ARROW CAPITAL GROUP, INC.

                       2000 COMPENSATORY STOCK OPTION PLAN

         1.       Purpose of this Plan.
                  ---------------------
     This 2000  Compensatory  Stock  Option  Plan  ("Plan")  is  intended  as an
employment  incentive,  to aid in  attracting  and  retaining  in the  employ or
service of ARROW CAPITAL GROUP, INC. ("Company"), a Nevada corporation,  and any
Affiliated Corporation, persons of experience and ability and whose services are
considered  valuable,  to encourage the sense of proprietorship in such persons,
and to  stimulate  the active  interest of such persons in the  development  and
success of the Company.  This Plan  provides  for the issuance of  non-statutory
stock  options  ("CSOs"  or  "options")  which are not  intended  to  qualify as
"incentive  stock  options"  within the meaning of Section  422 of the  Internal
Revenue Code of 1986, as amended ("Code").  Certain other terms also are defined
in Paragraph 17 and elsewhere of this Plan.

         2.       Administration of this Plan.
                  ---------------------------
     The  Company's  Board of  Directors  ("Board")  may appoint and maintain as
administrator of this Plan the Compensation Committee ("Committee") of the Board
which shall  consist of at least two members of the Board.  At any time that the
Committee is not duly  constituted,  the Board itself shall have and fulfill the
duties herein  allocated to the Committee.  The Committee  shall have full power
and authority to designate  Plan  participants,  to determine the provisions and
terms of  respective  CSOs (which need not be  identical  as to number of shares
covered by any CSO, the method of exercise as related to exercise in whole or in
installments,  or  otherwise),  including  the CSO price,  and to interpret  the
provisions and supervise the  administration  of this Plan. The Committee may in
its discretion provide that certain CSOs not vest (that is, become  exercisable)
until  expiration of a certain period after  issuance or until other  conditions
are satisfied, so long as not contrary to this Plan.

     A majority of the members of the Committee shall  constitute a quorum.  All
decisions  and  selections  made  by  the  Committee  pursuant  to  this  Plan's
provisions  shall be made by a majority of its members.  Any decision reduced to
writing and signed by all of the members  shall be fully  effective as if it had
been made by a majority at a meeting duly held.  The Committee  shall select one
of its  members as its  chairman  and shall hold its  meetings at such times and
places as it deems advisable. If at any time the Board shall consist of seven or
more  members,  then the Board may amend this Plan to provide that the Committee
shall  consist  only of Board  members  who  shall  not have  been  eligible  to
participate  in this Plan (or similar stock or stock option plan) of the Company
or its  affiliates  at any time  within  one year  prior to  appointment  to the
Committee.  Shareholder  approval of this Plan shall be  required,  and all CSOs
granted under this Plan will be subject to, and may not be exercised before, the
approval  of this Plan by the  shareholders.  Each CSO shall be  evidenced  by a
written agreement  containing terms and conditions  established by the Committee
consistent with the provisions of this Plan.

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<PAGE>



         3.       Designation of Participants.
                  ---------------------------
     Only  Employees  shall be  eligible  for  participation  in this Plan.  The
Committee shall have full power to designate,  from among eligible  individuals,
the  persons to whom CSOs may be  granted.  A person who has been  granted a CSO
hereunder  may be granted an additional  CSO or CSOs, if the Committee  shall so
determine.  The  granting  of a CSO  shall not be  construed  as a  contract  of
employment  or as  entitling  the  recipient  thereof to any rights of continued
employment or engagement  by the Company or an Affiliated  Corporation.  Persons
eligible under this Plan  additionally  may be granted one or more options under
any other  compensation  or stock option plan or awarded  shares under any other
benefit plan of the Company.

         4.       Stock Reserved for this Plan.
                  ----------------------------
     Subject  to  adjustment  as  provided  in  Paragraph  9  below,  a total of
2,000,000  shares of Common Stock of the Company ("Plan Stock" or "Plan Shares")
shall be subject to this Plan. The Plan Stock subject to this Plan shall consist
of unissued  shares of Common Stock or previously  issued shares of Common Stock
reacquired  and held by the  Company  or any  Affiliated  Corporation,  and such
number of Plan Shares shall be and is hereby reserved for sale for such purpose.
Any Plan Shares which may remain unsold and which are not subject to outstanding
CSOs at the  termination of this Plan shall cease to be reserved for the purpose
of this Plan, but until  termination of this Plan the Company shall at all times
reserve a  sufficient  number of shares to meet the  requirements  of this Plan.
Should  any CSO  expire  or be  canceled  prior to its  exercise  in  full,  the
unexercised Plan Shares  theretofore  subject to such CSO may again be subjected
to a CSO under this Plan.

         5.       Option Exercise Price.
                  ---------------------
     The purchase  price of each share of Plan Stock made subject to a CSO shall
not be less than one hundred  percent (100%) of the fair market value of a share
of Common Stock on the date the CSO is granted. The fair market value of a share
of Plan Stock on a  particular  date shall be deemed to be the average of either
(i) the highest and lowest  prices at which  shares of Common Stock were sold on
the date of grant, if traded on a national  securities  exchange,  (ii) the high
and low sale prices reported on the date of grant, if traded on the Nasdaq Small
Cap Market or National Market System, or (iii) the high bid and low asked price,
or if  unavailable,  the closing  high bid and low asked  price,  on the date of
grant, if quoted on the OTC Electronic Bulletin Board. If no transactions in the
Common  Stock  occur  on the  date of  grant,  the fair  market  value  shall be
determined  as of the next  earliest  day for which  reports or  quotations  are
available.  If the  Common  Stock  not then  quoted  on any  exchange  or in any
quotation medium at the time the option is granted,  then the Board of Directors
or Committee will use its discretion in selecting a good faith value believed to
represent  fair  market  value  based on factors  then  known to them.  The cash
proceeds from the sale of Plan Stock are to be added to the general funds of the
Company.


         6.       Exercise Period; Vesting.
                  ------------------------
         (a) The CSO  exercise  period shall be a term of not more than five (5)
years from the date of granting of each CSO and shall automatically terminate:

                                      -2-



<PAGE>

                  (i)      Upon  termination of the optionee's  employment  with
                           the Company for cause  (defined  as  termination  for
                           reasons  other  than  layoff  due to  lack  of  work,
                           injury,  illness,  disability,  or  due  to  economic
                           reasons  unrelated to the optionee's job performance,
                           or for a reason stated in  subparagraph  6(b) of this
                           Plan);

                  (ii)     At the  expiration of six (6) months from the date of
                           termination   without   cause   of   the   optionee's
                           employment with the Company for any reason other than
                           death;  provided,  that if the  optionee  dies within
                           such six-month  period,  sub-clause (iii) below shall
                           apply; or

                  (iii)    At the  expiration  of fifteen  (15) months after the
                           date of death of the optionee.

         (b)  "Employment  with the Company" as used in this Plan shall  include
employment  with (or in the case of a consultant,  adviser or agent,  engagement
by) any Affiliated Corporation in any capacity, even if employment or engagement
in  another  capacity  ceases,  and CSOs  granted  under  this Plan shall not be
affected  by an  employee's  transfer  of  employment  among the Company and any
Parent or Subsidiary  thereof.  An optionee's  employment with the Company shall
not be deemed interrupted or terminated by a bona fide leave of absence (such as
sabbatical leave or employment by the Government) duly approved,  military leave
or sick leave.

         (c) The Board or  Committee  may  determine at the time of grant that a
CSO granted  hereunder shall not vest  immediately but over a specified time, in
specified  amounts  per  time  period,  or  subject  to  other  restrictions  or
limitations.  Unless otherwise set forth in the granting resolution, a CSO shall
vest  immediately upon grant. If employment with the Company ceases before a CSO
vests, then vesting shall never take place, and unvested CSOs shall then be lost
forever.

         7.       Exercise of Options.
                  --------------------
         (a) The Committee, in granting CSOs, shall have discretion to determine
the terms upon which CSOs shall be exercisable, subject to applicable provisions
of this Plan. Once available for purchase,  unpurchased Plan Shares shall remain
subject to  purchase  until the CSO expires or  terminates  in  accordance  with
Paragraph 6 above.  Unless otherwise provided in the CSO, a CSO may be exercised
in  whole or in  part,  one or more  times,  but no CSO may be  exercised  for a
fractional  share.   Resulting  fractions  shall  be  rounded  up  or  down,  as
appropriate.

         (b)  CSOs  may be  exercised  solely  by the  optionee  or a  permitted
transferee  during his  lifetime or by a spouse or former  spouse  pursuant to a
qualified  domestic  relations  order,  or after his death (with  respect to the
number of shares which the optionee  could have  purchased at the time of death)
by the person or persons  entitled thereto under the decedent's will or the laws
of descent and distribution.


                                       -3-

<PAGE>

         (c)  The  purchase  price  of the  Plan  Shares  as to  which  a CSO is
exercised shall be paid in full at the time of exercise and no Plan Shares shall
be issued until full payment is made therefor.  Payment shall be made either (i)
in cash, represented by bank or cashier's check, certified check or money order,
or made by bank wire transfer; (ii) by delivering shares of the Company's Common
Stock which have been beneficially owned by the optionee, the optionee's spouse,
or both of them for a period  of at least  six (6)  months  prior to the time of
exercise (the "Delivered Stock"), in a number equal to the number of Plan Shares
being  purchased  upon  exercise  of the CSO;  (iii) a  combination  of cash and
Delivered Stock;  (iv) by delivery of shares of corporate stock which are freely
tradeable without  restriction and which are part of a class of securities which
has been  listed  for  trading on the  NASDAQ  system or a  national  securities
exchange,  with an  aggregate  fair market  value  equal to or greater  than the
exercise  price  of the  Plan  Shares  being  purchased  under  the CSO  ("Other
Shares"),  or (v) a combination of cash, Delivered Stock and Other Shares. A CSO
shall be deemed  exercised  when  written  notice  thereof,  accompanied  by the
appropriate  payment in full,  is  received by the  Company.  No holder of a CSO
shall be, or have any of the  rights and  privileges  of, a  shareholder  of the
Company in respect of any Plan Shares  purchasable upon exercise of a CSO unless
and until  certificates  representing  such shares shall have been issued by the
Company to him or her. The Committee shall have absolute  discretion  whether to
accept Other Shares offered and in valuing such shares.

         8.       Assignability.
                  --------------
         No CSO shall be assignable or otherwise  transferable except by will or
by  operation  of law,  pursuant to a  qualified  domestic  relations  order (as
defined  in  Rule  16b-3  of the  Securities  and  Exchange  Commission,  or any
successor  rule),  or  pursuant  to Title I of the  Employee  Retirement  Income
Security Act of 1974, as amended (ERISA),  or rules thereunder.  No CSO shall be
pledged or hypothecated in any manner, whether by operation of law or otherwise,
nor be subject to execution, attachment or similar process.

         9.       Reorganizations and Recapitalizations of the Company.
                  -----------------------------------------------------
         (a) The  existence  of this Plan and CSOs granted  hereunder  shall not
affect in any way the right or power of the Company or its  shareholders to make
or authorize  any and all  adjustments,  recapitalizations,  reorganizations  or
other changes in the Company's capital structure or its business,  or any merger
or  consolidation  of the Company,  or any issue of bonds,  debentures  or other
indebtedness, or any preferred or prior preference stocks senior to or affecting
the  Company's  Common  Stock  or the  rights  thereof,  or the  dissolution  or
liquidation of the Company, or any sale, exchange or transfer of all or any part
of its assets or business, or any other corporate act or proceeding,  whether of
a similar character or otherwise.

        (b) The Plan Shares with respect to which CSOs may be granted hereunder
are shares of the Common Stock of the Company as currently constituted.  If, and
whenever,  prior to delivery by the Company of all of the Plan Shares  which are
subject  to CSOs  granted  hereunder,  the  Company  shall  effect  a  split  or
combination of the Common Stock or other capital readjustment,  the payment of a
Common Stock dividend, or recapitalization or other increase or reduction of the
number of shares of the Common Stock outstanding without receiving  compensation
therefor  in  money,  services  or  property,  then the  number  of Plan  Shares
available  under this Plan and the number of Plan Shares  with  respect to which
CSOs granted  hereunder may thereafter be exercised shall (i) in the event of an
increase in the number of outstanding shares of Common Stock, be proportionately
increased, and the cash consideration payable per share shall be proportionately
reduced;  and (ii) in the event of a  reduction  in the  number  of  outstanding
shares of Common Stock, be proportionately  reduced,  and the cash consideration
payable per share shall be proportionately increased.



                                      -4-
<PAGE>

         (c) If the Company is reorganized,  merged,  consolidated or party to a
plan of exchange with another corporation  pursuant to which shareholders of the
Company  receive any shares of stock or other  securities  in  exchange  for the
Common  Stock,  there shall be  substituted  for the Plan Shares  subject to the
unexercised portions of outstanding CSOs an appropriate number of shares of each
class of stock or other securities which were distributed to the shareholders of
the  Company in respect  of the  Common  Stock in the case of a  reorganization,
merger,   consolidation  or  plan  of  exchange;  provided,  however,  that  all
outstanding  CSOs may be canceled by the Company as of the  effective  date of a
reorganization,  merger, consolidation,  plan of exchange, or any dissolution or
liquidation  of the Company,  by giving  notice to each optionee or his personal
representative  of its intention to do so and by permitting  the purchase of all
the Plan Shares subject to such  outstanding  CSOs for a period of not less than
thirty (30) days during the sixty (60) days immediately preceding such effective
date.

         (d) Except as  expressly  provided  above,  the  Company's  issuance of
shares of its capital stock of any class, or securities  convertible into shares
of its  capital  stock of any  class,  for  cash or  property,  or for  labor or
services,  either upon direct sale or upon the exercise of rights or warrants to
subscribe  therefor,  or upon conversion of shares or obligations of the Company
convertible into or exchangeable for shares of capital stock or other securities
of the Company,  shall not affect,  and no adjustment by reason thereof shall be
made  with  respect  to,  the  number of Plan  Shares  subject  to CSOs  granted
hereunder or the purchase price of such shares.

         10.      Purchase for Investment.
                  -----------------------
         Unless the Plan Shares covered by this Plan have been registered  under
the Act prior to issuance,  each person  exercising a CSO under this Plan may be
required by the Company to give a representation in writing that he is acquiring
such shares for his or her own account for investment and not with a view to, or
for sale in connection with, the distribution of any part thereof.

         11.      Effective Date and Expiration of this Plan.
                  -------------------------------------------
         This Plan shall be  effective  as of  October 6, 2000,  the date of its
adoption by the Board,  and no CSO shall be granted  pursuant to this Plan after
its expiration. This Plan shall expire on October 6, 2010 except as to CSOs then
outstanding,  which  shall  remain in effect  until  they have  expired  or been
exercised.


                                      -5-
<PAGE>

         12.      Amendments or Termination.
                  -------------------------
         The Committee or Board may amend, alter or discontinue this Plan at any
time in such  respects  as it shall  deem  advisable  in order to conform to any
change in any other applicable law, or in order to comply with the provisions of
any rule or regulation of the  Securities  and Exchange  Commission  required to
exempt this Plan or any CSOs granted  thereunder  from the  operation of Section
16(b) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or in
any other  respect not  inconsistent  with Section  16(b) of the  Exchange  Act;
provided,  that no amendment or alteration  shall be made which would impair the
rights of any participant under any CSO theretofore granted, without his consent
(unless made solely to conform such CSO to, and necessary because of, changes in
the  foregoing  laws,  rules or  regulations),  and except that no  amendment or
alteration  shall be made  without  the  approval  of  shareholders  which would
increase  the total  number of shares  reserved  for the  purposes  of this Plan
(except as provided in Paragraph 9) or extend the  expiration  date of this Plan
as set forth in Paragraph 11.

         13.      Government Regulations.
                  ----------------------
     This  Plan,  and the  granting  and  exercise  of CSOs  hereunder,  and the
obligation of the Company to sell and deliver Plan Shares under such CSOs, shall
be subject to all applicable laws, rules and regulations,  and to such approvals
by  any  governmental  agencies  or  national  securities  exchanges  as  may be
required.

         14.      Liability.
                  ----------
     No member of the Board of Directors  or the  Committee,  nor any  officers,
employees  or agents  of the  Company  or any  Affiliated  Corporation  shall be
personally liable for any action,  omission or determination  made in good faith
in connection with this Plan.

         15.      Options in Substitution for Other Options.
                  -----------------------------------------
         The Committee may, in its sole discretion,  at any time during the term
of this  Plan,  grant new  options to an  employee  under this Plan or any other
stock  option  plan of the Company on the  condition  that such  employee  shall
surrender for cancellation  one or more outstanding  options which represent the
right to purchase (after giving effect to any previous partial exercise thereof)
a number of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined  to grant such new options on such a conditional  basis ("New
Conditional  Options"),  no such New Conditional Option shall become exercisable
in the  absence  of such  employee's  consent  to the  condition  and  surrender
andcancellation as appropriate.  New Conditional Options shall be treated in all
respects under this Plan as newly granted options.  Options may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other  corporations  who are about to become  employees  of the Company or an
Affiliated Corporation as a result of a merger or consolidation of the employing
corporation with the Company or an Affiliated Corporation, or the acquisition by
the  Company  or an  Affiliated  Corporation  of the  assets  of  the  employing
corporation,  or the acquisition by the Company or an Affiliated  Corporation of
stock of the employing corporation as the result of which such other corporation
becomes an Affiliated Corporation.



                                      -6-
<PAGE>

         16.      Withholding Taxes.
                  ----------------
     Pursuant to applicable  federal and state laws, the Company may be required
to collect  withholding  taxes  upon the  exercise  of a CSO.  The  Company  may
require, as a condition to the exercise of a CSO, that the optionee concurrently
pay to the Company the entire amount or a portion of any taxes which the Company
is  required  to  withhold  by reason of such  exercise,  in such  amount as the
Committee or the Company in its discretion may determine. In lieu of part or all
of any such  payment,  the optionee may elect to have the Company  withhold from
the shares to be issued upon exercise of the option that number of shares having
a Fair  Market  Value  equal to the  amount  which the  Company is  required  to
withhold.

         17.      Definitions.
                  -----------
     Whenever used in this Plan, except where the context might clearly indicate
otherwise, the following terms shall have the meanings set forth below:

     (a) "Act" means the U.S. Securities Act of 1933, as amended.

     (b) "Affiliated Corporation" means any Parent or Subsidiary of the Company.

     (c) "Award" or "grant"  means any grant of a CSO  (option)  made under this
Plan.

     (d) "Board of Directors"  means the Board of Directors of the Company.  The
term "Committee" is defined in Section 2 of this Plan.

     (e) "Common  Stock" or "Common  Shares" means the common  stock,  $.001 par
value per share,  of the Company,  or in the event that the  outstanding  Common
Shares  are  hereafter  changed  into  or  exchanged  for  different  shares  or
securities of the Company or any other issuer, such other shares or securities.

     (f) "Date of Grant" means the day the Committee  authorizes  the grant of a
CSO or such  later  date as may be  specified  by the  committee  as the  date a
particular grant will become effective.

     (g)  "Employee"  means and includes the  following  persons:  (i) executive
officers,   officers  and  directors   (including  advisory  and  other  special
directors)  of the Company or an  Affiliated  Corporation;  (ii)  full-time  and
part-time employees of the Company or an Affiliated  Corporation;  (iii) natural
persons  engaged by the  Company or an  Affiliated  Corporation  as  consultant,
advisor or agent; and (iv) a lawyer, law firm, accountant or accounting firm, or
other  professional or professional firm engaged by the Company or an Affiliated
Corporation.



                                      -7-
<PAGE>

     (h) "Optionee" means an Employee to whom a CSO is granted.

     (i) "Parent" means any corporation owning 50% or more of the total combined
voting stock of all classes of the Company or of another corporation  qualifying
as a parent within this definition.

     (j) "Subsidiary"  means a corporation more than 50% of whose total combined
capital  stock of all  classes  held by the  Company or by  another  corporation
qualifying as a Subsidiary within this definition.

     By signature below, the undersigned  officers of the Company hereby certify
that the  foregoing  is a true and correct copy of the 2000  Compensatory  Stock
Option Plan of the Company.

DATED:   October 6, 2000

                                                     ARROW CAPITAL GROUP, INC.




(SEAL)                                               ---------------------------
                                                     James Season, President

---------------------------------------
Juan P. Martin, Secretary

                                      -8-
<PAGE>




                         CERTIFICATION OF PLAN ADOPTION

     I, the undersigned  Secretary of this corporation,  hereby certify that the
foregoing  2000  Compensatory  Stock  Option Plan of this  corporation  was duly
approved by the requisite number of holders of the issued and outstanding common
stock of this corporation as of the below date.

Date of Approval:   October 6, 2000






                                                     --------------------------
                                                     Juan P. Martin, Secretary



                                      -9-