of Grant) is cancelled and may not be exercised thereafter.

     b.   Except as provided in Subsection (c) below, or Section 13 or 14, in no
          event may an Option Agreement provide that the time for exercise be
          later than (i) sixty (60) calendar days after the Participant's
          termination of service or (ii) the date of expiration of the term of
          the Option; provided in any case that the Participant may not exercise
          an Option after the date of termination of service prior to the
          earlier of (iii) the date that the Company completes a Registration or
          (iv) five years following the date of grant of the Option.

     c.   The provisions of this Section 11, and not the provisions of Section
          13 or 14, shall apply to a Participant who subsequently becomes
          Disabled or dies within sixty (60) calendar days after the termination
          of service. Such a Participant or the Participant's Survivors may
          exercise the Option within one (1) year after the date of the
          Participant's termination of service, but in no event after the date
          of expiration of the term of the Option; provided further that the
          Participant may not

                                      -11-
<PAGE>

          exercise an Option after the date of termination of service prior to
          the earlier of (i) the date that the Company completes a Registration
          or (ii) five years following the date of grant of the Option.

     d.   Notwithstanding anything herein to the contrary, if subsequent to a
          Participant's termination of service, but prior to the exercise of an
          Option, the Board of Directors determines in good faith that, prior to
          the Participant's termination, the Participant engaged in conduct
          which would constitute Cause, then such Participant shall immediately
          cease to have any right to exercise any Option and all outstanding and
          unexercised Options will immediately be forfeited.

     e.   A Participant to whom an Option has been granted under the Plan who is
          absent from work with the Company or with an Affiliate because of
          temporary disability (any disability other than a permanent and total
          Disability as defined in Section 2 of the Plan), or who is on leave of
          absence which has been approved by the Company or an Affiliate for any
          purpose, shall not, during the period of any such approved absence, be
          deemed, by virtue of such absence alone, to have terminated such
          Participant's employment, director status or consultancy with the
          Company or with an Affiliate, except as the Administrator acting in
          good faith or the Option Agreement may otherwise expressly provide.

     f.   Except as required by law or as set forth in the pertinent Option
          Agreement, Options granted under the Plan shall not be affected by any
          change of a Participant's status within or among the Company and any
          Affiliates, so long as the Participant continues to be an employee,
          director or consultant of the Company or any Affiliate.


12.  EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
     --------------------------------------------

  Except as otherwise provided in the pertinent Option Agreement, the following
rules apply if the Participant's service (whether as an employee, director or
consultant) with the Company or an Affiliate is terminated for Cause prior to
the time that all his or her outstanding Options have been exercised:

     a.   All outstanding and unexercised Options as of the time the Participant
          is notified his or her service is terminated for Cause will
          immediately be forfeited.

     b.   The determination of the Administrator made in good faith as to the
          existence of Cause will be conclusive on the Participant, the Company
          and the applicable Affiliate for the purposes of the Plan.

     c.   "Cause" is not limited to events which have occurred prior to a
          Participant's termination of service, nor is it necessary that the
          Administrator's finding of "cause" occur prior to termination.  If the
          Administrator determines, subsequent to a Participant's termination of
          service but prior to the exercise of an Option, that

                                      -12-
<PAGE>

          either prior or subsequent to the Participant's termination the
          Participant engaged in conduct which would constitute "cause," then
          the right to exercise any Option is forfeited.

13.  EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
     -----------------------------------------------

  Except as otherwise provided in the pertinent Option Agreement, a Participant
who ceases to be an employee, director or consultant of the Company or of an
Affiliate by reason of Disability may exercise any Option granted to such
Participant:

     a.   To the extent exercisable but not exercised on the date of Disability,
          subject to the restrictions set forth in Section 10 hereof; and

     b.   In the event rights to exercise the Option accrue periodically, to the
          extent of a pro rata portion of any additional rights to exercise as
          would have accrued had the Participant not become Disabled prior to
          the end of the accrual period which next ends following the date of
          Disability.  The proration shall be based upon the number of days of
          such accrual period prior to the date of Disability.

  A Disabled Participant may exercise such rights only within the period ending
one (1) year after the date of the Participant's termination of employment,
directorship or consultancy, as the case may be, notwithstanding that the
Participant might have been able to exercise the Option as to some or all of the
Shares on a later date if the Participant had not become Disabled and had
continued to be an employee, director or consultant or, if earlier, within the
originally prescribed term of the Option.

  The Administrator, acting in good faith, shall make the determination both of
whether Disability has occurred and the date of its occurrence (unless a
procedure for such determination is set forth in another agreement between the
Company or Affiliate and such Participant, in which case such procedure shall be
used for such determination).  If requested by the Company, the Participant
shall be examined by a physician selected or approved by the Administrator, the
cost of which examination shall be paid for by the Company.


14.  EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
     ---------------------------------------------------------

  Except as otherwise provided in the pertinent Option Agreement, in the event
of the death of a Participant while the Participant is an employee, director or
consultant of the Company or of an Affiliate, such Option may be exercised by
the Participant's Survivors:

     a.   To the extent exercisable but not exercised on the date of death,
          subject to the restrictions set forth in Section 10 hereof; and

     b.   In the event rights to exercise the Option accrue periodically, to the
          extent of a pro rata portion of any additional rights which would have
          accrued had the Participant not died prior to the end of the accrual
          period which next ends following the date

                                      -13-
<PAGE>

          of death. The proration shall be based upon the number of days of such
          accrual period prior to the Participant's death.

  If the Participant's Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one (1) year after the date of
death of such Participant, notwithstanding that the Participant might have been
able to exercise the Option as to some or all of the Shares on a later date if
he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.

15.  PURCHASE FOR INVESTMENT.
     -----------------------

  Unless the offering and sale of the Shares to be issued upon the particular
exercise of an Option shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:

     a.   The person(s) who exercise(s) such Option shall warrant to the
          Company, prior to the receipt of such Shares, that such person(s) are
          acquiring such Shares for their own respective accounts, for
          investment, and not with a view to, or for sale in connection with,
          the distribution of any such Shares, in which event the person(s)
          acquiring such Shares shall be bound by the provisions of the
          following legend which shall be endorsed upon the certificate(s)
          evidencing their Shares issued pursuant to such exercise of such
          grant:

               "The shares represented by this certificate have been taken for
               investment and they may not be sold or otherwise transferred by
               any person, including a pledgee, unless (1) either (a) a
               Registration Statement with respect to such shares shall be
               effective under the Securities Act of 1933, as amended, or (b)
               the Company shall have received an opinion of counsel
               satisfactory to it that an exemption from registration under such
               Act is then available, and (2) there shall have been compliance
               with all applicable state securities laws."

     b.   At the discretion of the Administrator, the Company shall have
          received an opinion of its counsel that the Shares may be issued upon
          such particular exercise in compliance with the 1933 Act without
          registration thereunder.

  The Company may delay issuance of the Shares until completion of any action or
obtaining of any consent which the Company deems necessary under any applicable
law (including, without limitation, state securities or "blue sky" laws.)

16.  DISSOLUTION OR LIQUIDATION OF THE COMPANY.
     -----------------------------------------

  Upon the dissolution or liquidation of the Company, all Options granted under
this Plan which as of such date shall not have been exercised will terminate and
become null and void; provided, however, that if the rights of a Participant or
a Participant's Survivors have not

                                      -14-
<PAGE>

otherwise terminated and expired, (i) the Participant or the Participant's
Survivors will have the right immediately prior to such dissolution or
liquidation to exercise any Option to the extent that the Option is exercisable
as of the date immediately prior to such dissolution or liquidation; and (ii) if
a Change in Control shall have occurred within the twelve months immediately
prior to the date of such dissolution or liquidation, such Participant or such
Participant's Survivors will have the right immediately prior to such
dissolution or liquidation to exercise any Option then outstanding whether or
not such Option is exercisable as of such date.


17.  ADJUSTMENTS.
     -----------

  Upon the occurrence of any of the following events, a Participant's rights
with respect to any Option granted to him or her hereunder which has not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the pertinent Option Agreement:

  A.  Stock Dividends and Stock Splits.  If (i) the shares of Common Stock shall
      --------------------------------
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise of such Option may be appropriately increased or
decreased proportionately, and appropriate adjustments may be made in the
purchase price per share to reflect such subdivision, combination or stock
dividend as determined in the discretion of the Administrator. The maximum
number of Shares subject to options which may be granted pursuant to Section
4(c) and Section 6.A.g of the Plan shall also be proportionately adjusted upon
the occurrence of such events.

  B.  Changes in Control.  In the event of a Change in Control, each Option
      ------------------
outstanding as of the date such Change in Control is determined to have occurred
shall be either: (a)  assumed by the successor corporation (or its parent) or
replaced with a comparable option to purchase shares of the capital stock of the
successor corporation (or its parent) on an equitable basis, (b) terminated upon
written notice to the Participants stating that all Options (for purposes of
this Subsection, all Options vested on such date shall be deemed to be
exercisable or, at the discretion of the Board of Directors, all Options then
outstanding shall be deemed to be exercisable) must be exercised within a
specified number of days (which shall not be less than 15 calendar days) from
the date such notice is given, at the end of which period the Options shall
terminate, or (c) terminated in exchange for a cash payment equal to the excess
of the Fair Market Value of the shares subject to such Options (for purposes of
this Subsection, all Options vested on such date shall be deemed to be
exercisable or, at the discretion of the Board of Directors, all Options then
outstanding shall be deemed to be exercisable) over the exercise price thereof;
provided, however, that if any of the treatments of Options pursuant to this
Plan set forth in clauses (a), (b) or (c) above would make a Change in Control
transaction ineligible for pooling-of-interest accounting under APB No. 16 such
that but for the nature of such treatment such transaction would otherwise be
eligible for such accounting treatment, the Administrator (or the Board if no
Committee has been appointed) shall have the ability to substitute for any cash
or other consideration payable under such treatment shares of Common Stock with
a Fair Market Value or other consideration with value equal to the cash or



                                      -15-
<PAGE>

other consideration that would otherwise be payable pursuant to such treatment.
The determination of which of the treatments set forth in clauses (a), (b) and
(c) above to provide and of comparability under clause (a) above shall be made
by the Administrator and its determinations shall be final, binding and
conclusive.

  C.  Corporate Transaction.  In the event of a Corporate Transaction that does
      ---------------------
not constitute a Change in Control or in the event of a similar event, pursuant
to which securities of the Company or of another corporation or entity are
issued with respect to the outstanding shares of Common Stock, a Participant
upon exercising an Option prior thereto shall be entitled to receive for the
purchase price paid upon such exercise the securities which would have been
received if such Option had been exercised prior to such Corporate Transaction.

  D.  Modification of ISOs.  Notwithstanding the foregoing, any adjustments made
      --------------------
pursuant to Subparagraph A, B or C with respect to ISOs shall be made only after
the Administrator, after consulting with counsel for the Company, determines
whether such adjustments would constitute a "modification" of such ISOs (as that
term is defined in Section 424(h) of the Code) or would cause any adverse tax
consequences for the holders of such ISOs.  If the Administrator determines that
such adjustments made with respect to ISOs would constitute a "modification" of
such ISOs, it may refrain from making such adjustments, unless the holder of an
ISO specifically requests in writing that such adjustment be made and such
writing indicates that the holder has full knowledge of the consequences of such
"modification" on his or her income tax treatment with respect to the ISO.


18.  ISSUANCES OF SECURITIES.
     -----------------------

  Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares subject to Options.  Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company.


19.  FRACTIONAL SHARES.
     -----------------

  No fractional shares shall be issued under the Plan and the person exercising
such right shall receive from the Company cash in lieu of such fractional shares
equal to the Fair Market Value thereof.


20.  ANNUAL VALUATION.
     ----------------

  For purposes of Subsection (3) of the definition of Fair Market Value, on an
                                                      -----------------
annual basis prior to the ____ day of _____________ of each year (the "Valuation
Deadline"), the Administrator will cause a valuation firm to determine the Total
Common Equity Value of the

                                      -16-
<PAGE>

Company as of a date which shall be no greater than 45 calendar days prior to
the Valuation Deadline. The Total Common Equity Value will not include the value
of any preferred equity securities or any debt securities of the Company. The
valuation firm shall be an accounting firm or investment bank selected by the
Administrator, subject to any approval rights specifically granted to the
Company's stockholders.

21.  CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
     ------------------------------------------------------------------

  The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion.  Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options.  At the time of such
conversion, the Administrator (with the consent of the Participant) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan.  Nothing in the Plan shall be deemed
to give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action.  The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.

22.  REGISTRATION.
     ------------

  Within 180 calendar days following a Registration, the Company will use its
best efforts to register for sale the Shares of Common Stock issuable pursuant
to Options and arrange for the listing or inclusion of such Shares for trading
on the exchange or electronic market system through which shares of the Common
Stock are registered for trading.

23.  NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
     ----------------------------------------------

  Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO.  A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO.  If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.


24.  WITHHOLDING.
     -----------

  In the event that any federal, state, or local income taxes, employment taxes,
insurance contribution withholdings or other amounts are required by applicable
law or governmental

                                      -17-
<PAGE>

regulation to be withheld from the Participant's salary, wages or other
remuneration in connection with the grant or the exercise of an Option, the
Company may withhold from the Participant's compensation, if any, or may require
that the Participant advance in cash to the Company, or to any Affiliate of the
Company which employs or employed the Participant, the amount of such
withholdings unless a different withholding arrangement, including the use of
shares of the Company's Common Stock or a promissory note, is authorized by the
Administrator (and permitted by law). For purposes hereof, the fair market value
of the shares withheld for purposes of payroll withholding shall be determined
in the manner provided in Section 2 of the Plan, as of the most recent
practicable date prior to the date of exercise. If the fair market value of the
shares withheld is less than the amount of payroll withholdings required, the
Participant may be required to advance the difference in cash to the Company or
the Affiliate employer. The Administrator in its discretion may condition the
exercise of an Option for less than the then Fair Market Value on the
Participant's payment of such additional withholding.


25.  TERMINATION OF THE PLAN.
     -----------------------

     Unless sooner terminated by the Board of Directors, the Plan will terminate
on ______________, 2010, and no Options shall thereafter be granted under the
Plan.  All Options granted under the Plan prior to that date shall remain in
effect until such Options shall have been exercised or terminated in accordance
with the terms and provisions of the Plan and the applicable Option Agreements.
The Board of Directors may terminate the Plan at any time; provided, however,
that any such termination will not materially impair any rights under any Option
theretofore made under the Plan without the consent of the Participant.


26.  AMENDMENT OF THE PLAN AND AGREEMENTS.
     ------------------------------------

  The Plan may be amended by the stockholders of the Company.  The Plan may also
be amended by the Board of Directors or the Administrator, including, without
limitation, (i) to the extent necessary to qualify any or all outstanding
Options granted under the Plan or Options to be granted under the Plan for
favorable tax treatment (including deferral of taxation upon exercise) as may be
afforded stock options under applicable tax laws, (ii) for as long as the
Company has a class of stock registered for trading, to the extent necessary to
qualify the shares issuable upon exercise of any outstanding Options granted, or
Options to be granted, under the Plan for listing on any securities exchange or
quotation on any automated quotation system of securities dealers, and (iii) to
the extent necessary to comply with the laws of foreign countries in which the
Company and its Affiliates have Participants.  Any amendment approved by the
Administrator which the Administrator determines is of a scope that requires
stockholder approval shall be subject to obtaining such stockholder approval.
Any modification or amendment of the Plan shall not, without the consent of a
Participant, materially adversely affect his or her rights under an Option
previously granted to him or her except as required by applicable law.  With the
consent of the Participant affected, the Administrator may amend outstanding
Option Agreements in a manner which may be materially adverse to the Participant
but which is consistent with the Plan.  In the discretion of the Administrator,
outstanding Option Agreements may be amended by the Administrator in a manner
which the Administrator determines is not materially adverse to the Participant
but which is consistent with the Plan.

                                      -18-
<PAGE>

27.  EMPLOYMENT OR OTHER RELATIONSHIP.
     --------------------------------

  Nothing in this Plan or any Option Agreement shall be deemed to prevent the
Company or the corresponding Affiliate from terminating the employment or
director status of a Participant, nor to prevent a Participant from terminating
his or her own employment, consultancy or director status or to give any
Participant a right to be retained in employment or other service by the Company
or any Affiliate for any period of time.


28.  GOVERNING LAW.
     -------------

  This Plan, the Option Agreements and the Options, is governed by, and shall be
construed and enforced in accordance with, the law of the State of Delaware.

TRADOCS:1286874.1(RKY$01!.DOC)

                                      -19-