Document:

Exhibit 10.36

                         CHADMOORE WIRELESS GROUP, INC.
                             1998 STOCK OPTION PLAN
                         (As Amended February 11, 2000)

1.       Purposes of the Plan.  The  purposes  of this Stock  Option Plan are to
         attract  and retain  the best  available  personnel  for  positions  of
         substantial   responsibility,   to  provide  additional  incentives  to
         Employees,  Non-Employee  Directors and  Consultants of the Company and
         its Subsidiaries, and to promote the success of the Company's business.
         Options  granted  hereunder  may be either  Incentive  Stock Options or
         Nonstatutory Stock Options at the discretion of the Committee.

2.       Definitions.  As used herein, and in any  Option granted hereunder, the
         following definitions shall apply:

         (a)     "Board" shall mean the Board of Directors of the Company.

         (b)      "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
                  amended.

         (c)      "Common Stock" shall mean the Common Stock of the Company.

         (d)      "Company"  shall  mean  Chadmoore   Wireless  Group,  Inc.,  a
                  Colorado corporation.

         (e)      "Committee" shall mean the Committee appointed by the Board in
                  accordance with paragraph (a) of Section 4 of the Plan. If the
                  Board does not appoint or ceases to maintain a Committee,  the
                  term "Committee" shall refer to the Board.

         (f)      "Consultant" shall mean any independent contractor retained to
                  perform services for the Company or any Subsidiary.

         (g)      "Continuous   Employment"   shall  mean  the  absence  of  any
                  interruption  or  termination  of  service as an  Employee  or
                  Non-Employee  Director  by  the  Company  or  any  Subsidiary.
                  Continuous  Employment  shall  not be  considered  interrupted
                  during any period of sick leave,  military  leave or any other
                  leave  of  absence  approved  by the  Board  or in the case of
                  transfers  between  locations  of the  Company or between  the
                  Company  and  any  Parent,  Subsidiary  or  successor  of  the
                  Company.

         (h)      "Covered   Employee"   shall   mean   any   individual   whose
                  compensation   is   subject   to   the   limitations   on  tax
                  deductibility  provided by Section  162(m) of the Code and any
                  Treasury Regulations  promulgated  thereunder in effect at the
                  close of the  taxable  year of the  Company in which an Option
                  has been granted to such individual.

         (i)      "Employee" shall mean any person,  including officers (whether
                  or not they are  directors),  employed  by the  Company or any
                  Subsidiary.

         (j)      "Exchange Act" shall mean the Securities Exchange Act of 1934,
                  as amended.

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         (k)      "Incentive  Stock Option" shall mean any option  granted under
                  this Plan and any  other  option  granted  to an  Employee  in
                  accordance with the provisions of Section 422 of the Code, and
                  the regulations promulgated thereunder.

         (l)      "Non Employee Director" shall mean any director of the Company
                  or any  Subsidiary  who (i) is not  employed by the Company or
                  such  Subsidiary;  (ii) does not receive  compensation  either
                  directly  or  indirectly,  from the  Company  or a  parent  or
                  Subsidiary  for services  rendered as a  consultant  or in any
                  capacity  other than as a director,  except for an amount that
                  does not exceed the dollar amount for which  disclosure  would
                  be required  pursuant to Item 404(a) of Regulation  S-K; (iii)
                  does not  possess an  interest  in any other  transaction  for
                  which disclosure would be required  pursuant to Item 404(a) of
                  Regulation  S-K;  and  (iv)  is  not  engaged  in  a  business
                  relationship for which  disclosure would be required  pursuant
                  to Item 404(b) of Regulation S-K.

         (m)      "Nonstatutory Stock Option" shall mean an Option granted under
                  the Plan that is subject to the  provisions of Section  1.83-7
                  of the Treasury  Regulations  promulgated  under Section 83 of
                  the Code.

         (n)      "Option"  shall mean a stock  option  granted  pursuant to the
                  Plan.

         (o)      "Option  Agreement" shall mean a written agreement between the
                  Company and the Optionee  regarding  the grant and exercise of
                  Options  to  purchase  Shares  and the  terms  and  conditions
                  thereof as determined by the Committee pursuant to the Plan.

         (p)      "Optioned  Shares"  shall mean the Common Stock  subject to an
                  Option.

         (q)      "Optionee"  shall mean an Employee,  Non-Employee  Director or
                  Consultant who receives an Option.

         (r)      "Outside  Director"  shall mean a director  of the Company who
                  qualifies  as an  outside  director  as  such  term is used in
                  Section  162(m)  of the Code  and  defined  in any  applicable
                  Treasury Regulations promulgated thereunder.

         (s)      "Parent" shall remain a "parent  corporation,"  whether now or
                  hereafter existing, as defined by Section 424(e) of the Code.

         (t)      "Plan" shall mean this 1998 Stock Option Plan.

         (u)      "Securities  Act" shall mean the  Securities  Act of 1933,  as
                  amended.

         (v)      "Share"  shall  mean a share of  Common  Stock of the  Company
                  subject to an Option,  as adjusted in accordance  with Section
                  11 of the Plan.

         (w)      "Subsidiary"  shall mean a "subsidiary  corporation,"  whether
                  now or hereafter existing, as defined in Section 424(f) of the
                  Code.

3.       Stock Subject to the Plan.  Subject to the  provisions of Section 11 of
         the Plan, the maximum  aggregate number of Shares which may be optioned
         and  sold  under  the  Plan is  3,000,000  Shares.  The  Shares  may be
         authorized  but unissued or reacquired  shares of Common  Stock.  If an
         Option expires or becomes

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         unexercisable for any reason without having been exercised in full, the
         Shares  which were subject to the Option but as to which the Option was
         not exercised shall become  available for other Option grants under the
         Plan unless the Plan shall have been terminated.

4.       Administration of the Plan.

         (a)      Procedure.   The  Plan  and  all   Option   grants   shall  be
                  administered  and approved by a Committee  comprised solely of
                  two or more Outside Directors.

         (b)      Powers of the  Committee.  Subject  to the  provisions  of the
                  Plan,  the  Committee   shall  have  the  authority:   (i)  to
                  determine,  upon  review  of  relevant  information,  the fair
                  market  value  of the  Common  Stock;  (ii) to  determine  the
                  exercise  price  of  Options  to be  granted,  the  Employees,
                  Non-Employee  Directors or Consultants to whom and the time or
                  times at which  Options  shall be  granted,  and the number of
                  Shares to be  represented  by each Option;  (iii) to interpret
                  the  Plan;  (iv) to  prescribe,  amend and  rescind  rules and
                  regulations relating to the Plan; (iv) to prescribe, amend and
                  rescind  rules and  regulations  relating to the Plan;  (v) to
                  determine  the terms and  provisions  of each  Option  granted
                  under the Plan (which  need not be  identical)  and,  with the
                  consent of the holder thereof,  to modify or amend any Option;
                  (vi) to  authorize  any  person  to  execute  on behalf of the
                  Company any instrument  required to effectuate the grant of an
                  Option  previously  granted by the  Committee;  (vii) defer an
                  exercise   date  of  any  Option  (with  the  consent  of  the
                  Optionee),  subject to the  provisions  of Section 9(a) of the
                  Plan;  (viii) to determine  whether  Options granted under the
                  Plan will be Incentive  Stock  Options or  Nonstatutory  Stock
                  Options;  and (ix) to make  all  other  determinations  deemed
                  necessary or advisable for the administration of the Plan.

         (c)      Acceleration of Vesting.  In addition to its other powers, the
                  Committee,  in its  discretion,  has the  right to  accelerate
                  unvested options in connection with (i) any tender offer for a
                  majority  of the  outstanding  shares of  Common  Stock by any
                  person or entity;  (ii) any proposed sale or conveyance of all
                  or  substantially  all  of  the  property  and  assets  of the
                  Company; or (iii) any proposed  consolidation or merger of the
                  Company with or into any other corporation, unless the Company
                  is the surviving corporation.  In the case of such accelerated
                  vesting,  the Company shall give written  notice to the holder
                  of any option  that such option may be  exercised  even though
                  the option or portion  thereof would not  otherwise  have been
                  exercisable  had the  foregoing  event not  occurred.  In such
                  event,  the Company  shall  permit the holder of any option to
                  exercise  during the time period  specified  in the  Company's
                  notice, which period shall not be less than ten days following
                  the date of notice.  Upon  consummation  of a tender  offer or
                  proposed sale,  conveyance,  consolidation  or merger to which
                  such notice shall  relate,  all rights under said option which
                  shall not have been so exercised  shall  terminate  unless the
                  agreement governing the transaction shall provide otherwise.

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         (d)      Effect of Committee's Decision. All decisions,  determinations
                  and  interpretations  of the  Committee  shall  be  final  and
                  binding on all potential or actual Optionees, any other holder
                  of an Option or other  equity  security of the Company and all
                  other persons.

5.       Eligibility.

         (a)      Persons  Eligible for Options.  Options  under the Plan may be
                  granted   only  to   Employees,   Non-Employee   Directors  or
                  Consultants whom the Committee,  in its sole  discretion,  may
                  designate  from time to time.  Incentive  Stock Options may be
                  granted only to Employees. An Employee who has been granted an
                  Option, if he or she is otherwise eligible,  may be granted an
                  additional  Option or Options.  However,  the  aggregate  fair
                  market value  (determined in accordance with the provisions of
                  Section 8(a) of the Plan) of the shares subject to one or more
                  Incentive  Stock Options grants that are  exercisable  for the
                  first time by an Optionee  during any calendar year (under all
                  stock  option  plans  of  the  Company  and  its  Parents  and
                  Subsidiaries) shall not exceed $100,000  (determined as of the
                  grant  date).  Options  under  the Plan  shall be  granted  to
                  Covered  Employees upon satisfaction of the conditions to such
                  grants  provided  pursuant to Section  162(m) and any Treasury
                  Regulations promulgated thereunder.

         (b)      No Right to Continuing  Employment.  Neither the establishment
                  nor the  operation  of the Plan shall confer upon any Optionee
                  or any other person any right with respect to  continuation of
                  employment   or  other   service   with  the  Company  or  any
                  Subsidiary,  nor shall the Plan  interfere in any way with the
                  right of the  Optionee  or the  right of the  Company  (or any
                  Parent or Subsidiary) to terminate such  employment or service
                  at any time.

6.       Term of Plan. The Plan shall become  effective upon its adoption by the
         Board or its approval by vote of the holders of the outstanding  shares
         of the Company entitled to vote on the adoption of the Plan,  whichever
         is  earlier.  It shall  continue in effect for a term of ten (10) years
         unless sooner terminated under Section 13 of the Plan.

7.       Term of Option. Unless the Committee determines otherwise,  the term of
         each  Option  granted  under the Plan shall be eight (8) years from the
         date of grant.  The term of the Option shall be set forth in the Option
         Agreement.  No Incentive  Stock Option shall be  exercisable  after the
         expiration  of eight (8) years  from the date such  Option is  granted,
         provided that no Incentive Stock Option granted to any Employee who, at
         the date such  Option is granted,  owns  (within the meaning of Section
         215(d) of the Code) more than ten percent  (10%) of the total  combined
         voting  power of all  classes of stock of the  Company or any Parent or
         Subsidiary shall be exercisable  after the expiration of five (5) years
         from the date such Option is granted.

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8.       Exercise Price and Consideration.

         (a)      Exercise Price.  Except as provided in subsections (b) and (c)
                  below, the exercise price for the Shares to be issued pursuant
                  to any  Option  shall be such  price as is  determined  by the
                  Committee,  which  shall in no  event be less  than (i) in the
                  case of Incentive Stock Options, the fair market value of such
                  Shares on the date the Option is granted;  or (ii) in the case
                  of Nonstatutory Stock Options,  85% of such fair market value.
                  Fair market value of the Common Stock shall be  determined  by
                  the  Committee,  using  such  criteria  as it deems  relevant;
                  provided,  however,  that if there is a public  market for the
                  Common  Stock,  the fair  market  value per Share shall be the
                  average  of the last  reported  bid and  asked  prices  of the
                  Common  Stock on the date of grant,  as  reported  in The Wall
                  Street Journal (or, if not so reported,  as otherwise reported
                  by the National  Association of Securities  Dealers  Automated
                  Quotation  (NASDAQ)  System) or, in the event the Common Stock
                  is  listed  on a  national  securities  exchange  (within  the
                  meaning  of  Section 6 of the  Exchange  Act) or on the NASDAQ
                  National  Market  System  (or any  successor  national  market
                  system),  the fair market value per Share shall be the closing
                  price on such exchange on the date of grant of the Option,  as
                  reported in The Wall Street Journal.

         (b)      Ten Percent Shareholders. No option that is an Incentive Stock
                  Option  or  exempt   pursuant  to  Section   25102(o)  of  the
                  California General  Corporation Law or shall be granted to any
                  Employee who, at the date such Option is granted, owns (within
                  the  meaning  of  Section  424(d) of the  Code)  more than ten
                  percent  (10%)  of the  total  combined  voting  power  of all
                  classes of stock of the  Company or any Parent or  Subsidiary,
                  unless the exercise price for the Shares to be issued pursuant
                  to such Option is a least  equal to 110 percent  (110%) of the
                  fair market value of such Shares on the grant date  determined
                  by the  Committee  in the manner set forth in  subsection  (a)
                  above.

         (c)      Section  162(m)  Limitations.  The Option  Price of any Option
                  granted to a Covered  Employee  shall be at least equal to the
                  fair  market  value of the  Shares  as of the date of grant as
                  determined in the manner set forth in subsection (a) above.

         (d)      Consideration.  The  consideration to be paid for the Optioned
                  Shares shall be payment in cash or by check unless  payment in
                  some other manner,  including by promissory note, other shares
                  of the Company's Common Stock or such other  consideration and
                  method of payment for the  issuance of Optioned  Shares as may
                  otherwise be permitted by law, is  authorized by the Committee
                  at the  time of the  grant  of the  Option.  Any cash or other
                  property  received  by the  Company  from the  sale of  Shares
                  pursuant  to the Plan  shall  constitute  part of the  general
                  assets of the Company.

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9.       Exercise of Option.

         (a)      Vesting  Period.   Any  Option  granted   hereunder  shall  be
                  exercisable  at  such  times  and  under  such  conditions  as
                  determined by the Committee and as shall be permissible  under
                  the terms of the Plan,  which shall be specified in the Option
                  Agreement  evidencing  the Option.  Options  granted under the
                  Plan  shall  vest at a rate of at least  twenty  five  percent
                  (25%) per year.

         (b)      Exercise Procedures. An Option shall be deemed to be exercised
                  when  written  notice of such  exercise  has been given to the
                  Company in accordance  with the terms of the option  agreement
                  evidencing  the Option,  and full  payment for the Shares with
                  respect to which the Option is exercised  has been received by
                  the  Company.  In lieu of delivery  of a cash  payment for the
                  purchase  price of the Shares with respect to which the Option
                  is  exercised,  the Optionee may deliver to the Company a sell
                  order  to a  broker  for the  Shares  being  purchased  and an
                  agreement  to pay (or have the broker  remit  payment for) the
                  purchase price for the Shares being purchased on or before the
                  settlement date for the sale of such shares to the broker.

                  Pursuant to the terms of the Option  Agreement,  the Committee
                  may  require  that any Option may be  exercised  only upon the
                  execution of a Restricted Stock Transfer Agreement which gives
                  the Company a right of first  refusal in the Option  Shares at
                  the per share price at which the Option Shares are proposed to
                  be transferred.  The right of first refusal shall terminate at
                  such  time as the  Company  closes  a firm  commitment  public
                  offering  pursuant to the  Securities Act of 1933, as amended,
                  covering the offer and sale of the Company's  Common Stock for
                  the account of the  Company.  The  Restricted  Stock  Transfer
                  Agreement  shall contain such  provisions as the Committee may
                  approve in its sole discretion.

                  An Option may not be exercised for fractional  shares. As soon
                  as  practicable  following  the  exercise  of an Option in the
                  manner set forth above,  the Company  shall issue or cause its
                  transfer agent to issue stock  certificates  representing  the
                  Shares   purchased.   Until  the   issuance   of  such   stock
                  certificates  (as  evidenced by the  appropriate  entry on the
                  books of the Company or of a duly authorized transfer agent of
                  the  Company),  no right to vote or receive  dividends  or any
                  other rights as a shareholder  shall exist with respect to the
                  Optioned Shares notwithstanding the exercise of the Option. No
                  adjustment  will be made for a  dividend  or other  rights for
                  which the record date is prior to the date of the  transfer by
                  the  Optionee  of the  consideration  for the  purchase of the
                  Shares,  except as provided  in Section 11 of the Plan.  After
                  the Registration Date, the exercise of an Option by any person
                  subject to short-swing  trading  liability under Section 16(b)
                  of the  Exchange Act shall be subject to  compliance  with all
                  applicable  requirements of Rule 16(b-3) promulgated under the
                  Exchange Act.

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         (c)      Death of Optionee. In the event of the death during the Option
                  period of an Optionee who is at the time of his death,  or was
                  within the ninety (90) day period  immediately  prior thereto,
                  an  Employee  or  Non-Employee   Director,   and  who  was  in
                  Continuous  Employment  as such  from the date of the grant of
                  the Option until the date of death or termination,  the Option
                  may be exercised,  at any time prior to the  expiration of the
                  Option  period,  by the  Optionee's  estate or by a person who
                  acquired  the  right to  exercise  the  Option by  bequest  or
                  inheritance,  but only to the extent of the  accrued  right to
                  exercise at the time of the  termination  or death,  whichever
                  comes first.

         (d)      Disability  of Optionee.  In the event of the  disability  (as
                  defined in  Section  22(e)(3)  of the Code)  during the Option
                  period of an Optionee  who is at the time of such  disability,
                  or was within the ninety  (90)-day  period prior  thereto,  an
                  Employee or Non-Employee  Director,  and who was in Continuous
                  Employment  as such from the date of the  grant of the  Option
                  until  the  date  of  such  disability  or  termination,   any
                  Incentive Stock Option may be exercised at any time within one
                  (1)  year  following  the  date  of  such  disability  and any
                  Nonstatutory Stock Option may be exercised,  at any time prior
                  to the expiration of the Option period,  but in each case only
                  to the extent of the accrued  right to exercise at the time of
                  the termination or disability,  whichever comes first,  and in
                  the case of an Incentive Stock Option subject to the condition
                  that no option shall be exercised  after the expiration of the
                  Option period.

         (e)      Termination  of Status as Employee,  Non-Employee  Director or
                  Consultant.  If an  Optionee  shall cease to be an Employee or
                  Non-Employee  Director for any reason,  the Optionee  may, but
                  only within  ninety (90) days (or such other period of time as
                  is  determined  by the  Committee)  after  the  date he or she
                  ceases to be an Employee or  Non-Employee  Director,  exercise
                  his or her Option to the extent that he or she was entitled to
                  exercise  it at the date of such  termination,  subject to the
                  condition  that no  option  shall  be  exercisable  after  the
                  expiration of the Option period.  Upon such exercise and if so
                  provided  in the  Restricted  Stock  Transfer  Agreement,  the
                  Company may,  but only within  ninety (90) days (or such other
                  period of time as is  determined by the  Committee)  after the
                  date  of such  exercise,  repurchase  from  the  Optionee  the
                  Optionee's  Option  Shares  at  the  higher  of  the  original
                  purchase  price for the Option Shares or fair market value (as
                  determined by the Company's Board) of the Option Shares on the
                  date of  termination  of  employment.  The right to repurchase
                  shall be  exercisable  for cash or  cancellation  of  purchase
                  money indebtedness.

         (f)      Net Exercise. The Committee may permit an Optionee to exercise
                  an Option by delivering  shares of the Company's Common Stock.
                  If the Optionee is so permitted, the option agreement covering
                  such Option may include provisions authorizing the Optionee to
                  exercise the Option,  in whole or in part,  by: (i) delivering
                  whole shares of the Company's

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                  Common Stock previously owned by such Optionee (whether or not
                  acquired  through the prior exercise of a stock option) having
                  a fair market value equal to the aggregate  exercise price for
                  the Optioned Shares issuable on exercise of the Option; and/or
                  (ii)  directing  the Company to withhold  from the Shares that
                  would  otherwise  be issued  upon  exercise of the Option that
                  number of whole Shares having a fair market value equal to the
                  aggregate  exercise price of the Optioned  Shares  issuable on
                  exercise of the Option.  Shares of the Company's  Common Stock
                  so delivered or withheld  shall be valued at their fair market
                  value  at the  close  of the  last  business  day  immediately
                  preceding the date of exercise of the Option, as determined by
                  the  Committee,  in accordance  with the provisions of Section
                  8(a) of the Plan.  Any balance of the exercise  price shall be
                  paid in cash.  Any shares  delivered or withheld in accordance
                  with  this  provision  shall not again  become  available  for
                  purposes  of the Plan  and for  Options  subsequently  granted
                  thereunder.

         (g)      Tax  Withholding.  When an  Optionee is required to pay to the
                  Company an amount with respect to tax withholding  obligations
                  in connection with the exercise of an Option granted under the
                  Plan,  the  Optionee may elect prior to the date the amount of
                  such  withholding  tax is determined  (the "Tax Date") to make
                  such payment, or such increased payment as the Optionee elects
                  to make up to the maximum  federal,  state and local  marginal
                  tax rates,  including any related FICA obligation,  applicable
                  to the  Optionee  and  the  particular  transaction,  by:  (i)
                  delivering cash; (ii) delivering part or all of the payment in
                  previously  owned  shares  of  Common  Stock  (whether  or not
                  acquired  through the prior  exercise  of an  Option);  and/or
                  (iii)  irrevocably  directing the Company to withhold from the
                  Shares that would  otherwise  be issued  upon  exercise of the
                  Option that number of whole Shares  having a fair market value
                  equal to the amount of tax  required or elected to be withheld
                  (a  "Withholding  Election").  If an  Optionee's  Tax  Date is
                  deferred  beyond the date of exercise and the Optionee makes a
                  Withholding Election,  the Optionee will initially receive the
                  full  amount  of  Optioned  Shares  otherwise   issuable  upon
                  exercise of the Option, but will be unconditionally  obligated
                  to  surrender  to the  Company  on the Tax Date the  number of
                  Shares  necessary  to satisfy his or her  minimum  withholding
                  requirements,  or such  higher  payment  as he or she may have
                  elected to make, with adjustments to be made in cash after the
                  Tax Date.

                  Any  withholding  of  Optioned  Shares  with  respect to taxes
                  arising in  connection  with the  exercise of an Option by any
                  person subject to short-swing  trading liability under Section
                  16(b) of the Exchange Act shall  satisfy the  requirements  of
                  Section 16b-3(e).

                  Any adverse consequences  incurred by an Optionee with respect
                  to the use of shares  of  Common  Stock to pay any part of the
                  exercise  price or of any tax in connection  with the exercise
                  of an Option,  including  without  limitation  any adverse tax
                  consequences   arising   as  a  result   of  a

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                  disqualifying disposition within the meaning of Section 422 of
                  the Code  shall be the sole  responsibility  of the  Optionee.
                  Shares  withheld in accordance  with this provision  shall not
                  again  become  available  for  purposes  of the  Plan  and for
                  Options subsequently granted thereunder.

10.      Non-Transferability  of  Options.  An Option may not be sold,  pledged,
         assigned, hypothecated,  transferred or disposed of in any manner other
         than by will or by the  laws of  descent  and  distribution  and may be
         exercised, during the lifetime of the Optionee, only by the Optionee.

11.      Adjustments  Upon  Changes in  Capitalization.  Subject to any required
         action by the  shareholders  of the  Company,  the  number of  Optioned
         Shares covered by each outstanding  Option,  and the per share exercise
         price of each such Option,  shall be  proportionately  adjusted for any
         increase  or decrease  in the number of issued  shares of Common  Stock
         resulting  from a stock split,  reverse stock split,  recapitalization,
         combination,  reclassification,  the payment of a stock dividend on the
         Common  Stock or any other  increase  or decrease in the number of such
         shares of Common Stock effected without receipt of consideration by the
         Company;   provided,   however,  that  conversion  of  any  convertible
         securities  of the Company  shall not be deemed to have been  "effected
         without receipt of consideration". Such adjustment shall be made by the
         Board, whose determination in that respect shall be final,  binding and
         conclusive.  Except  as  expressly  provided  herein,  no  issue by the
         Company of shares of stock of any class, or securities convertible into
         shares of stock of any class, shall affect, and no adjustment by reason
         thereof  shall be made with  respect  to, the number or price of Common
         Stock subject to an Option.

         The  Committee  may, if it so  determines  in the  exercise of its sole
         discretion,  also make  provision  for adjusting the number or class of
         securities  covered  by any  Option,  as well as the  price  to be paid
         therefor,   in  the  event  that  the  Company   effects  one  or  more
         reorganizations,   recapitalizations,   rights   offerings,   or  other
         increases or reductions of shares of its outstanding  Common Stock, and
         in the event of the Company being  consolidated with or merged into any
         other corporation.

         Unless  otherwise  determined  by the Board,  upon the  dissolution  or
         liquidation  of the Company the  Options  granted  under the Plan shall
         terminate and  thereupon  become null and void.  The Optionee  shall be
         given  not  less  than ten  (10)  days  notice  of such  event  and the
         opportunity  to exercise each  outstanding  option before such event is
         effected.

         Upon any merger or  consolidation,  if the Company is not the surviving
         corporation, the Options granted under the Plan shall either be assumed
         by the new entity or shall  terminate in accordance with the provisions
         of the preceding paragraph.

12.      Time of Granting Options.  Unless otherwise specified by the Committee,
         the date of  grant of an  Option  under  the Plan  shall be the date on
         which the  Committee  makes the  determination  granting  such  Option.
         Notice of the determination  shall

<PAGE>

         be given to each  Optionee  to whom an  Option is so  granted  within a
         reasonable time after the date of such grant.

13.      Amendment and Termination of the Plan. The Board may amend or terminate
         the Plan  from  time to time in such  respects  as the  Board  may deem
         advisable,  except that,  without approval of the holders of a majority
         of the  outstanding  capital stock no such revision or amendment  shall
         change the number of shares subject to the Plan, change the designation
         of the  class of  employees  eligible  to  receive  Options  or add any
         material  benefit to Optionees  under the Plan.  Any such  amendment or
         termination of the Plan shall not affect Options already  granted,  and
         such  Options  shall remain in full force and effect as if the Plan had
         not been  amended or  terminated.  The  modification  or  addition of a
         material term of the Plan (as  determined  under Section 162(m) and any
         applicable  Treasury  Regulations   promulgated  thereunder)  shall  be
         approved by the shareholders.

14.      Conditions  Upon  Issuance of Shares.  Shares  shall not be issued with
         respect to an Option granted under the Plan unless the exercise of such
         Option and the issuance and  delivery of such Shares  pursuant  thereto
         shall comply with all relevant  provisions of law,  including,  without
         limitation,  the  Securities  Act,  the  Exchange  Act,  the  rules and
         regulations promulgated  thereunder,  and the requirements of any stock
         exchange upon which the Shares may then be listed, and shall be further
         subject to the approval of counsel for the Company with respect to such
         compliance.  As a condition to the  exercise of an Option,  the Company
         may require the person  exercising such Option to represent and warrant
         at the time of any such  exercise  that the Shares are being  purchased
         only for  investment  and  without  any  present  intention  to sell or
         distribute  such Shares if, in the opinion of counsel for the  Company,
         such a representation is required by any of the aforementioned relevant
         provisions of law.

15.      Reservation of Shares. During the term of this Plan the Company will at
         all times  reserve and keep  available the number of Shares as shall be
         sufficient to satisfy the  requirements  of the Plan.  Inability of the
         Company to obtain  from any  regulatory  body having  jurisdiction  and
         authority deemed by the Company's counsel to be necessary to the lawful
         issuance and sale of any Shares  hereunder shall relieve the Company of
         any liability in respect of the  non-issuance or sale of such Shares as
         to which such requisite authority shall not have been obtained.

16.      Information  to Optionee.  During the term of any Option  granted under
         the Plan, the Company shall provide or otherwise make available to each
         Optionee a copy of its financial statements at least annually.

17.      Option Agreement.  Options granted under the Plan shall be evidenced by
         Option Agreements.

18.      Indemnification of Board (or Committee, if applicable).  In addition to
         such other rights of indemnification as they may have a directors or as
         members of the  Committee,  the members of the Board and the  Committee
         shall be  indemnified by the Company  against the reasonable  expenses,
         including   attorneys'  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

<PAGE>

         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 such
         action, suit or proceeding except in relation to matters as of which it
         shall be adjudged in such action, suit or proceeding that such Board or
         Committee  member  is  liable  for  negligence  or  misconduct  in  the
         performance of his or her duties; provided that within sixty days after
         institution of any such action, suit or proceeding a Board or Committee
         member shall in writing offer the Company the  opportunity,  at its own
         expense, to handle and defend the same.EXHIBIT 10.2

                         EXECUTIVE EMPLOYMENT AGREEMENT

         This agreement  ("Agreement") is made effective March 4, 1998,  between
OnLine  Entertainment,  Inc.  ("ONLN" or the "Company') and Larry G. Arnold (the
"Executive').

         In  consideration  of the  mutual  benefits  and  obligations  in  this
Agreement,  and  intending  to be legally  bound,  ONLN and  Executive  agree as
follows:

         1.       OFFICE AND DUTIES

         a.  Executive  shall be employed  as follows:  (i) by ONLN as its Chief
Executive  Officer;  (ii) as Chief Executive Officer of Glitch Master Marketing,
Inc. ("GMM"), a subsidiary corporation of ONLN; and (iii) and as Chief Executive
Officer OnLine Power Supply, Inc. ("OPS"), a subsidiary corporation of ONLN. The
Executive  shall  have the  duties  specified  in the  Bylaws of the  respective
companies,  and such duties as may be lawfully assigned by the respective Boards
of Directors from time to time.

         b. Executive agrees to devote  substantially all of his time and energy
to the performance of the duties of those positions so long as his employment in
such position shall be continued by ONLN or its successors.  Notwithstanding the
above,  Executive shall be permitted to have interests in other business that do
not compete with the Company or its  subsidiaries,  and may render  services for
such other business interests,  provided such service does not prevent Executive
from performing his duties under this Agreement.

         c. The Company  agrees to nominate  Executive for election to the Board
at each annual  meeting of  stockholders  of the Company  during his  employment
hereunder,  or at which his  class,  if such class is  designated,  comes up for
election, and shall perform likewise for election to the Board of GMM and OPS.

         2.       TERM OF EMPLOYMENT

         a. ONLN shall employ  Executive and Executive  accepts such  employment
for a term  beginning on the date of this  Agreement  and ending March 31, 2003,
upon the terms and conditions set forth in this Agreement.

         b. Notwithstanding the foregoing,  if the Agreement shall not have been
terminated in accordance with the provisions herein on or before March 31, 2003,
the  remaining  term of the  Agreement  shall be extended  such that at each and
every moment of time  thereafter,  the remaining term shall be five years unless
(i) the  Agreement  is  terminated  earlier in  accordance  with the  provisions
herein, or (ii) on or after September 30, 2002, the Board of Directors  notifies
Executive  in writing of its  determination  to have the date of this  Agreement
expire six months from the date of such notification.

         c. So long as Executive continues employment with at least one of ONLN,
GMM, or OPS, the  termination of services by Executive for any one of ONLN, GMM,
or OPS: (i) shall not be deemed a  termination  of services for any other of the
respective  companies  unless otherwise  specifically set forth in writing;  and
(ii) shall not reduce the compensation to Executive under this Agreement.

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Executive Employment Agreement
Page 2

         3.       DEFINITIONS

         For  purposes of this  Agreement,  the  following  terms shall have the
meaning set forth in this paragraph:

         a.       "Base  Compensation" shall  mean an  amount per annum equal to
the sum of:

                  (i) the annual base salary in effect for Executive immediately
preceding termination of employment (excluding any reduction in base salary made
in breach of this Agreement);

                  (ii) an amount  equal to the average of the cash  bonuses paid
to Executive  over the three most  recently  completed  calendar  years prior to
termination  (including any bonus amounts  deferred by Executive  under any ONLN
deferred compensation plan or arrangement);

                  (iii) continued  participation  in all basic and  supplemental
life,  accident,  disability,  and other  Company-sponsored  insurance  benefits
provided to  Executive  immediately  preceding  termination  (or,  if  continued
participation  in one or  more  of  these  benefits  is not  possible,  benefits
substantially similar to those which Executive would have been entitled to if he
had  continued as an employee of the Company at the same  compensation  level in
effect immediately prior to termination); and

                  (iv)  continuance  of vesting  and benefit  accrual  under any
Company-sponsored  retirement programs in effect for Executive immediately prior
to termination (or, if continued participation in such programs is not possible,
benefits substantially similar to those which executive would have been entitled
to if he had  continued  as an employee of the Company at the same  compensation
level immediately prior to termination).

         b.       "Board " means the Board of Directors of the Company.

         c.  "Cause"  shall mean (i) willful  refusal by  Executive  to follow a
lawful  written  demand of the Board,  (ii)  Executive's  willful and  continued
failure to perform his duties under this  Agreement  (except due to  Executive's
incapacity  due to  physical  or  mental  illness)  after a  written  demand  is
delivered to Executive by the Board specifically identifying the manner in which
the Board  believes  that  Executive  has failed to perform  his  duties,  (iii)
Executive's  willful engagement in conduct materially  injurious to the Company,
or (iv) Executive's  conviction for any felony  involving moral  turpitude.  For
purpose of clauses (i), (ii) or (iii) of this definition,  no act, or failure to
act on Executive's  part shall be deemed "willful" unless done, or omitted to be
done,  by  Executive  not in good  faith  and  without  reasonable  belief  that
Executive's act was in the best interests of the Company.

         d.  "Constructive   Termination"   shall  mean  Executive's   voluntary
termination  of employment  within ninety (90) days  following the occurrence of
one or more of the following events, unless such event is approved in writing by
Executive in advance of such event:

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Executive Employment Agreement
Page 3

                  (i) A  failure  by the  Company  to  abide by any part of this
Agreement that is not remedied  within ten (10) business days of notification by
Executive of such  failure,  including any  violation of  Executive's  rights as
described  in this  Agreement  unless  such rights are  replaced by  alternative
rights of approximately equal value;

                  (ii) A  reduction  in  Executive's  title or  responsibilities
below the positions specified in paragraph 1 of this Agreement; or

                  (iii) A relocation  of  Executive's  primary place of business
more than fifty (50) miles from its location as of the date of this Agreement.

         e. "Disability" shall be deemed to have occurred if Executive is unable
to substantially  perform the normal duties of his position with the Company, or
if  the  Executive  makes   application   for  disability   benefits  under  any
Company-sponsored  long-term disability program covering Executive and qualifies
for such benefits.

         f. "Retirement" shall mean Executive's  termination of service with the
Company at any time after 12 months from the date of this Agreement.

         4.       COMPENSATION

         For all  services  rendered  by the  Executive  in any  capacity to the
Company or any subsidiary or successor  during the term of this  Agreement,  the
Executive shall be compensated as follows:

         a. Base  Salary.  The minimum  annual base salary  payable to Executive
upon commencement of this Agreement shall be $72,000. The Board or its Executive
Compensation  Committee  of the Board (if one is  designated)  will  review  the
Executive's  base  salary  at least  annually  to  determine  the  amount of any
increase. Upon any such increase in Executive's base salary, such increased rate
shall  hereafter  constitute  Executive's  minimum  annual  base  salary for all
purposes of this  Agreement,  except  that the  Company  may reduce  Executive's
annual base Salary during any year by not more than 10% below the base salary in
effect at the  beginning  of the year as part of any  general  salary  reduction
which applies to all officers of the Company and its subsidiaries (if any).

         b.       Incentive Options.

                  (i) In recognition of the considerable  challenges accepted by
him,  Executive  shall receive an Incentive  Bonus  consisting of a stock option
grant to purchase  500,000 shares of the Company's common stock fully vested and
priced at $.0001 per share.  The Incentive  Options shall expire five years from
the date of this Agreement unless earlier exercised.

                  (ii) In addition  Executive shall receive a stock option grant
of 500,000 shares of the Company's  common stock priced at $.0001 per share, and
vesting in accordance  with the appropriate  portions of the  Performance  Bonus
schedule specified below (the "Performance  Options').  The Performance  Options
that  become  vested  shall  expire  five years from the date of this  Agreement
unless earlier exercised.

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Executive Employment Agreement
Page 4

                  (iii) In case of any  merger in which the  Company  is not the
surviving entity,  reclassification,  capital  reorganization or other change of
outstanding  shares of the securities of the Company (other than a change in par
value,  or from par value to no par value,  or from no par value to par  value),
the Company  shall cause  effective  provision to be made so that the  Executive
shall have the right  thereafter,  by exercising  Incentive Options specified in
paragraph  4b(i) and all  Performance  Options that are vested,  to purchase the
kind and amount of shares of securities and property  receivable by the security
holders  upon such merger,  reclassification,  capital  reorganization  or other
change.

         c.  Performance  Bonus.  In order to promote  goals  that may  increase
shareholder value, the Executive shall,  subject to sub paragraphs (i) and (ii),
below, be eligible to receive Performance Bonuses as follows:

         (i)      For the Company's fiscal year ending December 30, 1998:

                  (A)  fifty  percent  of base  salary if the  Company  achieves
consolidated net income for the fiscal year ending December, 1998 of one hundred
thousand dollars ($100,000) or more.

                  (B)  Executive  shall  receive  an  additional  bonus of fifty
percent of base  salary if the average of the closing bid and ask prices of ONLN
common stock for the last 20 business days ending  December 31, 1998 as reported
on the Company's primary market or trading forum, is equal to or exceeds $6.00.

                  (C) Further,  if the consolidated gross revenue of the Company
for the fiscal year ending  December,  1998 exceeds  $1,200,000,  the  Executive
shall receive an additional bonus equal to five percent of the amount of revenue
which exceeds $1,200,000.

         (ii) For the  Company's  fiscal  years  ending  September  30, 1999 and
later:

                  (A) An amount  equal to fifty  percent  of base  salary if the
average of the closing  bid and ask prices of ONLN common  stock for the last 20
business  days ending  December  31, 1998 as reported on the  Company's  primary
market or trading forum, exceeds the previous year's 20 business day average for
the same period by 51 % or more.

                  (B) Further, if the audited  consolidated gross revenue of the
Company  exceeds  $3,000,000 by December 30, 1999, the Executive shall be deemed
vested in 35 percent of the Performance  Options;  if in excess of $6,000,000 by
December  30,  2000,  he will be  vested  in an  additional  35  percent  of the
Performance  Options,  and if in excess of  $9,000,000  by December 30, 2001, he
will be vested in the remaining 30% of the Performance  Options. The Performance
Options  will  vest  at  the  earliest  fiscal  year  in  which  the  respective
consolidated  gross  revenue  requirements  are achieved.  Therefore,  by way of
example,  it is possible for all the Performance  Options to vest based upon the
first  measuring  period  if  all  the  respective  consolidated  gross  revenue
requirements are met in the first measuring period. The Performance Options that
do not vest are forfeited.

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Executive Employment Agreement
Page 5

         (iii)  Each cash  Performance  Bonus  shall be  payable  either 30 days
following the date Company's audited  consolidated  financial statements for the
fiscal year become  available  or on March 15  following  the end of that fiscal
year, whichever is later (the "Bonus Payment Date").

         (iv) In the event that there shall be a combination of the Company with
another  company,  or any other  occurrence  similar to a combination,  and as a
result  thereof  the  Executive  does not  continue  his  employment  under this
Agreement,  or this  Agreement is not accepted  and  continued by the  surviving
entity, then the Executive shall be fully vested in all Performance Options.

         (v)  Executive  shall be entitled to receive the bonus  provided for in
the  foregoing  paragraphs  for each  fiscal  year  during  which he is employed
hereunder and, in addition,  for the next eighteen (18) months after termination
of his employment:  provided,  that said post-  termination bonus coverage shall
only  extend for  twelve  (12)  months  after  termination  if  Executive  takes
employment  with  another  company  in the  same  industry  as ONLN or any  ONLN
subsidiary  within  twelve  (12) months of  termination,  and shall not apply if
Executive has been discharged for cause.

         (vi)  Bonus  payments  shall  be in cash or a  combination  of cash and
Restricted Stock or stock options at the discretion of the Executive.

         (vii)  In all  cases  where a bonus is based  upon the  average  of the
closing bid and ask prices for ONLN common  stock,  the  average  daily  trading
volume for the 20 day  measuring  period must be at least 10,000 shares in order
to qualify for the bonus.

         d. Registration of Performance and Incentive Stock Options. The Company
agrees  to file a  registration  statement  with  the  Securities  and  Exchange
Commission to register the public sale of the ONLN common stock  underlying  the
performance and incentive stock options granted under this Agreement,  within 90
days of the vesting of the first Performance Bonus option.

         e.  Vacation.  Executive  shall  receive five (5) weeks of vacation per
year.

         f.  Automobile  Allowance.  Executive  shall  receive an  unaccountable
automobile allowance of $500.00 per month.

         g. Benefit  Plans.  Executive  shall be entitled to  participate in all
perquisites  and  health  and  welfare  benefits  generally  available  to other
executive officers and employees of the Company.  Executive shall participate in
any key executive  long-term  incentive program or other executive bonus program
which the Board or its Executive Compensation Committee (if any) may define.

         h. Reimbursement.  Reimbursement of all reasonable expenses incurred by
Executive  in  connection  with  performance  of his duties upon  submission  of
vouchers,  subject to such  guidelines and policies as may be promulgated by the
Company for senior executives or employees.

         i. Life Insurance. In addition to any coverage required by the Company,
Executive  shall be  provided  with a life  insurance  policy  in the  amount of
$250,000  (provided  he can  meet the  medical  conditions  for such  coverage),
payable to such beneficiaries as he shall designate.

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Executive Employment Agreement
Page 6

         5.       EXECUTIVE's RIGHTS UPON TERMINATION

         a. In the event that  Executive's  employment at ONLN is terminated for
any reason other than (i) Death,  (ii) Disability,  (iii) Cause,  (iv) voluntary
resignation by Executive not constituting Constructive  Termination,  or (v) the
expiration  of the  term of his  Agreement,  ONLN  will  pay to  Executive  Base
Compensation  for a period  continuing five years after the date of termination.
In addition,  ONLN will fully vest all stock options and restricted stock awards
previously  granted by ONLN to Executive and fully vest and  immediately  pay to
Executive  any accrued  award earned by Executive  under the  Performance  Bonus
Plan(s),  above, or any other ONLN Executive  incentive plans which may exist at
the time of termination and in which the Executive is a participant.

         b. In the event the  Executive's  employment at ONLN is terminated  for
Death,  Disability,  Cause, voluntary resignation not constituting  Constructive
Termination,  or upon expiration of the term of this Agreement,  Executive shall
be  entitled  to all  benefits  under this  Agreement,  including  base  salary,
performance  and  incentive  bonuses for eighteen  (18) months after such event.
Stock options vested to date of termination  may be exercised at any time during
the eighteen (18) months period  following  termination  and may be exercised by
the  estate of the  Executive  in the event of his  death  during  the same time
period.

         c. Should the Executive  exercise his option to terminate his Executive
Employment voluntarily for Constructive Termination,  the Company shall continue
to employ the Executive as an advisor and consultant  ("Consulting  Employment")
for a period of five  years.  During the period of  Consulting  Employment,  the
Executive  shall at reasonable  times but not full time, be available to consult
with and advise the Company's officers, directors,  representatives and clients.
Executive shall be entitled to all benefits under this Agreement, including base
salary,  performance  and  incentive  bonuses  during  the  term  of  Consulting
Employment.  Stock options  vested to date of  Constructive  Termination  may be
exercised  at any time during the period of  Consulting  Employment.  During the
period of Consulting  Employment,  the Executive shall be permitted to engage in
any business so long as such business  practice is not in  competition  with the
Company.

         d.  Base  Compensation  payments  shall  be made  when  payments  would
otherwise have been made to Executive if he were still employed by ONLN,  except
in such cases  where a  different  payment  schedule  is  provided  for in other
Company-sponsored plans or programs.

         e. In the event of  termination  of  employment  of  Executive  for any
reason,  the Company shall  immediately  release the  Executive,  and obtain the
release of the Executive by third parties,  from any and all personal guarantees
and other credit  obligations the Executive has incurred or undertaken on behalf
of the Company or any subsidiary.

         6.       DESIGNATION OF BENEFICIARIES

         a. If Executive should die while receiving Base  Compensation  payments
pursuant to this Agreement, the remaining Base Compensation payments which would
have  been paid to  Executive  if he had lived  shall be paid as  designated  by
Executive on his Company  beneficiary  Designation  Form. Such payments shall be
made at the same time and in the same manner as if the  Executive  were alive to
receive the payments, except in such cases where a different payment schedule is
provided, or in other company-sponsored plans or programs.

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Executive Employment Agreement
Page 7

         b. The filing of a new Company beneficiary Designation Form will cancel
all designations previously filed. Any finalized divorce or marriage (other than
a  common-law  marriage)  of  Executive  subsequent  to the date of  filing of a
beneficiary  designation shall revoke such designation,  unless: (i) In the case
of divorce,  the previous spouse was not designated as beneficiary,  and (ii) In
the case of marriage,  Executive's  new spouse had previously been designated as
beneficiary.

         c. If Executive fails to designate a beneficiary as provided for above,
or if the beneficiary designation is revoked by marriage,  divorce, or otherwise
without  execution  of a new  designation,  then  the  Company's  Board  (or its
Compensation  Committee  if one exists)  shall  direct the  distribution  of any
benefits under this Agreement to Executive's estate.

         7.       TRADE SECRETS AND CONFIDENTIAL INFORMATION

         The parties  hereto  recognize that a major need of the Company and its
subsidiaries  is to preserve  its  specialized  knowledge,  trade  secrets,  and
confidential  information concerning its business. The strength and good will of
the  Company  is derived  from the  specialized  knowledge,  trade  secrets  and
confidential   information   generated  from   experience  with  the  activities
undertaken  by  the  Company  and  its  subsidiaries.  The  disclosure  of  this
information  and  knowledge  to  competitors  would  be  beneficial  to them and
detrimental to the Company,  as would the  disclosure of  information  about the
marketing   practices,   pricing  practices,   costs,  profit  margins,   design
specifications,  analytical techniques, and similar items of the Company and its
subsidiaries.  By reason of his position with the Company, Executive has or will
have access to, and has obtained or will obtain,  specialized  knowledge,  trade
secrets and  confidential  information  about the Company's  operations  and the
operations of its subsidiaries.  Therefore,  Executive hereby agrees as follows,
recognizing  that the Company is relying on these  agreements  in entering  into
this Agreement:

         a. Executive covenants and agrees that Executive shall not, directly or
indirectly,  use,  disseminate,  or disclose for any purposes other than for the
purposes  of the  Company's  business,  any  confidential  information  or trade
secrets of the Company or its subsidiaries,  unless such disclosure is compelled
in a judicial  proceeding.  Upon termination of this employment,  all documents,
records,  notebooks,  and similar repositories of records containing information
relating  to  any  trade  secrets  or  confidential   information  then  in  the
Executive's  possession or control,  whether prepared by him or by others, shall
be left with the  Company or  returned to the  Company  upon its  request.  This
section shall not restrict the Executive  from using his general  knowledge (the
ideas,  concepts,  know-how and other industry  information which is part of his
common  knowledge)  from pursuit of livelihood  subsequent to any termination of
this Agreement.

         b. As a material inducement to the Company to enter into this Agreement
and to pay Executive the  compensation  and benefits  stated in this  Agreement,
Executive  covenants and agrees that during the term of this Agreement and for a
period of one year following the  termination  of the  Agreement,  the Executive
shall  not  compete  with  the  Company  or its  subsidiaries,  pursue  business
opportunities  with or serve  as a  consultant  or  member  of the  staff in any
capacity to any other  companies with whom the Company or its  subsidiaries  has
transacted business during the prior year of employment, either as a customer or
a supplier,  without the prior written  permission of the Company.  For one year
following  termination  of employment,  the Executive  confirms that he will not
directly or  indirectly,  without prior written  consent,  perform work that the
Company or any of its subsidiaries holds in backlog or is pursing at the time of
termination.

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Executive Employment Agreement
Page 8

         c. The covenant of non-disclosure  and covenant not to compete apply to
the  Company and its  subsidiaries,  have been  negotiated  and agreed to by and
between the Company and Executive with the full knowledge of and pursuant to the
Colorado  Trade  Secrets  Act,  and are  deemed by both  parties  to be fair and
reasonable.

         d. Executive  agrees that any breach of the covenant of  non-disclosure
or covenant not to compete will cause the Company irreparable damage for which a
remedy at law will not be wholly adequate.  In the event of breach or threatened
breach by  Executive  of the  covenant  of  non-disclosure  or  covenant  not to
compete,  the Company  shall be entitled to  injunctive  relief to restrain  the
breach or threatened  breach,  as well as to damages sustained and recovery of a
reasonable  attorney  fee.  The  Company  may  elect to  enforce  this  right to
injunctive  relief in any court of jurisdiction,  or may proceed in arbitration.
This section controls and supersedes  Section 10.g (Dispute  Resolution) of this
Agreement.  If there is a judgment in court or in arbitration that the Executive
has  breached  the covenant of  non-disclosure  or covenant not to compete,  the
Company  shall be  entitled to  terminate  all  payment  obligations  under this
Agreement, and recover any payments made to Executive after the date of breach.

         e. The  parties  intended  that the  covenant  not to compete  shall be
construed  as a series of  separate  covenants,  one for each county and city to
which it may be applicable.  Except for geographic coverage,  each such separate
covenant  not to  compete  shall  be  deemed  identical.  If,  in  any  judicial
proceeding, a court shall refuse to enforce any of the separate covenants,  then
the  unenforceable  covenant  shall be deemed  reduced or  eliminated  from this
Agreement for the purpose of those proceedings to the extent necessary to permit
the  remaining  separate  covenants  to be  enforced.  In the  event a court  of
competent  jurisdiction finds this covenant so overbroad as to be unenforceable,
the parties intend that this covenant be reduced in scope by the court, but only
to the extent  necessary  by the court to render  the  covenant  reasonable  and
enforceable,  keeping in mind that  Executive and the Company intend to give the
Company the broadest possible protection against harmful future competition.

         8.       TAX MATTERS

         a. If any  payments  due  Executive  under  this  Agreement  result  in
Executive's  liability  for an excise tax  ("parachute  tax") under the Internal
Revenue Code (the "Code'),  the Company will pay to Executive,  after  deducting
any  Federal,  state or local  income  tax  imposed  on the  payment,  an amount
sufficient to fully satisfy the "parachute tax" liability. Such payment shall be
made to  Executive  not later than thirty (30) days prior to the due date of the
"parachute tax".

         b. To the extent  required by law, the Company shall  withhold from any
payments under this Agreement any applicable federal, state or local withholding
taxes.

                                       96

<PAGE>

Executive Employment Agreement
Page 9

         9.       INDEMNIFICATION

         So long as  Executive  is not found by a court of law to be guilty of a
willful  and  material  breach  of this  Agreement,  or to be  guilty  of  gross
misconduct,  he  shall  be  indemnified  from and  against  any and all  losses,
liability,  claims and  expenses,  damages,  or causes of action,  proceeding or
investigations,  or threats  thereof  (including  reasonable  attorney  fees and
expenses  of counsel  satisfactory  to and  approved by  Executive)  incurred by
Executive,  arising  out of,  in  connection  with,  or based  upon  Executive's
services  and  the  performance  of  his  duties  pursuant  to  this  Employment
Agreement,  or any  other  matter  contemplated  by this  Employment  Agreement,
whether or not resulting in any such  liability  subject to such  limitations as
are provided by the  Colorado  Business  Corporations  Act.  Executive  shall be
reimbursed by the Company as an when incurred for any reasonable legal and other
damage,  liability,  action  proceeding,  investigation  or threat  thereof,  or
producing  evidence,  producing  documents or taking any other action in respect
thereto  (whether or not  Executive  is a defendant in or target of such action,
proceeding or investigation), subject to such limitations as are provided by the
Colorado Business Corporations Act.

         10.      OTHER MATTERS

         a. Successors.  The rights and duties of a party hereunder shall not be
assignable  by that  party;  provided,  however,  that this  Agreement  shall be
binding upon and insure to the benefit of any  successor  of ONLN,  and any such
successor  shall  be  deemed  substituted  for  ONLN  under  the  terms  of this
Agreement.  The term  successor as used herein shall  include any person,  firm,
corporation or other business  entity which at any time, by merger,  purchase or
otherwise,  acquires all or substantially all of the assets or business of ONLN.
This  Agreement  shall also be binding  upon and shall  inure to the  benefit of
Executive, Executive's heirs, executors, administrators and beneficiaries.

         b. Entire Agreement. With respect to the matters specified herein, this
Agreement  contains the entire agreement  between the parties and supersedes all
prior oral and written  agreements,  understandings and commitments  between the
parties.   This  Agreement   shall  not  affect  the  provisions  of  any  other
compensation, retirement or other benefits program of ONLN to which Executive is
a party or of which he is a beneficiary.  No amendments to this Agreement may be
made except through a written document signed by both parties.

         c. Validity.  In the event that any provision of this Agreement is held
to be invalid, void or unenforceable,  the same shall not affect, in any respect
whatsoever, the validity of any other provision of the Agreement.

         d. Notice. Any notice or demand required or permitted to be given under
this Agreement  shall be made in writing and shall be deemed  effective upon the
personal  delivery thereof if delivered or, if by express delivery  service,  24
hours after placing in the control of a nationally  recognized  express delivery
service; or if mailed, 72 hours after having been deposited in the United States
mail,  postage prepaid,  and addressed in the case of ONLN to its then principal
place of business,  presently 6909 South Holly Circle, Suite 320, Englewood,  CO
80112, and in the case of Executive to Larry G. Arnold, 6207 South Forest Court,
Littleton,  CO 80121.  Either party may change the address to which such notices
are to be addressed  by giving the other party  notice in the manner  herein set
forth.

                                       97

<PAGE>

Executive Employment Agreement
Page 10

         e.  Attorneys  Fees and  Costs.  In any  action  at law or in equity to
enforce any of the provisions or rights under this Agreement,  the  unsuccessful
party to such  litigation,  as  determined  by the Court in a final  judgment or
decree,  shall pay the  successful  party or  parties  all costs,  expenses  and
reasonable  attorneys' fees incurred therein by such party or parties (including
without  limitation such costs,  expenses and fees on any appeals),  and if such
successful  party or  parties  shall  recover  judgment  in any such  action  or
proceeding, such costs, expenses and attorneys' fees shall be included a part of
such judgment.  Notwithstanding the foregoing  provision,  in no event shall the
successful  party  or  parties  be  entitled  to  recover  any  amount  from the
unsuccessful  party for costs,  expenses  and  attorneys'  fees that  exceed the
unsuccessful party's costs,  expenses and attorneys' fees in connection with the
action or proceeding.

         f.  Mitigation and Offset.  Executive shall not be required to mitigate
the amount of any payment  provided for in this Agreement by seeking  employment
or  otherwise,  nor to offset the  amount of any  payment  provided  for in this
Agreement  by  amounts  earned  as  a  result  of   Executive's   employment  or
self-employment during the period he is entitled to such payment.

         g.  Applicable  Law  and  Dispute   Resolution.   To  the  full  extent
controllable by stipulation of the parties,  this Agreement shall be interpreted
under  Colorado law. All disputes  arising out of this Agreement will be settled
by  binding  arbitration  in  Denver,  Colorado,  with a  representative  of the
American Arbitration Association or successor organization.

         h.  Survival  of  Obligations.  The  obligation  of the  parties  under
Sections 5, 7, 9, and 10 of this Agreement shall survive any termination of this
Agreement.

         This  Executive  Employment  Agreement  has been  signed by the parties
effective as of the date first stated above.

ONLINE ENTERTAINMENT, INC.                  EXECUTIVE

   /s/   Gordon F. Ware                         /s/    Larry G. Arnold
----------------------------------          -----------------------------------
By:                                         Larry G. Arnold

                                       98

<PAGE>

                         EXECUTIVE EMPLOYMENT AGREEMENT
                                   AMENDMENT 1

This  Amendment  to  the  Executive   Employment  Agreement  is  made  effective
retroactively to March 4, 1998, between OnLine  Entertainment,  Inc., ("ONLN" or
the "Company") and Larry G.
Arnold (the "Executive").

In consideration  of the mutual benefits and obligations in this Agreement,  and
intending to be legally bound, ONLN and Executive agree as follows:

Reference paragraph 4b(i),  Compensation  (Incentive Options). This paragraph is
changed and amended to the following:

In recognition of the considerable  challenges  accepted by him, Executive shall
receive an  Incentive  Bonus  consisting  of a stock  option  grant to  purchase
500,000  shares of the  Company's  common stock fully vested and priced at $5.50
per share.  The  incentive  options shall expire ten years from the date of this
Agreement unless earlier exercised.

This  Amendment to the  Executive  Employment  Agreement  has been signed by the
parties as of the date below and effective retroactively to March 4, 1998.

Date:    12/31/98                          Date:    12/31/98

OnLine Entertainment, Inc.                 Executive

     /s/    Kris M. Budinger                /s/    Larry G. Arnold
----------------------------------        ------------------------------------
By:                                        Larry G. Arnold

                                       99

<PAGE>

                            ONLINE POWER SUPPLY INC.

                       (FORMERLY ONLINE ENTERTAINMENT INC)

                       AUTHORIZATION FOR PAYROLL INCREASE

         Effective  January 1, 2000, Mr. Larry Arnold's base  compensation  will
increase  $6,500 per month to a monthly  total of $12,500  and to an annual base
compensation  of  $150,000  in  his  position  as C E O.  All  other  terms  and
conditions of Mr. Arnold's Executive Employment  Compensation Agreement executed
in March, 1998 remain the same.
         The  Board  of  Directors   unanimously   approved   this  increase  in
compensation for Mr. Arnold at it's meeting on December 1, 1999.

                                         /s/   Kris M. Arnold
                                       -----------------------------------------
                                       On Behalf of the Board of Directors of
                                       OnLine Power Supply Inc.
                                       (Formerly OnLine Entertainment Inc)

                                       100

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