Document:

<PAGE>

                                                                    Exhibit 10.1

                                STOCK OPTION PLAN

     1. PURPOSE OF THE PLAN. Under this Stock Option Plan (the "Plan") of Freei
Networks, Inc. (the "Company") options may be granted to eligible employees to
purchase shares of the Company's capital stock. The Plan is designed to enable
the Company and its subsidiaries to attract, retain and motivate their employees
by providing for or increasing the proprietary interests of such employees in
the Company. The Plan provides for options which qualify as incentive stock
options ("Incentive Options") under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), as well as options which do not so qualify.

     2. STOCK SUBJECT TO PLAN. The maximum number of shares of stock for which
options granted hereunder may be exercised shall be 1,500,000 shares of no par
common stock, subject to the adjustments provided in Sections 6 and 11. Shares
of stock subject to the unexercised portions of any options granted under this
Plan which expire or terminate or are cancelled may again be subject to options
under the Plan. However, if stock appreciation rights are granted with respect
to any options under this Plan, the total number of shares of stock for which
further options may be granted under this Plan shall be irrevocably reduced not
only when there is an exercise of an option granted under this Plan, but also
when such option is surrendered upon an exercise of a stock appreciation right
granted under this Plan, in either case by the number of shares covered by the
portion of such option which is exercised or surrendered. When the exercise
price for an option granted under this Plan is paid with previously outstanding
shares or with shares as to which the option is being exercised, as permitted in
Section 9, the total number of shares of stock for which further options may be
granted under this Plan shall be irrevocably reduced by the total number of
shares for which such option is thus exercised, without regard to the number of
shares received or retained by the Company in connection with that exercise, but
if that exercise results in the grant of a replacement option in accordance with
Section 15 the total number of shares of stock for which further options may be
granted under this Plan shall not be reduced by the number of received or
retained shares for which that replacement option is granted until and unless
the replacement option itself is exercised, whereupon it shall be reduced by the
number of shares for which the replacement option is exercised.

     3. ELIGIBLE EMPLOYEES. The employees eligible to be considered for the
grant of options hereunder are any persons regularly employed by the Company or
its parent(s) or subsidiaries in a managerial, professional or technical
capacity on a full-time, salaried basis.

     4. MINIMUM EXERCISE PRICE. The exercise price for each option granted
hereunder shall be not less than 100% of the fair market value of the stock at
the date of the grant of the option.

     5. NONTRANSFERABILITY. Any option granted under this Plan shall by its
terms be nontransferable by the optionee other than by will or the laws of
descent and distribution and is exercisable during the optionee's lifetime only
by him or by his guardian or legal representative.

     6. ADJUSTMENTS. If the outstanding shares of stock of the class then
subject to this Plan are increased or decreased, or are changed into or
exchanged for a different number or kind of shares or securities, as a result of
one or more reorganizations, recapitalizations, stock splits, reverse

<PAGE>

stock splits, stock dividends or the like, appropriate adjustments shall be made
in the number and/or kind of shares or securities for which options may
thereafter be granted under this Plan and for which options then outstanding
under this Plan may thereafter be exercised. Any such adjustment in outstanding
options shall be made without changing the aggregate exercise price applicable
to the unexercised portions of such options.

7. MAXIMUM OPTION TERM. NO option granted under this Plan may be exercised in
whole or in part more than ten years after its date of grant.

8. PLAN DURATION. Options may not be granted under this Plan more than ten years
after the date of the adoption of this Plan, or of shareholder approval thereof,
whichever is earlier.

9. PAYMENT. Payment for stock purchased upon any exercise of an option granted
under this Plan shall be made in full in cash concurrently with such exercise,
except that, if and to the extent the instrument evidencing the option so
provides and if the Company is not then prohibited from purchasing or acquiring
shares of such stock, such payment may be made in whole or in part with shares
of the same class of stock as that then subject to the option, delivered in lieu
of cash concurrently with such exercise, the shares so delivered to be valued on
the basis of the fair market value of the stock (determined in a manner
specified in the instrument evidencing the option) on the day preceding the date
of exercise. If and while payment with stock is permitted for the exercise of an
option granted under this Plan in accordance with the foregoing provision, the
person then entitled to exercise that option may, in lieu of using previously
outstanding shares therefor, use some of the shares as to which the option is
then being exercised.

10. ADMINISTRATION. The Plan shall be administered by the Company's board of
directors (the "Board") or, at the discretion of the Board, by a committee (the
"Committee") of not less than two members of the Board each of whom shall not at
any time during his service as an administrator of the Plan be an officer or
employee of the Company or of any parent or subsidiary corporation of the
Company.

The interpretation and construction by the Committee of any term or provision of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board in which event such determination by the Board shall be
final. The Board or the Committee may from time to time adopt rules and
regulations for carrying out this Plan and, subject to the provisions of this
Plan, may prescribe the form or forms of the instruments evidencing any option
granted under this Plan.

Subject to the provisions of this Plan, the Board or, by delegation from the
Board, the Committee, shall have full and final authority in its discretion
to select the employees to be granted options, to grant such options and to
determine the number of shares to be subject thereto, the exercise prices,
the terms of exercise, expiration dates and other pertinent provisions
thereof.

11. CORPORATE REORGANIZATIONS. Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company as a
result of which the outstanding

                                        2

<PAGE>

securities of the class then subject to options hereunder are changed into or
exchanged for cash or property or securities not of the Company's issue, or any
combination thereof, or upon a sale of substantially all the property of the
Company to, or the acquisition of stock representing more than eighty percent
(80%) of the voting power of the stock of the Company then outstanding by,
another corporation or person, the Plan shall terminate, and all options
theretofore granted hereunder shall terminate, unless provision be made in
writing in connection with such transaction for the continuance of the Plan
and/or for the, assumption of options covering the stock of a successor employer
corporation, or a parent or a subsidiary thereof, with appropriate adjustments
as to the number and kind of shares and prices, in which event the Plan and
options theretofore granted shall continue in the manner and under the terms so
provided. If the Plan and unexercised options shall terminate pursuant to the
foregoing sentence, all persons entitled to exercise any unexercised portions of
options then outstanding shall have the right, at such time prior to the
consummation of the transaction causing such termination as the Company shall
designate, to exercise the unexercised portions of their options, including the
portions thereof which would, but for this paragraph entitled "Corporate
Reorganizations," not yet be exercisable. The instrument evidencing any option
may also provide for such acceleration of otherwise unexercisable portions of
the option upon other specified events or occurrences, such as involuntary
terminations of the option holder's employment following certain changes in the
control of the Company.

12. STOCK APPRECIATION RIGHTS. If the instrument evidencing the option so
provides, an option granted under this Plan (herein sometimes referred to as
the "corresponding option") may include the right (a "Stock Appreciation Right")
to receive an amount equal to some or all of the excess of the fair market value
(determined in a manner specified in the instrument evidencing the corresponding
option) of the shares subject to unexercised portions of the corresponding
option over the aggregate exercise price for such shares under the corresponding
option as of the date the Stock Appreciation Right is exercised. The amount
payable upon exercise of a Stock Appreciation Right may be paid in cash or in
shares of the class then subject to the corresponding option (valued on the
basis of their fair market value, determined as specified with respect to the
measurement of the amount payable as aforesaid), or in a combination of cash and
such shares so valued. No Stock Appreciation Right may be exercised in whole or
in part (a) other than in connection with the contemporaneous surrender without
exercise of such corresponding option, or the portion thereof that corresponds
to the portion of the Stock Appreciation Right being exercised, or (b) except to
the extent that the corresponding option or such portion thereof is exercisable
on the date of exercise of the Stock Appreciation right by the person exercising
the Stock Appreciation Right, or (c) unless the class of stock then subject to
the corresponding option is then "publicly traded." For this purpose, a class
of stock is "publicly traded" if it is listed or admitted to unlisted trading
privileges on a national securities exchange or on the NASDAQ National Market or
if sales or bid and offer quotations therefor are reported on the automated
quotation system ("NASDAQ") operated by the National Association of Securities
Dealers, Inc. or on any then operative successor to the NASDAQ system.

13. RESTRICTED STOCK If the instrument evidencing the option so provides, shares
of stock issued on exercise of an option granted under this Plan may upon
issuance be subject to the following restrictions (and, as used herein,
"restricted stock" means shares issued on exercise of

                                       3

<PAGE>

options granted under this Plan which are still subject to restrictions imposed
under this Section 13 that have not yet expired or terminated):

     (a) shares of restricted stock may not be sold or otherwise transferred or
hypothecated;

     (b) if the employment of the holder of shares of restricted stock with the
Company or a subsidiary is terminated for any reason other than his death,
normal or early retirement in accordance with his employer's established
retirement policies or practices, or total disability, the Company (or any
subsidiary designated by it) shall have the option for sixty (60) days after
such termination of employment to purchase for cash all or any part of his
restricted stock at the lesser of (i) the price paid therefor by the holder, or
(ii) the fair market value of the restricted stock on the date of such
termination of employment (determined in a manner specified in the instrument
evidencing the option); and

     (c) as to the shares of stock affected thereby, any additional restrictions
that may be imposed on particular shares of restricted stock as specified in the
instrument evidencing the option.

     The restrictions imposed under this Section 13 shall apply as well to
all shares or other securities issued in respect of restricted stock in
connection with any stock split, reverse stock split, stock dividend,
recapitalization, reclassification, spin-off, split-off, merger,
consolidation or reorganization, but such restrictions shall expire or
terminate at such time or times as shall be specified therefor in the
instrument evidencing the option which provides for the restrictions.

     14. FINANCIAL ASSISTANCE The Company is vested with authority under this
Plan to assist any employee to whom an option is granted hereunder (including
any director or officer of the Company or any of its subsidiaries who is also an
employee) in the payment of the purchase price payable on exercise of that
option, by lending the amount of such purchase price to such employee on such
terms and at such rates of interest and upon such security (or unsecured) as
shall have been authorized by or under authority of the Board.

     15. REPLACEMENT OPTIONS. If the instrument evidencing the option so
provides, when the exercise price of an option granted under this Plan (herein
sometimes referred to as the "reloaded option") is paid with previously
outstanding shares or with shares as to which the option is being exercised, as
permitted in Section 9, such exercise of the reloaded option shall result in the
automatic and simultaneous grant to the exercising optionee of a supplemental
option under this Plan (herein sometimes referred to as a "replacement option")
for a number of shares equal to the number of shares delivered by the optionee
or retained by the Company in the exercise of the reloaded option, subject to
the adjustments provided in Sections 6 and 11, at an exercise price per share
equal to the fair market value (determined in a manner specified in the
instrument evidencing the reloaded option) of the shares subject to the
replacement option on the date the reloaded option is thus exercised. The
replacement option shall expire on the expiration date of the reloaded option
and shall in other respects contain the same terms and provisions as the
reloaded option, except that:* (a) the replacement option shall not itself
provide for any further replacement options upon its exercise; and (b) the
replacement option may not be exercised

                                        4

<PAGE>

before the earlier of (i) the expiration of one year after the date it is
granted or (ii) the first day of the calendar month in which it is scheduled to
expire, subject to any acceleration of its exercisability under Section 11
hereof.

     16. RESTRICTIONS APPLICABLE UNTIL THE COMPANY IS SUBJECT TO FEDERAL
REPORTING REQUIREMENTS. Notwithstanding any other provisions of this Plan,
unless and until the Company has become a reporting company with respect to any
class of its equity securities under the Securities Exchange Act of 1934, as
amended: (a) no, option, granted under this Plan may be exercised prior to the
calendar month in which that option is scheduled to expire by its terms (without
regard to any provisions for premature termination or cancellation); (b) prior
to that calendar month in which the option is scheduled to expire by its terms,
the Company has the right, exercisable at its discretion, to cancel and purchase
any such option for an amount equal to the excess, if any, of the fair market
value (determined in a manner specified in the instrument evidencing the option)
of the stock subject to that option over its exercise price; and (c) no option
granted under this Plan may be transferred, except upon the death of the grantee
of the option to that grantee's estate or the administrator(s) or executor(s) of
that estate (this exception does not extend to or permit the distribution or
other transfer by that estate or executor(s) or administrator(s) to the
grantee's heirs or other beneficiaries of the estate, and under the
circumstances described in this paragraph any portion of the option remaining
unexercised at the time of the final distribution of that estate will then
terminate).

     17. AMENDMENT AND TERMINATION. The Board may alter, amend, suspend or
terminate this Plan, provided that no such action shall deprive an optionee,
without his consent, of any option granted to the optionee pursuant to this Plan
or of any of his rights under such option. Except as herein provided, no such
action of the Board, unless taken with the approval of the shareholders of the
Company, may:

     (a) increase the maximum number of shares for which options granted under
this Plan may be exercised;

     (b) reduce the minimum permissible exercise price;

     (c) extend the ten-year duration of this Plan set forth herein; or

     (d) alter the class of employees eligible to receive options under the
Plan.

     ADOPTED BY FREEI NETWORKS, INC. SHAREHOLDERS AT MEETING HELD ON APRIL
12,1999.

     -----------------------------
     Secretary

                                        5

<PAGE>

                             STOCK OPTION AGREEMENT

     Freei Networks, Inc. (the "Company"), desiring to afford an opportunity to
the Grantee named below to purchase certain shares of the Company's no par
common stock, to provide the Grantee with an added incentive as an employee of
the Company or of one or more of its subsidiaries, hereby grants to Grantee, and
the Grantee hereby accepts, an option to purchase the number of such shares
optioned as specified below, during the term ending at midnight (prevailing
local time at the Company's principal offices) on the expiration date of this
Option specified below, at the option exercise price specified below, subject to
and upon the following terms and conditions:

     1. IDENTIFYING PROVISIONS: As used in this Option, the following terms
shall have the following respective meanings:

     (a) Grantee:
     (b) Date of grant:
     (c) Number of shares optioned:
     (d) Option exercise price per share:
     (e) Expiration date:

This Option is not intended to be and shall not be treated as an incentive stock
option under Section 422 of the Internal Revenue Code unless this sentence has
been manually lined out and its deletion is followed by the signature of the
corporate officer who signed this Option on behalf of the Company:

     2. TIMING OF PURCHASES: This Option is not exercisable in any part until
one (1) year after the date of grant. Upon the expiration of one (1) year after
the date of grant and subject to the provisions for termination and acceleration
herein, this Option shall become exercisable in installments as follows: This
Option may not in the aggregate be exercised as to more than twenty-five percent
(25%) of the total number of shares optioned until one (1) year after the date
of grant. Following each quarter after April 30, 2000 (i.e., July 31,
October 31, January 31, April 30) an additional 6.35% of this Option may be
exercised. Upon the expiration of four (4) years after the date of grant, this
Option may be exercised as to all optioned shares for which it had not
previously been exercised, until and including the expiration date of this
Option whereupon the Option shall expire and may thereafter no longer be
exercised.

     3. RESTRICTIONS ON EXERCISE: The following additional provisions shall
apply to the exercise of this Option:

     (i)  TERMINATION OF EMPLOYMENT. If the Grantee's employment by the Company
          or any of its subsidiaries is terminated for any reason other than
          death only that portion of this Option exercisable at the time of such
          termination of employment may thereafter be exercised, and it

<PAGE>

          may not be exercised more than three (3) months after such termination
          nor after the expiration date of this Option, whichever date is
          sooner, unless such termination is by reason of the Grantee's
          permanent and total disability, in which case such period of three (3)
          months shall be extended to one (1) year. In all other respects, this
          Option shall terminate upon such termination of employment.

     (ii) DEATH OF GRANTEE. If the Grantee shall die during the term of this
          Option, the Grantee's legal representative or representatives, or the
          person or persons entitled to do so under the Grantee's last will and
          testament or under applicable intestate laws, shall have the right to
          exercise this Option, but only for the number of shares as to which
          the Grantee was entitled to exercise this Option in accordance with
          Section 2 hereof on the date of his death, and such right shall expire
          and this Option shall terminate one (1) year after the date of the
          Grantee's death or on the expiration date of this Option, whichever
          date is sooner. In all other respects, this Option shall terminate
          upon such death.

     (iii) CONTINUITY OF EMPLOYMENT. This Option shall not be exercisable by the
          Grantee in any part unless at all times beginning with the date of
          grant and ending no more than three (3) months prior to the date of
          exercise, the Grantee has, except for military service leave, sick
          leave or other bona fide leave of absence (such as temporary
          employment by the United States Government) been in the continuous
          employ of the Company or a parent or subsidiary thereof, except that
          such period of three (3) months shall be one (1) year following any
          termination of the Grantee's employment by reason of his permanent and
          total disability.

     4. NON-TRANSFERABLE: The Grantee may not transfer this Option except by
will or the laws of descent and distribution. This Option shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in any way, whether
by operation of law or otherwise, and shall be exercisable during the Grantee's
lifetime only by the Grantee or his guardian or legal representative.

     5. ADJUSTMENTS AND CORPORATE REORGANIZATIONS: Subject to the provisions of
the Company's Stock Option Plan under which this Option is granted, if the
outstanding shares of the class then subject to this Option are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities, as a result of one or more reorganizations,
recapitalizations, stock splits, reverse stock splits, stock dividends or the
like, appropriate adjustments shall be made in the number and/or kind of shares
or securities for which the unexercised portions of this is Option may
thereafter be exercised, all without any change in the aggregate exercise price
applicable to the unexercised portions of this Option, but with a corresponding
adjustment in the exercise price per share or other unit. No fractional share of
stock shall be issued under this Option or in connection with any such
adjustment. Such adjustments shall be made by or under authority of the
Company's board of directors whose determinations as to what adjustments shall
be made, and the extent thereof, shall be final, binding and conclusive.

Upon the dissolution or liquidation of the Company, or upon a reorganization,
merger or consolidation of the Company as a result of which the outstanding
securities of the class then subject to this Option are changed into or
exchanged for cash or property or securities not of the

                                       2

<PAGE>

Company's issue, or any combination thereof, or upon a sale of substantially all
the property of the Company to, or the acquisition of stock representing more
than eighty percent (80%) of the voting power of the stock of the Company then
outstanding by, another corporation or person, this Option shall terminate,
unless provision be made in writing in connection with such transaction for the
assumption of options theretofore granted under the Stock Option Plan under
which this Option was granted, or the substitution for such options of any
options covering the stock of a successor employer corporation, or a parent or,
subsidiary thereof, with appropriate adjustments as to, the number and kind of
shares and prices, in which event this Option shall continue in the manner and
under the terms so provided. If this Option shall terminate pursuant to the
foregoing sentence, the Grantee shall have the right, at such time prior to the
consummation of the transaction causing such termination as the Company shall
designate, to exercise the unexercised portions of this Option, including the
portions thereof which would, but for this Section entitled "Adjustments and
Corporate Reorganizations," not yet be exercisable.

     6. CHANGES IN CONTROL: Notwithstanding any other provisions hereof, this
Option shall accelerate so that the Grantee shall have the right, at all times
until the expiration or earlier termination of the Option, to exercise the
unexercised portions of this Option, including the portions thereof which would,
but for this Section entitled "Changes in Control," not yet be exercisable, from
and after any Involuntary Termination within twenty-four (24) months after a
Change in Control that occurs while the Grantee is an employee of the Company or
any of its subsidiaries. For purposes of this paragraph: (a) an "Involuntary
Termination" is any termination of the Grantee's employment with the Company or
any of its subsidiaries for reasons other than (1) the Grantee's death, (2) the
Grantee's total and permanent disability, (3) the Grantee's retirement under
circumstances that entitle the Grantee to full benefits under one or another of
his employer's retirement or pension plans or programs generally applicable to
salaried employees, (4) termination for cause (meaning (i) an act by the Grantee
resulting or intended to result directly or indirectly in substantial gain or
personal enrichment at the expense of the Company or any of its affiliated
corporations, or (ii) the Grantee's willful engagement in misconduct that
results in material injury to the Company or any of its affiliated corporations,
or (iii) the Grantee's willful and continued failure substantially to perform
the Grantee's duties to the Company or a subsidiary after a written demand for
substantial performance is delivered to the Grantee by the Company's chief
executive officer, or by the Company's board of directors if the Grantee is the
chief executive officer, which specifically identifies the manner in which it is
believed that the Grantee has not substantially performed his duties), or (5)
the Grantee's voluntary termination of employment following the assignment to
the Grantee by his employer of any duties that are significantly incompatible
with, and detract from, the Grantee's position, duties, titles, offices,
responsibilities or status with the Company or a subsidiary immediately before
the Change in Control; and (b) a "Change in Control" means any of the following
events if they occur after the date of grant of this Option and after the class
of stock then subject to this Option becomes Publicly Traded (as defined
herein): the direct or indirect beneficial ownership (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934 and Regulation 13D-G
thereunder) of 50% or more of the class of securities then subject to this
Option is acquired or becomes held by any person or group of persons (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934), or the
sale, mortgage, lease or other transfer in one or more transactions not in the
ordinary course of the Company's business of assets or

                                        3

<PAGE>

earning power constituting more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to any such person or group of
persons.

     7. EXERCISE, PAYMENT FOR AND DELIVERY OF STOCK: This Option may be
exercised by the Grantee or other person then entitled to exercise it by giving
four (4) business days' written notice of exercise to the Company specifying the
number of shares to be purchased and the total purchase price, accompanied by a
check to the order of the Company in payment of such price. If the Company is
required to withhold on account of any present or future tax imposed as a
result of such exercise, the notice of exercise shall be accompanied by a check
to the order of the Company in payment of the amount of such withholding.

     8. ALTERNATIVE PAYMENT WITH STOCK: Notwithstanding the foregoing provisions
requiring payment by check, payment of such purchase price or any portion
thereof may be made with shares of stock of the same class as the shares then
subject to this Option, if shares of that class are then Publicly Traded (as
defined herein), such shares to be credited toward such purchase price on the
valuation basis set forth below, in which event the stock certificates
evidencing the shares so to be used shall accompany the notice of exercise and
shall be duly endorsed or accompanied by duly executed stock powers to transfer
the same to the Company; provided, however, that such payment in stock instead
of cash shall not be effective and shall be rejected by the Company if (i) the
Company is then prohibited from purchasing or acquiring shares of the class of
its stock thus tendered to it, or (ii) the right or power of the person
exercising the Option to deliver such shares in payment of said purchase price
is subject to the prior interests of any other person (excepting the Company),
as indicated by legends upon the certificate(s) or as known to the Company. For
credit toward the purchase price, shares so surrendered shall be valued at their
Fair Market Value (as defined herein) as of the day immediately preceding the
delivery to the Company of the certificate(s) evidencing such shares. If the
Company rejects the payment in stock, the tendered notice of exercise shall not
be effective hereunder unless promptly after being notified of such rejection
the person exercising the Option pays the purchase price in acceptable form. If
and while payment of the purchase price with stock is permitted in accordance
with the foregoing provisions, the person then entitled to exercise this Option
may, in lieu of using previously outstanding shares therefor, use some of the
shares as to which this Option is then being exercised, in which case the notice
of exercise need not be accompanied by any stock certificates but shall include
a statement directing the Company to withhold so many of the shares that would
otherwise have been delivered upon that exercise of this Option as equals the
number of shares that would have been transferred to the Company if the purchase
price had been paid with previously issued stock.

     9. RIGHTS IN SHARES BEFORE ISSUANCE AND DELIVERY: No person shall be
entitled to the privileges of stock ownership in respect of any shares issuable
upon exercise of this Option, unless and until such shares have been issued to
such person as fully paid shares.

     10. REQUIREMENTS OF LAW AND OF STOCK EXCHANGES: By accepting this Option,
the Grantee represents and agrees for himself and his transferees by will or
the laws of descent and distribution that, unless a registration statement under
the Securities Act of 1933 is in effect as to shares purchased upon any exercise
of this Option, (i) any and all shares so purchased shall be

                                       10

<PAGE>

acquired for his personal account and not with a view to or for sale in
connection with any distribution, and (ii) each notice of the exercise of any
portion of this Option shall be accompanied by a representation and warranty in
writing, signed by the person entitled to exercise the same, that the shares are
being so acquired in good faith for his personal account and not with view to or
for sale in connection with any distribution.

No certificate or certificates for shares of stock purchased upon exercise of
this Option shall be issued and delivered prior to the admission of such shares
to listing on notice of issuance on any stock exchange or other securities
market on which shares of that class are then listed, nor unless and until, in
the opinion of counsel for the Company, such securities may be issued and
delivered without causing the Company to be in violation of or incur any
liability under any federal, state or other securities law, any requirement of
any securities exchange listing agreement to which the Company may be a party,
or any other requirement of law or of any regulatory body having jurisdiction
over the Company.

     11. [RESERVED]

     12. RESTRICTED STOCK PROVISIONS: Shares of stock issued on exercise of this
Option shall upon issuance be subject to the following restrictions (and, as
used herein, "restricted stock" means shares issued on exercise of this Option
which are still subject to the restrictions imposed under this paragraph that
have not yet expired or terminated):

     (a)  Such shares of restricted stock may not be sold or otherwise
          transferred or hypothecated;

     (b)  If the employment of the Grantee with the Company or a subsidiary of
          the Company is terminated for any reason other than his death, normal
          or early retirement in accordance with his employer's established
          retirement policies and practices, or total disability, the Company
          (or any subsidiary designated by it) shall have the option for sixty
          (60) days after such termination of employment to purchase for cash
          all or any part of his restricted stock at the lesser of (i) the price
          paid therefor upon exercise of this Option, or (ii) the Fair Market
          Value (as defined herein) of the restricted stock on the date of such
          termination of employment. The restrictions imposed under this
          paragraph shall apply as well to all shares or other securities
          issued in respect of restricted stock in connection with any stock
          split, reverse stock split, stock dividend, recapitalization,
          reclassification, spin-off, split-off, merger, consolidation or
          reorganization, but such restrictions shall expire or terminate on the
          earliest to occur of the following:

          (i)  The ninetieth (90th) day after the date on which shares of the
               same class of stock as such restricted stock first become
               Publicly Traded (as defined herein).

          (ii) The tenth (10th) anniversary of the date of grant hereof.

                                        5

<PAGE>

          (iii) As to any shares for which the Company's (or a subsidiary's)
               sixty (60) day option to purchase upon termination of employment
               shall have become exercisable but shall expire without having
               been exercised, on the first business day of the calendar month
               next following the expiration of such sixty (60) day option
               period.

          (iv) The first business day of the calendar month next following the
               termination of the Grantee's employment with the Company or a
               subsidiary because of his death, normal or early retirement in
               accordance with his employer's established employment policies or
               practices, or total disability.

          (v)  The occurrence of any event or transaction upon which this Option
               terminates by reason of the provisions of paragraph 5 hereof.

Any certificates evidencing shares of restricted stock may contain such legends
as the Company may deem necessary or advisable to reflect and give effect to the
restrictions imposed thereon hereunder.

     13.  [RESERVED]

     14. RESTRICTIONS APPLICABLE UNTIL THE COMPANY IS SUBJECT TO FEDERAL
REPORTING REQUIREMENTS. Notwithstanding any other provisions of this Option,
unless and until the Company has become a reporting company with respect to any
class of its equity securities under the Securities and Exchange Act of 1934, as
amended: (a) this Option may not be exercised prior to the calendar month in
which its expiration date (see paragraph I above) occurs; (b) prior to that
calendar month in which the expiration date of this Option occurs, the Company
has the right, exercisable at its discretion, to cancel and purchase this Option
for an amount equal to the excess, if any, of the Fair Market Value (as defined
herein) of the stock subject to this Option over its exercise price; and (c)
this Option may not be transferred, except upon the death of the Grantee to the
Grantee's estate or the administrator(s) or executor(s) of that estate (this
exception does not extend to or permit the distribution or other transfer by
that estate or executor(s) or administrator(s) to the Grantee's heirs or other
beneficiaries of the estate, and under the circumstances described in this
paragraph any portion of this Option remaining unexercised at the time of the
final distribution of that estate will then terminate). The Company's right to
cancel and purchase the Option under this paragraph is exercised when the
Company gives written notice to the Grantee of the cancellation and purchase of
the Option under this paragraph, specifying the Fair Market Value of the stock
on the basis of which payment is to be made and a date, not later than the
Option's expiration date, on which the purchase price is to be paid.

     15. CERTAIN DEFINITIONS. As used in this Option: "Fair Market Value" of
corporate stock shall mean:

                                       6

<PAGE>

     (a)  If the stock is then Publicly Traded: The closing price of stock of
          that class as of the day in question (or, if such day is not a trading
          day in the principal securities market or markets for such stock, on
          the nearest preceding trading day), as reported with respect to the
          market (or the composite of markets, if more than one) in which shares
          of such stock are then traded, or, if no such closing prices are
          reported, on the basis of the mean between the high bid and low asked
          prices that day on the principal market or quotation system on which
          shares of such stock are then quoted, or, if not so quoted, as
          furnished by a professional securities dealer making a market in such
          stock selected by or under authority of the board of directors of the
          Company.

     (b)  If the stock is then not Publicly Traded: The price at which one could
          reasonably expect such stock to be sold in an arm's length
          transaction, for cash, other than on an installment basis, to a person
          not employed by, controlled by, in control of or under common control
          with the issuer of such shares. Such Fair Market Value shall be that
          which has currently or most recently been determined for this purpose
          by the Company's board of directors, or at the discretion of that
          board by an independent appraiser or appraisers selected by the board,
          in either case giving due consideration to recent transactions
          involving shares of such stock, if any, the issuer's net worth,
          prospective earning power and dividend-paying capacity, the goodwill
          of the issuer's business, the issuer's industry position and its
          management, that industry's economic outlook, the values of
          securities of issuers whose stock is Publicly Traded and which are
          engaged in similar businesses, the effect of transfer restrictions to
          which such stock may be subject under law and under the applicable
          terms of any contract governing such stock, the absence of a public
          market for such stock and such other matters as the board or its
          appraiser or appraisers deem pertinent. The determination by the
          Company's board of directors or its appraiser or appraisers of the
          Fair Market Value shall, if not unreasonable, be conclusive and
          binding notwithstanding the possibility that other persons might make
          a different, and also reasonable, determination. If the Fair Market
          Value to be used was thus fixed more than sixteen months prior to the
          day as of which Fair Market Value is being determined, it shall in any
          event be no less than the book value of the stock being valued at the
          end of the most recent period for which financial statements of the
          issuer are available.

Corporate stock is "Publicly Traded" if stock of that class is listed or
admitted to unlisted trading privileges on a national securities exchange or on
the NASDAQ National Market or if sales or bid and offer quotations are reported
for that class of stock in the automated quotation system ("NASDAQ") operated by
the National Association of Securities Dealers, Inc. ("NASD").

     16.  STOCK OPTION PLAN: This Option is subject to, and the Company and the
          Grantee agree to be bound by, all of the terms and conditions of the
          Company's Stock Option Plan under which this Option was granted, as
          the same shall have been amended from time to time in accordance with
          the terms thereof, provided that no such amendment shall deprive the
          Grantee, without his consent, of this Option or

                                       7
<PAGE>

          any of his rights hereunder. Pursuant to said Plan, the board of
          directors of the Company or its Committee established for such
          purposes is vested with final authority to interpret and construe the
          Plan and this Option, and is authorized to adopt rules and regulations
          for carrying out the Plan. A copy of the Plan in its present form is
          available for inspection during business hours by the Grantee or other
          persons entitled to exercise this Option at the Company's principal
          office.

     17.  NOTICES: Any notice to be given to the Company shall be addressed to
          the Company in care of its Secretary at its principal office, and any
          notice to be given to the Grantee shall be addressed to him at the
          address given beneath his signature hereto or at such other address as
          the Grantee may hereafter designate in writing to the Company. Any
          such notice shall be deemed duly given when enclosed in a properly
          sealed envelope or wrapper addressed as aforesaid, registered or
          certified, and deposited, postage and registry or certification fee
          prepaid, in a post office or branch post office regularly maintained
          by the United States Postal Service.

     18.  LAWS APPLICABLE TO CONSTRUCTION: This Agreement has been executed and
          delivered by the Company in Washington, and this Agreement shall be
          construed and enforced in accordance with the laws of said State.

                                       8

<PAGE>

     IN WITNESS WHEREOF, the Company has granted this Option on the date of
grant specified above.

                                                      FREEI NETWORKS, INC.

                                                      By
                                                        ------------------------

                                                      Its:
                                                          ----------------------

------------------------
Signature

------------------------
Grantee

------------------------
Street Address

------------------------
City and State

                                       9<PAGE>
                                                                   Exhibit 10.2

                              FREEI NETWORKS, INC.
                        2000 EMPLOYEE STOCK PURCHASE PLAN

I.   PURPOSE OF PLAN

     As a means by which Employees may share in the Company's growth and
     success, Freei Networks, Inc. (the "Company") believes that ownership of
     shares of its Common Stock by its Employees is desirable. To this end, and
     as an incentive to better performance and improved profits, the Company has
     established the Freei Networks, Inc. 2000 Employee Stock Purchase Plan (the
     "Plan").

     The Company intends that the Plan will constitute an "employee stock
     purchase plan" within the meaning of Section 423 of the Code.

II.  DEFINITIONS

     Terms that are capitalized within this document shall have the meanings as
     set forth in Exhibit A, unless otherwise specified within the text.

III. EMPLOYEE PARTICIPATION

     PARTICIPATION

     Subject to the provisions of this Section III, an Employee may elect to
     participate in the Plan effective as of any Enrollment Date by completing
     and filing a Payroll Deduction Authorization Form in the form attached
     hereto as EXHIBIT B, as provided in Section IV. As of each Enrollment Date,
     the Company hereby grants a right to purchase Shares under the terms of the
     Plan to each eligible Employee who has elected to participate in the
     Offering commencing on that Enrollment Date.

     REQUIREMENTS FOR PARTICIPATION

     A person shall become eligible to participate in the Plan on the first
     Enrollment Date on which that person meets the following requirements:

       a)     The person is an Employee, and

       b)     The person's customary period of Employment is more than twenty
              (20) hours per week.

              Any eligible Employee may enroll in the Plan as of the Enrollment
              Date of any Offering by filing timely written notice of such
              participation, subject to the following provisions:

       (i)    In order to enroll in the Plan initially, an eligible Employee
              must complete, sign and submit to the Company the following forms:

              (A)   Payroll Deduction Authorization Form. This form must be
              received by the Company at least fifteen (15) days prior to the
              Enrollment Date of an Offering to be effective for that Offering.

              (B)   ESPP New Account Form. This form must accompany the Payroll
              Deduction Authorization Form submitted for enrollment in the Plan.
              An ESPP New Account Form must be received by the Company at least
              fifteen (15) days prior to the Enrollment Date of an Offering to
              be effective for that Offering.

       (ii)   A Participant in an ongoing Offering may elect as of any
              Enrollment Date to enroll in the new Offering commencing on that
              Enrollment Date by filing a Payroll Deduction Authorization Form
              making such election prior to 4:00 p.m. Pacific Time on the
              Enrollment Date. An election by a current Participant to enroll in
              a new Offering shall constitute a withdrawal, effective as of such
              Enrollment Date, from the ongoing Offering and simultaneous
              reenrollment in the new Offering. A reenrollment shall not affect
              the purchase of Shares under the ongoing Offering occurring on the
              Purchase Date immediately preceding the Enrollment Date. A
              Participant may make an ongoing election to reenroll on any
              Enrollment Date as of which the fair market value of the Shares
              for purposes of Section VI is less than it was as of the
              Enrollment Date for the Offering in which the Participant is
              currently participating. Unless otherwise specified by the
              Participant, any such ongoing reenrollment election shall be
              subject to revocation;

<PAGE>

              provided, however, that to be effective to prevent reenrollment on
              any Enrollment Date, such revocation must be received by the
              Company prior to 4:00 p.m. Pacific Time on the Enrollment Date.

       (iii)  Absent withdrawal from the Plan pursuant to Section VII, a
              Participant will automatically be re-enrolled in the Offering
              commencing on the Enrollment Date immediately following the
              expiration of the Offering of which that person is then a
              Participant.

              A Participant shall become ineligible to participate in the Plan
              and shall cease to be a Participant when the Participant ceases to
              meet the eligibility requirements as defined above.

         LIMITATIONS ON PARTICIPATION

         No Employee may obtain a right to purchase Shares under the Plan if,
         immediately after the right is granted, the Employee owns or is deemed
         to own Shares possessing five percent (5%) or more of the combined
         voting power or value of all classes of stock of the Company or any
         parent or subsidiary of the Company. For purposes of determining share
         ownership, the rules of Section 425(d) of the Code shall apply and
         Shares that the Employee may purchase under any options or rights to
         purchase, whether or not vested, shall be treated as Shares owned by
         the Employee.

         No Employee may obtain a right to purchase Shares under the Plan that
         permits the Employee's rights to purchase Shares under the Plan and any
         other employee stock purchase plan within the meaning of Section 423 of
         the Code of the Company or any parent or subsidiary of the Company to
         accrue at a rate which exceeds $25,000 in fair market value of Shares
         (determined as of the Enrollment Date) for each calendar year of the
         Offering. This section shall be interpreted to permit an Employee to
         purchase the maximum number of Shares permitted under Section 423(b)(8)
         of the Code and regulations and interpretations adopted thereunder.

         The maximum number of Shares that an Employee may purchase in an
         Offering shall not exceed 10,000 shares, no more than one-third of
         which may be purchased on any Purchase Date with respect to that
         Offering.

         VOLUNTARY PARTICIPATION

         Participation in the Plan shall be strictly voluntary.

IV.      PAYROLL DEDUCTIONS

         PAYROLL DEDUCTION AUTHORIZATION

         An Employee may contribute to the Plan only by means of payroll
         deductions. A Payroll Deduction Authorization Form must be filed with
         the Company's stock administrator at least fifteen (15) days prior to
         the Enrollment Date as of which the payroll deductions are to take
         effect.

         AMOUNT OF DEDUCTIONS

         A Participant may specify that the person desires to make contributions
         to the Plan at a rate not less than 1% and not more than 10% of the
         Compensation paid to the Participant during each pay period in the
         Offering, or other such minimum or maximum percentages as the Plan
         Administrator shall establish from time to time. Such specification
         shall apply during any period of continuous participation in the Plan,
         unless otherwise modified or terminated as provided in this Section IV
         or as otherwise provided in the Plan. If a payroll deduction cannot he
         made in whole or in part because the Participant's pay for the period
         in question is insufficient to fund the deduction after having first
         withheld all other amounts deductible from that person's pay, the
         amount that was not withheld cannot be made up by the Participant nor
         will it be withheld from subsequent pay checks.

         COMMENCEMENT OF DEDUCTIONS

         Payroll deductions for a Participant shall commence on the Enrollment
         Date of the Offering for which that person's Payroll Deduction
         Authorization Form is effective and shall continue indefinitely, unless
         modified or terminated as provided in this Section IV or as otherwise
         provided in the Plan.

         ACCOUNTS

         All payroll deductions made for a Participant shall be credited to his
         or her Account under the Plan.

<PAGE>

         each Purchase Date, the Plan Administrator shall promptly deliver a
         report to each Participant setting forth the aggregate payroll
         deductions credited to such Participant's Account during the preceding
         six months and the number of Shares purchased and delivered to the
         Custodian for deposit into the Participant's Custodial Account.

         MODIFICATION OF AUTHORIZED DEDUCTIONS

         A Participant may, prior to the commencement of each Offering in which
         that person will be a Participant, and not more than three times during
         each Offering, increase or decrease the amount of that person's payroll
         deduction effective for all applicable payroll periods, by completing
         an amended Payroll Deduction Authorization Form and filing it with the
         Company's stock administrator in accordance with this Section IV.

         A Participant may at any time discontinue the Participant's payroll
         deductions, without withdrawing from the Plan, by completing an amended
         Payroll Deduction Authorization Form and filing it with the Company's
         stock administrator. Previous payroll deductions will then be retained
         in the Participant's Account for application to purchase Shares on the
         next Purchase Date, after which the Participant's participation in the
         Offering and in the Plan will terminate unless the participant has
         timely filed another Payroll Deduction Authorization Form to resume
         payroll deductions.

         For purposes of the above, an amended Payroll Deduction Authorization
         form shall be effective for a specific pay period when filed 15 days
         prior to the last day of such payroll period.

V.       CUSTODY OF SHARES

         DELIVERY AND CUSTODY OF SHARES

         Shares purchased pursuant to the Plan shall be delivered to and held by
         the Custodian.

         CUSTODIAL ACCOUNT

         As soon as practicable after each Purchase Date, the Company shall
         deliver to the Custodian the full Shares purchased for each
         Participant's Account. The Shares will be held in a Custodial Account
         specifically established for this purpose. An Employee must open a
         Custodial Account with the Custodian in order to be eligible to
         purchase Shares under the Plan. In order to open a Custodial Account,
         the Participant must complete an ESPP New Account Form and file it with
         the stock administrator no later than fifteen (15) days prior to the
         Enrollment Date of the Offering as of which the enrollment is to take
         effect; provided, however, that an ESPP New Account Form that effects a
         change in the status of the Custodial Account may be filed at any time
         during participation in the Plan.

         TRANSFER OF SHARES

         Upon receipt of appropriate instructions from a Participant on forms
         provided for that purpose, the Custodian will transfer into the
         Participant's own name all or part of the Shares held in the
         Participant's Custodial Account and deliver such Shares to the
         Participant.

         STATEMENTS

         The Custodian will deliver to each Participant a semi-annual statement
         showing the activity of the Participant's Custodial Account and the
         balance as to both Shares and cash. Participants will be furnished such
         other reports and statements, and at such intervals, as the Custodian
         and Plan Administrator shall determine from time to time.

VI.      PURCHASE OF SHARES

         PURCHASE OF SHARES

          Subject to the limitations of Section VII, on each Purchase Date in an
          Offering, the Company shall apply the amount credited to each
          Participant's Account to the purchase of as many full Shares that may
          be purchased with such amount at the price set forth in this Section
          VI, and shall promptly deliver such Shares to the Custodian for
          deposit into the Participant's Custodial Account. Payment for Shares
          purchased under the Plan will be made only through payroll withholding
          deductions in accordance with Section IV.

<PAGE>

         PRICE

         The price of Shares to be purchased on any Purchase Date shall be the
         lower of:

               (a) Eighty-five percent (85%) of the fair market value of the
               Shares on the Enrollment Date of the Offering; or

               (b) Eighty-five percent (85%) of the fair market value of the
               Shares on the Purchase Date.

         FAIR MARKET VALUE

         The fair market value of the Shares on any date shall be equal to the
         closing trade price of such shares on the Valuation Date, as reported
         on the NASDAQ National Market System or such other quotation system
         that supersedes it.

         UNUSED CONTRIBUTIONS

         Any amount credited to a Participant's Account and remaining therein
         immediately after a Purchase Date because it was less than the amount
         required to purchase a full Share shall be carried forward in such
         Participant's Account for application on the next succeeding Purchase
         Date.

VII.     TERMINATION AND WITHDRAWAL

         TERMINATION OF EMPLOYMENT

         Upon termination of a Participant's Employment for any reason other
         than death, Retirement or Disability, the payroll deductions credited
         to such Participant's Account shall be returned to the Participant. A
         Participant shall have no right to accrue Shares upon termination of
         the person's Employment.

         TERMINATION UPON DEATH, RETIREMENT OR DISABILITY

         Upon termination of the Participant's Employment because of that
         person's death, Retirement or Disability, the payroll deductions
         credited to that person's Account shall be used to purchase Shares as
         provided in Section VI on the next Purchase Date. Any remaining balance
         in the Participant's Account shall be returned to that person or, in
         the case of death, any Shares purchased and any remaining balance shall
         be transferred to the deceased Participant's Beneficiary, or if none,
         to that person's estate.

         DESIGNATION OF BENEFICIARY

         Each Participant may designate, revoke, and redesignate Beneficiaries.
         All changes to designation of Beneficiary shall be in writing and will
         be effective upon delivery to the Plan Administrator.

         WITHDRAWAL

         A Participant may withdraw the entire amount credited to that
         individual's Account under the Plan and thereby terminate participation
         in the current Offering at any time by giving written notice to the
         Company, but in no case may a Participant withdraw accounts within the
         15 days immediately preceding a Purchase Date for the Offering. Any
         amount withdrawn shall be paid to the Participant promptly after
         receipt of proper notice of withdrawal and no further payroll
         deductions shall be made from the person's Compensation unless a
         Payroll Deduction Authorization Form directing further deductions is or
         has been submitted.

         STATUS OF CUSTODIAL ACCOUNT

         Upon termination of a Participant's Employment for any reason other
         than death, the Participant may,

               (a) Elect to retain with the Custodian the Shares held in the
               Participant's Custodial Account. The Participant will bear the
               cost of any annual fees resulting from maintaining such an
               account.

               (b) Request issuance of the Shares held in the Participant's
               Custodial Account by submitting to the Custodian the appropriate
               forms provided for that purpose.

<PAGE>

          Upon termination of a Participant's Employment as a result of death,
          any Shares held by the Custodian for the Participant's Account shall
          be transferred to the person(s) entitled thereto under the laws of the
          state of domicile of the Participant upon a proper showing of
          authority.

VIII.     SHARES PURCHASED UNDER THE PLAN

          SOURCE AND LIMITATION OF SHARES

          The Company has reserved for sale under the Plan 2,000,000 shares of
          common stock, subject to adjustment upon changes in capitalization of
          the Company as provided in Section X. Shares sold under the Plan may
          be newly issued Shares or Shares reacquired in private transactions or
          open market purchases, but all Shares sold under the Plan regardless
          of source shall be counted against the 2,000,000 Share limitation.

          If there is an insufficient number of Shares to permit the full
          exercise of all existing rights to purchase Shares, or if the legal
          obligations of the Company prohibit the issuance of all Shares
          purchasable upon the full exercise of such rights, the Plan
          Administrator shall make a pro rata allocation of the Shares remaining
          available in as nearly a uniform and equitable manner as possible,
          based pro rata on the aggregate amounts then credited to each
          Participant's Account. In such event, payroll deductions to be made
          shall be reduced accordingly and the Plan Administrator shall give
          written notice of such reduction to each Participant affected thereby.
          Any amount remaining in a Participant's Account immediately after all
          available Shares have been purchased will be promptly remitted to such
          Participant. Determination by the Plan Administrator in this regard
          shall be final, binding and conclusive on all persons. No deductions
          shall be permitted under the Plan at any time when no Shares are
          available.

          DELIVERY OF SHARES

          As promptly as practicable after each Purchase Date, the Company shall
          deliver to the Custodian the full Shares purchased for each
          Participant's Account.

          INTEREST IN SHARES

          The rights to purchase Shares granted pursuant to this Plan will in
          all respects be subject to the terms and conditions of the Plan, as
          interpreted by the Plan Administrator from time to time. The
          Participant shall have no interest in Shares purchasable under the
          Plan until payment for the Shares has been completed at the close of
          business on the relevant Purchase Date. The Plan provides only an
          unfunded, unsecured promise by the Company to pay money or property in
          the future. Except with respect to the Shares purchased on a Purchase
          Date, an Employee choosing to participate in the Plan shall have no
          greater rights than an unsecured creditor of the Company. After the
          purchase of Shares, the Participant shall be entitled to all rights of
          a shareholder of the Company.

IX.       ADMINISTRATION

          PLAN ADMINISTRATOR

          At the discretion of the Board of Directors, the Plan shall be
          administered by the Board of Directors or by a Committee appointed by
          the Board of Directors. Each member of the Committee shall be a
          director, an officer or an Employee of the Company. Each member shall
          serve for a term commencing on a date specified by the Board of
          Directors and continuing until that person dies, resigns or is removed
          by the Board of Directors.

          POWERS

          The Plan Administrator shall be vested with full authority to make,
          administer and interpret the rules and regulations as it deems
          necessary to administer the Plan. Any determination, decision or act
          of the Plan Administrator with respect to any action in connection
          with the construction, interpretation, administration or application
          of the Plan shall be final, binding and conclusive upon all
          Participants and any and all other persons claiming under or through
          any Participant. The provisions of the Plan shall be construed in a
          manner consistent with the requirements of Section 423 of the Code.

<PAGE>

X         CHANGES IN CAPITALIZATION, MERGER, ETC.

          RIGHTS OF THE COMPANY

          The grant of a right to purchase Shares pursuant to this Plan shall
          not affect in any way the right or power of the Company to make
          adjustments, reclassifications, reorganizations or other changes in
          its capital or business structure or to merge, consolidate or
          dissolve, liquidate or transfer all or any part of its divisions,
          subsidiaries, business or assets.

          RECAPITALIZATION

          Subject to any required action by shareholders, the number of Shares
          covered by the Plan as provided in Section VIII and the price per
          Share shall be proportionately adjusted for any increase or decrease
          in the number of issued Shares of the Company resulting from a
          subdivision or consolidation of Shares or the payment of a stock
          dividend or any other increase or decrease in the number of such
          Shares effected without receipt or payment of consideration by the
          Company.

          CONSOLIDATION OR MERGER

          In the event of the consolidation or merger of the Company with or
          into any other business entity, or sale by the Company of
          substantially all of its assets, the successor may at its discretion
          continue the Plan by adopting the same by resolution of its Board of
          Directors or agreement of its partners or proprietors or substitute an
          equivalent Plan therefor. If the successor refuses to continue or
          substitute for the Plan, the Plan Administrator will shorten the
          Offering to a specified date before the proposed consolidation, merger
          or sale. Similarly, in the event of a liquidation or dissolution of
          the Company, the Plan Administrator will shorten the Offering to a
          specified date before the proposed liquidation or dissolution.

XI.       TERMINATION OF EMPLOYMENT

          VACATION, LEAVE OR LAYOFF

          A person's Employment shall not terminate on account of an authorized
          leave of absence, sick leave or vacation, or on account of a military
          leave described in this Section XI, or a direct transfer between
          Employers. Failure to return to work upon expiration of any leave of
          absence, sick leave or vacation shall be considered a resignation
          effective as of the expiration of such leave of absence, sick leave or
          vacation.

          MILITARY LEAVE

          Any Employee who leaves the Employer directly to perform services in
          the Armed Forces of the United States or in the United States Public
          Health Service under conditions entitling the Employee to reemployment
          rights provided by the laws of the United States, shall be on military
          leave. An Employee's military leave shall expire if the Employee
          voluntarily resigns from the Employer during the leave or if that
          person fails to make an application for reemployment within a period
          specified by such law for preservation of employment rights. In such
          event, the individual's Employment shall terminate by resignation on
          the day the military leave expires.

XII.      SHAREHOLDER APPROVAL AND RULINGS

          The Plan is expressly made subject to (a) the approval of the Plan
          within twelve (12) months after the Plan is adopted by the
          shareholders of the Company and (b) at the Company's election, to the
          receipt by the Company from the Internal Revenue Service of a ruling
          in scope and content satisfactory to counsel to the Company, affirming
          qualification of the Plan within the meaning of Section 423 of the
          Code. If the Plan is not so approved by the shareholders within 12
          months after the date the Plan is adopted and if, at the election of
          the Company a ruling from the Internal Revenue Service is sought but
          not received on or before one year after this Plan's adoption by the
          Board of Directors, this Plan shall not come into effect. In that
          case, the Account of each Participant shall forthwith be paid to the
          Participant.

XIII.     MISCELLANEOUS PROVISIONS

          AMENDMENT AND TERMINATION OF THE PLAN

          The Board of Directors of the Company may at any time amend the Plan.
          Except as otherwise provided herein, no amendment may adversely affect
          or change any right to purchase Shares without prior approval of the
          shareholders of the Company if the amendment would:

<PAGE>

               (i)  Permit the sale of more Shares than are authorized under
                    Section VIII;

               (ii) Permit the sale of Shares to employees of entities which are
                    not Employers;

               (iii) Materially increase the benefits accruing to Participants
                    under the Plan; or

               (iv) Materially modify the requirements as to eligibility for
                    participation in the Plan.

         The Plan is intended to be a permanent program, but the Company
         reserves the right to declare the Plan terminated at any time. Upon
         such termination, amounts credited to the Accounts of the Participants
         with respect to whom the Plan has been terminated shall be returned to
         such Participants.

         NON-TRANSFERABILITY

         Neither payroll deductions credited to a Participant's Account nor any
         rights with regard to the purchase of Shares under the Plan may be
         assigned, transferred, pledged or otherwise disposed of in any way by
         the Participant except as provided in Section VII, and any attempted
         assignment, transfer, pledge, or other disposition shall be null and
         void. The Company may treat any such act as an election to withdraw
         funds in accordance with Section VII.

         USE OF FUNDS

         All payroll deductions received or held by the Company under the Plan
         may be used by the Company for any corporate purposes and the Company
         shall not be obligated to segregate the payroll deductions.

         EXPENSES

         All expenses of administering the Plan shall be borne by the Company.
         The Company will not pay expenses, commissions or taxes incurred in
         connection with sales of Shares by the Custodian at the request of a
         Participant. Expenses to be paid by a Participant will be deducted from
         the proceeds of sale prior to remittance.

         TAX WITHHOLDING

         Each Participant who has purchased Shares under the Plan shall
         immediately upon notification of the amount due, if any, pay to the
         Employer in cash amounts necessary to satisfy any applicable federal,
         state and local tax withholding determined by the Employer to be
         required. If the Employer determines that additional withholding is
         required beyond any amounts deposited at the time of purchase, the
         Participant shall pay such amount to the Employer on demand. If the
         Participant fails to pay the amount demanded, the Employer may withhold
         that amount from other amounts payable by the Employer to the
         Participant, including salary, subject to applicable law.

         NO INTEREST

         No Participant shall be entitled, at any time, to any payment or credit
         for interest with respect to or on the payroll deductions contemplated
         herein, or on any other assets held hereunder for the Participant's
         Account.

         REGISTRATION AND QUALIFICATION OF SHARES

         The offering of Shares hereunder shall be subject to the effecting by
         the Company of any registration or qualification of the Shares under
         any federal or state law or the obtaining of the consent or approval of
         any governmental regulatory body which the Company shall determine, in
         its sole discretion, is necessary or desirable as a condition to, or in
         connection with, the offering or the issue or purchase of the Shares
         covered thereby. The Company shall make every reasonable effort to
         effect such registration or qualification or to obtain such consent or
         approval.

         RESPONSIBILITY AND INDEMNITY

         Neither the Company, its Board of Directors, the Custodian, nor any
         member, officer, agent or employee of any of them, shall be liable to
         any Participant under the Plan for any mistake of judgment or for any
         omission or wrongful act unless resulting from gross negligence,
         willful misconduct or intentional misfeasance. The Company will
         indemnify and save harmless its Board of Directors, the Custodian and
         any such member, officer, agent or employee against any claim, loss,
         liability or expense arising out of the Plan, except such as may result
         from the gross negligence, willful misconduct or intentional
         misfeasance of such entity or person.

<PAGE>

         PLAN NOT A CONTRACT OF EMPLOYMENT

         The Plan is strictly a voluntary undertaking on the part of the
         Employer and shall not constitute a contract between the Employer and
         any Employee, or consideration for or an inducement or a condition of
         employment of an Employee. Except as otherwise required by law, or any
         applicable collective bargaining agreement, nothing contained in the
         Plan shall give any Employee the right to be retained in the service of
         the Employer or to interfere with or restrict the right of the
         Employer, which is hereby expressly reserved, to discharge or retire
         any Employee at any time, with or without cause and with or without
         notice. Except as otherwise required by law, inclusion under the Plan
         will not give any Employee any right or claim to any benefit hereunder
         except to the extent such right has specifically become fixed under the
         terms of the Plan. The doctrine of substantial performance shall have
         no application to any Employee, Participant, or Beneficiary. Each
         condition and provision, including numerical items, has been carefully
         considered and constitutes the minimum limit on performance which will
         give rise to the applicable right.

         SERVICE OF PROCESS

         The Secretary of the Company is hereby designated agent for service or
         legal process on the Plan.

         NOTICE

         All notices or other communications by a Participant to the Company
         under or in connection with the Plan shall be deemed to have been duly
         given when received by the Plan Administrator. Any notice required by
         the Plan to be received by the Company prior to an Enrollment Date,
         payroll period or other specified date, and received by the Plan
         Administrator subsequent to such date shall be effective on the next
         occurring Enrollment Date, payroll period or other specified date to
         which such notice applies.

         GOVERNING LAW

         The Plan shall be interpreted, administered and enforced in accordance
         with the Code, and the rights of Participants, former Participants,
         Beneficiaries and all other persons shall be determined in accordance
         with it. To the extent state law is applicable, the laws of the State
         of Washington shall apply.

         REFERENCES

         Unless the context clearly indicates to the contrary, reference to a
         Plan provision, statute, regulation or document shall be construed as
         referring to any subsequently enacted, adopted or executed counterpart.

<PAGE>

                                    EXHIBIT A
                                   DEFINITIONS

ACCOUNT

Shall mean each separate account maintained for a Participant under the Plan
collectively or singly as the context requires. Each Account shall be credited
with a Participant's contributions, and shall be charged for the purchase of
Shares. A Participant shall be fully vested in the cash contributions to that
person's Account at all times. The Plan Administrator may create special types
of Accounts for administrative reasons, even though the Accounts are not
expressly authorized by the Plan.

BENEFICIARY

Shall mean a person or entity entitled under Section VII of the Plan to receive
Shares purchased by, and any remaining balance in, a Participant's Account on
the Participant's death.

BOARD OF DIRECTORS

Shall mean the Board of Directors of the Company.

CODE

Shall mean the Internal Revenue Code of 1986, as amended, or the corresponding
provisions of any future tax code.

COMMITTEE

Shall mean the Committee appointed by the Board of Directors in accordance with
Section IX of the Plan.

COMPENSATION

Shall mean the total cash compensation (except as otherwise set forth below),
before tax withholding, paid to an Employee in the period in question for
services rendered to the Employer by the Employee. Compensation shall include
the earnings waived by an Employee pursuant to a salary reduction arrangement
under any cash or deferred or cafeteria plan that is maintained by the Employer
and that is intended to be qualified under Section 40 1(k) or 125 of the Code.
An Employee's Compensation shall not include severance pay, hiring or relocation
bonuses, or pay in lieu of vacations or sick leave

COMMON STOCK

Shall mean the common stock of the Company.

COMPANY

Shall mean Freei Networks, Inc., a Washington Corporation.

CUSTODIAN

Shall mean the investment or financial firm appointed by the Plan Administrator
to hold all Shares pursuant to the Plan.

CUSTODIAL ACCOUNT

Shall mean the account maintained by the Custodian for a Participant under the
Plan.

DISABILITY

Shall refer to a mental or physical impairment which is expected to result in
death or which has lasted or is expected to last for a continuous period of
twelve (12) months or more and which causes the Employee to be unable, in the
opinion of the Company and two independent physicians, to perform his or her
duties as an Employee of the Company. Disability shall be deemed to have
occurred on the first day after the Company and two independent physicians have
furnished their opinion of Disability to the Plan Administrator.

<PAGE>

EMPLOYEE

Shall mean an individual who renders services to the Employer pursuant to a
regular-status employment relationship with such Employer. A person rendering
services to an Employer purportedly as an independent consultant or contractor
shall not be an Employee for purposes of the Plan.

EMPLOYER

Shall mean, collectively, the Company and its Subsidiaries or any successor
entity that continues the Plan. All Employees of entities which constitute the
Employer shall be treated as employed by a single company for all purposes of
the Plan.

EMPLOYMENT

Shall mean the period during which an individual is an Employee. Employment
shall commence on the day the individual first performs services for the
Employer as an Employee and shall terminate on the day such services cease,
except as determined under Section XI.

ENROLLMENT DATE

Shall mean the first day of each Offering.

ESPP NEW ACCOUNT FORM

Shall mean the form provided by the Company on which a Participant shall elect
to open an Account with the Custodian and authorize delivery to the Custodian of
all Shares issued for the Participant's Account.

OFFERING

Shall mean any one of the separate overlapping eighteen (18) month periods
commencing on May 15 and November 15 of each calendar year under the Plan;
provided, however, the first Offering shall commence on the effective date of
the Company's registration statement filed in connection with the Company's
initial public offering and end on November 14, 2001.

PARTICIPANT

Shall mean any Employee who is participating in any Offering under the Plan
pursuant to Section III.

PAYROLL DEDUCTION

Shall mean the form provided by the Company on which a Participant shall elect
to participate in the Plan and the Offering under the Plan and designate the
percentage of that individual's compensation to be contributed to that
individual's Account through payroll deductions.

PLAN AUTHORIZATION FORM

Shall mean this document.

PLAN ADMINISTRATOR

Shall mean the Board of Directors or the Committee, whichever shall be
administering the Plan from time to time in the discretion of the Board of
Directors, as described in Section IX.

PURCHASE DATE

Other than the first Offering, Purchase Date shall mean the last day of each of
the sixth-, twelfth- and eighteenth-month periods of each Offering; accordingly,
Purchase Dates for every Offering other than the first Offering shall occur on
May 14 and November 14 of each year, beginning with November 14, 2000. For
purposes of the first Offering (which shall commence on the effective date of
the Company's registration statement filed in connection with the Company's
initial public offering and end on November 14, 2001), the Purchase Dates shall
be November 14, 2000, May 14, 2001 and November 14, 2001.

RETIREMENT

Shall mean a Participant's termination of Employment on or after attaining the
age of 65 or after the Plan Administrator has determined that the individual has
suffered a Disability.

<PAGE>

SHARE

Shall mean one share of Common Stock.

SUBSIDIARIES

Shall mean any corporation in which at least eighty percent (80%) or more of the
total combined voting power of all classes of stock are owned directly or
indirectly by Freei Networks, Inc.

VALUATION DATE

Shall mean the date upon which the fair market value of Shares is to be
determined for purposes of setting the price of Shares under Section VI (that
is, the Enrollment Date or the applicable Purchase Date). If the Enrollment Date
or the Purchase Date is not a date on which the fair market value may be
determined in accordance with Section VI, the Valuation Date shall be the first
day prior to the Enrollment Date or the Purchase Date, as applicable, for which
such fair market value may be determined.

VESTED

Shall mean non-forfeitable.

<PAGE>

                                    EXHIBIT B

             Freei Networks, Inc. 2000 Employee Stock Purchase Plan
                      Payroll Deduction Authorization Form

NAME_________________________________
SOCIAL SECURITY:_____________________       DATE OF HIRE:______________________

Please complete the sections below which apply. Initial enrollments, withdrawals
and changes in payroll deductions are effective for a specific pay period if
submitted to the Stock Administrator 15 days prior to the last day of the
payroll period. Re-enrollments must be received by the Stock Administrator by
4:00 PM on the Enrollment Date. Beneficiary designations are effective
immediately and remain in effect until revoked. Enrollment Dates are on November
15 and May 15. Each Offering is in effect for 18 months.

1.       __ INITIAL ENROLLMENT

         Complete 5 below. Attach Stock Broker New Account forms (Account
         Agreement, Information Sheet, and W-9), if you do not already have a
         custodial account with Stock Broker.

         I elect to participate in the Freei Networks, Inc. 2000 Employee Stock
         Purchase Plan, effective as of the next Enrollment Date. I authorize a
         deduction of ___% per pay period (not less than 1% or more than 10%)
         of my Compensation.

         On any Enrollment Date on which the market price of the shares is less
         than the initial market price of Freei Networks, Inc. shares in the
         Offering in which I am currently participating, I hereby elect to
         withdraw from the Offering in which I am currently participating and
         reenroll in the new Offering beginning on such Enrollment Date.

2.       CHANGE IN PAYROLL DEDUCTION

         I elect to change the amount of my payroll deduction to per pay period
         (not less than 1% or more than 10%) of my Compensation. I understand
         that the Plan permits modifications not more than three times during
         each 18 month Offering Period.

         I elect to discontinue my payroll deduction, without withdrawing from
         the Plan. I request that the aggregate balance in my Account be used to
         purchase Shares on the next Purchase Date, after which my participation
         in the Plan will terminate unless I timely file another Payroll
         Deduction Authorization form to resume payroll deductions.

3.       WITHDRAWAL/TERMINATION

         I elect to withdraw from the Plan and terminate participation in the
         Offering in which I am currently participating. I request that my
         contributions be discontinued and the aggregate balance in my Account
         be returned to me. I understand that my Account balance will not be
         returned unless my election to withdraw is submitted at least 15 days
         prior to the next Purchase Date.

4.       RE-ENROLLMENT

         Effective as of the first Enrollment Date that is either on or after
         the date of this Form, I elect to withdraw from the Offering in which I
         am currently participating and re-enroll in the new Offering beginning
         on such Enrollment Date.

5.       BENEFICIARY DESIGNATION OR CHANGE

         I designate the following individual(s) as my beneficiary:

                 (Name)                               (Relationship)

   ---------------------------------        ---------------------------------
   ---------------------------------        ---------------------------------
I have read the Freei Networks, Inc. 2000 Employee Stock Purchase Plan and
understand the terms and conditions stated in the Plan. I authorize the
transactions indicated above. I understand that my current elections remain in
effect until I submit a new election, in writing and on a timely basis, to the
Stock Administrator.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00006-of-00352.parquet"}]]