EXHIBIT (10)

                           TENGTU INTERNATIONAL CORP.
                 1999 NON-QUALIFIED STOCK OPTION INCENTIVE PLAN



12.      PURPOSE; EFFECTIVENESS OF THE PLAN.

         (a)      The purpose of the 1999 Tengtu International Corp. (the
                  "Company") 1999 Stock Option Incentive Plan (the "Plan") is to
                  advance the interests of the Company and its stockholders by
                  helping the Company obtain and retain the services of
                  employees, officers, consultants, counsel and directors, upon
                  whose judgment, initiative and efforts the Company is
                  substantially dependent, and to provide those persons with
                  further incentives to advance the interests of the Company.

         (b)      The Plan will become effective on the date of its approval by
                  the stockholders of the Company, provided such approval is
                  within twelve months of March 29, 1999, the date of adoption
                  by the Company's Board of Directors. If the Plan is not so
                  approved by the stockholders of the Company, any options
                  granted under this Plan will be rescinded and will be void.
                  The Plan will remain in effect until it is terminated by the
                  Board or the Committee (as defined hereafter) under section 9
                  hereof, OR DECEMBER 31, 2000, whichever is earlier. This Plan
                  will be governed by, and construed in accordance with, the
                  laws of the State of Delaware.

13. CERTAIN DEFINITIONS. Unless the context otherwise requires, the following



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defined terms (together with other capitalized terms defined elsewhere in the
Plan) will govern the construction of the Plan, and of any stock option
agreements entered into pursuant to the Plan:

         (a)      "1933 Act" means the federal Securities Act of 1933, as
                  amended;

         (b)      "Board" means the Board of Directors of the Company;

         (c)      "Committee" refers to the Board's Compensation Committee
                  consisting of two or more Disinterested and Non-Employee
                  Directors (as defined herein); provided that the term
                  "Committee" will refer to the Board during such times as no
                  Committee is appointed by the Board;

         (d)      "Company" means Tengtu International Corp., a Delaware
                  corporation;

         (e)      "Disinterested Director" means a member of the Board who does
                  not receive Options under the Plan other than the grant of a
                  Formula Option pursuant to section 4(m);

         (f)      "Eligible Participants" means persons who, at a particular
                  time, are employees, officers, consultants, or directors of
                  the Company or its subsidiaries or counsel to the Company or
                  its subsidiaries;

         (g)      "ESO" means an "Employee Stock Option" which is an Option
                  granted to a director, officer or employee of the Company;

         (h)      "Fair Market Value" means, with respect to the Stock and as of






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                  the date an Option or a Formula Option is granted hereunder,
                  the market price per share of such Stock determined by the
                  Committee as follows:

                  (i) the Fair Market Value will be equal to the
                      last-transaction price quoted by the NASDAQ system for any
                      date; or

                  (ii)if no trades in the Stock occurred on the date in
                      question, the Fair Market Value will be the last
                      transaction price quoted by the NASDAQ system for the last
                      date on which trades of the Stock occurred.

         (i)      "Formula Option" means an Option granted to non-employee
                  members of the Board of Directors pursuant to section 4(m)
                  hereof;

         (j)      "Non-Employee Director" means a director of the Company who:
                  (i) is not currently an employee or officer of the Company or
                  a parent or Subsidiary of the Company;

                  (ii)does not receive compensation, either directly or
                      indirectly, from the Company, or a parent or subsidiary of
                      the Company, for services rendered as a consultant or in
                      any capacity other than as a director, except for an
                      amount that does not exceed $60,000;

                  (iii) does not possess an interest in a transaction, to which
                      the Company, or a Company Subsidiary is a party, where the
                      amount involved in the transaction exceeds $60,000; and

                  (iv)is not an owner, executive officer or beneficial owner of
                      in excess of 10% of a business or professional entity:



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1.       which during the Company's last fiscal year has made, or currently
         proposes to make, payments to the Company, or a Company Subsidiary, for
         property or services in excess of 5% of the Company's or its
         Subsidiaries gross revenues for its last full fiscal year;

         A.       which during the Company's last fiscal year has received, or
                  currently proposes to receive, payments from the Company, or a
                  Company Subsidiary, for property or services in excess of 5%
                  of the Company's or its Subsidiaries gross revenues for its
                  last full fiscal year; or

         B.       to which, at the end of the Company's last fiscal year, the
                  Company owed a debt in excess of 5% of the Company's
                  consolidated assets;

         (v)      during the Company's last fiscal year, has not been a member
                  of, or counsel to, a law firm that the Company retained or
                  currently proposes to retain;

         (vi)     during the Company's last fiscal year, has not been a partner
                  or executive officer of any investment banking firm that has
                  performed services for the Company, or is currently proposed
                  to perform services for the Company, other than as a
                  participating underwriter in a syndicate.


         a.       "NSO" means "Non-employee Stock Option" which is any option
                  granted under this Plan which fails to qualify as an ESO
                  because is it granted to someone other than a director,
                  officer or employee of the Company;





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         b.       "Option" means an option granted pursuant to the Plan
                  entitling the option holder to acquire shares of Stock issued
                  by the Company;

         c.       "Option Agreement" means an agreement between the Company and
                  an Optionee, in form and substance satisfactory to the
                  Committee in its sole discretion, consistent with the Plan;

         d.       "Option Price" with respect to any particular Option means the
                  exercise price at which the Optionee may acquire each share of
                  the Option Stock called for under such Option;

         e.       "Option Stock" means Stock issued or issuable by the Company
                  pursuant to the valid exercise of an Option;

         f.       "Optionee" means an Eligible Participant to whom Options are
                  granted hereunder, and any transferee thereof pursuant to a
                  transfer authorized under the Plan;

         g.       "Plan" means this 1999 Stock Option Incentive Plan of the
                  Company;

         h.       "Stock" means shares of the Company's Common Stock, $.01 par
                  value;

         i.       "Subsidiary" means any company in which the Company has more
                  than a 30% ownership interest;

         j.       "Transfer," with respect to and Option or Option Stock,
                  includes, without limitation, a voluntary or involuntary sale,
                  assignment,





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                  transfer, conveyance, pledge, hypothecation, encumbrance,
                  disposal, loan, gift attachment or levy of such Option or
                  Option Stock, including without limitation an assignment for
                  the benefit of creditors of the Optionee, a transfer by
                  operation of law, such as a transfer by will or under the laws
                  of descent and distribution, an execution of judgment against
                  the Option Stock or the acquisition or record or beneficial
                  ownership thereof by a lender or creditor, a transfer pursuant
                  to any decree of divorce, dissolution or separate maintenance,
                  any property settlement, any separation agreement or any other
                  agreement with a spouse (except for estate planing purposes)
                  under which a part or all of the shares of Option Stock are
                  transferred or awarded to the spouse of the Optionee or are
                  required to be sold; or a transfer resulting from the filing
                  by the Optionee of a petition for relief, or the filing of an
                  involuntary petition against such Optionee, under the
                  bankruptcy laws of the United States or of any other nation.

2. ELIGIBILITY. The Company may grant Options under this Plan only to persons
who are Eligible Participants as of the time of such grant. Subject to the
provisions of sections 4(d), 5 and 6 hereof, there is no limitation on the
number of Options that may be granted to an Eligible Participant.

3. ADMINISTRATION.

         a.       COMMITTEE. The Committee will administer the Plan as set forth
                  herein. No grant of Options, except for Formula Options, shall
                  be made under the Plan without approval by the Committee.






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         b.       COMPOSITION OF THE COMMITTEE. The Committee shall be composed
                  of two or more Non-Employee Disinterested Directors.

         c.       AUTHORITY AND DISCRETION OF COMMITTEE. The Committee will have
                  full and final authority in its discretion, at any time and
                  from time to time, subject only to the express terms,
                  conditions and other provisions of the Company's certificate
                  of incorporation and by-laws, the Plan, Delaware law and the
                  specific limitations on such discretion set forth herein:

                  i.  to select and approve the persons who will be granted
                      Options under this Plan from among the Eligible
                      Participants, and to grant to any person so selected one
                      or more Options to purchase such number of shares of
                      Option Stock as the Committee may determine;

                  ii. to determine the period or periods of time during which
                      Options may be exercised, the Option Price and the
                      duration of such Options, and other matters to be
                      determined by the Committee in connection with specific
                      Option grants and Options Agreements as specified under
                      this Plan;

                  iii. to interpret this Plan, to prescribe, amend and rescind
                      rules and regulations relating to this Plan, and to make
                      all other determinations necessary or advisable for the
                      operation and administration of this Plan; and






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         d.       LIMITATION ON AUTHORITY. Notwithstanding the foregoing, or any
                  other provision of this Plan, the Committee will have no
                  authority;

                  i.  to grant Options to any of its members, whether or not
                      approved by the Board; and

                  ii. to determine any matters, or exercise any discretion, in
                      connection with the Formula Options under section 4(m)
                      hereof.

         e.       DESIGNATION OF OPTIONS. Except as otherwise granted hereunder,
                  the Committee will designate any Option granted hereunder
                  either as an ESO or an NSO. ESO's may only be granted to
                  persons who are directors, officers or employees of the
                  Company and/or its Subsidiaries.

         f.       OPTION AGREEMENTS. Options will be deemed granted hereunder
                  only upon the execution and delivery of an Option Agreement by
                  the Optionee and a duly authorized officer of the Company in
                  the form annexed hereto as Exhibit A. Options will not be
                  deemed granted hereunder merely upon the authorization of such
                  grant by the Committee.

4.       SHARES RESERVED FOR OPTIONS.

         a.       OPTION POOL. The aggregate number of shares of Option Stock
                  that may be issued pursuant to the exercise of Options granted
                  under the Plan will not exceed three million (3,000,000) (the
                  "Option Pool").(1)

 --------

(1) As at May 1, 1999 and before giving any effect to any stock split, reserve
split, recapitalization, combination or reclassification.





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         b.       ADJUSTMENTS UPON CHANGES IN STOCK. In the event of any change
                  in the outstanding Stock of the Company as a result of a stock
                  split, reverse stock split, stock dividend, recapitalization,
                  combination or reclassification, appropriate proportionate
                  adjustment will be made in: (i) the aggregate number of shares
                  of Option Stock in the Option Pool; (ii) the Option Price and
                  the number of shares of Option Stock called for in each
                  outstanding Option granted hereunder; and (iii) other rights
                  and matters determined on a per share basis under the Plan or
                  any Option Agreement hereunder. No such adjustment will be
                  required by reason of the issuance or sale by the company for
                  cash or other consideration of additional shares of its Stock
                  or securities convertible into or exchangeable for shares of
                  its Stock.

5. TERMS OF STOCK OPTION AGREEMENTS. Each Option granted pursuant to this Plan
will be evidence by an Option Agreement. Without limiting the foregoing, each
Option Agreement (unless otherwise stated therein) will be deemed to include the
following terms and conditions:

         a.       VESTING PERIODS. Except as otherwise provided herein, each
                  Option Agreement may specify the period of periods of time
                  within which each Option or portion thereof will first become
                  exercisable (the "Vesting Period").

                  i.  Unless the Option Agreement, in the discretion of the
                      Committee, provides otherwise, for Eligible Participants
                      who are not directors, officers or employees of the
                      Company or any subsidiary of the Company, any options
                      granted under the Plan shall have no Vesting Period and
                      shall be immediately exercisable.





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                  ii. For Eligible Participants that are directors, officers or
                      employees of the Company or its Subsidiaries, the Option
                      will become exercisable, as to twenty percent (20%) of the
                      Option Stock on each of the first, second, third, fourth
                      and fifth anniversaries of such date of granting.
                      Therefore, the Option will only become fully exercisable,
                      subject to the Optionee's remaining an Eligible
                      Participant, on the fifth anniversary of granting.

b.       EXERCISE OF THE OPTION.

                  i.  MECHANICS AND NOTICE. An Option may be exercised to the
                      extent exercisable by giving written notice of exercise to
                      the Company, specifying the number of full shares of
                      Option Stock to be purchased and accompanied by full
                      payment of the Option Price; and (2) by giving assurances
                      satisfactory to the Company that the shares of Option
                      Stock to be purchased for investment and not with a view
                      to resale in connection with any distribution of such
                      shares in violation of the 1933 Act; provided, however,
                      that in the event the Option Stock called for under the
                      Option is registered under the 1933 Act, or in the event
                      resale of such Option Stock without such registration
                      would otherwise be permissible, this second condition will
                      be inoperative if, in the opinion of counsel for the
                      Company, such condition is not required under the 1933
                      Act, or any other applicable law, regulation or rule of
                      any governmental agency.







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         c.       OPTION PRICE. Each Option Agreement will specify the Option
                  Price with respect to the exercise of Option Stock thereunder.
                  The Option Price may not be less than Fair Market Value.

         d.       PAYMENT OF THE OPTION PRICE. The Option Price will be payable
                  to the Company in United States dollars in cash or by check
                  or, such other legal consideration as may be approved by the
                  Committee in its discretion.

         e.       TERMINATION OF THE OPTION. Except as otherwise provided
                  herein, each Option Agreement will specify the period of time,
                  to be fixed by the Committee in its discretion, during which
                  the Option granted therein will be exercisable, not to exceed
                  ten years from the date of grant in the case of an ESO (the
                  "Option Period"); provided that the Option Period will not
                  exceed five years from the date of grant in the case of an ESO
                  granted to a 10% Stockholder.

                  i.  TERMINATION OF EMPLOYMENT. Any Option granted to a
                      director, officer or employee under the Plan shall
                      terminate (1) ninety days after the date that the Optionee
                      ceases to be an Eligible Participant for any reason, other
                      than by reason of death or disability or (2) twelve months
                      after the date that the Optionee ceases to be an Eligible
                      Participant by reason of such person's death or
                      disability.

                  ii. MERGER OR SALE. In the event of a sale or all or
                      substantially all of the assets of the Company, or a
                      merger or consolidation or





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                      other reorganization in which the Company is not the
                      surviving corporation, or in which the Company becomes a
                      subsidiary of another corporation (any of the foregoing
                      events, a "Corporation Transaction"), then notwithstanding
                      anything else herein, the right to exercise all then
                      outstanding Options will vest immediately prior to such
                      Corporation Transaction and will terminate immediately
                      after such Corporate Transaction; provided, however, that
                      if the Board, in its sole discretion, determines that such
                      immediate vesting of the right to exercise outstanding
                      Options is not in the best interests of the Company, then
                      the successor corporation must agree to assume the
                      outstanding Options or substitute therefor comparable
                      options of such successor corporation or a parent or
                      subsidiary of such successor corporation.

                  f.  OPTIONS NONTRANSFERABLE. No Option will be transferable by
                      the Optionee otherwise than by will or the laws of descent
                      and distribution.

                  g.  QUALIFICATION OF STOCK. If the Board determines that the
                      listing, registration or qualification of the shares of
                      Option Stock is necessary on any securities exchange or
                      under any state or federal law, or the consent or approval
                      of any governmental regulatory authority, is necessary or
                      desirable as a condition of the exercise of an Option, the
                      Option may not be exercised, in whole or in part, unless
                      and until such listing, registration, qualification,
                      consent or approval is effected or obtained free of any
                      conditions not acceptable to the Board.







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                  h.  ADDITIONAL RESTRICTIONS ON TRANSFER. By accepting Options
                      and/or Option Stock under this Plan, the Optionee will be
                      deemed to represent, warrant and agree as follows:

                      i. SECURITIES ACT OF 1933. The Optionee understands that
                         the shares of Option Stock have not been registered
                         under the 1933 Act, and that such shares are not freely
                         tradeable and must be held indefinitely unless such
                         shares are either registered under the 1933 Act or an
                         exemption from such registration is available. The
                         Optionee understands that the Company is under no
                         obligation to register the shares of Option Stock.

                      ii. OTHER APPLICABLE LAWS. The Optionee further
                         understands that Transfer of the Option Stock requires
                         full compliance with the provisions of all applicable
                         laws.

                      iii. INVESTMENT INTENT. Unless a registration statement is
                         in effect with respect to the sale of Option Stock
                         obtained through exercise of Options granted hereunder:
                         (1) Upon exercise of any Option, the Optionee will
                         purchase the Option Stock for his or her own account
                         and not with a view to distribution within the meaning
                         of the 1933 Act, other than as may be effected in
                         compliance with the 1933 Act and the rules and
                         regulations promulgated thereunder and (2) no one else
                         will have any beneficial interest in the Option Stock.






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                  i.  COMPLIANCE WITH LAW. Notwithstanding any other provision
                      of this Plan, Options may be granted pursuant to the Plan,
                      and Option Stock may be issued pursuant to the exercise
                      thereof by an Optionee, only after there has been
                      compliance with all applicable federal and state
                      securities laws, and all of the same will be subject to
                      this overriding condition. The Company will not be
                      required to register or qualify Option Stock with the
                      Securities and Exchange Commission or any state agency.

                  j.  STOCK CERTIFICATES. Certificates representing the Option
                      Stock issued pursuant to the exercise of Options will bear
                      all legends required by law and necessary to effectuate
                      this Plan's provisions. The Company may place a "stop
                      transfer" order against shares of the Option Stock until
                      all restrictions and conditions set forth in this Plan and
                      in the legends referred to in this section 6(j) have been
                      complied with.

                  k.  NOTICES. Any notice to be given to the Company under the
                      terms of an Option Agreement will be addressed to the
                      Company at its principal executive office, Attention:
                      Corporate Secretary, or at such other address as the
                      Company may designate in writing. Any notice to be given
                      to an Optionee will be addressed to the Optionee at the
                      address provided to the Company by the Optionee. Any such
                      notice will be deemed to have been duly given if and when
                      enclosed in a properly sealed envelope, addressed as
                      aforesaid, registered and deposited, postage and registry
                      fee prepaid, in a post office or branch post office
                      regularly maintained by the United States or Canadian
                      Government.





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                  l.  OTHER PROVISIONS. The Option Agreement may contain such
                      other terms, provisions and conditions, including such
                      special forfeiture conditions, rights of repurchase,
                      rights of first refusal and other restrictions on Transfer
                      of Option Stock issued upon exercise of any Options
                      granted hereunder, not inconsistent with the Plan, as may
                      be determined by the Committee in its sole discretion.

                  m.  FORMULA OPTIONS. On the date on which the Board appoints a
                      director to the Committee for the first time, such
                      director will be granted a Formula Option to purchase __
                      shares of Stock. Immediately after the completion of each
                      annual meeting of the stockholders of the Company, each
                      member of the Committee will be awarded a Formula Option
                      to purchase __ shares of Stock. Formula Options will have
                      an Option Price equal to the Fair Market Value of the
                      Stock as of the date of such grant. Except as otherwise
                      specifically provided in this section 4(m), the terms of
                      this Plan, including the vesting provisions of section
                      4(a), will apply to all Formula Options granted pursuant
                      to this section 4(m).

6. PROCEEDS FROM SALE OF STOCK. Cash proceeds from the sale of shares of Option
Stock will be added to the general funds of the Company and will be used for
general corporate purposes.

7. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the terms and
conditions and within the limitations of the Plan, and except with respect to
Formula Options, the Committee may modify, extend or renew outstanding Options
granted under this Plan, or accept the surrender of outstanding







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Options (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, however, no modification of any Option will,
without the consent of the holder of the Option, alter or impair any rights or
obligations under any Option theretofore granted under this Plan.

8. AMENDMENT AND DISCONTINUANCE. The Board may amend, suspend or discontinue
this Plan at any time or from time to time; provided that:

         a.       no such action may, without the approval of the stockholders
                  of the Company, materially increase (other than by reason of
                  an adjustment pursuant to section 5(b) hereof) the maximum
                  aggregate number of shares of Option Stock in the Option Pool
                  that may be issued under Options granted pursuant to this Plan
                  or materially increase the benefits accruing to Plan
                  participants or materially modify eligibility requirements for
                  the participants, and

         b.       the provisions of section 4(m) hereof may not be amended more
                  often than once during any six (6) month period, and

         c.       no such action may alter or impair any Option previously
                  granted under this Plan without the consent of the holder of
                  such Option.

9. PLAN COMPLIANCE WITH RULE 16B-3. With respect to persons subject to Section
16 of the Securities Exchange Act of 1934, transactions under this plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the 1934 Act. To the extent any provision of the Plan or action
by the Plan administrators fails so to comply, it shall be deemed





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null and void, to the extent permitted by law and deemed advisable by the Plan
administrators. In accordance with Rule 16b-3, a grant of options to a
beneficial owner of more than 10% of the Company's Common Stock, who is not an
officer or director of the Company, will not be exempt under Rule 16b-3.

10. COPIES OF PLAN. A copy of this Plan will be delivered to each Optionee at or
before the time he or she executes an Option Agreement.

         Date Plan Adopted by Board of Directors: March 29, 1999

         Date Plan Approved by Stockholders: August 31, 1999.







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Exhibit (10)


          TENGTU CULTURE & EDUCATION ELECTRONICS DEVELOPMENT CO., LTD;
           TENGTU ELECTRONIC PUBLISHING HOUSE & MICROSOFT (CHINA) LTD.
         ESTABLISHMENT OF STRATEGIC COOPERATION PARTNERSHIP RELATIONSHIP
                         COOPERATION AGREEMENT FRAMEWORK

Party A:          Tengtu Culture & Education Electronics Development Co., Ltd.
                  Tengtu United Electronics Development Co., Ltd.
                  Tengtu Electronic Publishing House

Party B:          Microsoft (China) Co., Ltd.

Tengtu International Electronics Developing Co., Ltd.

1.       Both parties agree to establish strategic cooperation partnership
         relationships on the Chinese elementary/secondary educational market.

2.       Party A is to consult with the Ministry of Education to become the
         state appointed partner for Microsoft products and overall technical
         service. Party A will positively develop market business.

3.       In order to support the Chinese education business and the promotion of
         Party A's overall "Application Solution Scheme for Information-Based
         Education," Party B will offer its products at specially favored
         prices.

4.       Both parties agree to focus cooperation on application problems and
         products. Party B promises to provide Party A with technical and
         environmental support on the development of application systems based
         on the former operating system platform. This will technically support
         Party A to complete the state class Torch projects (General
         Elementary/Secondary School Campus Network and Digital
         Elementary/Secondary School Library) with high quality.

5.       In order to further explore and establish information-based
         elementary/secondary education market and create ongoing development
         foundation, Party B will provide product for the "Overall Application
         Solution Scheme for Information-Based Education." Party A and Party B
         will positively support the Ministry of Education and relevant
         organizations on the establishment of the "China Software Research and
         Testing Centre for Information-Based Elementary/Secondary Education."

6.       Both Parties agree to promote the "Overall Application Solution Scheme"
         items and jointly formulate the market promotion plan. Party A will be
         responsible for market promotion and product sales. Party B will
         provide certain funds support for market promotion.

7.       Party B will provide support to Party A, the Ministry of Education and
         educational organizations of various provinces on the expiration of the
         "21st Century Training Center for Information-Based
         Elementary/Secondary Education" and the "General Information-Based
         Education Overall Application Solution Scheme" items.





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8.       Party B will authorize Party A to use Party B's materials (books,
         software training material, lecture material, promotion materials,
         etc.) To compile and distribute associated materials for the "Overall
         Application Solution Scheme" item.

9.       Both parties agree to carry out the various tasks associated the above
         agreement as soon as possible and come up with a business plan which
         includes:

                  a.       Technical Development Cooperation Plan;

                  b.       Marketing & Business Plan;

                  c.       Technical Services Plan;

                  d.       Publication Cooperation Plan.

10.      Regarding promotion of this cooperation, both Parties shall consult and
         confirm with each other.

11.      Both Parties shall understand this agreement is only a framework.
         Further substantial implementation plans are subject to signing of a
         separate agreement.

Representative of Party A                        Representative of Party B


--------------------------                       ----------------------------
8/23/99                                          8/23/99






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