PINNACLE RESOURCES, INC.
                                STOCK OPTION PLAN
                                (APRIL 2001)

SECTION 1.     INTRODUCTION

         1.1 Establishment. Effective as provided in Section 17,
Pinnacle Resources, Inc., a Wyoming corporation (the "Company"), hereby
restates this plan of long-term stock-based compensation incentives for
selected Eligible Participants of the Company and its affiliated
corporations. The plan is known as the Pinnacle Stock Option Plan (the
"Plan"). The Plan was adopted by the Company on April 10, 2001.

         1.2 Purpose. The purpose of the Plan is to promote the best
interest of the Company, and its stockholders by providing a means of
non-cash remuneration to selected Eligible Participants who contribute
most to the operating progress and earning power of the Company.

SECTION 2.     DEFINITIONS

         The following definitions shall be applicable to the terms
used in the Plan:

         2.1 "Affiliated Corporation" means any corporation that is
either a parent corporation with respect to the Company or a
subsidiary corporation with respect to the Company (within the meaning
of Sections 424(e) and (f), respectively, of the Internal Revenue
Code).

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

         2.3 "Committee" means a committee designated by the Board of
Directors to administer the Plan or, if no committee is so designated,
the Board of Directors. Any Committee Member who is also an Eligible
Participant may receive a grant only if he abstains from voting in
favor of a grant to himself, and the grant is determined and approved
by the remaining Committee Members. The Board of Directors, in its
sole discretion, may at any time remove any member of the Committee
and appoint another Director to fill any vacancy on the Committee.

         2.4 "Common Stock" means the Company's $.00001 par value
voting common stock.

         2.5 "Company" means Pinnacle Resources, Inc., a Wyoming
corporation and its subsidiaries.

         2.6 "Effective Date" means the effective date of the Plan, as
set forth in Section 17 hereof.

         2.7 "Eligible Participant" or "Participant" means any
employee, director, officer, consultant, or advisor of the Company who
is determined (in accordance with the provisions of Section 4 hereof)
to be eligible to receive stock and exercise stock options hereunder.

         2.8 "Fair Market Value" means with respect to Common Stock,
as of any date, the closing price of a share of Common Stock as
reported on such exchange on which the Company's Common Stock may be
listed.

         2.9 "Option" means the grant to an Eligible Participant of a
right to acquire shares of Restricted Stock of the Company, unless
said shares are duly registered, and thus freely tradeable, pursuant
to a Grant of Option approved by the Committee and executed and
delivered by the Company.

         2.10 "Plan" means this Pinnacle Resources, Inc. Stock Option
Plan, adopted on April 10, 2001.

         2.11 "Registered Stock" means shares of common stock, $.00001
par value, of the Company underlying an Option which, if specified in
the written Option are, upon issuance, freely tradeable by virtue of
having been registered with the Securities and Exchange Commission
under cover of Form S-8, or another appropriate registration
statement, and which shares have been issued subject to the "blue sky"


<PAGE>12

provisions of any appropriate state jurisdiction. Special resale
restrictions may, however, apply to officers, directors, control
shareholders and affiliates of the Company and such persons will be
required to obtain an opinion of counsel as regards their ability to
resell shares received pursuant to this Plan.

         2.12 "Stock" or "Restricted Stock" means shares of common
stock, $.00001 par value, of the Company issuable directly under the
Plan or underlying the grant of the Option, which are, upon issuance,
subject to the restrictions set forth in Section 11 hereof.

         Wherever appropriate, words used in the Plan in the singular
may mean the plural, the plural may mean the singular, and the
masculine may mean the feminine.

SECTION 3.     ADOPTION AND ADMINISTRATION OF THE PLAN

         The Plan was adopted on April 10, 2001. In the absence of
contrary action by the Board of Directors, and except for action taken
by the Committee pursuant to Section 4 in connection with the
determination of Eligible Participants, any action taken by the
Committee or by the Board of Directors with respect to the
implementation, interpretation or administration of the Plan shall be
final, conclusive and binding.

SECTION 4.     ELIGIBILITY AND AWARDS

         The Committee shall determine at any time and from time to
time after the effective date of the Plan: (i) the Eligible
Participants; (ii) the number of shares of Common Stock issuable
directly or to be granted pursuant to an Option which an Eligible
Participant may exercise; (iii) the price per share at which each
option may be exercised, in cash or cancellation of fees for services
for which the Company is liable, if applicable, or the value per share
if a direct issue of stock; and (iv) the terms on which each option
may be granted. Such determination, as may from time to time be
amended or altered at the sole discretion of the Committee.
Notwithstanding the provisions of Section 3 hereof, no such
determination by the Committee shall be final, conclusive and binding
upon the Company unless and until the Board of Directors has approved
the same; provided, however, that if the Committee is composed of a
majority of the persons then comprising the Board of Directors of the
Company, such approval by the Board of Directors shall not be
necessary.

SECTION 5.     GRANT OF OPTION

         Subject to the terms and provisions of this Plan, the terms
and conditions under which an Option may be granted to an Eligible
Participant shall be set forth in a written agreement (i.e., a
Consulting Agreement, Services Agreement, Fee Agreement, or Employment
Agreement) or as written Grant of Option hereunder shall be in the
form attached hereto as Exhibit A and made a part hereof and
containing such modifications thereto and such other provisions as the
Committee, in its sole discretion, may determine. Notwithstanding the
foregoing provisions of this Section 5, each Grant of Option shall
incorporate the provisions of this Plan by reference.

SECTION 6.     TOTAL NUMBER OF SHARES OF COMMON STOCK

         The total number of shares of Common Stock reserved for
issuance by the Company either directly or underlying Options granted
under this Plan shall not be more than 1,000,000. The total number of
shares of Common Stock reserved for such issuance may be increased
only by a resolution adopted by the Board of Directors and amendment
of the Plan.   Such Common Stock may be authorized and unissued or
reacquired common stock of the Company.

SECTION 7.     PURCHASE OF SHARES OF COMMON STOCK

         7.1 As soon as practicable after the determination by the
Committee and approval by the Board of Directors (if necessary,
pursuant to Section 4 hereof) of the Eligible Participants and the
number of shares an Eligible Participant may be issued directly or
granted pursuant to an Option, the Committee shall give notice
(written or oral) thereof to each Eligible Participant, which notice
may be accompanied by the Grant of Option, if appropriate, to be



<PAGE>13

executed by such Eligible Participant. Upon receipt, an Eligible
Participant may exercise his right to an Option to purchase Common
Stock by providing written notice as specified in the Grant of Option.

         7.2 The negotiated cost basis of stock issued directly or the
exercise price for each option to purchase shares of Common Stock
pursuant to paragraph 7.1 shall be as determined by the Committee, it
being understood that the price so determined by the Committee may
vary from one Eligible Participant to another. In computing the
negotiated direct issue price or the Option exercise price of a share
of Common Stock, the Committee shall take into consideration, among
other factors, the restrictions set forth in Section 11 hereof.

SECTION 8.     PAYMENT UPON EXERCISE OF OPTION OR DIRECT ISSUANCE

         The Committee shall determine the terms of the Grant of
Option and the exercise price or direct issue price for payment by
each Participant for his shares of Common Stock granted thereunder.
Such terms shall be set forth or referred to in the Grant of Option or
Board Resolution authorizing the share issuance. The terms and/or
exercise price so set by the Committee may vary from one Participant
to another. In the event that all the Committee approves an Option
grant permitting deferred payments, the Participant's obligation to
pay for such Common Stock shall be evidenced by a Promissory Note
executed by such Participant and containing such modifications thereto
and such other provisions as the Committee, in its sole discretion,
may determine.

SECTION 9.     DELIVERY OF SHARES OF COMMON STOCK UPON EXERCISE

         The Company shall deliver to or on behalf of each Participant
such number of shares of Common Stock as such Participant elects to
purchase upon direct issuance or upon exercise of the Option. Such
shares, which shall be fully paid and nonassessable upon the issuance
thereof (unless a portion or all of the purchase price shall be paid
on a deferred basis) shall be represented by a certificate or
certificates registered in the name of the Participant and stamped
with an appropriate legend referring to the restrictions thereon, if
any, as may be set forth in the Grant of Option. Subject to the terms
and provisions of the Wyoming Business Corporation Act and the Grant
of Option to which he is a party, a Participant shall have all the
rights of a stockholder with respect to such shares, including the
right to vote the shares and to receive all dividends or other
distributions paid or made with respect thereto (except to the extent
such Participant defaults under the promissory note, if any,
evidencing the deferred purchase price for such shares), provided that
such shares shall be subject to the restrictions hereinafter set
forth. In the event of a merger or consolidation to which the Company
is a party, or of any other acquisition of a majority of the issued
and outstanding shares of common stock of the Company involving an
exchange or a substitution of stock of an acquiring corporation for
common stock of the Company, or of any transfer of all or
substantially all of the assets of the Company in exchange for stock
of an acquiring corporation, a determination as to whether the stock
of the acquiring corporation so received shall be subject to the
restrictions set forth in Section 11 shall be made solely by the
acquiring corporation.

SECTION 10.    RIGHTS OF EMPLOYEES; PARTICIPANTS

         10.1 Employment. Nothing contained in the Plan or in any
Stock Option, Restricted Stock award or other Common Stock award
granted under the Plan shall confer upon any Participant any right
with respect to the continuation of his or her employment by the
Company or any Affiliated Corporation, or interfere in any way with
the right of the Company or any Affiliated Corporation, subject to the
terms of any separate employment agreement to the contrary, at any
time to terminate such employment or to increase or decrease the
compensation of the Participant from the rate in existence at the time
of the grant of a Stock Option or other Common Stock award. Whether an
authorized leave of absence, or absence in military or government
service, shall constitute termination of employment shall be
determined by the Committee at the time.

         10.2 Non-transferability. No right or interest of any
Participant in a Stock Option award shall be assignable or
transferable during the lifetime of the Participant, either
voluntarily or involuntarily, or subjected to any lien, directly or

<PAGE>14

indirectly, by operation of law, or otherwise, including execution,
levy, garnishment, attachment, pledge or bankruptcy. In the event of a
Participant's death, a Participant's rights and interest in Stock
Option awards shall be transferable by testamentary will or the laws
of descent and distribution, and payment of any amounts due under the
Plan shall be made to, and exercise of any Stock Options may be made
by, the Participant's legal representatives, heirs or legatees. If in
the opinion of the Committee a person entitled to payments or to
exercise rights with respect to the Plan is unable to care for his or
her affairs because of mental condition, physical condition, or age,
payment due such person may be made to, and such rights shall be
exercised by, such person's guardian, conservator or other legal
personal representative upon furnishing the Committee with evidence
satisfactory to the Committee of such status.

SECTION 11.    GENERAL RESTRICTIONS

         11.1 Investment Representations. The Company may require any
person to whom a Stock Option, Restricted Stock award, or other Common
Stock award is granted, as a condition of exercising such Stock
Option, or receiving such Restricted Stock award, or other Common
Stock award, to give written assurances in substance and form
satisfactory to the Company and its counsel to the effect that such
person is acquiring the Common Stock subject to the Stock Option,
Restricted Stock award, or other Common Stock award for his or her own
account for investment and not with any present intention of selling
or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal
and applicable state securities laws.

         11.2 Compliance with Securities Laws. Each Stock Option shall
be subject to the requirement that if at any time counsel to the
Company shall determine that the listing, registration or
qualification of the shares subject to such Stock Option upon any
securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, is necessary as a
condition of, or in connection with, the issuance or purchase of
shares thereunder, such Stock Option may not be accepted or exercised
in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained on conditions
acceptable to the Committee. Nothing herein shall be deemed to require
the Company to apply for or to obtain such listing, registration or
qualification.

         11.3 Changes in Accounting Rules. Notwithstanding any other
provision of the Plan to the contrary, if, during the term of the
Plan, any changes in the financial or tax accounting rules applicable
to Stock Options, Restricted Stock awards or other Common Stock awards
shall occur that, in the sole judgment of the Committee, may have a
material adverse effect on the reported earnings, assets or
liabilities of the Company, the Committee shall have the right and
power to modify as necessary, or cancel, any then outstanding and
unexercised Stock Options, any then outstanding Restricted Stock
awards as to which the applicable employment restriction has not been
satisfied and any other Common Stock awards.

SECTION 12.    WITHHOLDING REQUIREMENT

         The Company's obligations to deliver shares of Common Stock
upon the exercise of any Stock Option granted under the Plan or
pursuant to any other Common Stock award, shall be subject to the
Participant's satisfaction of all applicable federal, state and local
income and other tax withholding requirements. The Company may, in its
sole discretion, withhold the appropriate number of shares of Common
Stock from Participant's option exercise to satisfy such tax
requirements.

SECTION 13.    PLAN BINDING UPON ASSIGNS OR TRANSFEREES

         In the event that, at any time or from time to time, any
shares of Common Stock are sold, exchanged, assigned or transferred to
any party (other than the Company) pursuant to the provisions of
Section 10.2 hereof, such party shall take such shares of Common Stock
pursuant to all provisions and conditions of this Plan, and, as a
condition precedent to the transfer of such shares of Common Stock,
such party shall agree (for and on behalf of himself or itself, his or
its legal representatives and his or its transferees and assigns) in
writing to be bound by all provisions of this Plan.



<PAGE>15

SECTION 14.    COSTS AND EXPENSES

         All costs and expenses with respect to the adoption,
implementation, interpretation and administration of the Plan shall be
borne by the Company.

SECTION 15.    CHANGES IN CAPITAL STRUCTURE OF THE COMPANY

         Unless otherwise consented to by the Company in writing or
unless otherwise required by law, the shares of Restricted Stock
issuable upon exercise of the Option which are held by a Participant
shall not be adjusted in any manner for: (i) a subdivision or
combination of any of the shares of capital stock of the Company; (ii)
a dividend payable in shares of capital stock of the Company; (iii) a
reclassification of any shares of capital stock of the Company;
or (iv) any other change in the capital structure of the Company.

SECTION 16.    PLAN AMENDMENT, MODIFICATION AND TERMINATION

         The Board, upon recommendation of the Committee or at its own
initiative, at any time may terminate and at any time and from time to
time and in any respect, may amend or modify the Plan, including:

                  (a) Increase the total amount of Common Stock that
may be awarded under the Plan, except as provided in Section 15 of the
Plan;

                  (b) Change the classes of Eligible Employees from
which Participants may be selected or materially modify the
requirements as to eligibility for participation in the Plan;

                  (c) Increase the benefits accruing to Participants;
or

                  (d) Extend the duration of the Plan.

         Any Stock Option or other Common Stock award granted to a
Participant prior to the date the Plan is amended, modified or
terminated will remain in effect according to its terms unless
otherwise agreed upon by the Participant; provided, however, that this
sentence shall not impair the right of the Committee to take whatever
action it deems appropriate under Section 11 or Section 15. The
termination or any modification or amendment of the Plan shall not,
without the consent of a Participant, affect his rights under a Stock
Option, Restricted Stock Award or other Common Stock award previously
granted to him. With the consent of the Participant, the Committee may
amend outstanding option agreements in a manner not inconsistent with
the Plan. The Board shall have the right to amend or modify the terms
and provisions of the Plan and of any outstanding Stock Options
granted under the Plan.

SECTION 17.    EFFECTIVE DATE OF THE PLAN

         17.1  Effective  Date.  The Plan is effective as of April 10,
2001, the date it was adopted by the Board of Directors of the
Company.

         17.2  Duration of the Plan. The Plan shall terminate at
midnight on April 10, 2011, which is the day before the fifth
anniversary of the Effective Date, and may be extended thereafter or
terminated prior thereto by action of the Board of Directors; and no
Stock Option, Restricted Stock Award or other Common Stock award shall
be granted after such termination. Stock Options, Restricted Stock
Awards and other Common Stock awards outstanding at the time of the
Plan termination may continue to be exercised, or become free of
restrictions, in accordance with their terms.

SECTION 18.    BURDEN AND BENEFIT

         The terms and provisions of this Plan shall be binding upon,
and shall inure to the benefit of, each Participant, his executives or
administrators, heirs, and personal and legal representatives.



<PAGE>16

         Dated the 11th day of April 2001.

                                        PINNACLE RESOURCES, INC.

                                        By: /s/ Glen R. Gamble
                                            --------------------------
                                            Glen R. Gamble, President

ATTEST:


/s/ Robert A. Hildebrand
--------------------------------
Robert A. Hildebrand, Secretary




<PAGE>17

                                    EXHIBIT A
                                     FORM OF
                         GRANT OF OPTION PURSUANT TO THE
               PINNACLE RESOURCES, INC. STOCK OPTION PLAN


         Pinnacle Resources, Inc., a Wyoming corporation (the
"Company"), hereby grants to ________________________________
("Optionee") an option to purchase ___________ shares of common stock,
$.00001 par value (the "Shares") of the Company at the purchase price
of $______ per share (the "Purchase Price") in accordance with and
subject to the terms and conditions of the Pinnacle Stock Option Plan.
This option is exercisable in whole or in part, and upon payment in
cash or cancellation of fees, or other form of payment acceptable to
the Company, to the offices of the Company at 655 Redwood Hwy., #273,
Mill Valley, California 94941. This Grant of Option form supersedes
and replaces any prior notice of option grant, description of vesting
terms or similar documents previously delivered to Optionee for
options granted on the date stated below.

         Unless otherwise set forth in a separate employment or
consulting agreement executed prior to April 10, 2001, in the event
that Optionee's employee or consultant status with the Company or any
of its subsidiaries ceases or terminates for any reason whatsoever,
including, but not limited to, death, disability, or voluntary or
involuntary cessation or termination, this Grant of Option shall
terminate with respect to any portion of this Grant of Option that has
not vested prior to the date of cessation or termination of employee
or consultant status, as determined in the sole discretion of the
Company. In the event of termination for cause, this Grant of Option
shall immediately terminate in full with respect to any un-exercised
options, and any vested but un-exercised options shall immediately
expire and may not be exercised. Unless otherwise set forth in a
separate employment or consulting agreement, vested options must be
exercised within one (1) year after the date of termination (other
than for cause), notwithstanding the Expiration Date set forth above.

         Subject to the preceding paragraph, this Grant of Option, or
any portion hereof, may be exercised only to the extent vested per the
attached schedule, and must be exercised by Optionee no later than
______________________ (the "Expiration Date") by (i) notice in
writing, sent by facsimile copy to the Company at its address set
forth above; and (ii) payment of the Purchase Price of a minimum of
$1,000 (unless the Purchase price for the exercise of all vested
options available to be exercised totals less than $1,000) pursuant to
the terms of this Grant of Option and the Company's Employee Benefit
and Consulting Services Compensation Plan. Any portion of this Grant
of Option that is not exercised on or before to the Expiration Date
shall lapse. The notice must refer to this Grant of Option, and it
must specify the number of shares being purchased, and recite the
consideration being paid therefor. Notice shall be deemed given on the
date on which the notice is delivered to the Company by facsimile
transmission bearing an authorized signature of Optionee.

         This Option shall be considered validly exercised once
payment therefore has cleared the banking system or the Company has
issued a credit memo for services in the appropriate amount, or
receives a duly executed acceptable promissory note, if the Option is
granted with deferred payment, and the Company has received written
notice of such exercise.

         If Optionee fails to exercise this Option in accordance with
this Agreement, then this Agreement shall terminate and have no force
and effect, in which event Optionor and Optionee shall have no
liability to each other with respect to this Grant of Option.

         This Option may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

         The validity, construction and enforceability of this Grant
of Option shall be construed under and governed by the laws of the
State of Wyoming, without regard to its rules concerning conflicts of
laws, and any action brought to enforce this Grant of Option or
resolve any controversy, breach or disagreement relative hereto shall
be brought only in a court of competent jurisdiction in the State of
Wyoming.



<PAGE>18

         Unless otherwise set forth in a separate employment or
consulting agreement, the shares of stock issuable upon exercise of
the Option (the "Underlying Shares") are not subject to adjustment due
to any changes in the capital structure of the Company as set forth in
Section 15 of the Plan.  Further, the Underlying Shares may not be
sold, exchanged, assigned, transferred or permitted to be transferred,
whether voluntarily, involuntarily or by operation of law, delivered,
encumbered, discounted, pledged, hypothecated or otherwise disposed of
until (i) the Underlying Shares have been registered with the
Securities and Exchange Commission pursuant to an effective
registration statement on Form S-8, or such other form as may be
appropriate, in the discretion of the Company; or (ii) an Opinion of
Counsel, satisfactory to the Company, has been received, which opinion
sets forth the basis and availability of any exemption for resale or
transfer from federal or state securities registration requirements.

         The Underlying Shares ___________________ [insert appropriate
language: "have" or "have not"] been registered with the Securities
and Exchange Commission pursuant to a registration statement on Form
S-8.

         This Grant of Option relates to options granted
on____________________, 20___.




<PAGE>19

                                       PINNACLE RESOURCES, INC.

                                       BY THE BOARD OF DIRECTORS
                                       OR A SPECIAL COMMITTEE THEREOF

                                           NOT FOR EXECUTION
                                       By:
                                          ----------------------------

                                           NOT FOR EXECUTION
                                       By:
                                          ----------------------------

                                           NOT FOR EXECUTION
                                       By:
                                          ----------------------------


OPTIONEE:

NOT FOR EXECUTION

-----------------------------------------


-----------------------------------------
PINNACLE STOCK OPTION PLAN (4/01)

GRANT OF OPTION PURSUANT TO THE PINNACLE TELLI*PHONE
CORPORATION STOCK OPTION PLAN, DATED APRIL 10, 2001.

OPTIONEE:                -----------------------------

OPTIONS GRANTED:         -----------------------------

PURCHASE PRICE:          $       per Share
                          ------

DATE OF GRANT:           -----------------------------

EXERCISE PERIOD:                       to
                         ------------      -----------

EXERCISED TO DATE:                          INCLUDING THIS EXERCISE
                              -------------
BALANCE TO BE EXERCISED:
                              -------------




<PAGE>20

                              FORM OF SUBSCRIPTION
                 (TO BE SIGNED ONLY UPON EXERCISE OF THE OPTION)

TO:      Pinnacle Resources, Inc. ("Optionor")

         The undersigned, the holder of the Option described above,
hereby irrevocably elects to exercise the purchase rights represented
by such Option for, and to purchase thereunder, ___________ shares of
the Common Stock of Pinnacle Resources, Inc., and herewith makes
payment of _____________ therefor. Optionee requests that the
certificates for such shares be issued in the name of Optionee and be
delivered to Optionee at the address of
____________________________________________________________________
____________________________________________________________________,
and if such shares shall not be all of the shares purchasable
hereunder, represents that a new Subscription of like tenor for the
appropriate balance of the shares, or a portion thereof, purchasable
under the Grant of Option pursuant to the Pinnacle Resources, Inc.
Stock Option Plan, be delivered to Optionor when and as appropriate.


                                    OPTIONEE:

                                    NOT FOR EXECUTION

Dated:
       -------------------------    --------------------------------