Document:

Exhibit 10.1

                             ARETE INDUSTRIES, INC.
                  2002 OMNIBUS STOCK OPTION AND INCENTIVE PLAN

1.   PURPOSE.

The Plan is intended to provide incentive to key employees and directors of, and
key consultants,  vendors, customers, and others expected to provide significant
services  to  the  Corporation,   to  encourage   proprietary  interest  in  the
Corporation,  to  encourage  such key  employees  to remain in the employ of the
Corporation  and its  Subsidiaries,  to attract new employees  with  outstanding
qualifications,  and to afford  additional  incentive to  consultants,  vendors,
customers,  and  others to  increase  their  efforts  in  providing  significant
beneficial services to the Corporation.

2.   DEFINITIONS.

2.1 "Award"  shall mean an Option which may be  designated  an  Incentive  Stock
Option or a Non-statutory  Stock Option, a Purchase Right, a Stock  Appreciation
Right or a Stock Payment, in each case as granted pursuant to the Plan.

2.2 "Award  Agreement"  shall mean a Stock Option  Agreement,  Restricted  Stock
Agreement or a Purchase Right Agreement.

2.3 "Beneficiary"  shall mean the person,  persons,  trust or trusts entitled by
will or the laws of descent and  distribution to receive the benefits  specified
under the Plan in the event of a Participant's death.

2.4 "Board" shall mean the Board of Directors of the Corporation.

2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.6  "Committee"  shall mean the  committee,  if any,  appointed by the Board in
accordance with Section 4 of the Plan.

2.7 "Common Stock" shall mean the Common Stock of the Corporation.

2.8 "Corporation" shall mean Arete Industries, Inc. and its Subsidiaries.

2.9 "Disability"  shall mean the condition of a Participant who is unable to (i)
perform his or her substantial and material job duties due to injury or sickness
or such other  condition  as the Board or  Committee  may  determine in its sole
discretion;  and/or (ii) engage in any substantial gainful activity by reason of
any medically  determinable  physical or mental impairment which can be expected
to  result  in  death or  which  has  lasted  or can be  expected  to last for a
continuous period of not less than twelve (12) months.

2.10  "Discount"  shall mean,  with  respect to the  Purchase  Price of Purchase
Rights,  the  discount  from the Fair  Market  Value of a Share as set  forth in
Section 8.3.

2.11 "Dividend Equivalent" shall mean a right to receive a number of Shares or a
cash amount, determined as provided in Article 12 hereof.

2.12 "Eligible  Employee"  shall mean an individual who is employed  (within the
meaning of Code Section 3401 and the regulations thereunder) by the Corporation.

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2.13 "Event" shall mean any of the following:

(a) Any  person or entity  (or group of  affiliated  persons  or  entities)  who
acquired in one or more transactions, whether before or after the Effective Date
of the Plan,  ownership  of more than  fifty  percent  (50%) of the  outstanding
Shares  of  stock  entitled  to  vote  in  the  election  of  directors  of  the
Corporation; or

(b) The  dissolution  or liquidation  of the  Corporation  or a  reorganization,
merger or  consolidation  of the  Corporation  with one or more  entities,  as a
result of which the Corporation is not the surviving entity, or a sale of all or
substantially  all of the assets of the  Corporation  as an  entirety to another
entity.

For purposes of this definition,  ownership does not include ownership: (i) by a
person  owning such Shares  merely of record  (such as a member of a  securities
exchange, a nominee or a securities  depository system), (ii) by a person who is
a bona fide pledgee of Shares prior to a default and  determination  to exercise
powers as an owner of the Shares,  (iii) by a person who is not required to file
a statement on Schedule  13D by virtue of Rule  13d-1(b) of the  Securities  and
Exchange  Commission  under the  Exchange  Act,  or (iv) by a person who owns or
holds  Shares as an  underwriter  acquired in  connection  with an  underwritten
offering pending and for purposes of resale.

2.14 "Exchange  Act" shall mean the Securities  Exchange Act of 1934, as amended
from time to time.

2.15 "Exercise Price" shall mean the price per Share of Common Stock, determined
by the Board or the Committee, at which an Award may be exercised.

2.16 "Fair Market  Value" shall mean the value of one (1) Share of Common Stock,
determined as follows:

(i) if the Shares are traded on an exchange, the price at which Shares traded at
the close of business on the date of valuation; or

(ii) if the Shares are traded over-the-counter on the NASDAQ System, the closing
bid price if one is  available,  or the mean between the bid and asked prices on
said system at the close of business on the date of valuation; or

(iii) if neither (i) nor (ii) above applies, the Fair Market Value as determined
by the  Board  or the  Committee  in good  faith.  Such  determination  shall be
conclusive and binding on all persons.

2.17 "Incentive  Stock Option" shall mean an option described in Section 422A(b)
of the Code.

2.18  "Nonstatutory  Stock Option" shall mean an option not described in Section
422(b), 422A(b), 423(b) or 424(b) of the Code.

2.19  "Option"  shall mean either an Incentive  Stock  Option or a  Nonstatutory
Stock Option granted pursuant to the Plan.

2.20  "Participant"  shall mean an Eligible  Employee  who has received an Award
under the Plan.

2.21  "Performance  Award"  shall  mean a  cash  bonus,  stock  bonus  or  other
performance or incentive  award that is paid in cash,  stock or a combination of
both.

2.22 "Plan" shall mean the Arete Industries,  Inc. 2002 Omnibus Stock Option and
Incentive Plan, as it may be amended from time to time.

2.23  "Purchase  Price" shall mean the Exercise Price times the number of Shares
with respect to which an Award is exercised.

2.24  "Purchase  Right"  shall  mean the  grant to an  Employee  of the right to
purchase Shares under the Plan.

2.25 "Restricted  Stock" shall mean those Shares issued pursuant to a Restricted
Stock  Award  that are not free of the  restrictions  set  forth in the  related
Restricted Stock Agreement.

2.26  "Restricted  Stock  Award" shall mean an award of a fixed number of shares
subject  to  payment  of  such  consideration,   if  any,  and  such  forfeiture
provisions, as are set forth in the related Restricted Stock Agreement.

2.27  "Retirement"  shall mean the  voluntary  termination  of  employment by an
Employee upon the  attainment of age  sixty-five  (65) and the completion of not
less than twenty (20) years of service with the Corporation or a Subsidiary.

2.28 "Share"  shall mean one (1) share of Common  Stock,  adjusted in accordance
with Section 15.3 of the Plan (if applicable).

2.29  "Securities  Act" shall mean the  Securities  Act of 1933, as amended from
time to time.

2.30  "Stock  Appreciation  Right"  shall  mean the right to receive a number of
Shares or a cash amount,  or a  combination  of Shares and cash,  based upon the
Fair Market Value,  book value or other  measure  determined by the Board or the
Committee, as the case may be, pursuant to Section 9 of the Plan.

2.31 "Stock  Payment" shall mean a payment in the form of Shares,  or a Purchase
Right, as part of a deferred compensation arrangement made in lieu of all or any
portion of the compensation, including without limitation the salary, bonuses or
commissions,  that  would  otherwise  become  payable  in  cash  to an  Eligible
Employee.

2.32 "Subsidiary" shall mean any corporation at least fifty percent (50%) of the
total combined  voting power of which is owned by the  Corporation or by another
subsidiary.

2.33 "Tax Date" shall have the meaning set forth in Section 15.3 hereof.

3.   EFFECTIVE DATE.

The Plan was  proposed by the Board of  Directors on May 31, 2002 and adopted by
the  Corporation's  shareholders on July 2, 2002. The Effective Date of the Plan
shall be June 1, 2002 (the "Effective Date").

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4.   ADMINISTRATION.

The Plan shall be administered by the Board in compliance with Rule 16b-3 of the
Exchange Act ("Rule  16b-3"),  or by a Committee  appointed by the Board,  which
Committee shall be constituted to permit the Plan to comply with Rule 16b-3, and
which shall consist of not less than three (3) members.  The Board shall appoint
one (1) of the  members of the  Committee,  if there be one,  as Chairman of the
Committee. If a Committee has been appointed,  the Committee shall hold meetings
at  such  times  and  places  as it may  determine.  Acts of a  majority  of the
Committee  at which a quorum is  present,  or acts  reduced  to or  approved  in
writing by a majority of the members of the Committee shall be valid acts of the
Committee. The Board, or the Committee, if there be one, shall from time to time
at its discretion  select the Eligible  Employees and  consultants who are to be
granted  Awards,  determine  the  number of Shares or cash,  or the  combination
thereof,  to be applicable to such Award, and designate any Options as Incentive
Stock Options or  Nonstatutory  Stock  Options,  except that no Incentive  Stock
Option may be granted to a non-employee director or a non-employee consultant. A
member of the Board or  Committee  member shall in no event  participate  in any
determination  relating  to Awards  held by or to be  granted  to such  Board or
Committee member;  however, a member of the Board or a Committee member shall be
entitled to receive Awards  approved by the  shareholders in accordance with the
provisions of Rule 16b-3. The  interpretation  and construction by the Board, or
by the Committee,  if there be one, of any provision of the Plan or of any Award
granted thereunder shall be final. No member of the Board or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan  or  any  Award   granted   thereunder.   In   addition  to  any  right  of
indemnification  provided  by the  Articles  of  Incorporation  or Bylaws of the
Corporation,  such  person  shall  be  indemnified  and  held  harmless  by  the
Corporation from any loss,  cost,  liability or expense that may be imposed upon
or reasonably  incurred by him in  connection  with any claim,  suit,  action or
proceeding to which he may be a party by reason of any action or omission  under
the Plan.

5.   PARTICIPATION.

5.1  Eligibility.  Subject to the terms and conditions of Section 5.2 below, the
Participants  shall be such  persons as the  shareholders  may approve or as the
Committee may select from among the following classes of persons:  (i) Employees
of the Corporation or of a Subsidiary (who may be officers,  whether or not they
are directors); and (ii) Consultants, vendors, customers, and others expected to
provide significant services to the Corporation or a Subsidiary.

For  purposes of this Plan,  a  Participant  who is a director or a  consultant,
vendor,  customer,  or other provider of significant services to the Corporation
or a  Subsidiary  shall be deemed to be an Eligible  Employee,  and service as a
director,  consultant,  vendor,  customer,  or  other  provider  of  significant
services to the  Corporation  or a Subsidiary  shall be deemed to be employment,
except that no Incentive Stock Option may be granted to a non-employee  director
or non-employee  consultant,  vendor, customer, or other provider of significant
services to the  Corporation  or a Subsidiary,  and except that no  Nonstatutory
Stock  Option  may  be  granted  to  a  non-employee  director  or  non-employee
consultant,  vendor,  customer, or other provider of significant services to the
Corporation  or  a  Subsidiary   other  than  upon  a  vote  of  a  majority  of
disinterested directors finding that the value of the services rendered or to be
rendered to the  Corporation  or a Subsidiary by such  non-employee  director or
non-employee  consultant,  vendor, customer, or other provider of services is at
least equal to the value of the Awards granted.

5.2  Ten-Percent  Shareholders.  An  Eligible  Employee  who owns  more than ten
percent (10%) of the total  combined  voting power of all classes of outstanding
stock of the  Corporation,  its parent or any of its  Subsidiaries  shall not be
eligible  to  receive  an Award for an  Incentive  Stock  Option  unless (i) the
Exercise  Price of the Shares  subject to such Award is at least one hundred ten
percent (110%) of the Fair Market Value of such Shares on the date of grant: and
(ii) such Award by its terms is not exercisable after the expiration of five (5)
years from the date of grant.

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5.3 Stock  Ownership.  For purposes of Section 5.2 above,  in determining  stock
ownership,  an Eligible  Employee shall be considered as owning the stock owned,
directly or indirectly,  by or for a corporation,  partnership,  estate or trust
shall be considered as being owned  proportionately  by or for its shareholders,
partners or  beneficiaries.  Stock with respect to which such Eligible  Employee
holds an Award shall not be counted.

5.4 Outstanding  Stock. For purposes of Section 5.2 above,  "Outstanding  stock"
shall include all stock actually  issued and outstanding  immediately  after the
grant of the Award to the  Participant.  "Outstanding  stock"  shall not include
shares authorized for issue under outstanding Options or Purchase Rights held by
the Participant or by any other person.

6.   STOCK SUBJECT TO THE PLAN.

The stock  subject  to  Awards  granted  under  the Plan  shall be Shares of the
Corporation's  authorized but unissued or reacquired Common Stock. The aggregate
number of Shares that may be issued as Awards or upon  exercise of Awards  under
the Plan shall not exceed Eight Hundred Million  (800,000,000) common shares (or
Forty  Million   (40,000,000)  common  shares  if  the  proposal  to  perform  a
consolidation  of the  outstanding  common stock of the corporation by a 20 to 1
reverse  stock split is approved by  shareholders  at the  stockholders  meeting
scheduled  for July 2,  2002).  The  number of  Shares  subject  to  unexercised
Options, Stock Appreciation Rights or Purchase Rights (plus the number of Shares
previously  issued  under the Plan)  shall not at any time  exceed the number of
Shares  available for issuance under the Plan. In the event that any unexercised
Option,  Stock Appreciation Right or Purchase Right, or any portion thereof, for
any reason  expires or is  terminated,  or if any Shares subject to a Restricted
Stock Award do not vest or are not delivered, the unexercised or unvested Shares
allocable to such Option, Stock Appreciation Right, Purchase Right or Restricted
Stock Award may again be made subject to any Award.  Any Shares  withheld by the
Corporation  pursuant  to Section  15.3  shall not be deemed to be  issued.  The
number of withheld Shares shall be deducted from the applicable  Award and shall
not  entitle the  Participant  to receive  additional  Shares.  The  limitations
established  by this  Article 6 shall be  subject  to  adjustment  in the manner
provided  in Section  14.5  hereof  upon the  occurrence  of an event  specified
therein.

7.   OPTIONS.

7.1 Stock Option Agreements.  Options shall be evidenced by written stock option
agreements in such form as the Committee shall from time to time determine. Such
agreements  shall  comply  with and be subject to the terms and  conditions  set
forth below.

7.2 Number of Shares.  Each Option  shall state the number of Shares to which it
pertains and shall provide for the  adjustment  thereof in  accordance  with the
provisions of Section 14.5 hereof.

7.3 Exercise  Price.  Each Option shall state the Exercise  Price  thereof.  The
Exercise Price in the case of any Incentive  Stock Option shall not be less than
the  Fair  Market  Value on the date of  grant  and,  in the case of any  Option
granted to an Optionee  described in Section 5.2 hereof,  shall not be less than
one hundred ten  percent  (110%) of the Fair Market  Value on the date of grant.
The  Exercise  Price in the case of any  Nonstatutory  Stock Option shall not be
less than  eighty-five  percent  (85%) of the Fair  Market  Value on the date of
grant.

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7.4 Medium and Time of Payment.  The Purchase  Price shall be payable in full in
United States dollars upon the exercise of the Option;  provided,  however, that
if the applicable  Stock Option Agreement so provides the Purchase Price may the
paid (i) by the  surrender  of Shares in good  form for  transfer,  owned by the
Participant  and having a Fair Market Value on the date of exercise equal to the
Purchase Price, or in any combination of cash and Shares,  as long as the sum of
the cash so paid and the Fair Market Value of the Shares so  surrendered  equals
the Purchase Price, (ii) by cancellation of indebtedness owed by the Corporation
to the Participant,  (iii) with a full recourse  promissory note executed by the
Participant,  or (iv) any  combination of the  foregoing.  The interest rate and
other terms and  conditions of such note shall be  determined by the  Committee.
The Committee may require that the  Participant  pledge his or her Shares to the
Corporation  for the purpose of securing  the payment of such note.  In no event
shall the stock  certificate(s)  representing  such  Shares be  released  to the
Participant until such note shall be paid in full.

7.5 Term and Non-Transferability of Options. Each option shall state the time or
times  which  all or part  thereof  becomes  exercisable.  No  Option  shall  be
exercisable after the expiration of ten (10) years from the date it was granted,
and no Option granted to a Participant  described in Section 5.2 hereof shall be
exercisable after the expiration of five (5) years from the date it was granted.
During the lifetime of the Participant,  the Option shall be exercisable only by
the Participant and shall not be assignable or transferable. In the event of the
Participant's  death,  the Option shall not be  transferable  by the Participant
other than by will or the laws of descent and distribution.

7.6 Modification, Extension and Renewal of Option. Within the limitations of the
Plan, the Committee may modify,  extend or renew  outstanding  Options or accept
the cancellation of outstanding Options (to the extent not previously exercised)
for  the  granting  of new  Options  in  substitution  therefor.  The  foregoing
notwithstanding, no modifications of an Option shall, without the consent of the
Participant,  alter or  impair  any  rights  or  obligations  under  any  Option
previously granted.

7.7  Limitation on Grant of Incentive  Stock  Options.  In the case of Incentive
Stock Options granted hereunder,  the aggregate Fair Market Value (determined as
of the date of the grant thereof) of the Shares with respect to which  Incentive
Stock Options become  exercisable by any  Participant  for the first time during
any  calendar  year  (under  this Plan and all  other  plans  maintained  by the
Corporation,  its  parent or it  Subsidiaries)  shall  not  exceed  One  Hundred
Thousand  Dollars  ($100,000).  The Board or Committee  may,  however,  with the
Participant's  consent  authorize an amendment to the  incentive  Stock  Option,
which renders it a Nonstatutory Stock Option.

7.8 Other Provisions.  The Stock Option Agreements authorized under the Plan may
contain  such  other  provisions  not  inconsistent  with the  terms of the Plan
(including, without limitation, restrictions upon the exercise of the Option) as
the Committee shall deem advisable.

7.9 Specific Awards Approved by the Shareholders. Subject to the approval by the
vote of the shareholders at the Annual Meeting of the Shareholders to be held on
July 2, 2002, the individuals  whose names are set forth in Schedule "A", a copy
of which is attached hereto and incorporated herein by this reference,  shall be
deemed granted Awards in the amounts and denominations specified thereon, in the
amounts and for the amount  indicated  opposite their  respective  names, and in
accordance  with the vesting  schedule set forth herein,  all in accordance with
the provisions set form in this Article 7 of the Plan,  effective as of the date
granted or the  Effective  Date,  whichever is specified in  resolutions  of the
Board of Directors  granting  such awards.  The  provisions  of this Section 7.9
shall not be amended more than once every six (6) months,  other than to comport
with changes in the  Internal  Revenue  Code,  the  Employee  Retirement  Income
Security  Act,  or the rules  thereunder,  and/or  intended to be  construed  in
accordance  with the provisions  pertaining to "formula  awards" under Paragraph
(c)(2)(ii) of Rule 16b-3.

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8.   RESTRICTED STOCK PURCHASE RIGHTS

8.1 Stock  Purchase  Agreements.  Purchase  Rights shall be evidenced by written
Stock Purchase  Agreements in such form as the Committee shall from time to time
determine.  Such  agreements  shall  comply with and be subject to the terms and
conditions set forth below.

8.2 Number of Shares.  Each  Purchase  Right shall state the number of Shares to
which it pertains and shall  provide for the  adjustment  thereof in  accordance
with the provisions of Section 14.5 hereof.

8.3 Purchase Price. Each Stock Purchase Agreement shall state the Purchase Price
per Share at which the Purchase Right may be exercised  which,  unless the Board
or Committee otherwise determines,  shall not be less than the Fair Market Value
of a Share  as of the date on  which  the  Purchase  Right  is  granted,  less a
discount (the "Discount") equal to not more than  seventy-five  percent (75%) of
such value.

8.4 Exercisability and Non -Transferability of Purchase Rights.  Purchase Rights
granted to an Eligible  Employee  pursuant to the Plan must be exercised  within
sixty (60) days after the later to occur of (i) Board  approval  of the grant of
the Purchase Right or (ii) delivery of notice of such grant. Purchase Rights may
not be sold, pledged assigned,  hypothecated,  transferred or disposed of in any
manner and shall expire  immediately  upon the death of the  Participant  or the
termination of such Participant a employment with the Corporation.

8.5 Medium and Time of Payment.  The Purchase  Price shall be payable in full in
United States dollars upon exercise of the Purchase Right; provided however that
if the applicable Stock Purchase Agreement so provides the Purchase Price may be
paid (i) by the  surrender  of  Shares in good  form for  transfer  owned by the
person  exercising the Purchase Right and having a Fair Market Value on the date
of exercise equal to the Purchase Price or in any combination of cash and Shares
as long as the sum of the cash so paid and the Fair  Market  Value of the Shares
so surrendered equal the Purchase Price or (iii) with a full recourse promissory
note  executed  by the  Participant.  The  interest  rate and  other  terms  and
conditions of such note shall be determined by the Committee.  The Committee may
require that the Participant pledge his or her Shares to the Corporation for the
purpose  of  securing  the  payment of such  note.  In no event  shall the stock
certificate(s)  representing  such Shares be released to Participant  until such
note shall be paid in full. In the event the  Corporation  determines that it is
required to withhold  state or federal income tax as a result of the exercise of
a Purchase Right, as a condition to the exercise  thereof,  a Participant may be
required to make arrangements  satisfactory to the Corporation for it to satisfy
such  withholding  requirements.  In addition,  the  Participant  shall agree to
immediately  notify the  Corporation if he or she files an election  pursuant to
Section 83(b) of the Code with respect to receipt of the Shares.

8.6 Consent of Spouse.  Each  Participant  who is married  must cause his or her
spouse to sign and deliver the Stock Purchase  Agreement to the Corporation,  in
the place provided for such signature on the Stock Purchase Agreement.

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8.7  Modification,   Extension  and  Renewal  of  Purchase  Rights.  Within  the
limitations of the Plan, the Board or the Committee may modify,  extend or renew
outstanding  Purchase Rights or accept the cancellation of outstanding  Purchase
Rights (to the extent not previously exercised) for the granting of new Purchase
Rights in substitution therefor. The foregoing notwithstanding,  no modification
of a Purchase Right shall, without the consent of the Employee,  alter or impair
any rights or obligations under any Purchase Right previously granted.

8.8 Repurchase Option as to Unvested Shares.

8.8.1   Termination  of   Employment.   In  the  event  of  the  voluntary  or
        involuntary  termination  or cessation of employment or association of
        the Participant  with the Corporation or any Subsidiary for any reason
        whatsoever, with or without cause (including death or disability), the
        Corporation  shall,  upon  the  date  of  such  termination,  have  an
        irrevocable,  exclusive option to repurchase (the "Repurchase Option")
        all or any portion of the Shares held by the Employee that are subject
        to the  Repurchase  Option  as of such date at the  original  Purchase
        Price.

8.8.2   Vesting.  Initially,  all  of  the  Shares  shall  be  subject  to the
        Repurchase Option.  Thereafter,  the Repurchase Option shall lapse and
        expire,  or  "vest",  as  to a  specified  number  of  the  Shares  in
        accordance  with a  schedule  to be  determined  by the  Board  or the
        Committee,  as the case may be,  which  shall be attached to the Stock
        Purchase  Agreement to be entered into between the Participant sad the
        Corporation  as  provided  in  Section  8.1 above.  All  Shares  which
        continue  to  be  subject  to  the  Repurchase  Option  are  sometimes
        hereinafter referred to as "Unvested Shares."

8.8.3   Notice.   Within   ninety  (90)  days   following   the  date  of  the
        Participant's  termination  of  employment  by  the  Corporation,  the
        Corporation  shall  notify  the  Employee  as to  whether it wishes to
        repurchase  the  Unvested  Shares  pursuant  to  the  exercise  of the
        Repurchase  Option.  If the  Corporation  elects  to  repurchase  said
        Unvested  Shares,  it  shall  set  a  date  for  the  closing  of  the
        transaction  at the Executive  Offices of the  Corporation,  not later
        than thirty (30) days from the date of such notice.

8.8.4   Transfers.  Except for  transfers  to  Participant's  descendants  and
        spouses,  the  Participant  shall not  transfer  by sale,  assignment,
        hypothecation, donation or otherwise any of the Shares or any interest
        therein  prior to the  release  of such  Shares  from  the  Repurchase
        Option.

8.8.5   Assignment.  The  Corporation's  Repurchase  Option may be assigned in
        whole or in part to any stockholder or stockholders of the Corporation
        or other persons or organizations.

Corporation's  Right of First  Refusal to  Purchase  Vested  Shares.  Each Stock
Purchase  Agreement entered into as provided herein shall provide for a right of
first refusal and option on the part of the  Corporation  to purchase all or any
part of any Shares which are no longer  subject to the  Repurchase  Option which
the Participant  purposes to sell,  transfer or otherwise dispose of (except for
transfers to  Participant's  descendants and spouses) on the following terms and
conditions:

The  Participant  must notify the  Corporation  in writing of any proposed sale,
transfer or other  disposition  of any of the Shares,  specifying  the  proposed
transferee,  the number of Shares proposed to be  transferred,  and the price at
which such Shares are to be sold, transferred or otherwise disposed.

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The  Corporation  shall have a period of thirty  (30) days from  receipt of such
notice to notify the Participant in writing as to whether or not the Corporation
elects to purchase all or a specified portion of such Shares at the lower of: i)
price per share set forth in the  notice  given by the  Participant,  or ii) the
Fair  Market  Value  for a share  of the  Corporation's  Common  Stock,  without
restrictions,  on the date on which the  notice is given by  Participant  to the
Corporation  (determined as provided in Section 2.13 above), less in either case
an amount equal to the Discount.  If the Corporation  elects not to purchase all
of the Shares  specified in the notice,  the Participant  may sell,  transfer or
otherwise  dispose of the remaining  Shares in strict  accordance with the terms
specified  in the  notice  within  ninety  (90) days  following  the date of the
notice.  It is understood  and agreed that any  transferee of any of such Shares
(other than the Corporation) will take and acquire all of such Shares subject to
the continuing  right of first refusal and option on the part of the Corporation
to purchase all or any portion of such Shares from the  transferee on all of the
same  terms and  conditions  as are set forth in the Stock  Purchase  Agreement,
unless the Participant  shall have paid to the Corporation,  out of the proceeds
from the sale of such Shares or otherwise,  an amount equal to the lesser of (i)
the  Discount,  or (ii) the amount by which the Fair Market Value for a share of
the Corporation's Common Stock, without  restrictions,  on the date on which the
notice is given by  Participant  to the  Corporation  (determined as provided in
Section 2.13 above) exceeds the price per Share paid by the Participant for such
Shares.

8.10 Other Provisions. The Stock Purchase Agreements authorized may contain such
other provisions not inconsistent with the terms of the Plan as the Board or the
Committee shall deem advisable.

9.   STOCK APPRECIATION RIGHTS.

9.1 Grant.  Stock  Appreciation  Rights related or unrelated to Options or other
Awards may be granted to Eligible Employees: (i) at any time, if unrelated to an
Award, or if related to an Award other than an Incentive  Stock Option;  or (ii)
only at the time of grant of an Option if related thereto.  A Stock Appreciation
Right may extend to all or a portion of the Shares covered by a related Award.

9.2 Exercise of Stock Appreciation Rights. A Stock Appreciation Right granted in
connection with an Award shall be exercisable only at such time or times, and to
the extent  that a related  Award is  exercisable.  A Stock  Appreciation  Right
granted  in  connection  with an Option  may be  exercisable  only when the Fair
Market Value of the stock  subject to the Option  exceeds the Exercise  Price of
the Incentive Stock Option.

9.3  Payment.

(a)  Upon  the  exercise  of a Stock  Appreciation  Right,  and,  if such  Stock
Appreciation Right is related to an Award,  surrender of an exercisable  portion
of a related Award,  the Participant  shall be entitled to receive payment of an
amount determined by multiplying: (i) the difference obtained by subtracting the
purchase price of a share of Common Stock  specified in the related Award, or if
such Stock  Appreciation  Right is unrelated  to an Award,  from the Fair Market
Value,  book  value or  other  measure  specified  in the  Award  of such  Stock
Appreciation  Right of a share of Common  Stock on the date of  exercise of such
Stock  Appreciation  Right,  by (ii) the number of Shares as to which such Stock
Appreciation Right has been exercised.

                                        9
<PAGE>

(b) The Board or the Committee, as the case may be, in its sole discretion,  may
require  settlement of the amount determined under paragraph (a) above solely in
cash,  solely in Shares of Common  Stock  (valued  at Fair  Market  Value on the
business  day next  preceding  the date of exercise  of such Stock  Appreciation
Right), or partly in such Shares and partly in cash.

9.4 Maximum Stock Appreciation Right Term. Each Stock Appreciation Right and all
rights  and  obligations  thereunder  shall  expire  on such  date as  shall  be
determined by the Board or the Committed but not later than ten (10) years after
the date of the Award  thereof,  and shall be subject to earlier  termination as
provided in the related Award Agreement and Sections 14.6,  14.7, 14.8, 14.9 and
15.1.

10.  PERFORMANCE AWARDS.

One or more  Performance  Awards may be granted to any  Eligible  Employee.  The
value of such  Awards  may be linked to the  market  value,  book value or other
measure of the value of the Common Stock or other specific  performance criteria
determined  appropriate  by the  Board  or the  Committee,  in  each  case  on a
specified date or over any period  determined by the Board or the Committee,  or
may be based  upon the  appreciation  in the market  value,  book value or other
measure  of the value of a  specified  number of Shares of Common  Stock  over a
fixed  period  determined  by  the  Board  or  the  Committee.  In  making  such
determinations,  the Board or the  Committee  may  consider  (among  such  other
factors  as it deems  relevant  in  light of the  specific  type of  award)  the
contributions, responsibilities and other compensation of the Participant.

11.  DIVIDEND EQUIVALENTS.

A Participant may also be granted "Dividend  Equivalents" based on the dividends
declared on the Common  Stock,  to be credited  as of  dividend  payment  dates,
during the period  between the Award Date and the date such Award is  exercised,
vests or expires as  determined  by the Board or the  Committee.  Such  Dividend
Equivalents  shall be converted to cash or additional  Shares of Common Stock by
such  formula  and at  such  time  and  subject  to such  limitations  as may be
determined by the Board or the Committee.

12.  STOCK PAYMENTS.

The Board or the Committee may approve Stock Payments to Eligible  Employees who
elect to receive such payments in the manner determined from time to time by the
Board or the Committee. The number of Shares shall be determined by the Board or
the Committee  and may be based upon the Fair Market Value,  book value or other
measure of the value of such Shares on the Award Date or on any date thereafter.

13.  LOANS.

The Corporation may, with the Board's or the Committee's approval, extend one or
more  loans to  Participants  in  connection  with the  exercise  or  receipt of
outstanding  Awards  granted  under the Plan;  provided  any such loan  shall be
subject to the following terms and conditions;

(i) The principal of the loan shall not exceed the amount required to be paid to
the  Corporation  upon the  exercise or receipt of one or more Awards  under the
Plan less the aggregate Par Value of any Common Stock deliverable on such event,
and the loan proceeds shall be paid directly to the Corporation in consideration
of such exercise or receipt.

(ii) The  initial  term of the  loan  shall be  determined  by the  Board or the
Committee;  provided that the term of the loan, including extensions,  shall not
exceed a period of ten (10) years.

                                       10
<PAGE>

(iii)  The  loan  shall  be with  full  recourse  to the  Participant,  shall be
evidenced by the Participant's promissory note and shall bear interest at a rate
determined  by the Board or the  Committee  but not less than the  Corporation's
average  cost of funds as of a date within  thirty-one  (31) days of the date of
such loan, as determined by the Board or Committee.

(iv) in the event a Participant  terminates his or her employment at the request
of the Corporation,  the unpaid  principal  balance of the note shall become due
and payable on the tenth (10th) business day after such  termination;  provided,
however,  that if a sale of such Shares  would cause such  Participant  to incur
liability  under  Section  16(b) of the Exchange  Act, the unpaid  balance shall
become due and payable on the tenth  (10th)  business day after the first day on
which a sale of  such  Shares  could  have  been  made  without  incurring  such
liability  assuming for these purposes that there are no other  transactions  by
the  Participant  subsequent  to such  termination.  In the event a  Participant
terminates  employment other than at the request of the Corporation,  the unpaid
principal  balance of the note shall become due and payable six (6) months after
the date of such termination.

14.  RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES.

14.1 Employee Status. Status as an Eligible Employee shall not be construed as a
commitment that any Award will be made under the Plan to an Eligible Employee or
to Eligible Employees generally.

14.2 No  Employment  Contract.  Nothing  contained  in the Plan (or in the Award
Agreements  or in any other  documents  related to the Plan or to Awards)  shall
confer upon any Eligible  Employee or any  Participant  any right to continue in
the employ of the  Corporation  or  constitute  any  contract  or  agreement  of
employment,  or interfere in any way with the right of the Corporation to reduce
such  person's  compensation  or to terminate  the  employment  of such Eligible
Employee or  Participant,  with or without cause,  but nothing  contained in the
Plan or any document related thereto shall affect any other contractual right of
any Eligible  employee or Participant.  Nothing contained in the Plan (or in the
Award  Agreements or in any other  documents  related to the Plan or the Awards)
shall  confer upon any  director of the  Corporation  any right to continue as a
director of the Corporation.

14.3 No Transferability. Awards may be exercised only by, and amounts payable or
Shares issued  pursuant to an Award shall be paid only to or registered  only in
the name of, the Participant or, in the event of the Participant's death, to the
Participant's  Beneficiary or, in the event of the Participant's  Disability, to
the  participant's  Personal  Representative  or,  if  there  is  none,  to  the
Participant.  Other than by will or the laws of  descent  and  distribution,  no
right or benefit under the Plan or any Award, including, without limitation, any
Option or share of Restricted Stock that has not vested, shall be subject in any
manner  to  anticipation,   alienation,  sale,  transfer,   assignment,  pledge,
encumbrance  or charge and any such  attempted  action shall be void and no such
right or benefit  shall be, in any manner,  liable  for,  or subject to,  debts,
contract,   liabilities,   engagements,  or  torts  of  any  Eligible  Employee,
Participant  or  Beneficiary,  in any case except as may  otherwise by expressly
required by  applicable  law. The Board or the  Committee  shall  disregard  any
attempt at transfer;  assignment or other alienation prohibited by the preceding
sentence  and shall  pay or  deliver  such  cash or  Shares  of Common  Stock in
accordance with the provisions of the Plan.  Notwithstanding the foregoing,  the
Board or the Committee  may authorize  exercise by or transfers or payments to a
third  party in a  specific  case or more  generally;  provided,  however,  with
respect to any option or similar right (including any Stock Appreciation  Right)
such discretion may only be exercised to the extent that applicable  rules under
Section 16 of the Exchange Act would so permit  without  disqualifying  the Plan
from certain benefits thereunder.

                                       11
<PAGE>

14.4 Plan Not Funded. No Participant, Beneficiary or other person shall have any
right,  title or interest in any fund or in any specific asset (including Shares
of Common Stock) of the  Corporation  by reason of any Award granted  hereunder.
There shall be no funding of any benefits  which may become  payable  hereunder.
Neither the provision of the Plan (or of any documents  related hereto,  nor the
creation  or  adoption  of the  Plan,  nor  any  action  taken  pursuant  to the
provisions of the Plan shall create,  or be construed to create,  a trust of any
kind or a fiduciary  relationship between the Corporation and any Participant or
Beneficiary.  To the extent that a  Participant,  a Beneficiary  or other person
acquires a right to receive an Award  hereunder,  such right shall be no greater
than the right of any  unsecured  general  creditor of the  Corporation.  Awards
payable  under the Plan  shall be paid in  Shares  of  Common  Stock or from the
general  assets of the  Corporation,  and no special or separate fund or deposit
shall be  established  and no  segregation  of assets or Shares shall be made to
assure payment of such Awards.

14.5 Adjustment Upon  Recapitalization and Corporate Changes. If the outstanding
Shares of Common  Stock are changed  into or  exchanged  for cash or a different
number or kind of Shares or securities of the Corporation, or if the outstanding
Shares of the Common Stock are increased, decreased, exchanged for, or otherwise
changes,  or if additional  Shares or new or different  shares or securities are
distributed with respect to the outstanding Shares of the Common Stock,  through
a  reorganization  or merger in which the Corporation is the surviving entity or
through a combination, consolidation, recapitalization,  reclassification, stock
split, stock dividend, reverse stock split, stock consolidation or other capital
change or adjustment,  an appropriate adjustment shall be made in the number and
kind of shares or other  consideration  that is subject  to or may be  developed
under the Plan and pursuant to outstanding Awards. A corresponding adjustment to
the  consideration  payable  with  respect to Awards  granted  prior to any such
change and to the price, if any, to be paid in connection with Restricted  Stock
Awards shall also be made as  appropriate.  Corresponding  adjustments  shall be
made with respect to Stock Appreciation  Rights related to Options to which they
are related.  In addition,  the Board or the Committee may grant such additional
rights in the foregoing  circumstances as the Board or the Committee deems to be
in the best interest of any Participant and the Corporation in order to preserve
for the participant the benefits of an Award.

14.6 Termination of Employment Except by Death,  Disability or Retirement.  If a
Participant ceases to be an Employee for any reason other than his or her death,
disability or retirement,  such Participant shall have the right, subject to the
restrictions  of Section  14.3 above,  to exercise  any Award at any time within
three (3) months after  termination of employment,  but only to the extent that,
at the date of termination of employment,  the  Participant's  right to exercise
such Award had accrued pursuant to the terms of the applicable agreement and had
not previously been exercised;  provided,  however,  that if the Participant was
terminated  for cause (as  defined in the  applicable  agreement)  any Award not
exercised in full prior to such termination shall be canceled. For this purpose,
the  employment  relationship  shall be treated as  continuing  intact while the
Participant is on military leave, sick leave or other bona fide leave of absence
(to be determined in the sole  discretion  of the Board or the  Committee).  The
foregoing notwithstanding,  in the case of an Incentive Stock Option, employment
shall  not be deemed to  continue  beyond  the  ninetieth  (90th)  day after the
Participant's re-employment rights are guaranteed by statute or by contract.

                                       12
<PAGE>

14.7 Death of  Participant.  If a Participant  dies while an Employee,  or after
ceasing to be an  Employee  but  during  the  period  while he or she could have
exercised  the Award under this Section  14.7,  and has not fully  exercised the
Award,  then the Award may be exercised  in full at any time within  twelve (12)
months after the  Participant's  death but no later than the date of termination
(fixed in the applicable  agreement),  by the executors or administrators of his
or her estate or by any person or persons who have  acquired the Award  directly
from the Participant by bequest or inheritance,  but only to the extent that, at
the date of death,  the  Participant's  right to exercise such Award had accrued
and had not been forfeited pursuant to the terms of the applicable agreement and
had not previously been exercised.

14.8  Disability of  Participant.  If a Participant  ceases to be an Employee by
reason of  Disability,  such  Participant  shall have the right to exercise  the
Award at any time within twelve (12) months after termination of employment (but
not later than the termination date fixed in the applicable agreements) but only
to the extent that at the date of termination of employment,  the  Participant's
right to exercise such Award had accrued pursuant to the terms of the applicable
agreement and had not previously been exercised.

14.9  Retirement of  Participant.  If a Participant  ceases to be an Employee by
reason of  Retirement,  such  Participant  shall have the right to exercise  the
Award at any time within three (3) months after  termination of employment  (but
not later than the termination date fixed in the applicable agreements) but only
to the extent that, at the date of termination of employment,  the Participant's
right to exercise such Award had accrued pursuant to the terms of the applicable
agreement and had not previously been exercised.

14.10 Rights as a Stockholder. A Participant,  or a transferee of a Participant,
shall have no rights as a stockholder  with respect to any Shares covered by his
or her Award  until the date of the  issuance  of a stock  certificate  for such
Shares.  No adjustment shall be made for dividends  (ordinary or  extraordinary,
whether in cash,  securities or other  property),  distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 14.5 hereof.

14.11 Deferral of Payments.  The Board or the Committee may approve the deferral
of any  payments  that may become due under the Plan.  Such  deferrals  shall be
subject to any  conditions,  restrictions  or  requirements  as the Board or the
Committee may determine.

14.12  Acceleration of Awards.  Immediately prior to the occurrence of an Event,
(i) each  Option  and  Stock  Appreciation  Right  under the Plan  shall  become
exercisable  in full;  (ii)  Restricted  Stock  delivered  under the Plan  shall
immediately  vest free of  restriction;  and (iii) each other Award  outstanding
under the Plan shall be fully vested or  exercisable  unless prior to the Event,
the Board or the  Committee  otherwise  determines  that there  shall be no such
acceleration or vesting of an Award or otherwise  determines  those Awards which
shall  be  accelerated  or  vested  and to the  extent  to which  they  shall be
accelerated or vested, or that an Award shall terminate, or unless in connection
with  such  Event the  Board  provides  (a) for the  assumption  of such  Awards
theretofore  granted;  or (b) for the substitution for such Awards of new awards
covering  securities or obligations (or any combination  thereof) of a successor
corporation,  or a parent or subsidiary thereof, with appropriate adjustments as
to number  and kind of shares  and  prices;  or (c) for the  payment of the Fair
Market  Value of the then  outstanding  Awards.  In  addition,  the Board or the
Committee may grant such additional rights in the foregoing circumstances as the
Board or the Committee  deems to be in the best interest of the  Participant and
the  Corporation  in order to preserve  for the  Participant  the benefits of an
Award.  For purposes of this Section  14.12 only,  Board shall mean the Board of
Directors of the Corporation as constituted  immediately  prior to the Event. In
addition,  the Board may in its sole discretion accelerate the exercisability or
vesting of any or all Awards  outstanding under the Plan in circumstances  under
which the Board or the Committee determines such acceleration appropriate.

                                       13
<PAGE>

15. MISCELLANEOUS

15.1 Termination,  Suspension and Amendment.  The Board or the Committee may, at
any time suspend,  amend, modify of terminate the Plan (or any part thereof) and
may, with the consent of a  Participant,  authorize  such  modifications  of the
terms and  conditions of such  Participant's  Award as it shall deem  advisable;
provided that,  except as permitted  under the provision of Section 14.5 hereof,
no amendment or modification  of the Plan may be adopted  without  approval by a
majority of the Shares of the Common Stock  (represented  in person or by proxy)
at a meeting of  stockholders  at which a quorum is present and entitled to vote
thereat, if such amendment or modification would:

(i) materially  increase the benefits  accruing to  Participants  under the Plan
within  the  meaning  of Rule  16b-3  under the  Exchange  Act or any  successor
provision;

ii)  materially  increase the aggregate  number of Shares which may be delivered
pursuant to Awards granted under the Plan; or

iii)  materially  modify the  requirements of eligibility for either adoption of
the Plan.

Neither adoption of the Plan nor the provisions hereof shall limit the authority
of the Board to adopt other Plans or to authorize  other payment of compensation
and benefits  under  applicable  law. No Awards under the Plan may be granted or
amended  during  any  suspension  of the  Plan or  after  its  termination.  The
amendment,  suspension or termination of the Plan shall not, without the consent
of the Participant,  alter or impair any rights or obligations pertaining to any
Awards  granted  under  the  Plan  prior  to  such   amendment,   suspension  or
termination.

15.2 No Fractional Shares. No Award or installment  thereof shall be exercisable
except in  respect to whole  Shares,  and  fractional  share  interest  shall be
disregarded.

15.3 Tax  Withholding  and Tax Bonuses.  As required by law,  federal,  state or
local taxes that are subject to the  withholding  of tax at the source  shall be
withheld by the  Corporation  as  necessary  to satisfy  such  requirement.  The
Corporation is entitled to require deduction from other compensation  payable to
such  Participant  or, in the  alternative;  i) the  Corporation may require the
Participant to advance such sums: or ii) if Participant  elects, the Corporation
may  withhold  (or  require the return of) Shares  having the Fair Market  Value
equal to the sums required to be withheld.  If the Participant elects to advance
such sums directly,  written notice of that election shall be delivered prior to
such  exercise  and,  whether  pursuant  to  such  election  or  pursuant  to  a
requirement imposed by the Corporation, payment in cash or by check of such sums
for taxes shall be delivered  within ten (10) days after the Exercise  Date.  If
the Participant  elects to have the Corporation  withhold Shares (or be entitled
to the return of Shares)  having a Fair Market Value equal to the sums  required
to be  withheld,  the value of the Shares to be withheld (or  returned)  will be
equal to the Fair Market  Value on the day the amount of tax to be withheld  (or
subject to return) is to be determined (the "Tax Date").

15.4 Restriction on Elections Made by Participants. Elections by Participants to
have Shares  withheld (or subject to return) for this purpose will be subject to
the following restrictions:  i) the election must be made prior to the Tax Date;
ii) the election must be  irrevocable;  iii) the election will be subject to the
Board's  disapproval;  and (iv) if the  Participant  is an "officer"  within the
meaning of Section 16 of the Exchange Act, the election shall be subject to such
additional restrictions as the Board or the Committee may impose in an effort to
secure the benefits of any regulations thereunder.

                                       14
<PAGE>

15.5 Limitations on the Corporation's Obligations.  The Corporation shall not be
obligated to issue Shares and/or  distribute  cash to the  Participant  upon any
Award  exercise  until  such  payment  has been  received  or  Shares  have been
withheld,  (unless withholding for offset against a cash payment) as of or prior
to the Exercise Date,  sufficient to cover all such sums due or which may be due
with respect to such exercise. In addition, the Board or the Committee may grant
to a Participant a cash bonus in any amount required by federal, state, or local
tax law to be withheld with respect to an Award.

15.6  Compliance with Laws. The Plan, the granting of Awards under the Plan, the
Stock  Option  Agreements  and Stock  Purchase  Agreements  and the  delivery of
Options,  Shares  and  Awards  (and/or  the  payment  of money or Common  Stock)
pursuant  thereto and the  extension of any loans  hereunder are subject to such
additional  requirements  as the Board or the  Committee may impose to assure or
facilitate  compliance  with all  applicable  federal and state laws,  rules and
regulations   (including,   without  limitation,   securities  laws  and  margin
requirements)  and to such  approvals by any regulatory or  governmental  agency
which may be necessary or advisable in connection therewith.  In connection with
the  administration  of the Plan or the  grant of any  Award,  the  Board or the
Committee  may impose such further  limitations  or conditions as in its opinion
may be required or advisable to satisfy,  or secure the benefits of,  applicable
regulatory  requirements  (including those rules promulgated under Section 16 of
the Exchange Act or those rules that  facilitate  exemption  from or  compliance
with the  Securities Act or the Exchange  Act),  the  requirements  of any stock
exchange upon which such Shares or shares of the same class are then listed, and
any Blue Sky or other securities laws applicable to such Shares.

15.7  Governing  Laws.  The Plan and all Awards  granted  under the Plan and the
documents  evidencing  Awards shall be governed by, and  construed in accordance
with, the laws of the State of Colorado.

15.8 Securities Law Requirements.

a) Legality of  issuance.  The  issuance an any Shares upon the  exercise of any
Option and the grant of any Option shall be contingent upon the following:

i) the Corporation and the Participant  shall have taken all actions required to
register the Shares under the Securities  Act, and to qualify the Option and the
Shares  under any and all  applicable  state  securities  or "Blue  Sky" laws or
regulations,  or to perfect an exemption  from the respective  registration  and
qualification requirements thereof;

ii) any applicable listing requirement of any stock exchange on which the Common
Stock is listed shall have been satisfied; and

iii) any other applicable provision of federal law shall have been satisfied.

b)  Restrictions  on  Transfer.  Regardless  of whether the offering and sale of
Shares under the Plan has been  registered  under the Securities Act or has been
registered or qualified under the securities laws of any state,  the Corporation
may impose  restrictions  on the sale,  pledge or other  transfer of such Shares
(including the placement of appropriate  legends on stock  certificates)  if, in
the judgment of the Corporation and its counsel, such restrictions are necessary
or desirable in order to achieve compliance with the provision of the Securities
Act,  the  securities  laws of any state or any other law. In the event that the
sale of Shares under the Plan is not registered  under the Securities Act but an

                                       15
<PAGE>

exemption is available  which  required an  investment  representation  or other
representation, each Participant shall be required to represent that such Shares
are  being  acquired  for  investment,  and  not  with a view  to  the  sale  or
distribution  thereof,  and to make such  other  representations  as are  deemed
necessary or appropriate by the Corporation and its counsel.  Any  determination
by the  Corporation  and its  counsel in  connection  with any of the matter set
forth in this Section  15.8(b) shall be  conclusive  and binding on all persons.
Stock  certificates  evidencing  Shares  acquired  under the Plan pursuant to an
unregistered  transaction shall bear the following  restrictive  legend and such
other  restrictive  legends  as are  required  or  deemed  advisable  under  the
provisions of any applicable law:

THE SALE OF THE SECURITIES  REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE  "SECURITIES  ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT IS IN
EFFECT AS TO SUCH  TRANSFER  OR IN THE  OPINION OF COUNSEL  FOR THE ISSUER  SUCH
REGISTRATION  IS  UNNECESSARY  IN ORDER FOR SUCH  TRANSFER  TO  COMPLY  WITH THE
SECURITIES ACT.

c) Registration or Qualification  of Securities.  The Corporation may, but shall
not be obligated  to register or qualify the issuance of Awards  and/or the sale
of Shares under the Securities Act or any other  applicable law. The Corporation
shall  not be  obligated  to take any  affirmative  action in order to cause the
issuance of Awards or the sale of Shares under the Plan to comply with any law.

d)  Exchange of  Certificates.  If, in the  opinion of the  Corporation  and its
counsel,  any legend  placed on a certificate  representing  Shares issued under
that  Plan is no  longer  required,  the  holder  of such  certificate  shall be
entitled to exchange such  certificate for a certificate  representing  the same
number of Shares but lacking such legend.

15.9  Execution.  To record the adoption of the Plan in the form set forth above
by the Board  effective as of June 1, 2002, the Corporation has caused this Plan
to be executed in the name and on behalf of the Corporation where provided below
by an officer of the Corporation thereunto duly authorized.

ARETE INDUSTRIES, INC.

By:  /s/ Thomas P. Raabe
     ------------------------------------
     Chief Executive Officer

Attest:

     /s/ William W. Stewart
     ------------------------------------
     Secretary

                                       16
<PAGE>

<TABLE>
            Schedule A to Omnibus Stock Option and Compensation Plan
                             Arete Industries, Inc.
                             Effective June 1, 2002
<CAPTION>

                Name                         Grant Date/     Type of Stock       Quantity   Consideration/    Period
                                              Vest Date                                     Exercise Price
------------------------------------------   ------------   -----------------   ----------    ----------   ---------------
<S>                                          <C>            <C>                 <C>           <C>          <C>
Thomas Raabe                                 11/19/01       Common Option       40,000,000*   $   40,000   To 11/19/03

------------------------------------------   ------------   -----------------   ----------    ----------   ---------------

Thomas Y. Gorman, Jr                         11/19/01       Common Option       40,000,000*   $   40,000   To 11/19/03

------------------------------------------   ------------   -----------------   ----------    ----------   ---------------

William W. Stewart                           12/19/01       Common Option       40,000,000*   $   40,000   To 12/19/03

------------------------------------------   ------------   -----------------   ----------    ----------   ---------------

Gerald J. Brandimarte                        5/31/02        Common Option       40,000,000*   $   40,000   To 06/01/03

------------------------------------------   ------------   -----------------   ----------    ----------   ---------------

Thomas Raabe                                 7/15/02        Compensation        40,000,000*   $   40,000   Pre-reverse
                                                            Grant
------------------------------------------   ------------   -----------------   ----------    ----------   ---------------

Gerald J. Brandimarte                        7/15/02        Compensation        40,000,000*   $   40,000
                                                            Grant
------------------------------------------   ------------   -----------------   ----------    ----------   ---------------

William W. Stewart                           7/15/02        Compensation        40,000,000*   $   40,000
                                                            Grant
------------------------------------------   ------------   -----------------   ----------    ----------   ---------------
</TABLE>Exhibit 10.2

[[Arete Industries, Inc. Logo]]

April 7, 2002

Mr. Thomas P. Raabe
7641 Estate Circle
Niwot, Colorado 80503

Re: Settlement of Wages, Bonus and Expenses

Dear Tom:

Pursuant  to  ongoing  conversations,  when  signed  by you,  this  letter  will
constitute a final  settlement as to  outstanding  wages and bonuses owed you by
Arete Industries, Inc. (Arete) and any of its subsidiaries, including Aggression
Sports,  Inc.  (Arete  Outdoors)  and  will  resolve  any  claims  you may  have
whatsoever against either entity or any of its officers,  directors or employees
concerning  the  business  of either  Company  arising  during  the term of your
employment there through the date of this agreement.

According to the records of the Company,  you have outstanding $158,500 in gross
wages and $88,750 in gross bonus owing from the  Company  through  December  31,
2001.  The Company  does not have now, nor does it  anticipate  that in the near
future,  will have any  funds to pay these  amounts,  but does  anticipate  that
within the next 6 months,  it will own common stock interests in companies which
will be acquired in part by the  Company and which the Company  will  distribute
all or a portion of its  holdings in such  companies  to its  shareholders  in a
registered dividend of freely trading shares in such entities.

Therefore,  as an  inducement  to you to forgive  the  Company of $75,000 of the
obligations to you as described  above,  offers in exchange for such forgiveness
the right to receive 3% of the total stock dividend  distribution  issued by the
Company to its shareholders  from the first four (4) companies that it spins off
to its  shareholders in a registered  stock dividend and/or a registered  rights
offering.  On or before June 30, 2002, the Company will identify the entities to
which the above dividend will apply.

By your signature  below  indicating your acceptance of this offer of settlement
as a binding legal agreement upon you and the Company,  its officers,  directors
and  subsidiaries,  you  confirm  that you waive the right to sue to collect the
above indicated  portion out of the total amounts due you, and waive and release
the  Company,  its  subsidiaries,  current and former  officers,  directors  and
shareholders  from any  claims,  rights or  causes of action  which you may have
against them or any of them arising from your employment or otherwise during the
term  thereof,  arising as a  shareholder  or  employee  of the  Company and its
subsidiaries  through the date hereof. You further confirm and acknowledge:  (i)
that there are potential  unanticipated problems which may arise relating to the
Company's  ability  to  issue  the  referenced   dividends,   including  without
limitation the inability of either or all the  prospective  subsidiaries to gain
approval of the Securities and Exchange  Commission of a registration  statement

             2955 Valmont Road, Suite 300 o Boulder, Colorado 80301
                   o Phone: 303.247.1313 o Fax: 303.247.1315
<PAGE>

Mr. Thomas P. Raabe
April 7, 2002
Page 2 of 2

covering the shares of such subsidiaries subject to the dividend;  (ii) that two
of the four proposed  dividends are  contingent  upon the Company  entering into
acquisition  agreements with companies yet to be identified and that acquisition
agreements concerning them are not assured and that the forgiveness, waivers and
releases  being made by you are not  contingent  upon the occurrence of any such
event;  and  (iii)  that  there may be  adverse  tax  consequences  to the above
settlement  by the  Company  or  other  adverse  consequences  arising  from the
unconditional  waivers and releases provided in this agreement and none-the-less
enter into this agreement without reservation or qualification.

This offer is valid and binding on the Company only upon your signature below on
or before 12:00 midnight, Monday, April 8, 2002.

By the Company and on behalf of its subsidiary, Aggression Sports, Inc.:

By: /s/ William Stewart                              Date:  April 7, 2002
    --------------------------------                        --------------------
    William Stewart, Director

WITNESS:

BY: /s/ Thomas P. Raabe                              Date:  April 7, 2002
    --------------------------------                        --------------------
    Thomas P. Raabe, Individually

WITNESS:

    --------------------------------                 Date:
                                                            --------------------

             2955 Valmont Road, Suite 300 o Boulder, Colorado 80301
                   o Phone: 303.247.1313 o Fax: 303.247.1315

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]