DESCRIPTION:  REGISTRANT'S EMPLOYEE STOCK OPTION PLAN (2000)

                    Ohio & Southwestern Energy Company, Inc.

                           EMPLOYEE STOCK OPTION PLAN

1.  PURPOSE.  The  purpose  of this Ohio &  Southwestern  Energy  Company,  Inc.
Employee Stock Option Plan ("Plan") is to further the growth and  development of
Ohio &  Southwestern  Energy  Company,  Inc.  ("Company")  by providing  through
ownership  of stock of the  Company,  an  incentive  to  officers  and other key
employees  who are in a position to contribute  materially to the  prosperity of
the Company,  to increase such persons' interests in the Company's  welfare,  to
encourage them to continue their services to the Company or its subsidiaries, if
any, and to attract  individuals of outstanding  ability to enter the employment
of the Company or its subsidiaries.

2. INCENTIVE AND NON-QUALIFIED STOCK OPTIONS.  Two types of options (referred to
herein as "options" without  distinction  between such two types) may be granted
under  the  plan:  Options  intended  to  qualify  as  incentive  stock  options
("incentive  stock options")  under Section 422 of the Internal  Revenue Code of
1986, as amended  ("Code"),  and any successor  statutes;  and other options not
specifically  authorized or qualified for favorable  income tax treatment by the
Code ("non-qualified stock options").

3.      ADMINISTRATION

        3.1  ADMINISTRATION BY BOARD.  Subject to Section 3.2, the Plan shall be
administered by the Board of Directors of the Company ("Board").  Subject to the
provisions of the Plan, the Board shall have authority to construe and interpret
the Plan, to promulgate,  amend,  and rescind rules and regulations  relating to
its  administration,  from  time to time  to  select  from  among  the  eligible
employees  (as  determined  pursuant  to  Section  4) of  the  Company  and  its
subsidiaries  those employees to whom options will be granted,  to determine the
timing and manner of the grant of the options,  to determine the exercise price,
the  number  of  shares  covered  by and all of the  terms  of the  options,  to
determine  the duration and purpose of leaves of absence which may be granted to
optionees without  constituting  termination of their employment for purposes of
the Plan,  and to make all of the  determinations  necessary  or  advisable  for
administration of the Plan. The  interpretation and construction by the Board of
any provision of the Plan, or of agreement  issued and executed  under the Plan,
shall be final and  binding  upon all  parties.  No member of the Board shall be
liable for any  action or  determination  undertaken  or made in good faith with
respect to the Plan or any agreement executed pursuant to the Plan.

3.2 ADMINISTRATION BY COMMITTEE. The Board may, in its sole discretion, delegate
any or all of its administrative  duties to a committee (the "Committee") of not
less than three individuals, to be appointed by and serve at the pleasure of the
Board.  From time to time,  the Board may increase or decrease (to not less than
three  members) the size of the  Committee,  and add  additional  members to, or
remove  members  from,  the  Committee.  The  Committee  shall act pursuant to a
majority vote, or the written consent of a majority of its members,  and minutes
shall be kept of all of its meetings and copies thereof shall be provided to the

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Board.  Subject to the  provisions of the Plan and the  directions of the Board,
the  Committee  may  establish  and follow  such rules and  regulations  for the
conduct of its business,  as it may deem  advisable.  No member of the Committee
shall be liable for any action or determination undertaken or made in good faith
with respect to the Plan or any agreement executed pursuant to the Plan.

4. ELIGIBILITY.  Any employee  (including any officer who is an employee) of the
Company or any of its subsidiaries  shall be eligible to receive an option under
the Plan; provided,  however, that no person who owns stock possessing more than
10% of the total combined voting power of all classes of stock of the Company or
any of its parent or  subsidiary  corporations  shall be  eligible to receive an
incentive  stock option under the Plan unless at the time such option is granted
the option price  (determined in the manner provided in Section 6.2) is at least
110% of the fair  market  value of the  shares  subject  to the  option and such
option by its terms is not  exercisable  after the expiration of five years from
the date such option is granted.  An employee  may receive  more than one option
under the Plan.

5. SHARES SUBJECT TO OPTIONS. The stock available for grant of options under the
Plan shall be shares of the Company's  authorized  but unissued,  or reacquired,
common  stock.  The  aggregate  number of shares that may be issued  pursuant to
exercise  of  options  granted  under the Plan,  as  amended,  shall not  exceed
1,000,000  shares of common stock  (subject to adjustment as provided in Section
6.13),  including shares previously issued under the Plan. In the event that any
outstanding  option under the Plan for any reason expires or is terminated,  the
shares of common stock allocable to the unexercised  portion of the option shall
again be available  for options  under the Plan as if no option had been granted
with respect to such shares.

6. TERMS AND  CONDITIONS  OF OPTIONS.  Options  granted  under the Plan shall be
evidenced  by  agreements  (which  need  not be  identical)  in  such  form  and
containing such provisions that are consistent with the Plan as the Board or the
Committee  shall from time to time approve.  Such agreements may incorporate all
or any of the terms hereof by reference  and shall comply with and be subject to
the following terms and conditions:

     6.1 NUMBER OF SHARES SUBJECT TO OPTION. Each option agreement shall specify
the number of shares subject to the option.

        6.2 OPTION  PRICE.  The  purchase  price for the  shares  subject to any
option  shall not be less than 100% of the fair  market  value of the  shares of
common stock of the Company on the date the option is granted. In the case of an
incentive  stock option  granted to an employee who owns stock  possessing  more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company or any of its parent or subsidiary corporations,  the option price shall
not be less than 110% of the fair market  value of the shares of common stock of
the Company on the date the option is  granted.  For  purposes of the Plan,  the
"fair  market  value" of any share of common  stock of the  Company  at any date
shall be (a) if the common stock is listed on an  established  stock exchange or
exchanges,  the last reported sale price per share on the day prior to such date
on the principal  exchange on which it is traded, or if no sale was made on such
day on such principal exchange, at the closing reported bid price on such day on

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such exchange, or (b) if the common stock is not then listed on an exchange, the
average of the  closing bid and asked  prices per share for the common  stock in
the over-the-counter market as quoted on NASDAQ or the Over-the-Counter Bulletin
Board  (OTC-BB) on the day prior to such date, or (c) if the common stock is not
then listed on an exchange or quoted NASDAQ or OTC-BB,  an amount  determined in
good faith by the Board or the Committee.

        6.3  MEDIUM  AND TIME OF  PAYMENT.  The  purchase  price for any  shares
purchased pursuant to exercise of an option granted under the Plan shall be paid
in full upon exercise of the option in cash or by check.

        6.4 TERM OF OPTION.  No option shall be exercisable after the expiration
of the  earliest of (a) five (5) years after the date of option is granted,  (b)
two (2) months after the date of the optionee's  employment with the Company and
its  subsidiaries  terminates if such  termination  is for any reason other than
permanent disability or death, or (c) one (1) year after the date the optionee's
employment with the Company and its subsidiaries  terminates if such termination
is a result of death or permanent  disability or if such  termination is for any
reason other than death or permanent disability,  and optionee dies within three
(3)  months  after the date of such  termination;  provided,  however,  that the
option  agreement for any option may provide for shorter  periods in each of the
foregoing  instances.  In the case of an incentive  stock  option  granted to an
employee who owns stock  possessing  more than 10% of the total combined  voting
power of all classes of stock of the Company or any of its parent or  subsidiary
corporations,  the term set  forth in (a),  above,  shall  not be more than five
years after the date the option is  granted.  For the  purposes of this  Section
6.2,  "permanent  disability"  shall mean a  disability  of the type  defined in
Section 22(e)(3) of the Code.

        6.5  EXERCISE  OF  OPTION.  No option  shall be  exercisable  during the
lifetime  of an optionee  by any person  other than the  optionee or at any time
prior to one year from the date the option is granted. Subject to the foregoing,
the Board or the Committee  shall have the power to set the time or times within
which each option shall be  exercisable  and to accelerate  the time or times of
exercise.  The extent that an  optionee  has the right to exercise an option and
purchase shares pursuant thereto,  the option may be exercised from time to time
by written notice to the Company,  stating the number of shares being  purchased
and accompanied by payment in full of the purchase price for such shares.

     6.6 NO TRANSFER OF OPTION.  No option shall be  transferable by an optionee
otherwise than by will or the laws of descent and distribution.

        6.7  RESTRICTION  ON  ISSUANCE  OF SHARES.  The  issuance of options and
shares shall be subject to compliance with all of the applicable requirements of
law with  respect to the  issuance and sale of  securities,  including,  without
limitation,  any  required  qualification  under  the  2000  Colorado  Corporate
Statutes.

        6.8  INVESTMENT  REPRESENTATION.  Any  optionee  may be  required,  as a
condition of issuance of shares covered by his or her option,  to represent that
the shares to be  acquired  pursuant  to exercise of the option will be acquired
for investment and without a view to distribution thereof, and in such case, the
Company may place a legend on the certificate  evidencing the shares  reflecting
the  fact  that  they  were  acquired  for  investment  and  cannot  be  sold or

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transferred  unless registered under the Securities Act of 1933, as amended,  or
unless  counsel  for the  Company is  satisfied  that the  circumstances  of the
proposed transfer do not require such registration.

        6.9 RIGHTS AS A SHAREHOLDER OR EMPLOYEE. An optionee or transferee of an
option shall have no right as a  shareholder  of the Company with respect to any
shares  covered  by any  option  until  the  date  of the  issuance  of a  share
certificate for such shares. No adjustment shall be made for dividends (ordinary
or extraordinary,  whether cash, securities, or other property) or distributions
or other  rights  for which  the  record  date is prior to the date  such  share
certificate is issued,  except as provided in Section 6.13.  Nothing in the Plan
or in any option  agreement shall confer upon any employee any right to continue
in the employ of the Company or any of its  subsidiaries or interfere in any way
with any right of the Company or any  subsidiary  to  terminate  the  optionee's
employment at any time.

     6.10 NO  FRACTIONAL  SHARES.  In no event  shall the Company be required to
issue fractional shares upon the exercise of an option.

        6.11  EXERCISABILITY IN THE EVENT OF DEATH. In the event of the death of
the optionee, any option or unexercised portion thereof granted to the optionee,
to the extent  exercisable by him or her on the date of death,  may be exercised
by the optionee's  personal  representatives,  heirs, or legatees subject to the
provisions of Section 6.4 hereof.

        6.12  RECAPITALIZATION  OR  REORGANIZATION  OF COMPANY OR ACQUISITION OF
MATERIAL  ADDITIONAL  OPERATING  ASSETS.  Except as otherwise  provided  herein,
appropriate and proportionate  adjustments shall be made in the number and class
of shares  subject to the Plan and to the option rights  granted under the Plan,
and the exercise price of such option  rights,  in the event of a stock dividend
(but only on common stock), stock split, reverse stock split,  recapitalization,
reorganization,  merger,  consolidation,  separation,  or  like  change  in  the
corporate  or  capital  structure  of the  Company.  In the event of a  complete
liquidation of the Company or a merger, reorganization,  or consolidation of the
Company  with any other  corporation  in which the Company is not the  surviving
corporation  or  the  Company  becomes  a  wholly-owned  subsidiary  of  another
corporation, any unexercised options theretofore granted under the Plan shall be
deemed   canceled   unless  the  surviving   corporation  in  any  such  merger,
reorganization,  or consolidation elects to assume the options under the Plan or
to  issue  substitute  options  in  place  thereof;  provided,   however,  that,
notwithstanding  the foregoing,  if such options would be canceled in accordance
with the  foregoing,  the optionee  shall have the right,  exercisable  during a
ten-day  period ending on the fifth day prior to such  liquidation,  merger,  or
consolidation,  to exercise  the  optionee's  option in whole or in part without
regard  to  any  installment   exercise  provisions  in  the  optionee's  option
agreement.  To the  extent  that the  foregoing  adjustments  relate to stock or

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securities of the Company,  such  adjustments  shall be made by the Board or the
Committee,  the determination of which in that respect shall be final,  binding,
and conclusive,  provided that each incentive  stock option granted  pursuant to
the Plan  shall  not be  adjusted  in a  manner  that  causes  its it to fail to
continue to qualify as an incentive  stock option  within the meaning of Section
422A of the Code.  In the event that the Company shall issue  additional  common
shares for cash which cash shall be used to acquire additional assets to be used
in the business,  including new businesses, or issue additional common shares in
exchange for assets to be used for the benefit of the  shareholders,  the number
of shares  permitted to be granted pursuant to this Plan shall be increased from
the 1,000,000  referred to in paragraph 5, above to a number equal to 10% of the
outstanding common shares of the Company.

        6.13  MODIFICATION,  EXTENSION,  AND RENEWAL OF OPTIONS.  Subject to the
terms and  conditions  and  within  the  limitations  of the Plan,  the Board or
Committee may modify,  extend,  or renew  outstanding  options granted under the
Plan, accept the surrender of outstanding options (to the extent not theretofore
exercised).  The Board or Committee shall not,  however,  modify any outstanding
incentive stock option in any manner which would cause the option not to qualify
as an incentive stock option within the meaning of Section 422A of the Code.

         Notwithstanding  the  foregoing,  no  modification  of an option shall,
without the consent of the optionee,  alter or impair any rights of the optionee
under the option.

     6.14  OTHER   PROVISIONS.   Each  option  may  contain  such  other  terms,
provisions,  and conditions not inconsistent  with the Plan as may be determined
by the Board or Committee.

7.  TERMINATION OR AMENDMENT OF THE PLAN. The Board may at any time terminate or
amend the plan;  provided  that,  without  approval of the  shareholders  of the
Company,  there shall be, except by operation of the provisions of Section 6.12,
no increase in the total number of shares  covered by the Plan, no change in the
class of  persons  eligible  to  receive  options  granted  under the  Plan,  no
reduction  in the  exercise  price  of  options  granted  under  the Plan and no
extension of the latest date upon which options may be  exercised;  and provided
further that,  without the consent of the  optionee,  no amendment may adversely
affect any then outstanding option or any unexercised portion thereof.

8. INDEMNIFICATION.  In addition to such other rights of indemnification as they
may have as members of the Board or the  Committee,  the members of the Board or
the Committee administering the Plan shall be indemnified by the Company against
reasonable expense, including attorney's fees, actually and necessarily incurred
in  connection  with the  defense of any  action,  suit,  or  proceeding,  or in
connection with any appeal therein,  to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection  with the
Plan or any option granted  thereunder,  and against all amounts paid by them in
settlement  thereof  (provided such settlement is approved by independent  legal
counsel  selected by the Company) or paid by them in  satisfaction of a judgment
in any action, suit, or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit, or proceeding that such member is liable
for  negligence or misconduct in the  performance  of his duties,  provided that
within 60 days after  institution of any such action,  suit, or proceeding,  the
member shall in writing offer the Company the  opportunity,  at its own expense,
to handle and defend the same.



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9. TERM OF PLAN. The Plan was adopted by the Board on September 30, 2000. Unless
sooner  terminated by the Board in its sole discretion,  the Plan will expire on
September 30, 2010.

                                       Ohio & Southwestern Energy Company, Inc.



                                        By: ------------------------------------

                                        Name: Ralph Shearing

                                        Title:  President







The undersigned  controlling  shareholder of Ohio & Southwestern  Energy Company
("Company")  acknowledges and endorses this  Registrant's  Employee Stock Option
Plan  2000.  Furthermore,  by  signing  in  the  space  provided  below  Canarab
Acquisitions  Corp. votes their 8,650,000 common shares of the Company in favour
of  adopting  the said Stock  Option Plan  (2000) and will  irrevocably  vote in
favour of the said Stock Option Plan (2000) at the next Annual  General  Meeting
of the Company, if shareholder approval of the plan is required under law.


Acknowledged and Agreed by:

Canarab Acquisitions Corp.


--------------------------
Ralph Shearing (President)




--------------------------
Abbas Salih (Director/Secretary)