Document:

<PAGE>

                                  EXHIBIT 10.3

                     MDU COMMUNICATIONS INTERNATIONAL, INC.
                                 (THE "COMPANY")

                    SUPPLIERS' STOCK OPTION PLAN FOR 1998/99

         THIS PLAN is made effective as of December 31, 1998.

         WHEREAS the Company has agreed to establish a stock option plan
pursuant to which the key suppliers of MDU Communications Inc. and the Company
(the "Optionees") are granted options to purchase shares of the Company on terms
and subject to the conditions herein;

         NOW THEREFORE in consideration of the premises and provisos herein
contained, the Company agrees to the following Plan:

1.       The Company hereby establishes a key supplier stock option plan (the
         "Plan") for 1998/99 pursuant to which the Optionees are granted options
         to purchase up to 215,135 shares of the Company as follows:

         (a)      options to acquire up to 22,500 common shares of the Company
                  at $1.50 U.S. will be granted to Britcom Communications upon
                  successful completion of technical work at the Brent Gardens
                  Complex; and

         (b)      options to acquire 11,385 common shares of the Company at
                  $1.50 U.S. will be granted to Britcom Communications upon
                  successful completion of technical work at the Dynasty,
                  Richmond Residences, The Monarch, and The Spot, based on 23
                  stock options per suite passed (for a total of 495 suites for
                  the four buildings); and

         (c)      for a designated block of 50 buildings, options to acquire
                  12,375 common shares of the Company at $1.75 U.S. will be
                  granted to the Britcom Communications upon successful
                  completion of the first 15 buildings, based on a formula which
                  will not exceed 8.25 stock options per suite passed; and
                  options to acquire 16,500 common shares of the Company at
                  $2.00 U.S. on the next 20 buildings based on a formula that
                  will not exceed 8.25 options per suites passed; and options to
                  acquire 12,375 common shares of the Company at $2.50 U.S. on
                  the last 15 buildings based on a formula that will not exceed
                  8.25 options per suites passed; and

         (d)      for additional marketing and printing work for the Company,
                  options to acquire 40,000 common shares of the Company at
                  $1.50 U.S. will be granted to Direct Focus on or about March
                  1, 1999, plus an additional 25,000 options at $1.50 U.S. on or
                  about September 30, 2000, plus an additional 25,000 options at
                  $1.50 U.S. on or about September 30, 2001, and

         (e)      options to acquire 50,000 common shares of the Company at
                  $1.50 U.S. will be granted to Visawest Capital Group on or
                  about September 30, 1999, based on investor relations work
                  achieved during the Company's 1999 fiscal year.

         subject to the following conditions;

         (a)      the option price will be as stipulated above;

         (b)      the options may be exercised in whole or in part during the
                  term hereof;

         (c)      the options are non-assignable and non-transferable;

         (d)      to exercise the option the Optionee shall give written notice
                  to the Company prior to the Expiry Date;

         (e)      payment for any shares of the Company purchased by the
                  Optionee hereunder shall be made by cash or cheque payable to
                  the Company against delivery of certificates representing the
                  shares so purchased;

<PAGE>

         (f)      this Plan and the allotment and grant of stock options
                  hereunder are subject to compliance with all applicable
                  securities legislation and regulatory bodies. The Company
                  undertakes to use its best efforts to secure all such
                  approvals as may be required;

         (g)      any amendment to this Plan shall require the approval of the
                  Board of Directors of the Company;

2.       (a)      the term of the Option Agreement shall commence on the date
                  of the grant of each specific option and shall continue from
                  such commencement date up to and including five subject years
                  from the date hereof, (the "Expiry Date") subject to
                  paragraphs 2(b) and 2(c) hereto;

         (b)      if the Optionee shall cease to be a key supplier of the
                  Company, then their option agreement will terminate 30 days
                  following the date of cessation.

3.       In the event of:

         (a)      any reduction in the number of shares of the Company due to
                  consolidation thereof;

         (b)      any increase in the number of shares of the Company
                  outstanding due to subdivision thereof, or

         (c)      any reclassification of shares of the Company.

         An appropriate adjustment shall be made in the number or kind of shares
         issuable pursuant to the exercise of the option hereunder subsequent to
         any such change in the number of kind of outstanding shares becoming
         effective.

4.       This Agreement constitutes and expresses the whole plan of the parties
         hereto regarding stock options for 1998/99.

5.       Any notice required to be given hereunder shall be properly given if
         sent by prepaid registered mail to the party concerned at the party's
         last known address. Any such notice mailed as aforesaid shall be deemed
         to have been delivered on the second day of mailing thereof. No
         alternation or amendment to this Agreement shall take effect unless the
         same shall be in writing and duly executed by all the parties in the
         same manner as this Agreement.

6.       The legal costs relating to this Plan and the grant of any stock
         options hereunder, and to securing all such approvals as may be
         necessary hereto, including legal costs relating to the qualification
         for sale to the public of any shares resulting from the exercise of the
         options hereunder, shall be the responsibility of the Company.

         IN WITNESS WHEREOF this Plan has been executed on the date and in the
year first above written.

Approved by the Board of Directors of
MDU COMMUNICATIONS
INTERNATIONAL, INC.

in the presence of:

/s/ Sheldon Nelson
-------------------------------------
Director

/s/ Doug Irving
-------------------------------------
Director

                                       2<PAGE>

                                  EXHIBIT 10.4
                     MDU COMMUNICATIONS INTERNATIONAL, INC.

              THE 2000 INCENTIVE STOCK OPTION PLAN (ISO & NON-ISO)

1.                INTERPRETATION

1.1               DEFINED TERMS - For the purposes of this Plan, the following
terms shall have the following meanings:

         (a)      "AFFILIATE" means a Parent Corporation or a Subsidiary
                  Corporation of a corporation;

         (b)      "ASSOCIATE" means, where used to indicate a relationship with
                  any Person,

                  (i)      any relative of that Person,

                  (ii)     any person of the opposite sex to whom that Person is
                           married or with whom that Person is living in a
                           conjugal relationship outside marriage,

                  (iii)    any relative of a Person mentioned in clause (ii) who
                           has the same home as that Person,

                  (iv)     any partner of that Person,

                  (v)      any trust or estate in which such Person has a
                           substantial beneficial interest or as to which such
                           Person serves as trustee or in a similar capacity, or

                  (vi)     any corporation of which such Person beneficially
                           owns, directly or indirectly, voting securities
                           carrying more than ten percent of the voting rights
                           attached to all outstanding voting securities of the
                           corporation;

         (c)      "BENEFICIAL OWNER" of a security includes any Person who,
                  directly or indirectly, through any contract, arrangement,
                  understanding, relationship or otherwise has voting power over
                  the security or the power to dispose or direct the disposition
                  of the security, and any Person who uses a trust or other
                  arrangement with the purpose or effect of divesting such
                  Person of beneficial ownership as part of a plan to evade the
                  reporting requirements of section 13 of the Exchange Act shall
                  be deemed to be the Beneficial Owner of the security;

         (d)      "BOARD" means the Board of Directors of the Company;

         (e)      "CODE" means the United States Internal Revenue Code of 1986,
                  as amended from time to time;

         (f)      "COMMITTEE" means a committee of the Board appointed in
                  accordance with this Plan, or if no such committee is
                  appointed, the Board itself;

         (g)      "COMPANY" means MDU Communications International, Inc.

         (h)      "DATE OF GRANT" means the date on which a grant of an Option
                  is effective;

         (i)      "DIRECT OR INDIRECT OWNERSHIP" of securities by a Person is
                  calculated in accordance with the following rules:

<PAGE>
                                       2

                  (i)      the Person shall be deemed to own stock owned,
                           directly or indirectly, by or for his brothers and
                           sisters (including half-brothers and half-sisters),
                           spouse, ancestors and lineal descendants, and

                  (ii)     stock owned, directly or indirectly, by or for a
                           corporation, partnership, estate or trust, shall be
                           deemed to be owned proportionately by or for its
                           shareholders, partners or beneficiaries;

         (j)      "DISABILITY" means a medically determinable physical or mental
                  impairment expected to result in death or to last for a
                  continuous period of not less than 12 months which causes an
                  individual to be unable to engage in any substantial gainful
                  activity;

         (k)      "DISPOSITION" includes a sale, exchange, gift, or transfer of
                  legal title, but does not include a pledge, hypothecation,
                  transfer from a descendent to an estate, transfer by bequest
                  or inheritance, or the other excepted circumstances referred
                  to in section 424(c) of the Code;

         (l)      "DOMESTIC RELATIONS SUCCESSOR" means a person entitled to
                  receive transfer of ownership of an Option pursuant to a
                  Qualified Domestic Relations Order;

         (m)      "EFFECTIVE DATE" means the effective date of this Plan, which
                  is February 5, 2000;

         (n)      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
                  amended;

         (o)      "FAIR MARKET VALUE" means:

                  (i)      where the Shares are listed for trading on a stock
                           exchange or over the counter market, the closing
                           price of the Shares on the stock exchange or over the
                           counter market which is the principal trading market
                           for the Shares, as may be determined for such purpose
                           by the Committee;

                  (ii)     where the Shares are not listed for trading on a
                           stock exchange or over the counter market, the value
                           which is determined by the Committee to be the fair
                           value of the Shares, taking into consideration all
                           factors that the Committee deems appropriate,
                           including, without limitation, recent sale and offer
                           prices of the Shares in private transactions
                           negotiated at arm's length;

         (p)      "GUARDIAN" means the guardian, if any, appointed for an
                  Optionee;

         (q)      "ISO" means an Option granted to an employee of the Company
                  that qualifies as an "incentive stock option" for purposes of
                  section 422 of the Code and is therefore subject to favorable
                  tax treatment under the Code;

         (r)      "ISO OPTIONEE" means an Optionee to whom an ISO has been
                  granted;

         (s)      "MODIFICATION" means any change in the terms of an Option
                  which gives the Optionee additional benefits under the Option,
                  but such change shall not include a change in the terms of an
                  Option:

                  (i)      to make the Option not transferable other than by
                           will or the laws of descent and distribution,

                  (ii)     to make the Option exercisable only by the Optionee
                           during his lifetime,

                  (iii)    in the case of an Option not immediately exercisable
                           in full, to accelerate the time within which the
                           Option may be exercised, or

<PAGE>
                                       3

                  (iv)     attributable to the issuance or assumption of an
                           Option by reason of a corporate merger,
                           consolidation, acquisition of property or stock,
                           separation, reorganization or liquidation if the new
                           Option or assumption of the old Option does not give
                           the Optionee additional benefits which he did not
                           have under the old Option;

         (t)      "NON-ISO" means an Option that is not an "incentive stock
                  option" for purposes of section 422 of the Code, and is
                  therefore not subject to favorable tax treatment under the
                  Code;

         (u)      "NON-ISO OPTIONEE" means an Optionee to whom a Non-ISO has
                  been granted;

         (v)      "OPTION" means an option to purchase Shares granted pursuant
                  to the terms of this Plan;

         (w)      "OPTION AGREEMENT" means a written agreement between the
                  Company and an Optionee, specifying the terms of the Option
                  being granted to the Optionee under this Plan;

         (x)      "OPTION PRICE" means the price at which an Option is
                  exercisable to purchase Shares;

         (y)      "OPTIONEE" means a person to whom an Option has been granted;

         (z)      "PARENT CORPORATION" means any corporation in an unbroken
                  chain of corporations ending with the Company if, at the Date
                  of Grant, each corporation other than the Company owns stock
                  possessing 50 percent or more of the total combined voting
                  power of all classes of stock in one of the other corporations
                  in such chain;

         (aa)     "PERSON" means a natural person, company, government, or
                  political subdivision or agency of a government; and where two
                  or more Persons act as a partnership, limited partnership,
                  syndicate or other group for the purpose of acquiring, holding
                  or disposing of securities of an issuer, such syndicate or
                  group shall be deemed to be a Person;

         (bb)     "PLAN" means this Stock Option Plan of the Company;

         (cc)     "PRIOR PLANS" mean the Employees' Incentive Stock Option Plan
                  for 1998/99 and the 1998 Directors'/Officers' Stock Option
                  Plan of the Company approved on November 24, 1998.

         (dd)     "QUALIFIED DOMESTIC RELATIONS ORDER" means a judgment or order
                  which relates to the provision of child support, alimony
                  payments or marital property rights to a spouse, former
                  spouse, child or other dependent of an Optionee, made pursuant
                  to domestic relations law of a state of the United States, and
                  which meets all the requirements of section 414(p) of the
                  Code;

         (ee)     "QUALIFIED SUCCESSOR" means a person who is:

                  (i)      entitled to ownership of an Option upon the death of
                           an Optionee, pursuant to a will or the applicable
                           laws of descent and distribution upon death, or

                  (ii)     a Domestic Relations Successor of an Optionee;

         (ff)     "SHARES" means the voting common stock with par value of
                  $0.001 per share in the capital of the Company;

         (gg)     "SUBSIDIARY CORPORATION" means any corporation in an unbroken
                  chain of corporations beginning with the Company if, at the
                  Date of Grant, each of the corporations other than the last
                  corporation owns stock possessing 50 percent or more of the
                  total combined voting power of all classes of stock in one of
                  the other corporations in such chain;

         (hh)     "TERM" means the period of time during which an Option is
                  exercisable;

<PAGE>
                                       4

         (ii)     "TERMINATING EVENT" means:

                  (i)      the dissolution or liquidation of the Company,

                  (ii)     a merger or consolidation of the Company with one or
                           more corporations as a result of which, immediately
                           following such merger or consolidation, the
                           shareholders owning a majority of the Company,
                           immediately prior to the merger or consolidation, as
                           a group will hold less than a majority of the
                           outstanding capital stock of the surviving
                           corporation,

                  (iii)    the sale or other disposition of all or substantially
                           all of the assets of the Company,

                  (iv)     the occurrence of an event whereby any Person or
                           entity becomes the Beneficial Owner of Shares
                           representing 50% or more of the combined voting power
                           of the voting securities of the Company, or

                  (v)      a material change in the capital structure of the
                           Company that is deemed to be a Terminating Event by
                           virtue of the last sentence of Section 11.1 of this
                           Plan or by virtue of Section 11.4 of this Plan;

         (jj)     "TERMINATION FOR CAUSE" means dismissal for willful material
                  misconduct or failure to discharge duties, conviction or
                  confession of a crime punishable by law (except minor
                  violations), the performance of an illegal act involving moral
                  turpitude while purporting to act in the Company's behalf, or
                  engaging in activities directly in competition or antithetical
                  to the best interests of the Company. If an Optionee is
                  suspended pending an investigation of whether or not the
                  Optionee shall be terminated for cause, all Optionee's rights
                  under any option granted under this Plan shall likewise be
                  suspended during the period of investigation.

2.                STATEMENT OF PURPOSE

2.1               PRINCIPAL PURPOSES - The principal purposes of this Plan are
to provide the Company, and its Affiliates, with the advantages of the incentive
inherent in stock ownership on the part of employees, officers, directors, and
consultants responsible for the continued success of the Company; to create in
such individuals a proprietary interest in, and a greater concern for, the
welfare and success of the Company; to encourage such individuals to remain with
the Company and its Affiliates; and to attract new employees, officers,
directors and consultants to the Company and its Affiliates.

2.2               ISOS AND NON-ISOS - Under this Plan, the Company may grant
either ISOs or Non-ISOs. Each ISO granted hereunder is intended to constitute an
"incentive stock option," for the purposes of section 422 of the Code, and this
Plan and each such ISO is intended to comply with all of the requirements of
Section 422 of the Code and of all other provisions of the Code applicable to
"incentive stock options" and to plans issuing the same. Each Non-ISO granted
hereunder is intended to constitute an Option that is not an "incentive stock
option" for the purposes of section 422 of the Code, and that does not comply
with the requirements of Section 422 of the Code.

2.3               BENEFIT TO SHAREHOLDERS - This Plan is expected to benefit
shareholders by enabling the Company and its Affiliates to attract and retain
personnel of the highest caliber by offering them an opportunity to share in any
increase in value of the Shares resulting from their efforts.

<PAGE>
                                       5

3.                ADMINISTRATION

3.1               BOARD OR COMMITTEE - This Plan shall be administered by the
Board or by a Committee appointed in accordance with Section 3.2 or 3.4(b)
below.

3.2               APPOINTMENT OF COMMITTEE - The Board may at any time appoint a
Committee, consisting of not less than two of its members, to administer this
Plan on behalf of the Board in accordance with such terms and conditions as the
Board may prescribe, consistent with this Plan. Once appointed, the Committee
shall continue to serve until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint additional
members, remove members (with or without cause) and appoint new members in their
place, fill vacancies however caused, or remove all members of the Committee and
thereafter directly administer this Plan.

3.3               QUORUM AND VOTING - A majority of the members of the Committee
shall constitute a quorum, and, subject to the limitations in this Section 3,
all actions of the Committee shall require the affirmative vote of members who
constitute a majority of such quorum. Members of the Committee who are not
Disinterested Persons may vote on any matters affecting the administration of
this Plan or the grant of Options pursuant to this Plan, except that no such
member shall act upon the granting of an Option to himself (but any such member
may be counted in determining the existence of a quorum at any meeting of the
Committee during which action is taken with respect to the granting of Options
to him).

3.4               ADMINISTRATION OF PLAN UPON REGISTRATION OF EQUITY
SECURITIES - In the event the Company registers any of its equity securities
pursuant to Section 12 of the Exchange Act, it is the intention of the Company
that this Plan, and options granted under this Plan, comply in all respects with
Rule 16 b-3 under the Exchange Act, as it may be amended from time to time, and
if any Plan provision is later found not to be in compliance with such Rule, the
provision shall be deemed null and void, and in all events this Plan shall be
construed in favor of its meeting the requirements of Rule 16 b-3.
Notwithstanding anything in this Plan to the contrary, the Board, in its
absolute discretion, may bifurcate this Plan so as to restrict, limit or
condition the use of any provision of this Plan to participants who are officers
and directors subject to Section 16 (b) of the Exchange Act without so
restricting, limiting or conditioning other Plan participants. In particular,
it is the intent of the Board that options granted under this Plan to officers
and directors shall comply with the requirements of Rule 16 b-3 as amended from
time to time.

3.5               POWERS OF COMMITTEE - Any Committee appointed under Section
3.2 or 3.4(b) above shall have the authority to do the following:

         (a)      administer this Plan in accordance with its express terms;

         (b)      determine all questions arising in connection with the
                  administration, interpretation, and application of this Plan,
                  including all questions relating to the value of the Shares;

         (c)      correct any defect, supply any information, or reconcile any
                  inconsistency in this Plan in such manner and to such extent
                  as shall be deemed necessary or advisable to carry out the
                  purposes of this Plan;

         (d)      prescribe, amend, and rescind rules and regulations relating
                  to the administration of this Plan;

         (e)      determine the duration and purposes of leaves of absence from
                  employment which may be granted to Optionees without
                  constituting a termination of employment for purposes of this
                  Plan;

         (f)      do the following with respect to the granting of Options:

                  (i)      determine the employees, officers, directors, or
                           consultants to whom Options shall be granted, based
                           on the eligibility criteria set out in this Plan,

                  (ii)     determine whether such Options shall be ISOs or
                           Non-ISOs,

<PAGE>
                                       6

                  (iii)    determine the terms and provisions of the Option
                           Agreement to be entered into with any Optionee (which
                           need not be identical with the terms of any other
                           Option Agreement),

                  (iv)     amend the terms and provisions of Option Agreements,
                           provided the Committee obtains:

                           (A)      the consent of the Optionee; and

                           (B)      the approval of any stock exchange on which
                                    the Company is listed,

                  (v)      determine when Options shall be granted,

                  (v)      determine the number of Shares subject to each
                           Option, and

         (g)      make all other determinations necessary or advisable for
                  administration of this Plan.

3.6               OBTAIN REGULATORY APPROVALS - In administering this Plan the
Committee will obtain any regulatory approvals, which may be required pursuant
to applicable securities law or the rules of any stock exchange on which the
Company is listed.

3.7               ADMINISTRATION BY COMMITTEE - The Committee's exercise of the
authority set out in Section 3.5 shall be consistent with the intent that ISOs
issued under this Plan be qualified under the terms of Section 422 of the Code,
and that Non-ISOs shall not be so qualified. All determinations made by the
Committee in good faith on matters referred to in Section 3.5 shall be final,
conclusive, and binding upon all Persons. The Committee shall have all powers
necessary or appropriate to accomplish its duties under this Plan. In addition,
the Committee's administration of this Plan shall in all respects be consistent
with the policies and rules of any stock exchange or over the counter market on
which the Shares are listed.

4.                ELIGIBILITY

4.1               ELIGIBILITY FOR ISOS - ISOs may be granted to any employee of
the Company or an Affiliate, including directors or officers of the Company who
are employees of the Company or an Affiliate. An Optionee who is not an employee
of the Company or an Affiliate is not eligible to receive an ISO under this
Plan.

4.2               ELIGIBILITY FOR NON-ISOS - Non-ISOs may be granted to any
employee, officer, director or consultant of the Company or an Affiliate.

4.3               NO VIOLATION OF SECURITIES LAWS - No Option shall be granted
to any Optionee unless the Committee has determined that the grant of such
Option and the exercise thereof by the Optionee will not violate the securities
law of the jurisdiction where the Optionee resides.

5.                SHARES SUBJECT TO THE PLAN

5.1               NUMBER OF SHARES - The Committee, from time to time, may grant
Options to purchase an aggregate of up to 4,000,000 Shares, subject to
regulatory approval, to be made available from authorized, but unissued or
reacquired, Shares. In calculating the foregoing 4,000,000 Shares, the Committee
shall include all Shares subject to options outstanding prior to the Effective
Date of this Plan. The foregoing number of Shares shall be adjusted, where
necessary, to take account of the events referred to in Section 11 hereof.

5.2               DECREASE IN NUMBER OF SHARES SUBJECT TO PLAN - Upon exercise
of an Option, the number of Shares thereafter available under this Plan and
under the Option shall decrease by the number of Shares as to which the Option
was exercised.

<PAGE>
                                       7

5.3               EXPIRY OF OPTION - If an Option expires or terminates for any
reason without having been exercised in full, the unpurchased Shares subject
thereto shall again be available for the purposes of this Plan.

5.4               RESERVATION OF SHARES - The Company will at all times reserve
and keep available such number of Shares as shall be sufficient to satisfy the
requirements of this Plan.

5.5               ROLLOVER OF OPTIONS GRANTED UNDER THE PRIOR PLANS. Effective
upon the approval of the Board of this Plan, the options granted under the Prior
Plans shall be included and rolled over to the Plan, and such options granted
under the Prior Plans shall hereinafter be governed by the Plan.

6.                OPTION TERMS

6.1               OPTION AGREEMENT - With respect to each Option to be granted
to an Optionee, the Committee shall specify the following terms in the Option
Agreement between the Company and the Optionee:

         (a)      whether such Option is an ISO or a Non-ISO;

         (b)      the number of Shares subject to purchase pursuant to such
                  Option;

         (c)      the Date of Grant;

         (d)      the Term, provided that:

                  (i)      the Term shall in no event be more than ten years
                           following the Date of Grant; and

                  (ii)     if an ISO Option is granted to an Optionee who on the
                           Date of Grant has Direct or Indirect Ownership of
                           more than 10% of the total combined voting power of
                           all classes of stock of the Company, the Term of the
                           Option shall not exceed five years;

         (e)      the Option Price, provided that,

                  (i)      the Option Price shall not be less than the Fair
                           Market Value of the Shares; and

                  (ii)     if an ISO Option is granted to an Optionee who on the
                           Date of Grant has Direct or Indirect Ownership of
                           more than 10% of the total combined voting power of
                           all classes of stock of the Company, then the Option
                           Price shall be at least 110% of the Fair Market Value
                           of the Shares on the Date of Grant;

         (f)      any vesting schedule upon which the exercise of an Option is
                  contingent; and

         (g)      such other terms and conditions as the Committee deems
                  advisable and are consistent with the purposes of this Plan.

6.2               NO GRANT AFTER TEN YEARS FROM EFFECTIVE DATE - No Option shall
be granted under this Plan later than ten years from the Effective Date of this
Plan. Except as expressly provided herein, nothing contained in this Plan shall
require that the terms and conditions of Options granted under this Plan be
uniform.

6.3               NO DISPOSITION FOR SIX MONTHS - An Optionee who is subject to
section 16 of the Exchange Act shall not make a Disposition of any Shares issued
upon exercise of an Option unless at least six months has elapsed between the
Date of Grant of the Option and the date of Disposition of the Shares issued
upon exercise of such Option.

<PAGE>
                                       8

7.                LIMITATION ON GRANTS OF OPTIONS

7.1               NON-ISO IF EXCEED $100,000 (U.S.) - If the aggregate Fair
Market Value of:

         (a)      Shares underlying ISOs which have been granted to an Optionee
                  under this Plan and which are exercisable for the first time
                  during a calendar year, and

         (b)      Shares underlying incentive stock options which have been
                  granted to such Optionee under any other plan of the Company
                  and which are exercisable for the first time during that
                  calendar year,

exceeds $100,000 (U.S.), measured as of the Date of Grant, as such amount may be
adjusted from time to time under Section 422(d) of the Code, then to the extent
of such excess such Options shall be treated as Non-ISOs.

7.2               ISO OPTIONEE OWNING GREATER THAN 10% OF VOTING SECURITIES -
The Committee may grant an ISO to an employee of the Company who, at the Date
of Grant, owns securities of the Company representing more than 10% of the
total combined voting power of all classes of stock of the Company only if:

         (a)      the Option Price is at least 110% of the Fair Market Value of
                  the Shares at the Date of Grant; and

         (b)      the Term is five years or less.

8.                EXERCISE OF OPTION

8.1               METHOD OF EXERCISE - Subject to any limitations or conditions
imposed upon an Optionee pursuant to the Option Agreement or Section 6 above,
an Optionee may exercise an Option by giving written notice thereof to the
Company at its principal place of business or as otherwise indicated by the
Company in writing.

8.2               PAYMENT OF OPTION PRICE - The notice described in Section 8.1
shall be accompanied by full payment of the aggregate Option Price to the extent
the Option is so exercised, and full payment of any amounts the Company
determines must be withheld for tax purposes from the Optionee pursuant to the
Option Agreement. Such payment shall be:

         (a)      in lawful money (US funds) in cash or by check;

         (b)      at the discretion of the Committee and if such form of payment
                  is permitted under the corporate laws then governing the
                  Company, by delivery of the Optionee's personal recourse note
                  bearing interest at a rate deemed appropriate by the
                  Committee;

         (c)      at the discretion of the Committee, and subject to all
                  applicable securities laws, through delivery by the Optionee
                  and/or withholding by the Company, of Shares having a market
                  value as of the date of exercise equal to the cash exercise
                  price of the Option plus any amounts that the Company
                  determines must be withheld from the Optionee for U.S. or
                  Canadian tax purposes. The market value of each of the Shares
                  on the date of delivery shall be determined in good faith by
                  the Committee, which determination shall be binding for all
                  purposes hereunder; or

         (d)      at the discretion of the Committee, by any combination of
                  Sections 8.2(a) to 8.2(c) above.

8.3               ISSUANCE OF STOCK CERTIFICATE - As soon as practicable after
exercise of an Option in accordance with Sections 8.1 and 8.2 above, the Company
shall issue a stock certificate evidencing the Shares with respect to which the
Option has been exercised. Until the issuance of such stock certificate, no
right to vote or receive dividends or any other rights as a shareholder shall
exist with respect to such Shares, notwithstanding the exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as provided
in Section 11 below.

<PAGE>
                                       9

9.                TRANSFERABILITY OF OPTIONS

9.1               NON-TRANSFERABLE - Except as provided otherwise in this
Section 9, Options are non-assignable and non-transferable.

9.2         DEATH OF OPTIONEE - If the employment of an Optionee as an employee
or consultant of the Company or an Affiliate, or the position of an Optionee as
a director of the Company or an Affiliate, terminates as a result of his or her
death, any Options held by such Optionee shall pass to the Qualified Successor
of the Optionee, and

         (a)      in the case of an ISO, shall be exercisable by the Qualified
                  Successor for a period of six months following such death, and

         (b)      in the case of a Non-ISO, shall be exercisable by the
                  Qualified Successor for a period of 12 months following such
                  death.

9.3               DISABILITY OF OPTIONEE - If the employment of an Optionee as
an employee or consultant of the Company or an Affiliate, or the position of an
Optionee as a director of the Company, is terminated by the Company by reason of
such Optionee's Disability, any Option held by such Optionee that could have
been exercised immediately prior to such termination of employment shall be
exercisable by such Optionee, or by his Guardian, for a period of one year
following the termination of employment of such Optionee.

9.4               DISABILITY AND DEATH OF OPTIONEE - If an Optionee who has
ceased to be employed by the Company, or an Affiliate, by reason of such
Optionee's Disability dies within six months after the termination of such
employment, any Option held by such Optionee that could have been exercised
immediately prior to his or her death shall pass to the Qualified Successor of
such Optionee, and shall be exercisable by the Qualified Successor

         (a)      in the case of an ISO, for a period of six months following
                  the death of such Optionee, and

         (b)      in the case of a Non-ISO, for a period of 12 months following
                  the death of such Optionee.

9.5               QUALIFIED DOMESTIC RELATIONS ORDER - In the event that a
Qualified Domestic Relations Order mandates the transfer of any Option that
could have been exercised immediately prior to the issuance of such order, such
Option shall pass to the Domestic Relations Successor, and shall be exercisable
by such person or persons in accordance with the terms of the applicable Option
Agreement.

9.6               VESTING - Options held by a Qualified Successor or
exercisable by a Guardian shall, during the period prior to their termination,
continue to vest in accordance with any vesting schedule to which such Options
are subject.

9.7               UNANIMOUS AGREEMENT - If two or more persons constitute the
Qualified Successor or the Guardian of an Optionee, the rights of such
Qualified Successor or such Guardian shall be exercisable only upon the
unanimous agreement of such persons.

9.8               DEEMED NON-INTERRUPTION OF EMPLOYMENT - Employment shall be
deemed to continue intact during any military or sick leave or other bona fide
leave of absence if the period of such leave does not exceed 90 days or, if
longer, for so long as the Optionee's right to re-employment with the Company,
or an Affiliate, is guaranteed either by statute or by contract. If the period
of such leave exceeds 90 days and the Optionee's re-employment is not so
guaranteed, then his or her employment shall be deemed to have terminated on
the ninety-first day of such leave.

<PAGE>
                                       10

10.               TERMINATION OF OPTIONS

10.1              TERMINATION OF OPTIONS - To the extent not earlier exercised
or terminated in accordance with section 9 above, an Option shall terminate at
the earliest of the following dates:

         (a)      the termination date specified for such Option in the Option
                  Agreement;

         (b)      where the Optionee's position as an employee, consultant or
                  director of the Company, or an Affiliate, is Terminated for
                  Cause effective as of the date of such Termination for Cause;

         (c)      where the Optionee's position as an employee, consultant or
                  director of the Company, or an Affiliate, terminates for a
                  reason other than the Optionee's Disability, death, or
                  termination for just cause, 30 days after such date of
                  termination, or upon the Optionee making written application
                  to the Committee and receiving the written consent of the
                  Committee, which consent may be given at the discretion of the
                  Committee, up to 90 days after such date of termination;

         (d)      the date of any sale, transfer, assignment or hypothecation,
                  or any attempted sale, transfer, assignment or hypothecation,
                  of such Option in violation of Section 9.1 above; and

         (e)      the date specified in Section 11.2 below for such termination
                  in the event of a Terminating Event.

11.               ADJUSTMENTS TO OPTIONS

11.1              ALTERATION IN CAPITAL STRUCTURE - If there is a material
alteration in the capital structure of the Company resulting from a
recapitalization, stock split, reverse stock split, stock dividend, or
otherwise, the Committee shall make such adjustments to this Plan and to the
Options then outstanding under this Plan as the Committee determines to be
appropriate and equitable under the circumstances, so that the proportionate
interest of each holder of any such Option shall, to the extent practicable,
be maintained as before the occurrence of such event. Such adjustments may
include, without limitation (a) a change in the number or kind of shares of
stock of the Company covered by such Options, and (b) a change in the Option
Price payable per share; provided, however, that the aggregate Option Price
applicable to the unexercised portion of existing Options shall not be altered,
it being intended that any adjustments made with respect to such Options shall
apply only to the price per share and the number of shares subject thereto. For
purposes of this Section 11.1, neither (i) the issuance of additional shares of
stock of the Company in exchange for adequate consideration (including
services), nor (ii) the conversion of outstanding preferred shares of the
Company into Shares shall be deemed to be material alterations of the capital
structure of the Company. If the Committee determines that the nature of a
material alteration in the capital structure of the Company is such that it is
not practical or feasible to make appropriate adjustments to this Plan or to the
Options granted hereunder, such event shall be deemed a Terminating Event for
the purposes of this Plan.

11.2              TERMINATING EVENTS - Subject to Section 11.3, all Options
granted under this Plan shall terminate upon the occurrence of a Terminating
Event, unless the Board decides otherwise prior to or in conjunction with the
Termination Event.

11.3              NOTICE OF TERMINATING EVENT - The Committee shall give notice
to Optionees not less than thirty days prior to the consummation of a
Terminating Event. Upon the giving of such notice, all Options granted under
this Plan shall become immediately exercisable, notwithstanding any contingent
vesting provision to which such Options may have otherwise been subject.

11.4              CORPORATE REORGANIZATION - In the event of a "reorganization"
as defined in this Section 11.4 in which the Company is not the surviving or
acquiring corporation, or in which the Company is or becomes a wholly-owned
subsidiary of another corporation after the effective date of the
reorganization, then unless provision is made by the acquiring corporation for
the assumption of each Option granted under this Plan, or the substitution of an
option therefore, such that no Modification of any such Option occurs, all
Options granted under this Plan shall terminate and such event shall be deemed a
Terminating Event. For purposes of this Section 11.4, reorganization

<PAGE>
                                       11

shall mean any statutory merger, statutory consolidation, sale of all or
substantially all of the assets of the Company, or sale, pursuant to an
agreement with the Company, of securities of the Company pursuant to which the
Company is or becomes a wholly-owned subsidiary of another corporation after the
effective date of the reorganization.

11.5              ACCELERATION OF DATE OF EXERCISE - The Committee shall have
the right to accelerate the date of exercise of any installment of any Option;
provided that, without the consent of the Optionee with respect to any Option,
the Committee shall not accelerate the date of any installment of any Option
granted to an employee as an ISO (and not previously converted into a Non-ISO
pursuant to Section 13 below) if such acceleration would violate the annual
vesting limitation contained in Section 422(d) of the Code, as described in
Section 7.1 above.

11.6              DETERMINATIONS TO BE MADE BY COMMITTEE - Adjustments and
determinations under this Section 11 shall be made by the Committee, whose
decisions as to what adjustments or determination shall be made, and the extent
thereof, shall be final, binding, and conclusive.

12.               TERMINATION AND AMENDMENT OF PLAN

12.1              TERMINATION OF PLAN - Unless earlier terminated as provided in
Section 11 above or in Section 12.2 below, this Plan shall terminate on, and no
Option shall be granted under this Plan, after ten years has passed from the
Effective Date of this Plan.

12.2              POWER OF COMMITTEE TO TERMINATE OR AMEND PLAN - Subject to the
approval of any stock exchange on which the Company is listed, the Committee may
terminate, suspend or amend the terms of this Plan; provided, however, that,
except as provided in Section 11 above, the Committee may not do any of the
following without obtaining, within 12 months either before or after the
Committee's adoption of a resolution authorizing such action, approval by the
affirmative votes of the holders of a majority of the voting securities of the
Company present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable corporate laws, or by the written consent of the
holders of a majority of the securities of the Company entitled to vote:

         (a)      increase the aggregate number of Shares which may be issued
                  under this Plan;

         (b)      materially modify the requirements as to eligibility for
                  participation in this Plan, or change the designation of the
                  employees or class of employees eligible to receive ISOs under
                  this Plan;

         (c)      materially increase the benefits accruing to participants
                  under this Plan; or

         (d)      make any change in the terms of this Plan that would cause the
                  ISOs granted hereunder to lose their qualification as
                  "incentive stock options" under Section 422 of the Code.

12.3              NO GRANT DURING SUSPENSION OF PLAN - No Option may be granted
during any suspension, or after termination, of this Plan. Amendment,
suspension, or termination of this Plan shall not, without the consent of the
Optionee, alter or impair any rights or obligations under any Option previously
granted.

13.               CONVERSION OF ISOS INTO NON-ISOS

13.1              CONVERSION OF ISOS INTO NON-ISOS - At the written request of
any ISO Optionee, the Committee may in its discretion take such actions as may
be necessary to convert such Optionee's ISOs (or any installments or portions
of installments thereof) that have not been exercised on the date of conversion
into Non-ISOs at any time prior to the expiration of such ISOs, regardless of
whether the Optionee is an employee of the Company at the time of such
conversion. Such actions include, but shall not be limited to, extending the
exercise period of such ISOs. At the time of such conversion, the Committee,
with the consent of the Optionee, may impose such conditions on the exercise of
the resulting Non-ISOs as the Committee in its discretion may determine,
provided that such conditions are consistent with this Plan. Nothing in this
Plan shall be deemed to give any Optionee the right to have such Optionee's ISOs
converted into Non-ISOs, and no such conversion shall occur until and unless the
Committee takes

<PAGE>
                                       12

appropriate action. The Committee, with the consent of the Optionee, may also
terminate any portion of any ISO that has not been exercised at the time of such
conversion.

14.               CONDITIONS PRECEDENT TO ISSUANCE OF SHARES

14.1              COMPLIANCE WITH SECURITIES LAWS - Shares shall not be issued
pursuant to the exercise of any Option unless the exercise of such Option and
the issuance and delivery of such Shares comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, any applicable state or provincial securities law, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed or otherwise traded.

14.2              REPRESENTATIONS BY OPTIONEE - As a condition precedent to the
exercise of any Option, the Company may require the Optionee to represent and
warrant, at the time of 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 representations and
warranties are required by any applicable law.

14.3              REGULATORY APPROVAL TO ISSUANCE OF SHARES - The Company's
inability to obtain authority from any regulatory body having jurisdiction,
which authority is 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 with respect to the failure to issue or sell such Shares.

15.               USE OF PROCEEDS

15.1              USE OF PROCEEDS - Proceeds from the sale of Shares pursuant
to the Options granted and exercised under this Plan shall constitute general
funds of the Company and shall be used for general corporate purposes.

16.               NOTICES

16.1              NOTICES - All notices, requests, demands and other
communications required or permitted to be given under this Plan and the Options
granted under this Plan shall be in writing and shall be either served
personally on the party to whom notice is to be given, in which case notice
shall be deemed to have been duly given on the date of such service; telefaxed,
in which case notice shall be deemed to have been duly given on the date the
telefax is sent; or mailed to the party to whom notice is to be given, by first
class mail, registered or certified, return receipt requested, postage prepaid,
and addressed to the party at his or its most recent known address, in which
case such notice shall be deemed to have been duly given on the tenth postal
delivery day following the date of such mailing.

17.               MISCELLANEOUS PROVISIONS

17.1              NO OBLIGATION TO EXERCISE - Optionees shall be under no
obligation to exercise Options granted under this Plan.

17.2              NO OBLIGATION TO RETAIN OPTIONEE - Nothing contained in this
Plan shall obligate the Company to retain an Optionee as an employee, officer,
director, or consultant for any period, nor shall this Plan interfere in any
way with the right of the Company to reduce such Optionee's compensation.

17.3              BINDING AGREEMENT - The provisions of this Plan and each
Option Agreement with an Optionee shall be binding upon such Optionee and the
Qualified Successor or Guardian of such Optionee.

17.4              USE OF TERMS - Where the context so requires, references
herein to the singular shall include the plural, and vice versa, and references
to a particular gender shall include either or both genders.

<PAGE>
                                       13

18.               SHAREHOLDER APPROVAL TO PLAN

18.1              SHAREHOLDER APPROVAL TO PLAN - This Plan must be approved by a
majority of the votes cast at a meeting of the shareholders of the Company.

19.               EFFECTIVE DATE OF PLAN

19.1              EFFECTIVE DATE OF PLAN - This Plan was adopted by the Board
of Directors on February 5, 2000 and will be submitted to the shareholders of
the Company for approval at the next annual or extra-ordinary general meeting of
the shareholders of the Company. The Effective Date of this Plan is February 5,
2000, provided that any Options granted pursuant to this Plan prior to the date
on which shareholder approval to this Plan is given may not be exercised until
this Plan and any such Options receive shareholder approval.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00008-of-00352.parquet"}]]