Document:

CONSULTING AGREEMENT

     This  Consulting  Agreement  (this  "Agreement")  is entered into as of 6th
December,   2000,  by  and  between  CathayOnline  Inc.  (the  "Company"),   and
Trueyou.com Inc (the "Consultant").

                                     WHEREAS

     1.  Consultant  has expertise in the area of the Company's  business and is
willing to provide consulting services to the Company.

     2. Mr. Kenneth Levy is the legal representative of the Consultant company.

     3.  The  Company  is  willing  to  engage   Consultant  as  an  independent
contractor,  and not as an  employee,  on the  terms  and  conditions  set forth
herein.

                                    AGREEMENT

     In  consideration  of the  foregoing  and of the mutual  promises set forth
herein, and intending to be legally bound, the parties hereto agree as follows:

     1. Engagement.

     (a) The Company  hereby  engages  Consultant to render,  as an  independent
contractor,  through Mr.  Kenneth  Levy the  consulting  services  described  in
Exhibit A hereto and such other  services  as may be agreed to in writing by the
Company and Consultant from time to time.

     (b) Consultant hereby accepts the engagement to provide consulting services
to the Company on the terms and conditions set forth herein.

     2. Term.  This  Agreement will commence on the date first written above for
the period of one (1) year. The Agreement is renewable at the sole discretion of
the  Company,  and Company may  terminate  this  Agreement  upon 30 days written
notice to Consultant.

     3. Compensation.

     (a) In  consideration  of the services to be performed by  Consultant,  the
Company  agrees to pay  Consultant  in the  manner and at the rates set forth in
Exhibit A.

     (b) Out of pocket  business  expenses  incurred  by  Consultant  in rending
consulting  services to Company,  which are jointly authorized by CEO and CFO of
the Company in advance in writing shall be reimbursed by Company to Consultant.

     4. Consultant's Business Activities.

     (a)  During  the  term of this  Agreement,  Consultant  will  engage  in no
business or other activities, which are or may be, directly competitive with the
business  activities of the Company without  obtaining the prior written consent
of the Company.

     (b) Consultant shall devote such time, attention and energy to the business
and affairs of the Company as requested by the Company, and in any event no less
than the amount of time specified in Exhibit A hereto.

     5. Confidential  Information and Assignments.  Consultant is simultaneously
executing a  Confidential  Information  and Invention  Assignment  Agreement for
Consultants  in the  form  of  Exhibit  B  (the  "Confidential  Information  and
Invention  Assignment  Agreement").   The  obligations  under  the  Confidential
Information and Invention Assignment Agreement shall survive termination of this
Agreement for any reason.

     6. Interference with the Company's Business.

     (a) Notwithstanding any other provision of this Agreement,  for a period of
one year after termination of this Agreement,  Consultant shall not, directly or
indirectly,  employ, solicit for employment, or advise or recommend to any other
person  that such other  person  employ or solicit  for  employment,  any person
employed or under contract  (whether as a consultant,  employee or otherwise) by
or to the  Company  during  the  period of such  person's  association  with the
Company and one year thereafter.

     (b)  Notwithstanding  any other  provision  of this  Agreement,  and to the
fullest extent  permitted by law, for a period of one year after  termination of
this  Agreement,  Consultant  shall not,  directly  or  indirectly,  solicit any
clients or customers of the Company.  Consultant  agrees that such  solicitation
would  necessarily  involve  disclosure or use of  confidential  information  in
breach of the Confidential Information and Invention Assignment Agreement.

     7. Representations and Warranties.  Consultant  represents and warrants (i)
that Consultant has no obligations,  legal or otherwise,  inconsistent  with the
terms of this Agreement or with Consultant's  undertaking this relationship with
the  Company,  (ii) that the  performance  of the  services  called  for by this
Agreement do not and will not violate any applicable  law, rule or regulation or
any  proprietary or other right of any third party,  (iii) that  Consultant will
not use in the  performance  of his  responsibilities  under this  Agreement any
confidential information or trade secrets of any other person or entity and (iv)
that  Consultant has not entered into or will enter into any agreement  (whether
oral or written) in conflict with this Agreement.

     8. Indemnification.  Consultant hereby indemnifies and agrees to defend and
hold  harmless  the Company  from and  against  any and all claims,  demands and
actions, and any liabilities, damages or expenses resulting therefrom, including
court costs and reasonable  attorneys'  fees,  arising out of or relating to the
services performed by Consultant under this Agreement or the representations and
warranties  made by  Consultant  pursuant to  paragraph  7 hereof.  Consultant's
obligations under this paragraph 8 hereof shall survive the termination, for any
reason, of this Agreement.

     9.  Attorney's  Fees.  Should  either party hereto,  or any heir,  personal
representative, successor or assign of either party hereto, resort to litigation
to enforce this  Agreement,  the party or parties  prevailing in such litigation
shall be  entitled,  in  addition  to such other  relief as may be  granted,  to
recover its or their  reasonable  attorneys'  fees and costs in such  litigation
from the party or parties against whom enforcement was sought.

     10. Entire Agreement. This Agreement, contains the entire understanding and
agreement  between the parties  hereto  with  respect to its subject  matter and
supersedes   any  prior  or   contemporaneous   written   or  oral   agreements,
representations or warranties between them respecting the subject matter hereof.

     11.  Amendment.  This  Agreement may be amended only by a writing signed by
Consultant and by a representative of the Company duly authorized.

     12.  Severability.  If any term,  provision,  covenant or condition of this
Agreement,  or the  application  thereof to any person,  place or  circumstance,
shall be held by a court of competent jurisdiction to be invalid,  unenforceable
or void, the remainder of this Agreement and such term,  provision,  covenant or
condition as applied to other persons,  places and circumstances shall remain in
full force and effect.

     13. Rights  Cumulative.  The rights and remedies provided by this Agreement
are  cumulative,  and the exercise of any right or remedy by either party hereto
(or by its  successors),  whether  pursuant  to  this  Agreement,  to any  other
agreement,  or to law,  shall not preclude or waive its right to exercise any or
all other rights and remedies.

     14. Nonwaiver. No failure or neglect of either party hereto in any instance
to  exercise  any  right,  power  or  privilege  hereunder  or under  law  shall
constitute a waiver of any other right, power or privilege or of the same right,
power or  privilege  in any other  instance.  All waivers by either party hereto
must be contained in a written instrument signed by the party to be charged and,
in the case of the  Company,  by an  executive  officer of the  Company or other
person duly authorized by the Company.

     15.  Remedy for Breach.  The  parties  hereto  agree that,  in the event of
breach or threatened breach of this Agreement,  the damage or imminent damage to
the value and the goodwill of the Company's  business will be  inestimable,  and
that therefore any remedy at law or in damages shall be inadequate. Accordingly,
the parties hereto agree that the Company shall be entitled to injunctive relief
against  Consultant  in  the  event  of  any  breach  or  threatened  breach  by
Consultant,  in addition to any other relief (including damages and the right of
the Company to stop payments hereunder which is hereby granted) available to the
Company under this Agreement or under law.

     16. Agreement to Perform  Necessary Acts.  Consultant agrees to perform any
further  acts and  execute  and deliver  any  documents  that may be  reasonably
necessary to carry out the provisions of this Agreement.

     17.  Assignment.  This Agreement may not be assigned by Consultant  without
the  Company's  prior  written  consent.  This  Agreement may be assigned by the
Company in connection with a merger or sale of all or  substantially  all of its
assets, and in other instances with the Consultant's consent which consent shall
not be unreasonably withheld or delayed.

     18.   Compliance  with  Law.  In  connection  with  his  services  rendered
hereunder,  Consultant  agrees to abide by all federal,  state,  and local laws,
ordinances and regulations.

     19.  Independent  Contractor.  The relationship  between Consultant and the
Company is that of independent  contractor under a "work for hire"  arrangement.
All work product  developed by Consultant  shall be deemed owned and assigned to
Company.  This  Agreement is not authority for Consultant to act for the Company
as its  agent  or make  commitments  for the  Company.  Consultant  will  not be
eligible for any employee  benefits,  nor will the company make  deductions from
fees to the  consultant  for  taxes,  insurance,  bonds or the like.  Consultant
retains the  discretion in performing  the tasks  assigned,  within the scope of
work specified.

     20.  Taxes.  Consultant  agrees  to pay all  appropriate  local,  state and
federal taxes.

     21.  Governing Law. This Agreement  shall be construed in accordance  with,
and all actions arising hereunder shall be governed by, the laws of the State of
New York.

CathayOnline Inc.:                                             Trueyou.com Inc.:

By:                                             By:
     -----------------------------------------
Name:                                           Name:    Kenneth Levy
       ---------------------------------------        -------------------------
Title:                                          Title:  Executive Vice President
        --------------------------------------         ------------------------

<PAGE>

                                    Exhibit A

1.       Description of Services to be Rendered

              1.1 Reporting directly to CEO of the Company;

2.       Compensation

2.1 Consulting fees:

              2.1.1   Consultant  shall  be  paid  monthly  a  basic  consulting
compensation at the rate of $500 per hour, payable in form of $300 cash and $200
in form of Company's common shares evaluated at the average closing price of the
last five (5) trading days of each month thereof;

              2.1.2 The  maximum  monthly  cash  compensation  shall not  exceed
$20,000. Any cash compensation in excess of this amount shall be pre-approved by
CEO of Company and any cash balance  above  $20,000 shall be paid in the form of
common shares of the Company;

              2.1.3 Consultant may, upon mutual consent by both parties, acquire
Common  Stock of  Company  in lieu of  whole  or part of its  cash  compensation
components.

2.2 Payment of fees:

              2.2.1 The Company shall pay the consultant nine thousand  ($9,000)
dollars  upon the signing of this  Agreement as the advance for the first month'
cash  compensation  for  regular  30  service  hours.  The cash  portion  of the
consulting compensation, nine thousand ($9,000) dollars shall be made payable to
the Consultant at the 1st day of each month thereafter. Any cash compensation in
excess of this amount as a result of extra hour consulting  services rendered by
the consultant  shall be paid to the Consultant on the 1st day of the next month
subject to section 2.1.2.  Stock portion  pursuant to section 2.1.1,  and 2.1.3,
and all other  eligible  shares as a result of extra  hour  consulting  services
shall be, calculated at the proportional rate set forth in section 2.1.1, issued
to the consultant at the 10th day of the next month.

              2.2.2 If the Consultant  engaged during any month whereby the cash
portion of the compensation would reach the maximum of twenty thousand ($20,000)
dollars,   and  CEO  of  the  Company  has  not  pre-approved  any  excess  cash
compensation,  the excess cash portion shall be converted into the common shares
of the Company at the equivalent  cash value,  evaluated at the average  closing
price of the last  five (5)  trading  days of that  month,  and be paid with all
other eligible common shares on the 10th day of the next month.

2.3 Upfront shares:

              2.3.1  Consultant is entitled to five hundred  thousand  (500,000)
Common Stock of Company after this Agreement is executed by both parties.

2.4 Bonus:

              2.4.1  Consultant  shall also be entitled to a bonus determined at
the sole discretion of the Board of Directors.

2.5 Stock options:

              2.5.1  Consultant  shall be  entitled  to options  to acquire  1.8
million  (1,800,000)  shares of the Common  Stock of the Company at the exercise
price  twenty five cents  ($0.25) for the period of 5 years  effective as of the
date of signing  this  Agreement.  The  options  shall be vested in at a rate of
150,000 per month starting with the first month of this Agreement and completing
on the 12th month of this Agreement.

              2.5.2 Shares and warrants  granted  pursuant to this Agreement are
non-cancelable.

3.       Minimum Time to be Expended

              3.1  Consultant  shall be  engaged  for a minimum  of 30 hours per
month and may provide  additional  consulting  services to the Company by mutual
consent.

<PAGE>

                                    Exhibit B

           CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT
                                 FOR CONSULTANT

<PAGE>

         This CONFIDENTIAL  INFORMATION AND INVENTION  ASSIGNMENT AGREEMENT (the
   "Agreement")  is made  between  CathayOnline  Inc.  (the  "Company")  and the
   undersigned consultant.

         In  consideration  of my  relationship  with  the  Company  (which  for
   purposes of this  Agreement  shall be deemed to include any  subsidiaries  or
   Affiliates** of the Company),  the receipt of confidential  information while
   associated with the Company,  and other good and valuable  consideration,  I,
   the undersigned individual, agree that:

         1. Term of Agreement.  This Agreement  shall continue in full force and
   effect  for a period of three  months  and shall  continue  thereafter  until
   terminated with 30 days notice through a written  instrument signed by either
   party.

         2.   Confidentiality.
              ---------------

              (a) Definitions.  "Proprietary Information" is all information and
   any idea whatever form,  tangible or intangible,  pertaining in any manner to
   the  business of the Company,  or any of its  Affiliates,  or its  employees,
   clients,  consultants,  or  business  associates,  which was  produced by any
   employee or consultant of the Company in the course of his or her  employment
   or consulting  relationship or otherwise produced or acquired by or on behalf
   of the Company.  All  Proprietary  Information not generally known outside of
   the Company's  organization,  and all  Proprietary  Information so known only
   through  improper  means,  shall be  deemed  "Confidential  Information."  By
   example  and without  limiting  the  foregoing  definition,  Proprietary  and
   Confidential Information shall include, but not be limited to:

              (1)  formulas,  research and  development  techniques,  processes,
              trade secrets, computer programs, software, electronic codes, mask
              works, inventions, innovations, patents, patent

              applications,  discoveries, improvements, data, know-how, formats,
              test results, and research projects;

              (2) information about costs, profits,  markets,  sales,  contracts
              and lists of customers, and distributors;

              (3) business, marketing, and strategic plans;

              (4)  forecasts,   unpublished  financial   information,   budgets,
              projections,   and  customer   identities,   characteristics   and
              agreements; and

              (5) employee personnel files and compensation information.

         Confidential  Information  is to be broadly  defined,  and includes all
   information  that has or could have commercial  value or other utility in the
   business in which the Company is engaged or  contemplates  engaging,  and all
   information of which the unauthorized  disclosure could be detrimental to the
   interests of the Company,  whether or not such  information  is identified as
   Confidential Information by the Company.

              (b) Existence of  Confidential  Information.  The Company owns and
   has  developed  and  compiled,  and will develop and compile,  certain  trade
   secrets, proprietary techniques and other Confidential Information which have
   great value to its business. This Confidential  Information includes not only
   information disclosed by the Company to me, but also information developed or
   learned by me during the course of my relationship with the Company.

              (c) Protection of Confidential  Information.  I will not, directly
   or indirectly,  use, make available,  sell, disclose or otherwise communicate
   to any third party,  other than in my assigned  duties and for the benefit of
   the Company, any of the Company's Confidential Information,  either during or
   after my relationship with the Company.  In the event I desire to publish the
   results of my work for the Company  through  literature  or speeches,  I will
   submit such  literature  or speeches to the President of the Company at least
   10 days before  dissemination  of such  information  for a  determination  of
   whether such disclosure may alter trade secret status,  may be prejudicial to
   the interests of the Company, or may constitute an invasion of its privacy. I
   agree not to publish,  disclose or  otherwise  disseminate  such  information
   without prior written approval of the President of the Company. I acknowledge
   that I am aware that the unauthorized disclosure of Confidential  Information
   of the Company may be highly  prejudicial  to its  interests,  an invasion of
   privacy, and an improper disclosure of trade secrets.

              (d) Delivery of Confidential Information.  Upon request or when my
   relationship with the Company  terminates,  I will immediately deliver to the
   Company  all copies of any and all  materials  and  writings  received  from,
   created for, or belonging to the Company including, but not limited to, those
   which relate to or contain Confidential Information.

              (e) Location and  Reproduction.  I shall  maintain at my workplace
   only such  Confidential  Information  as I have a  current  "need to know." I
   shall  return to the  appropriate  person or location or  otherwise  properly
   dispose of Confidential  Information once that need to know no longer exists.
   I shall not make copies of or otherwise  reproduce  Confidential  Information
   unless there is a legitimate business need of the Company for reproduction.

              (f) Prior Actions and Knowledge. I represent and warrant that from
   the time of my first contact with the Company I held in strict confidence all
   Confidential Information and have not disclosed any Confidential Information,
   directly or  indirectly,  to anyone  outside the  Company,  or used,  copied,
   published, or summarized any Confidential  information,  except to the extent
   otherwise permitted in this Agreement.

              (g) Third-Party  Information.  I acknowledge  that the Company has
   received and in the future will receive from third parties their confidential
   information  subject  to a  duty  on  the  Company's  part  to  maintain  the
   confidentiality  of such  information  and to use it only for certain limited
   purposes.  I agree  that I will  at all  times  hold  all  such  confidential
   information in the strictest confidence and not to disclose or use it, except
   as necessary to perform my  obligations  hereunder and as is consistent  with
   the Company's agreement with such third parties.

              (h) Third  Parties.  I  represent  that my  relationship  with the
   Company  does not and will not  breach  any  agreements  with or  duties to a
   former  employer or any other third party. I will not disclose to the Company
   or use on its behalf any confidential  information  belonging to others and I
   will not bring onto the premises of the Company any confidential  information
   belonging to any such party unless consented to in writing by such party.

         3.   Proprietary Rights, Inventions and New Ideas.
              --------------------------------------------

              (a)  Definition.  The term "Subject Ideas or Inventions"  includes
   any and all ideas, processes, trademarks, service marks, inventions, designs,
   technologies,  computer  hardware or software,  original works of authorship,
   formulas,  discoveries,  patents,  copyrights,  copyrightable works products,
   marketing and business ideas, and all improvements,  know-how,  data, rights,
   and claims related to the foregoing that,  whether or not  patentable,  which
   are  conceived,  developed  or created  which:  (1)  relate to the  Company's
   current  or  contemplated  business;  (2) relate to the  Company's  actual or
   demonstrably  anticipated  research or development;  (3) result from any work
   performed  by me for  the  Company;  (4)  involve  the  use of the  Company's
   equipment,  supplies,  facilities  or trade  secrets;  (5) result from or are
   suggested by any work done by the Company or at the Company's request, or any
   projects  specifically assigned to me; or (6) result from my access to any of
   the Company's memoranda,  notes, records,  drawings,  sketches, models, maps,
   customer lists, research results, data, formulae, specifications, inventions,
   processes, equipment or other materials (collectively, "Company Materials").

              (b) Company Ownership. All right, title and interest in and to all
   Subject Ideas and  Inventions,  including but not limited to all  registrable
   and patent rights which may subsist  therein,  shall be held and owned solely
   by the Company, and where applicable,  all Subject Ideas and Inventions shall
   be  considered  works  made for  hire.  I shall  mark all  Subject  Ideas and
   Inventions  with the  Company's  copyright  or other  proprietary  notice  as
   directed by the Company and shall take all actions  deemed  necessary  by the
   Company  to  protect  the  Company's  rights  therein.  In the event that the
   Subject Ideas and Inventions shall be deemed not to constitute works made for
   hire, or in the event that I should otherwise, by operation of law, be deemed
   to retain any rights (whether moral rights or otherwise) to any Subject Ideas
   and  Inventions,   I  agree  to  assign  to  the  Company,   without  further
   consideration,  my entire right,  title and interest in and to each and every
   such Subject Idea and Invention.

              (c) Disclosure.  I agree to disclose  promptly to the Company full
   details of any and all Subject Ideas and Inventions.

               (d)Determination of Subject Ideas and Inventions. I further agree
   that all information and records pertaining to any idea, process,  trademark,
   service mark, invention,  technology, computer hardware or software, original
   work of authorship,  design, formula, discovery, patent, copyright,  product,
   and all improvements,  know-how,  rights, and claims related to the foregoing
   ("Intellectual  Property"),  that I do not  believe  to be a Subject  Idea or
   Invention,  but that is conceived,  developed,  or reduced to practice by the
   Company (alone by me or with others) during my relationship  with the Company
   and for one (1) year  thereafter,  shall be  disclosed  promptly by me to the
   Company.  The Company shall examine such  information to determine if in fact
   the  Intellectual  Property is a Subject  Idea or  Invention  subject to this
   Agreement.

              (e) Access.  Because of the  difficulty of  establishing  when any
   Subject Ideas or Inventions are first  conceived by me, or whether it results
   from my access to Confidential Information or Company Materials, I agree that
   any Subject Idea and Invention shall, among other circumstances, be deemed to
   have resulted  from my access to Company  Materials if: (1) it grew out of or
   resulted  from my work with the Company or is related to the  business of the
   Company, and (2) it is made, used, sold, exploited or reduced to practice, or
   an  application  for  patent,  trademark,   copyright  or  other  proprietary
   protection is filed  thereon,  by me or with my significant  aid,  within one
   year after termination of my relationship with the Company.

              (f) Authorization to Company.  In the event the Company is unable,
   after reasonable  effort, to secure my signature on any patent,  copyright or
   other analogous protection relating to a Subject Idea and Invention,  whether
   because  of my  physical  or  mental  incapacity  or  for  any  other  reason
   whatsoever,  I hereby  irrevocably  designate and appoint the Company and its
   duly authorized officers and agents as my agent and attorney-in-fact,  to act
   for and on my behalf  and  stead to  execute  and file any such  application,
   applications or other  documents and to do all other lawfully  permitted acts
   to further the  prosecution,  issuance,  and  enforcement of letters  patent,
   copyright  or other  analogous  rights or  protections  thereon with the same
   legal  force and effect as if  executed  by me. My  obligation  to assist the
   Company in obtaining and enforcing  patents and  copyrights for Subject Ideas
   and Inventions in any and all countries shall continue beyond the termination
   of my relationship with the Company, but the Company shall compensate me at a
   reasonable  rate after such  termination for time actually spent by me at the
   Company's request on such assistance.

              (g)  Acknowledgement.  I  acknowledge  that there are no currently
   existing ideas,  processes,  inventions,  discoveries,  marketing or business
   ideas or  improvements  which I desire to exclude from the  operation of this
   Agreement. To the best of my knowledge,  there is no other contract to assign
   inventions,  trademarks,  copyrights, ideas, processes,  discoveries or other
   intellectual  property  that is now in  existence  between  me and any  other
   person (including any business or governmental entity).

              (h) No Use of Name. I shall not at any time use the Company's name
or any the Company trademark(s) or trade name(s) in any advertising or publicity
without the prior written consent of the Company.

         4.   Competitive Activity.
              --------------------

              (a)  Acknowledgment.   I  acknowledge  that  the  pursuit  of  the
   activities forbidden by Section 4(b) below would necessarily involve the use,
   disclosure or misappropriation of Confidential Information.

              (b)   Prohibited   Activity.   To  prevent   the   above-described
   disclosure,  misappropriation and breach, I agree that during my relationship
   and for a period of one (1) year  thereafter,  without the Company's  express
   written consent, I shall not, directly or indirectly, (i) employ, solicit for
   employment,  or recommend for employment  any person  employed by the Company
   (or any Affiliate);  and (ii) engage in any present or contemplated  business
   activity that is or may be competitive with the Company (or any Affiliate) in
   any state where the Company  conducts its  business,  unless I can prove that
   any action taken in  contravention  of this  subsection (ii) was done without
   the use in any way of Confidential Information.

         5.  Representations and Warranties.  I represent and warrant (i) that I
   have no obligations, legal or otherwise,  inconsistent with the terms of this
   Agreement or with my undertaking a relationship  with the Company;  (ii) that
   the  performance of the services called for by this Agreement do not and will
   not violate any  applicable  law, rule or regulation  or any  proprietary  or
   other right of any third party;  (iii) that I will not use in the performance
   of my responsibilities for the Company any confidential  information or trade
   secrets of any other person or entity;  and (iv) that I have not entered into
   or will enter into any  agreement  (whether oral or written) in conflict with
   this Agreement.

         6.   Termination Obligations.
              -----------------------

              (a) Upon the  termination of my  relationship  with the Company or
   promptly upon the  Company's  request,  I shall  surrender to the Company all
   equipment,  tangible Proprietary  Information,  documents,  books, notebooks,
   records,  reports,  notes,  memoranda,   drawings,  sketches,  models,  maps,
   contracts,  lists,  computer  disks (and other  computer-generated  files and
   data),   any  other  data  and  records  of  any  kind,  and  copies  thereof
   (collectively,  "Company  Records"),  created on any medium and furnished to,
   obtained  by,  or  prepared  by myself in the  course  of or  incident  to my
   relationship with the Company, that are in my possession or under my control.

              (b) My representations,  warranties,  and obligations contained in
   this  Agreement  shall survive the  termination of my  relationship  with the
   Company.

              (c) Following any termination of my relationship with the Company,
   I will  fully  cooperate  with the  Company  in all  matters  relating  to my
   continuing obligations under this Agreement.

              (d) I hereby grant consent to  notification  by the Company to any
   of my future  employers  or  companies  I consult  with  about my rights  and
   obligations under this Agreement.

              (e) Upon termination of my relationship  with the Company,  I will
   execute a Certificate  acknowledging  compliance  with this  Agreement in the
   form reasonably requested by the Company.

         7. Injunctive  Relief.  I acknowledge  that my failure to carry out any
   obligation under this Agreement,  or a breach by me of any provision  herein,
   will constitute immediate and irreparable damage to the Company, which cannot
   be fully and  adequately  compensated in money damages and which will warrant
   preliminary and other injunctive  relief, an order for specific  performance,
   and other  equitable  relief.  I further agree that no bond or other security
   shall be required in obtaining such equitable  relief and I hereby consent to
   the issuance of such injunction and to the ordering of specific  performance.
   I also  understand  that  other  action  may be taken and  remedies  enforced
   against me.

              8. Modification.  No modification of this Agreement shall be valid
unless made in writing and signed by both parties.

              9. Binding  Effect.  This  Agreement  shall be binding upon me, my
heirs,  executors,  assigns  and  administrators  and is for the  benefit of the
Company and its successors and assigns.

              10. Governing Law. This Agreement shall be construed in accordance
with, and all actions arising under or in connection therewith shall be governed
by, the internal laws of the State of New York without  reference to conflict of
law principles.

         11.  Integration.  This Agreement sets forth the parties' mutual rights
   and  obligations   with  respect  to  proprietary   information,   prohibited
   competition,  and  intellectual  property.  It is  intended  to be the final,
   complete,  and  exclusive  statement of the terms of the parties'  agreements
   regarding  these  subjects.  This  Agreement  supersedes  all other prior and
   contemporaneous  agreements and statements on these subjects,  and it may not
   be  contradicted  by evidence of any prior or  contemporaneous  statements or
   agreements. To the extent that the practices,  policies, or procedures of the
   Company,  now or in the future, apply to myself and are inconsistent with the
   terms of this  Agreement,  the  provisions  of this  Agreement  shall control
   unless changed in writing by the Company.

         12. Not Employment.  This Agreement is not an employment agreement as I
   am an independent consultant.  I understand that the Company may terminate my
   association with it at any time, with or without cause,  subject to the terms
   of any separate written  consulting  agreement  executed by a duly authorized
   officer of the Company.

         13.  Construction.  This  Agreement  shall  be  construed  as a  whole,
   according to its fair meaning,  and not in favor of or against any party.  By
   way of example and not  limitation,  this  Agreement  shall not be  construed
   against  the  party  responsible  for any  language  in this  Agreement.  The
   headings of the paragraphs  hereof are inserted for convenience  only, and do
   not constitute part of and shall not be used to interpret this Agreement.

         14.  Attorneys'  Fees.  Should  either I or the  Company,  or any heir,
   personal  representative,  successor  or  permitted  assign of either  party,
   resort to legal  proceedings to enforce this Agreement,  the prevailing party
   (as defined in California  statutory law) in such legal  proceeding  shall be
   awarded, in addition to such other relief as may be granted,  attorneys' fees
   and costs incurred in connection with such proceeding.

         15. Severability. If any term, provision, covenant or condition of this
   Agreement,  or the application thereof to any person,  place or circumstance,
   shall be held to be invalid,  unenforceable  or void,  the  remainder of this
   Agreement and such term, provision, covenant or condition as applied to other
   persons, places and circumstances shall remain in full force and effect.

         16.  Rights  Cumulative.  The  rights  and  remedies  provided  by this
   Agreement are  cumulative,  and the exercise of any right or remedy by either
   the Company or me (or by that party's successor), whether pursuant hereto, to
   any other  agreement,  or to law,  shall not  preclude or waive that  party's
   right to exercise any or all other rights and remedies.  This  Agreement will
   inure to the benefit of the Company and its successors and assigns.

         17.  Nonwaiver.  The  failure  of either  the  Company  or me,  whether
   purposeful  or  otherwise,  to exercise in any instance  any right,  power or
   privilege  under this Agreement or under law shall not constitute a waiver of
   any  other  right,  power  or  privilege,  nor of the  same  right,  power or
   privilege in any other  instance.  Any waiver by the Company or by me must be
   in writing  and signed by either  myself,  if I am seeking to waive any of my
   rights under this Agreement,  or by an officer of the Company (other than me)
   or some other person duly authorized by the Company.

         18.  Notices.  Any notice,  request,  consent or  approval  required or
   permitted  to be given  under  this  Agreement  or  pursuant  to law shall be
   sufficient if it is in writing,  and if and when it is hand delivered or sent
   by regular  mail,  with postage  prepaid,  to my  residence  (as noted in the
   Company's records), or to the Company's principal office, as the case may be.

              19.  Agreement to Perform  Necessary  Acts. I agree to perform any
further  acts and  execute  and deliver  any  documents  that may be  reasonably
necessary to carry out the provisions of this Agreement.

              20.  Assignment.  This  Agreement may not be assigned  without the
Company's prior written consent.

              21.  Compliance with Law. I agree to abide by all federal,  state,
and local laws, ordinances and regulations.

         22.  Acknowledgment.  I acknowledge  that I have had the opportunity to
   consult  legal  counsel  in  regard to this  Agreement,  that I have read and
   understand  this  Agreement,  that I am fully aware of its legal effect,  and
   that I have  entered  into it  freely  and  voluntarily  and  based on my own
   judgment  and  not  on any  representations  or  promises  other  than  those
   contained in this Agreement.

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the dates set forth below.

CAUTION:  THIS AGREEMENT CREATES IMPORTANT  OBLIGATIONS OF TRUST AND AFFECTS THE
CONSULTANT'S RIGHTS TO INVENTIONS AND OTHER INTELLECTUAL PROPERTY THE CONSULTANT
MAY DEVELOP.

   Dated: __________

   Consultant Signature

   Kenneth Levy, Executive Vice President

   For TrueYou.com Inc.

   CathayOnline Inc.

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

   Name:
         -----------------------------------

   Title:                                   ______
           ---------------------------------------

--------
* For purposes of this  Agreement,  "Affiliate"  shall mean any person or entity
that shall directly or indirectly controls, is controlled by, or is under common
control with the Company.<PAGE>

                                                                     EXHIBIT 4.1

                                 ICT GROUP, INC.
                          1996 EQUITY COMPENSATION PLAN
                          -----------------------------

                          As Amended as of May 24, 2000
                          -----------------------------

         The purpose of the ICT Group, Inc. 1996 Equity Compensation Plan (the
"Plan") is to provide (i) designated officers (including officers who are also
directors) and other employees of ICT Group, Inc. (the "Company") and its
subsidiaries, and (ii) independent contractors and consultants who perform
valuable services for the Company or its subsidiaries, with the opportunity to
receive grants of incentive stock options, nonqualified stock options, stock
appreciation rights, restricted stock or other awards that are valued in whole
or part by reference to, or are otherwise based on, the common stock of the
Company (hereinafter collectively referred to as "Grants"). The Company believes
that the Plan will cause the participants to contribute materially to the growth
of the Company, thereby benefiting the Company's shareholders and will align the
economic interests of the participants with those of the shareholders.

1.       Administration

         The Plan shall be administered and interpreted by a committee (the
"Committee"), which shall consist of two or more persons appointed by the Board
of Directors of the Company (the "Board"), all of whom shall be "disinterested
persons" as defined under Rule 16b-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and "outside directors" as defined under section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and related
Treasury regulations.

         The Committee shall have the sole authority to (i) determine the
individuals to whom grants shall be made under the Plan, (ii) determine the
type, size and terms of the grants to be made to each such individual, (iii)
determine the time when the grants will be made and the duration of any
applicable exercise or restriction period, including the criteria for vesting
and the acceleration of vesting and (iv) deal with any other matters arising
under the Plan.

         The Committee shall have full power and authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its business as it deems necessary or advisable, in its sole
discretion. The Committee's interpretations of the Plan and all determinations
made by the Committee pursuant to the powers vested in it hereunder shall be
conclusive and binding on all persons having any interests in the Plan or in any
awards granted hereunder. All powers of the Committee shall be executed in its
sole discretion, in the best interest of the Company and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

<PAGE>

2.       Grants

         All Grants shall be subject to the terms and conditions set forth
herein and to those other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the Committee to
the individual (the "Grant Letter"). The Committee shall approve the form and
provisions of each Grant Letter to an individual. Grants under a particular
Section of the Plan need not be uniform as among the grantees.

3.       Shares Subject to the Plan

         (a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company (the "Company Stock") that may be issued
under the Plan is 1,620,000 shares. Notwithstanding anything in the Plan to the
contrary, the maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any one individual during any calendar
year shall be 570,000 shares. The shares may be authorized but unissued shares
of Company Stock or reacquired shares of Company Stock, including shares
purchased by the Company on the open market for purposes of the Plan. If and to
the extent options granted under the Plan terminate, expire, or are cancelled,
forfeited, exchanged or surrendered without having been exercised or if any
shares of restricted stock are forfeited, the shares subject to such Grants
shall again be available for purposes of the Plan.

         (b) If there is any change in the number or kind of shares of Company
Stock outstanding by reason of a stock dividend, a recapitalization, stock
split, or combination or exchange of shares, or merger, reorganization or
consolidation in which the Company is the surviving corporation,
reclassification or change in par value or by reason of any other extraordinary
or unusual events affecting the outstanding Company Stock as a class without the
Company's receipt of consideration, or if the value of outstanding shares of
Company Stock is substantially reduced due to the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
may be subject to Grants to any one individual under the Plan in any calendar
year, the number of shares covered by outstanding Grants, and the price per
share or the applicable market value of such Grants shall be proportionately
adjusted by the Committee to reflect any increase or decrease in the number or
kind of issued shares of Company Stock to preclude the enlargement or dilution
of rights and benefits under such Grants; provided, however, that any fractional
shares resulting from such adjustment shall be eliminated. For purposes of this
Section 3(b), "shares of Company Stock" and "shares" include referenced shares
with respect to stock appreciation rights or other stock-based awards. The
adjustments determined by the Committee shall be final, binding and conclusive.
Notwithstanding the foregoing, no adjustment shall be authorized or made
pursuant to this Section to the extent that such authority or adjustment would
cause any incentive stock option to fail to comply with section 422 of the Code.

                                      -2-
<PAGE>

4.       Eligibility for Participation

         All employees of the Company and its subsidiaries (within the meaning
of section 424(f) of the Code) ("Employees") including Employees who are
officers or members of the Board shall be eligible to participate in the Plan.
Any independent contractors or consultants who perform valuable services (other
than consulting services in connection with a capital transaction) for the
Company or any of its subsidiaries ("Consultants") shall be eligible to
participate in the Plan, but shall not be eligible to receive incentive stock
options. The Committee shall select the Employees and Consultants to receive
Grants and determine the number of shares of Company Stock subject to a
particular Grant in such manner as the Committee determines. (Employees and
Consultants who receive Grants under this Plan shall hereinafter be referred to
as "Grantees".)

         Nothing contained in this Plan shall be construed to (i) limit the
right of the Committee to make Grants under this Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including options
granted to employees thereof who become Employees of the Company, or for other
proper corporate purpose, or (ii) limit the right of the Company to grant stock
options or make other awards outside of this Plan.

5.       Granting of Options

         (a) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Company Stock that will be subject to each
Grant of stock options to any Employee or Consultant.

         (b) Type of Option and Purchase Price. The Committee may grant options
intended to qualify as "incentive stock options" within the meaning of section
422 of the Code ("Incentive Stock Options") or options which are not intended to
so qualify ("Nonqualified Stock Options") or any combination of Incentive Stock
Options and Nonqualified Stock Options (hereinafter collectively the "Stock
Options"), all in accordance with the terms and conditions set forth herein.

         The purchase price of Company Stock subject to a Stock Option shall be
determined by the Committee and may be equal to, greater than, or less than the
Fair Market Value (as defined below) of a share of such Stock on the date such
Stock Option is granted; provided, however, that the purchase price of Company
Stock subject to an Incentive Stock Option shall be equal to, or greater than,
the Fair Market Value of a share of such Stock on the date such Stock Option is
granted.

                                      -3-
<PAGE>

         If the Company Stock is traded in a public market, then the Fair Market
Value per share shall be, if the principal trading market for the Company Stock
is a national securities exchange or the Nasdaq National Market, the last
reported sale price thereof on the relevant date or (if there were no trades on
that date) the latest preceding date upon which a sale was reported, or, if the
Company Stock is not principally traded on such exchange or market, the mean
between the last reported "bid" and "asked" prices thereof on the relevant date,
as reported on NASDAQ or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines. If the Company Stock is
not traded in a public market or subject to reported transactions or "bid" or
"ask" quotations as set forth above, the Fair Market Value per share shall be as
determined by the Committee.

         (c) Option Term. The Committee shall determine the term of each Stock
Option. The term of any Stock Option shall not exceed ten years from the date of
grant.

         (d) Exercisability of Options. Stock Options shall become exercisable
in accordance with the terms and conditions determined by the Committee, in its
sole discretion, and specified in the Grant Letter. The Committee, in its sole
discretion, may accelerate the exercisability of any or all outstanding Stock
Option, at any time for any reason.

         (e) Manner of Exercise. A Grantee may exercise a Stock Option which has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Committee with accompanying payment of the purchase price in accordance with
Subsection (g) below. Such notice may instruct the Company to deliver shares of
Company Stock due upon the exercise of the Stock Option to any registered broker
or dealer designated by the Committee ("Designated Broker") in lieu of delivery
to the Grantee. Such instructions must designate the account into which the
shares are to be deposited. The Grantee may tender a notice of exercise, which
has been properly executed by the Grantee and the aforementioned delivery
instructions to any Designated Broker.

         (f) Termination of Employment, Disability or Death.

                  (i) In the event that a Grantee ceases to be an Employee or
Consultant, as the case may be, of the Company for any reason other than a
"disability," death, or "termination for cause," any Stock Option which is
otherwise exercisable by the Grantee shall terminate unless exercised within 90
days of the date on which the Grantee ceases to be an Employee or Consultant of
the Company (or within such other period of time as may be specified in the
Grant Letter), but in any event no later than the date of expiration of the
option term. Any of the Grantee's Stock Options which are not otherwise
exercisable as of the date on which the Grantee ceases to be an Employee or
Consultant of the Company shall terminate as of such date.

                  (ii) In the event the Grantee ceases to be an Employee or
Consultant of the Company on account of a "termination for cause" by the
Company, any Stock Option held by the Grantee shall terminate as of the date the
Grantee ceases to be an Employee or Consultant of the Company.

                                      -4-
<PAGE>

                  (iii) In the event the Grantee ceases to be an Employee or
Consultant of the Company because the Grantee is "disabled", any Stock Option
which is otherwise exercisable by the Grantee shall terminate unless exercised
within one year of the date on which the Grantee ceases to be an Employee or
Consultant of the Company (or within such other period of time as may be
specified in the Grant Letter), but in any event no later than the date of
expiration of the option term. Any of the Grantee's Stock Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be an
Employee or Consultant shall terminate as of such date.

                  (iv) In the event of the death of the Grantee while the
Grantee is an Employee or Consultant of the Company or within not more than 90
days of the date on which the Grantee ceases to be an Employee or Consultant of
the Company on account of a termination of employment specified in Section
5(f)(i) of the Plan (or within such other period of time as may be specified in
the Grant Letter), any Stock Option which is otherwise exercisable by the
Grantee shall terminate unless exercised within one year of the date on which
the Grantee ceases to be an Employee or Consultant of the Company (or within
such other period of time as may be specified in the Grant Letter), but in any
event no later than the date of expiration of the option term. Any of the
Grantee's Stock Options which are not otherwise exercisable as of the date on
which the Grantee ceases to be an Employee or Consultant shall terminate as of
such date.

                  (v) For purposes of this Section 5(f), the term "Company"
shall include the Company's subsidiaries (within the meaning of section 424(f)
of the Code) and the following terms shall be defined as follows: (A)
"disability" shall mean a Grantee's becoming disabled within the meaning of
section 22(e)(3) of the Code and (B) "termination for cause" shall mean, except
to the extent otherwise provided in a Grantee's Grant Letter, a finding by the
Committee, after full consideration of the facts presented on behalf of both the
Company and the Grantee, that the Grantee has breached his or her employment or
service contract with the Company, or has been engaged in disloyalty to the
Company, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his or her employment or
service, or has disclosed trade secrets or confidential information of the
Company. In such event, in addition to the immediate termination of the Stock
Option, the Grantee shall automatically forfeit all option shares for any
exercised portion of a Stock Option for which the Company has not yet delivered
the share certificates upon refund by the Company of the purchase price.

         (g) Satisfaction of Purchase Price. The Grantee shall pay the purchase
price specified in the Grant Letter in (i) cash, (ii) with the approval of the
Committee, by delivering shares of Company Stock owned by the Grantee (including
Company Stock acquired in connection with the exercise of a Stock Option,
subject to such restrictions as the Committee deems appropriate) and having a
Fair Market Value on the date of exercise equal to the purchase price or (iii)
through any combination of (i) and (ii). The Grantee shall pay the purchase
price and the amount of withholding tax due, if any, at the time of exercise.
Shares of Company Stock shall not be issued upon exercise of a Stock Option
until the purchase price is fully paid and any required withholding is made.

                                      -5-
<PAGE>

         (h) Rule 16b-3 Restrictions. Unless a Grantee who is an "insider," as
defined under Section 16 of the Exchange Act, could otherwise transfer Company
Stock issued pursuant to a Stock Option without incurring liability under
Section 16(b) of the Exchange Act, at least six months must elapse from the date
of acquisition of a Stock Option by such a Grantee to the date of disposition of
the Company Stock issued upon exercise of such option.

         (i) Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that, to the extent that the aggregate Fair Market Value of the
Company Stock on the date of the grant with respect to which Incentive Stock
Options are exercisable for the first time by a Grantee during any calendar year
under the Plan or any other stock option plan of the Company exceeds $100,000,
then such option as to the excess shall be treated as a Nonqualified Stock
Option. An Incentive Stock Option shall not be granted to any participant who is
not an Employee of the Company or any "subsidiary" (within the meaning of
section 424(f) of the Code). An Incentive Stock Option shall not be granted to
any Employee who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company or any "parent" or "subsidiary" of the Company (within the meaning of
section 424(f) of the Code), unless the purchase price per share is not less
than 110% of the Fair Market Value of Company Stock on the date of grant and the
option exercise period is not more than five years from the date of grant.

6.       Restricted Stock Grants

         The Committee may issue or transfer shares of Company Stock to any
Employee or Consultant under a Grant (a "Restricted Stock Grant"), upon such
terms as the Committee deems appropriate. The following provisions are
applicable to Restricted Stock Grants:

         (a) General Requirements. Shares of Company Stock issued pursuant to
Restricted Stock Grants may be issued for cash consideration or for no cash
consideration, at the sole discretion of the Committee. The Committee shall
establish conditions under which restrictions on the transfer of shares of
Company Stock shall lapse over a period of time or according to such other
criteria as the Committee deems appropriate (including such performance goals as
the Committee may establish). The period of years during which the Restricted
Stock Grant will remain subject to restrictions will be designated in the Grant
Letter as the "Restriction Period."

         (b) Number of Shares. The Committee shall grant to each Grantee a
number of shares of Company Stock pursuant to a Restricted Stock Grant in such
manner as the Committee determines.

                                      -6-
<PAGE>

         (c) Termination of Employment or Services. If the Grantee's employment
or service with the Company and its subsidiaries terminates during a period
designated in the Grant Letter as the Restriction Period, or if other specified
conditions are not met, the Restricted Stock Grant shall terminate as to all
shares covered by the Grant as to which restrictions on transfer have not lapsed
and any such shares of Company Stock must be immediately returned to the
Company. The Committee may, however, provide for complete or partial exceptions
to this requirement as it deems equitable.

         (d) Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of Company Stock to which such Restriction
Period applies except to a Successor Grantee under Section 9. The Committee, at
its sole discretion, may determine that the Company not issue certificates for
any shares subject to a Restricted Stock Grant or that the Company retain
possession of certificates for any shares issued pursuant to a Restricted Stock
Grant, until all restrictions on such shares have lapsed. Each certificate for a
share issued under a Restricted Stock Grant shall contain a legend giving
appropriate notice of the applicable restrictions in the Grant. The Grantee
shall be entitled to receive a stock certificate or certificates, or have the
legend removed from the stock certificate or certificates covering any of the
shares subject to restrictions, as applicable, when all restrictions on such
shares have lapsed.

         (e) Right to Vote and to Receive Dividends. During the Restriction
Period, unless the Committee determines otherwise, the Grantee shall have the
right to vote, subject to the terms of Section 17, any shares subject to the
Restricted Stock Grant and the right to receive any dividends paid on such
shares, subject to such restrictions as the Committee deems appropriate.

         (f) Lapse of Restrictions. All restrictions imposed under the
Restricted Stock Grant shall lapse upon the expiration of the applicable
Restriction Period and the satisfaction of any conditions imposed by the
Committee. The Committee may determine, as to any or all Restricted Stock
Grants, that all the restrictions shall lapse without regard to any Restriction
Period.

7.       Stock Appreciation Rights

         (a) General Requirements. The Committee may grant stock appreciation
rights ("SARs") to any Employee or Consultant, separately or in tandem with any
Stock Option (for all or a portion of the applicable Stock Option). With respect
to tandem SARs, such SARs may be granted either at the time the Stock Option is
granted or at any time thereafter while the Stock Option remains outstanding;
provided, however, that in the case of an Incentive Stock Option, such rights
may be granted only at the time of the Grant of such Stock Option. Unless the
Committee determines otherwise, the base amount of each SAR shall be equal to
the per share purchase price of the related Stock Option, if any, or if there is
not related Stock Option, the Fair Market Value of a share of Company Stock as
of the date of Grant of such SAR.

                                      -7-
<PAGE>

         (b) Stock Options Terminate. Upon the exercise of a Stock Option, the
SARs relating to the Company Stock covered by such Stock Option, if any, shall
terminate. Upon the exercise of SARs, the related Stock Option, if any, shall
terminate to the extent of an equal number of shares of Company Stock.

         (c) Value of SARs. Upon a Grantee's exercise of some or all of the
Grantee's SARs, the Grantee shall receive in settlement of such SARs an amount
equal to the value of the stock appreciation for the number of SARs exercised,
payable in cash, Company Stock or a combination thereof. The stock appreciation
for an SAR is the amount by which (i) the Fair Market Value of the underlying
Company Stock on the date of exercise of such SAR exceeds (ii) the base amount
of the SAR as described in subsection (a).

         (d) Form of Payment. At the time of such exercise, the Grantee shall
have the right to elect the portion of the amount to be received that shall
consist of cash and the portion that shall consist of Common Stock, which for
purposes of calculating the number of shares of Company Stock to be received,
shall be valued at their Fair Market Value on the date of exercise of such SARs.
The Committee shall have the right to disapprove a Grantee's election to receive
cash in full or partial settlement of the SARs exercised and to require that
shares of Company Stock be delivered in lieu of cash. If shares of Company Stock
are to be received upon exercise of an SAR, cash shall be delivered in lieu of
any fractional share.

         (e) Certain Restrictions. An SAR is exercisable during the period
specified by the Committee in the Grant Letter, provided that a tandem SAR is
only exercisable during the period when the Stock Option to which it is related
is also exercisable. No SAR may be exercised for cash by an officer or director
of the Company subject to Section 16 of the Exchange Act, in whole or in part,
except in accordance with Rule 16b-3 under the Exchange Act.

8.       Stock-Based Awards.

                  The Committee is authorized, subject to limitations under
applicable law, to grant to any Employee or Consultant awards of Company Stock
or cash awards valued in whole or in part by reference to, or otherwise based
on, Company Stock. Such awards may be made subject to such conditions and
restrictions, if any, as the Committee may determine in its sole discretion,
including the achievement of such corporate or individual performance goals as
the Committee may establish.

9.       Transferability of Grants

         Only the Grantee or his or her authorized representative may exercise
rights under a Grant. Such persons may not transfer those rights except by will
or by the laws of descent and distribution or, with respect to Grants other than
Incentive Stock Options, if permitted by Rule 16b-3 under the Exchange Act and
if permitted in any specific case by the Committee in its sole discretion,

                                      -8-
<PAGE>

pursuant to a qualified domestic relations order as defined under the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended or
the regulations thereunder. When a Grantee dies, the representative or other
person entitled to succeed to the rights of the Grantee ("Successor Grantee")
may exercise such rights. A Successor Grantee must furnish proof satisfactory to
the Company of his or her right to receive the Grant under the Grantee's will or
under the applicable laws of descent and distribution.

10.      Change of Control of the Company

         As used herein, a "Change of Control" shall be deemed to have occurred
if:

         (a) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 40% or more of the voting power of the then outstanding securities
of the Company;

         (b) The stockholders of the Company approve an agreement providing for
(i) the merger or consolidation of the Company with another corporation where
the stockholders of the Company, immediately prior to the merger or
consolidation, would not beneficially own, immediately after the merger or
consolidation, shares entitling such stockholders to 30% or more of all votes
(without consideration of the rights of any class of stock to elect directors by
a separate class vote) to which all stockholders of the surviving corporation
would be entitled in the election of directors or where the members of the
Board, immediately prior to the merger or consolidation, would not, immediately
after the merger or consolidation, constitute a majority of the Board of the
surviving corporation or (ii) the sale or other disposition of all or
substantially all the assets of the Company, or a liquidation, dissolution or
statutory exchange of the Company;

         (c) Any person has commenced, or announced an intention to commence, a
tender offer or exchange offer for 40% or more of the voting power of the then
outstanding securities of the Company; or

         (d) During any period of two consecutive calendar years there is a
change of 25% or more in the composition of the Board in office at the beginning
of the period except for changes approved by at least two-thirds of the
directors then in office who were directors at the beginning of the period.

11.      Consequences of a Change of Control

         (a) Upon a Change of Control (i) the Company shall provide each Grantee
with outstanding Grants written notice of such Change of Control, (ii) all
outstanding Stock Options and SARs shall automatically accelerate and become
fully exercisable, (iii) the restrictions and conditions on all outstanding
Restricted Stock and any stock-based awards made pursuant to Section 8 shall
immediately lapse.

                                      -9-
<PAGE>

         (b) In addition, upon a Change of Control described in Section 10(b)(i)
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), all outstanding Stock Options and SARs shall
be assumed or replaced with comparable options or rights by the surviving
corporation.

         (c) Notwithstanding the foregoing, in the event of a Change of Control,
the Committee may take either or both of the following actions: (i) require that
Grantees surrender their outstanding Stock Options and SARs in exchange for a
payment by the Company, in cash or Company Stock as determined by the Committee,
in an amount equal to the amount by which the then Fair Market Value of the
shares of Company Stock subject to the Grantee's outstanding Stock Options or
SARs exceeds the option purchase price of the Stock Options or base amount of
the SARs, as the case may be or (ii) terminate any or all outstanding Stock
Options or SARs at such time as the Committee deems appropriate. Any such
surrender shall take place as of the date of the Change of Control or such other
date as the Committee may specify, and, in the case of a Stock Option or SAR
held by a Grantee who is subject to Section 16(b) of the Exchange Act, any such
surrender or payment shall be made on such date as the Committee shall determine
consistent with Rule 16b-3 under the Exchange Act. The Committee shall not have
the right to take the actions described in this Subsection (c) if such right
would make the applicable Change of Control ineligible for pooling of interest
accounting treatment under APB No. 16 or make such Change of Control ineligible
for desired tax treatment with respect to such Change of Control and, but for
this provision, the Change of Control would otherwise qualify for and the
Company intends to use such treatment.

12.      Amendment and Termination of the Plan

         (a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that any amendment that increases the aggregate number (or
individual limit for any single Grantee) of shares of Company Stock that may be
issued under the Plan (other than by operation of Section 3(b)), or modifies the
requirements as to eligibility for participation in the Plan, shall be subject
to approval by the shareholders of the Company and provided, further, that the
Board shall not amend the Plan without shareholder approval if such approval is
required by Rule 16b-3 of the Exchange Act or Section 162(m) of the Code.

         (b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date unless
terminated earlier by the Board or unless extended by the Board with the
approval of the shareholders.

                                      -10-
<PAGE>

         (c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 20(b) hereof. The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 20(b) hereof or may be amended by agreement
of the Company and the Grantee consistent with the Plan.

         (d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

13.      Funding of the Plan

         This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.

14.      Rights of Participants

         Nothing in this Plan shall entitle any Employee, Consultant or other
person to any claim or right to be granted a Grant under this Plan. Neither this
Plan nor any action taken hereunder shall be construed as giving any individual
any rights to be retained by, or in the employ or service of the Company or any
other employment rights.

15.      No Fractional Shares

         No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Grant. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.

16.      Withholding of Taxes

         (a) Grantees may make an election to satisfy the Company income tax
withholding obligation with respect to a Stock Option, SAR, Restricted Stock
Grant or other award by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. Such election must be in the form and manner
prescribed by the Committee and is subject to the prior approval of the
Committee. If the Grantee is a director or officer (within the meaning of Rule
16a-1(f) promulgated under the Exchange Act), if required under Rule 16b-3, such
election must be irrevocable and must be made six months prior to the date on
which the Stock Option is exercised or all the restrictions lapse with respect
to such shares.

                                      -11-
<PAGE>

         (b) The Company shall have the right to deduct from all Grants paid in
cash, or from other wages paid to an employee of the Company, any federal, state
or local taxes required by law to be withheld with respect to such cash awards
and, in the case of Grants paid in Company Stock, the Grantee or other person
receiving such shares shall be required to pay to the Company the amount of any
such taxes which the Company is required to withhold with respect to such Grants
or the Company shall have the right to deduct from other wages paid to the
employee by the Company the amount of any withholding due with respect to such
Grants.

17.      Voting Trust; Conditions and Requirements for Issuance of Shares

         Unless the Committee determines otherwise, all Grants hereunder shall
be contingent upon the Grantee entering a voting trust agreement with respect to
shares issued pursuant to such Grant, if any, in the form and manner prescribed
by the Committee, and no shares of Company Stock shall be issued in connection
with any Grant hereunder unless the Grantee participates in such voting trust.

         No Company Stock shall be issued in connection with any Grant hereunder
unless and until all legal requirements applicable to the issuance of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Grantee
hereunder on such Grantee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued under the Plan will be
subject to such stop-transfer orders and other restrictions as may be applicable
under such laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.

18       Headings

         Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

19       Effective Date of the Plan.

         Subject to the approval of the Company's shareholders, this Plan shall
be effective as of the date the Company's common stock is initially registered
with the Securities Exchange Commission pursuant to Section 12(g) of the
Exchange Act.

                                      -12-
<PAGE>

20       Miscellaneous

         (a) Substitute Grants. The Committee may make a Grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant made by such corporation ("Substituted Stock
Incentives"). The terms and conditions of the substitute grant may vary from the
terms and conditions required by the Plan and from those of the Substituted
Stock Incentives. The Committee shall prescribe the provisions of the substitute
grants.

         (b) Compliance with Law. The Plan, the exercise of Stock Options and
the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The Committee
may revoke any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation. The Committee may
also adopt rules regarding the withholding of taxes on payments to Grantees. The
Committee may, in its sole discretion, agree to limit its authority under this
Section.

         (c) Ownership of Stock. Except as otherwise provided by the Committee,
a Grantee or Successor Grantee shall have no rights as a shareholder with
respect to any shares of Company Stock covered by a Grant until the shares are
issued to the Grantee or Successor Grantee on the stock transfer records of the
Company.

         (d) Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Letters issued under the Plan shall exclusively be
governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania.

                                      -13-

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