Document:

CERTIFICATE OF DESIGNATION

Andrew Hromyk  certifies that he is the President and Secretary of Autoeye Inc.,
a Delaware  corporation  (hereinafter  referred to as the  "Company")  and that,
pursuant to the Company's Certificate of Incorporation,  as amended, and Section
151 of the General  Business  Corporation  Law,  the Board of  Directors  of the
Company adopted the following  resolutions on January, 27, 2000 and that none of
the  shares  of  Series  A  Convertible  Preferred  Stock  referred  to in  this
Certificate of Designation have been issued.

Creation of Series A Convertible Preferred Stock

1. There is hereby created a series of preferred stock  consisting of 750 shares
and designated as the Series A Convertible Preferred Stock ( "Preferred Stock"),
having the voting powers,  preferences,  relative,  participating,  limitations,
qualifications,  optional  and  other  special  rights  and the  qualifications,
limitations and restrictions thereof that are set forth below.

Conversion Provisions

2. The holders of Preferred Stock shall have  conversion  rights as follows (the
"Conversion Rights"):

Conversion

(a)  Right to  Convert.  From and  after the  forty-fifth  (45th)  calendar  day
     following  the day on  which  the  Company  receives  payment  in full  for
     Preferred Stock from and issues  Preferred Stock to a particular  holder of
     Preferred  Stock (the "Issuance  Date"),  all Preferred  Stock held by that
     holder shall be convertible at the option of the holder into such number of
     shares of common stock of the Company  ("Common Stock") as is calculated by
     the Conversion Rate (as hereinafter defined).  The Conversion Rate, subject
     to the exception defined in paragraph 2(b) hereof,  shall be that number of
     shares of Common  Stock  equal to $1,000  divided by seventy  five per cent
     (75%) of the average Market Price (as hereinafter defined) of the shares of
     Common Stock for the ten trading days  immediately  prior to the Conversion
     Date (as hereinafter  defined),  provided that in no event shall:  (i) less
     than 250 shares of Common Stock be issued upon conversion of each one share
     of  Preferred  Stock;  and (ii) more than 5,000  shares of Common  Stock be
     issued upon conversion of each one share of Preferred Stock.

(b)  Failure to Register Exemption.  In the event that a registration  statement
     in respect  of the Common  Stock to be issued  upon the  conversion  of the
     Preferred  Stock has not been  filed  with and  declared  effective  by the
     Securities  and Exchange  Commission  on or before the date which is twelve
     months following the Issuance Date (the "Anniversary  Date"), the number of
     shares of Common Stock issued to a particular  holder will be calculated by
     the Failure to Register Conversion Rate. The Failure to Register Conversion
     Rate shall be that number of shares of Common Stock equal to $1,000 divided
     by fifty per cent (50%) of the Market  Price of the shares of Common  Stock
     on the day immediately  preceding the Anniversary Date, provided that in no
     event  shall:  (i) less  than 250  shares of  common  Stock be issued  upon

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     conversion of each one share of Preferred  Stock;  and (ii) more than 5,000
     shares  of  Common  Stock be issued  upon  conversion  of each one share of
     Preferred Stock.

(c)         Market  Price.  Market  Price  for a  particular  date  shall be the
            closing  bid price of the shares of Common  Stock on such  date,  as
            reported by the National Association of Securities Dealers Automated
            Quotation  System  (`NASDAQ"),  or  the  closing  bid  price  in the
            over-the-counter market if other than NASDAQ.

(d)  No Fractional  Shares. No fractional shares of Common Stock shall be issued
     upon conversion of the Preferred  Stock,  and in lieu thereof the number of
     shares  of Common  Stock to be issued  for each  share of  Preferred  Stock
     converted  shall be rounded  down to the nearest  whole number of shares of
     Common Stock. Such number of whole shares of Common Stock to be issued upon
     the  conversion of one share of Preferred  Stock shall be multiplied by the
     number of shares of Preferred  Stock  submitted for conversion  pursuant to
     the Notice of Conversion  (defined  below) to determine the total number of
     shares of Common Stock to be issued in connection  with any one  particular
     conversions.

(e)  Method of Conversion.  In order to convert  Preferred  Stock into shares of
     Common Stock, a holder of Preferred Stock shall

(A)  complete,  execute and deliver to the  Company and the  Company's  Transfer
     Agent,  Interwest  Transfer Co. Inc. (the "Transfer  Agent") the conversion
     certificate attached hereto as Exhibit A (the "Notice of Conversion"), and

(B)            surrender  the  certificate  or  certificates   representing  the
               Preferred Stock being converted (the "Converted  Certificate") to
               the Transfer Agent.

          Subject to paragraph  2(h) hereof,  the Notice of Conversion  shall be
          effective  and in full  force  and  effect  for a  particular  date if
          delivered  to the Company and the  Transfer  Agent on that  particular
          date prior to 5:00 pm,  pacific  time,  by facsimile  transmission  or
          otherwise,  provided  that  particular  date is a  business  day,  and
          provided  that the original  Notice of  Conversion  and the  Converted
          Certificate are delivered to and received by the Transfer Agent within
          three (3) business days  thereafter at 1981 East Murray Holladay Road,
          Suite  100,  PO Box  17136,  Salt  Lake  City,  Utah  84117  Telephone
          801-272-9294  and that  particular date shall be referred to herein as
          the "Conversion  Date".  The person or persons entitled to receive the
          shares of Common Stock to be issued upon  conversion  shall be treated
          for all  purposes  as the record  holder or holders of such  shares of
          Common Stock as of the  Conversion  Date.  If the  original  Notice of
          Conversion  and the  Converted  Certificate  are not  delivered to and
          received  by  the  Transfer  Agent  within  three  (3)  business  days
          following the Conversion  Date, the Notice of Conversion  shall become

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          null and void as if it were never given and the Company shall,  within
          two (2) business  days  thereafter,  instruct  the  Transfer  Agent to
          return to the holder by overnight  courier any  Converted  Certificate
          that may have been submitted in connection  with any such  conversion.
          In the event that any  Converted  Certificate  submitted  represents a
          number of shares of Preferred Stock that is greater than the number of
          such  shares  that  is  being  converted  pursuant  to the  Notice  of
          Conversion delivered in connection therewith, the Transfer Agent shall
          advise the Company to deliver a certificate representing the remaining
          number of shares of Preferred Stock not converted.

(f)  Absolute  Obligation  to issue  Common  Stock.  Upon receipt of a Notice of
     Conversion,  the Company shall absolutely and  unconditionally be obligated
     to cause a certificate or certificates representing the number of shares of
     Common  Stock to which a  converting  holder of  Preferred  Stock  shall be
     entitled as provided  herein,  which shares shall constitute fully paid and
     non-assessable  shares of Common Stock and shall be issued to, delivered by
     overnight  courier  to,  and  received  by such  holder by the sixth  (6th)
     business day following the Conversion  Date. Such delivery shall be made at
     such  address  as such  holder  may  designate  therefor  in its  Notice of
     Conversion or in its written instructions submitted together therewith.

(g)         Minimum Conversion. No less than 10 shares of Preferred Stock may be
            converted at any one time by a particular holder,  unless the holder
            then holds less than 10 shares and  converts all such shares held by
            it at that time.

(h)  Deemed Conversion. Notwithstanding any other provision herein, and provided
     that a  registration  statement in respect of the Common Stock to be issued
     upon the conversion of the Preferred Stock has been filed with and declared
     effective  by the  Securities  and  Exchange  Commission  on or before  the
     Anniversary  Date,  all of the Preferred  Stock  outstanding on Anniversary
     Date  shall  be  deemed  to  convert  into  shares  of  Common  Stock as is
     calculated  by the  Conversion  Rate as defined in  paragraph  2(a) hereof,
     provided  that,  in  the  event  that  this  paragraph  would  result  in a
     particular  holder of Preferred Stock holding,  together with the shares of
     Common Stock then held by that holder, more than 9.9% of the Company's then
     issued and outstanding  Common Stock, the conversion deemed hereby shall be
     postponed  until such time as the  particular  holder  holds such number of
     shares of Common Stock that,  together with the shares of Common Stock then
     held by that holder,  would constitute less than 9.9% of the Company's then
     issued and outstanding  Common Stock. The onus for notifying the Company of
     the application of this qualification shall be upon the particular holder.

Adjustments to Conversion Rate

(i)  Reclassification,  Exchange  and  Substitution.  If the Common  Stock to be
     issued on conversion of the Preferred  Stock shall be changed into the same
     or a  different  number of shares of any other  class or  classes of stock,
     whether by capital reorganization, reclassification, reverse stock split or
     forward  stock  split  or  stock  dividend  or  otherwise   (other  than  a
     subdivision or combination  of shares  provided for above),  the holders of
     the Preferred Stock shall,  upon its conversion be entitled to receive,  in
     lieu of the Common  Stock which the holders  would have become  entitled to
     receive  but for such  change,  a number of shares of such  other  class or
     classes of stock that would have been  subject to receipt by the holders if
     they had  exercised  their  rights of  conversion  of the  Preferred  Stock
     immediately before that changes.

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(j)  Reorganizations,  Mergers, Consolidations or Sale of Assets. If at any time
     there  shall be a capital  reorganization  of the  Company's  common  stock
     (other than a  subdivision,  combination,  reclassification  or exchange of
     shares  provided for  elsewhere in this Section 2) or merger of the Company
     into  another  corporation,  or the sale of the  Company's  properties  and
     assets as, or substantially as, an entirety to any other person, then, as a
     part of such reorganization, merger or sale, lawful provision shall be made
     so that the holders of the Preferred  Stock receive the number of shares of
     stock or other  securities or property of the Company,  or of the successor
     corporation  resulting  from such  merger,  to which  holders of the Common
     Stock  deliverable  upon  conversion of the Preferred Stock would have been
     entitled on such capital  reorganization,  merger or sale if the  Preferred
     Stock had been converted  immediately  before that capital  reorganization,
     merger or sale to the end that the provisions of this paragraph  (including
     adjustment of the  Conversion  Rate then in effect and the number of shares
     purchasable  upon  conversion of the  Preferred  Stock) shall be applicable
     after that event as nearly equivalently as may be practicable.

(k)  No  Impairment.  The Company  will not,  by  amendment  of its  Articles of
     Incorporation or through any reorganization,  recapitalization, transfer of
     assets, merger,  dissolution,  or any other voluntary action, avoid or seek
     to avoid the  observance or  performance of any of the terms to be observed
     or performed hereunder by the Company,  but will at all times in good faith
     assist in the carrying out of all the  provisions  of this Section 2 and in
     the taking of all such action as may be necessary or  appropriate  in order
     to protect  the  Conversion  Rights of the holders of the  Preferred  Stock
     against impairment.

(l)  Certificate as to  Adjustments.  Upon the occurrence of each  adjustment or
     readjustment  of the  Conversion  Rate for any  shares of  Preferred  Stock
     pursuant to paragraphs 2(i) or (j) hereof, the Company at its expense shall
     promptly  compute such  adjustment or  readjustment  in accordance with the
     terms  hereof and prepare and  furnish to each  holder of  Preferred  Stock
     effected   thereby  a  certificate   setting   forth  such   adjustment  or
     readjustment  and showing in detail the facts upon which such adjustment or
     readjustment is based.  The Company shall,  upon the written request at any
     time of any holder of Preferred Stock,  furnish or cause to be furnished to
     such holder a like  certificate  setting forth:  (i) such  adjustments  and
     readjustments;  (ii) the Conversion  Rate at the time in effect;  and (iii)
     the  number  of shares of Common  Stock and the  amount,  if any,  of other
     property  which at the time would be received  upon the  conversion of such
     holder's shares of Preferred Stock.

Liquidation Provisions

3. In the event of any  liquidation,  dissolution  or winding up of the Company,
whether  voluntary or involuntary,  holders of Preferred Stock shall be entitled
to receive an amount equal to $1,000.00  per share,  plus any accrued and unpaid
dividends.  After the full preferential  liquidation amount has been paid to, or
determined  and set  apart  for the  Preferred  Stock  and all  other  series of
preferred stock hereafter authorized and issued, if any, the remaining assets of
the Company  available for  distribution  to  shareholders  shall be distributed
ratably  to the  holders  of the  Common  Stock.  In the event the assets of the
Company  available for  distribution to its shareholders are insufficient to pay

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the full  preferential  liquidation  amount per share required to be paid to the
holders of Company's Preferred Stock, the entire amount of assets of the Company
available for distribution to shareholders  shall be paid up to their respective
full liquidation  amounts first to the holders of Preferred  Stock,  then to any
other series of preferred  stock hereafter  authorized and issued,  all of which
amounts  shall be  distributed  ratably  among  holders  of each such  series of
preferred stock, and the Common Stock shall receive nothing. A reorganization or
any  other  consolidation  or  merger  of the  Company  with or into  any  other
corporation,  or any other sale of all or substantially all of the assets of the
Company,  shall not be deemed to be a liquidation,  dissolution or winding up of
the Company within the meaning of this Section 3, and the Preferred  Stock shall
be entitled only to: (i) the rights  provided in any agreement or plan governing
the reorganization or other consolidation, merger or sale of assets transaction;
(ii) the rights contained in the Delaware General Business  Corporation Law; and
(iii) the rights contained in other Sections hereof.

Dividend Provisions

4.   The holders of shares of  Preferred  Stock shall not be entitled to receive
     any dividends.

Reservation of Stock to be issued upon Conversion

5. The  Company  shall  at all  times  reserve  and  keep  available  out of its
authorized  but  unissued  shares of Common  Stock  solely  for the  purpose  of
effecting the conversion of the shares of the Preferred Stock such number of its
shares of Common  Stock as shall from time to time be  sufficient,  based on the
Conversion Rate then in effect, to effect the conversion of all then outstanding
shares of the  Preferred  Stock.  If at any time the  number of  authorized  but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding  shares of the Preferred Stock, then, in addition to all
rights,  claims and damages to which the holders of the Preferred Stock shall be
entitled  to  receive  at law or in equity as a result  of such  failure  by the
Company to fulfill its  obligations to the holders  hereunder,  the Company will
take any and all  corporate  or  other  action  as may,  in the  opinion  of its
counsel,  be helpful,  appropriate  or necessary to increase its  authorized but
unissued  shares of Common Stock to such number of shares as shall be sufficient
for such purpose.

Notices

6. In the event of the  establishment  by the Company of a record of the holders
of any class of securities  for the purpose of determining  the holders  thereof
who are  entitled to receive any  distribution,  the Company  shall mail to each
holder of Preferred  Stock at least twenty (20) days prior to the date specified
therein a notice specifying the date on which any such record is to be taken for
the  purpose  of  such  distribution  and  the  amount  and  character  of  such
distribution.

7. Any notices  required by the provisions  hereof to be given to the holders of
shares of  Preferred  Stock  shall be deemed  given if  deposited  in the United
States mail, postage prepaid and return receipt requested, and addressed to each
holder of record at its address appearing on the books of the Company or to such
other address of such holder or its representative as such holder may direct.

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Voting Provisions

8.   Except as otherwise  expressly  provided or required by law, the  Preferred
     Stock shall have no voting rights.

IN WITNESS  WHEREOF,  the Company has caused this  Certificate of Designation of
Series A  Convertible  Preferred  Stock to be duly executed by its President and
attested  to by its  Secretary  this 27th day of  January,  2000 who, by signing
their names hereto,  acknowledge that this Certificate of Designation is the act
of the Company and state to the best of their knowledge, information and belief,
under the penalties of perjury, that the above matters and facts are true in all
material respects.

                                    AUTOEYE INC.

                                    --------------------------------------
                                    Andrew Hromyk, President

                                    --------------------------------------
                                    Andrew Hromyk, Secretary

<PAGE>

                                    EXHIBIT A

                             CONVERSION CERTIFICATE
                                  AUTOEYE INC.
                      Series A Convertible Preferred Stock

The  undersigned  holder (the  "Holder")  is  surrendering  to Autoeye  Inc.,  a
Delaware  corporation (the  "Company"),  one or more  certificates  representing
shares of Series A Convertible  Preferred  Stock of the Company (the  "Preferred
Stock") in connection  with the  conversion of all or a portion of the Preferred
Stock into shares of Common Stock,  $0.0001 par value per share,  of the Company
(the "Common Stock") as set forth below.

1. The Holder  understands  that the  Preferred  Stock was issued by the Company
pursuant to the exemption for  registration  under the United States  Securities
Act of 1933,  as amended  (the  "Securities  Act"),  provided  by  Regulation  D
promulgated thereunder.

2. The Holder  represents  and warrants  that all offers and sales of the Common
Stock issued to the Holder upon such  conversion of the Preferred Stock shall be
made (a) pursuant to an effective  registration  statement  under the Securities
Act, (in which case the Holder  represents that a prospectus has been delivered)
(b) in compliance  with Rule 144, or (c) pursuant to some other  exemption  from
registration.

     Number of Shares of Preferred Stock being Converted:

     Applicable Conversion Rate:

     OR

     Applicable Alternative Conversion Rate:

     Number of Shares of Common Stock To be issued:

     Conversion Date:

   Delivery   instructions   for  certificates  of  Common  Stock  and  for  new
   certificates representing any remaining shares of Preferred Stock:

                                        -----------------------------------
                                        Name of Holder - Printed

                                        -----------------------------------
                                        Signature of HolderFORESTINDUSTRY.COM, INC.

                             2000 STOCK OPTION PLAN

1.  Purpose of the Plan.  The  purposes of this Stock Option Plan are to attract
and retain the best available personnel, to provide additional incentive to such
individuals,  and to promote the success of the  Company's  business by aligning
employee financial interests with long-term shareholder value.

        Options  granted  hereunder  may be either  Incentive  Stock  Options or
Nonqualified  Stock Options,  at the discretion of the Board and as reflected in
the terms of the written option agreement.

2.      Definitions.  As used herein, the following definitions shall apply:
        -----------

        (a)  "Board"  shall  mean  the  Committee,  if such  Committee  has been
appointed,  or the Board of Directors of the Company,  if such Committee has not
been appointed.

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

        (c)  "Committee"  shall  mean the  Committee  appointed  by the Board of
Directors in accordance  with  paragraph (a) of Section 4 of the Plan, if one is
appointed;  provided,  however, if the Board of Directors appoints more than one
Committee pursuant to Section 4, then "Committee" shall refer to the appropriate
Committee, as indicated by the context of the reference.

(d)  "Common    Shares"   shall   mean   the   shares   of   Common   Stock   of
     forestindustry.com, Inc.

(e)  "Company" shall mean  forestindustry.com,  Inc., a Delaware corporation and
     any successor thereto.

        (f)  "Continuous  Status as an  Employee"  shall mean the absence of any
interruption or termination of service as an Employee.  Continuous  Status as an
Employee  shall  not be  considered  interrupted  in the  case  of  sick  leave,
maternity leave,  infant care leave,  medical emergency leave or any other leave
of absence authorized in writing by a Vice President of the Company prior to its
commencement.

(g)  "Employee"  shall mean any  person,  including  officers,  employed  by the
     Company or any Parent or Subsidiary of the Company.

        (h) "Incentive  Stock Option" shall mean any Option  intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.

<PAGE>

(i)  "Maximum Annual Employee Grant" shall have the meaning set forth in Section
     5(e).

        (j)  "Non-Employee  Director"  shall have the same meaning as defined or
interpreted  for  purposes of Rule 16b-3  (including  amendments  and  successor
provisions) as promulgated by the Securities and Exchange Commission pursuant to
its authority under the Exchange Act ("Rule 16b-3").

(k)  "Nonqualified Stock Option" shall mean an Option not intended to qualify as
     an Incentive Stock Option.

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

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

        (n)     "Optionee" shall mean an Employee who receives an Option.

(o) "Outside Director" shall have the same meaning as defined or interpreted for
purposes of Section 162(m) of the Code.

(p)  "Parent"  shall  mean a  "parent  corporation,"  whether  now or  hereafter
     existing, as defined in Section 424(e) of the Code.

(q)  "Plan"  shall mean this 2000 Stock Option Plan,  including  any  amendments
     thereto.

        (r)  "Share"  shall mean one share of the  Company's  Common  Stock,  as
adjusted in accordance with Section 11 of the Plan.

        (s) "Subsidiary" shall mean (i) in the case of an Incentive Stock Option
a "subsidiary  corporation,"  whether now or hereafter  existing,  as defined in
Section 424(f) of the Code, and (ii) in the case of a Nonqualified Stock Option,
in addition to a subsidiary  corporation as defined in (i), a limited  liability
company, partnership or other entity in which the Company controls 50 percent or
more of the voting power or equity interests.

     3. Shares  Subject to the Plan.  Subject to the provisions of Section 11 of
the Plan, the maximum  aggregate number of Shares which may be optioned and sold
under the Plan is 250,000 Shares. The Shares may be authorized, but unissued, or
reacquired Shares.

        If an  Option  should  expire  or become  unexercisable  for any  reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated,  become available for
future grant under the Plan.

<PAGE>

4.      Administration of the Plan.
        --------------------------

(a)  Procedure.  The Plan shall be administered by the Board of Directors of the
     Company.

                (1) The Board of  Directors  may appoint one or more  Committees
each  consisting  of not less  than two  members  of the Board of  Directors  to
administer  the Plan on behalf of the Board of Directors,  subject to such terms
and conditions as the Board of Directors may  prescribe.  Once  appointed,  such
Committees  shall  continue  to serve until  otherwise  directed by the Board of
Directors.

                (2) Any grants of Options to officers who are subject to Section
16 of the Securities  Exchange Act of 1934 (the "Exchange Act") shall be made by
(i) a  Committee  of two or more  directors,  each  of  whom  is a  Non-Employee
Director  and an Outside  Director or (ii) as  otherwise  permitted by both Rule
16b-3, Section 162(m) of the Code and other applicable regulations.

                (3) Subject to the  foregoing  subparagraphs  (1) and (2),  from
time to time the Board of Directors  may  increase the size of the  Committee(s)
and appoint additional  members thereof,  remove members (with or without cause)
and appoint new members in  substitution  therefor,  or fill  vacancies  however
caused.

        (b) Powers of the  Board.  Subject to the  provisions  of the Plan,  the
Board shall have the authority, in its discretion:  (i) to grant Incentive Stock
Options or  Nonqualified  Stock Options;  (ii) to determine,  in accordance with
Section  8(b) of the  Plan,  the  fair  market  value  of the  Shares;  (iii) to
determine,  in accordance  with Section 8(a) of the Plan, the exercise price per
Share of Options to be granted; (iv) to determine the Employees to whom, and the
time or times at which,  Options shall be granted and the number of Shares to be
represented by each Option; (v) to interpret the Plan; (vi) to prescribe, amend,
and rescind rules and regulations  relating to the Plan;  (vii) to determine the
terms and provisions of each Option  granted (which need not be identical)  and,
with the consent of the holder thereof,  modify or amend each Option;  (viii) to
reduce the exercise price per Share of outstanding and unexercised Options; (ix)
to  accelerate  or defer (with the consent of the Optionee) the exercise date of
any Option;  (x) to authorize any person to execute on behalf of the Company any
instrument  required to effectuate the grant of an Option previously  granted by
the  Board;  and (xi) to make  all  other  determinations  deemed  necessary  or
advisable for the administration of the Plan.

     (c)  Effect  of  Board's  Decision.  All  decisions,   determinations,  and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.

<PAGE>

5.      Eligibility.
        -----------

(a)  Options may be granted only to Employees. For avoidance of doubt, directors
     are not  eligible to  participate  in the Plan  unless  they are  full-time
     Employees.

        (b) Each Option shall be designated in the written  option  agreement as
either an  Incentive  Stock  Option or a  Nonqualified  Stock  Option.  However,
notwithstanding such designations,  to the extent that the aggregate fair market
value of the Shares with respect to which Options  designated as Incentive Stock
Options are  exercisable  for the first time by any Optionee during any calendar
year (under all plans of the Company)  exceeds  $100,000,  such Options shall be
treated as Nonqualified Stock Options.

        (c) For purposes of Section 5(b), Options shall be taken into account in
the order in which they were  granted,  and the fair market  value of the Shares
shall be  determined  as of the time the Option  with  respect to such Shares is
granted.

        (d) Nothing in the Plan or any Option  granted  hereunder  shall  confer
upon any Optionee any right with respect to  continuation of employment with the
Company,  nor shall it  interfere  in any way with the  Optionee's  right or the
Company's  right to terminate the employment  relationship  at any time, with or
without cause.

        (e) The  maximum  number of Shares  with  respect  to which an Option or
Options may be granted to any  Employee  in any one taxable  year of the Company
shall not exceed 5,000 Shares (the "Maximum Annual Employee Grant").

6. Term of Plan. The Plan shall become effective upon its adoption by the Board.
It shall  continue in effect until February 29, 2010,  unless sooner  terminated
under Section 14 of the Plan.

7. Term of Option.  The term of each Option shall be no more than ten (10) years
from the  date of  grant.  However,  in the case of an  Incentive  Stock  Option
granted to an  Optionee  who,  at the time the Option is  granted,  owns  Shares
representing  more than ten percent  (10%) of the voting power of all classes of
shares of the Company or any Parent or Subsidiary,  the term of the Option shall
be no more than five (5) years from the date of grant.

8.      Exercise Price and Consideration.
        --------------------------------

        (a) The per Share  exercise  price under each Option shall be such price
as is determined by the Board, subject to the following:

                (1)    In the case of an Incentive Stock Option

     (i) granted to an Employee who, at the time of the grant of such  Incentive
Stock Option, owns shares representing more than ten percent (10%) of the voting

<PAGE>

power of all classes of shares of the Company or any Parent or  Subsidiary,  the
per Share exercise price shall be no less than 110% of the fair market value per
Share on the date of grant.

     (ii) granted to any other  Employee,  the per Share exercise price shall be
no less than 100% of the fair market value per Share on the date of grant.

                (2) In the case of a  Nonqualified  Stock  Option  the per Share
exercise  price may not be less than the fair market value per Share on the date
of grant.

        (b) The fair market value per Share shall be the closing price per Share
on the Nasdaq  Stock Market  ("Nasdaq")  on the date of grant or the closing bid
price in the over-the-counter market, if other than Nasdaq.

        (c) The  consideration  to be paid  for the  Shares  to be  issued  upon
exercise of an Option,  including the method of payment,  shall be determined by
the Board at the time of grant and may consist of cash and/or check. Payment may
also be made by delivering a properly  executed  exercise  notice  together with
irrevocable  instructions  to a broker to  promptly  deliver to the  Company the
amount of sale proceeds  necessary to pay the exercise price. If the Optionee is
an officer of the Company  within the meaning of Section 16 of the Exchange Act,
he may in  addition  be  allowed to pay all or part of the  purchase  price with
Shares.  Shares used by officers  to pay the  exercise  price shall be valued at
their fair market value on the exercise date.

        (d) Prior to  issuance of the Shares  upon  exercise  of an Option,  the
Optionee shall pay any federal, state, local or other withholding obligations of
the Company,  if applicable.  If an Optionee is an officer of the Company within
the  meaning  of  Section  16 of the  Exchange  Act,  he may  elect  to pay such
withholding tax obligations by having the Company withhold Shares having a value
equal to the  amount  required  to be  withheld.  The value of the  Shares to be
withheld  shall equal the fair market  value of the Shares on the day the Option
is  exercised.  The right of an officer  to dispose of Shares to the  Company in
satisfaction of withholding  tax  obligations  shall be deemed to be approved as
part of the initial grant of an option, unless thereafter  rescinded,  and shall
otherwise  be  made  in  compliance   with  Rule  16b-3  and  other   applicable
regulations.

9.      Exercise of Option.
        ------------------

        (a) Procedure for Exercise; Rights as a Shareholder.  Any Option granted
hereunder  shall be  exercisable  at such  times and under  such  conditions  as
determined by the Board at the time of grant, and as shall be permissible  under
the terms of the Plan.

                An Option may not be exercised for a fraction of a Share.

                An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance  with the terms of the
Option by the person  entitled to exercise  the Option and full  payment for the

<PAGE>

Shares with  respect to which the Option is exercised  has been  received by the
Company.  Full  payment  may,  as  authorized  by  the  Board,  consist  of  any
consideration  and method of payment  allowable  under Section 8(c) of the Plan.
Until the issuance (as  evidenced by the  appropriate  entry on the books of the
Company or of a duly  authorized  transfer  agent of the  Company)  of the share
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a  shareholder  shall exist with respect to the Optioned  Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such share  certificate  promptly upon exercise of the Option. In the
event that the  exercise  of an Option is treated in part as the  exercise of an
Incentive  Stock  Option and in part as the  exercise  of a  Nonqualified  Stock
Option  pursuant to Section 5(b),  the Company  shall issue a share  certificate
evidencing  the Shares  treated as acquired  upon the  exercise of an  Incentive
Stock Option and a separate share  certificate  evidencing the Shares treated as
acquired upon the exercise of a  Nonqualified  Stock Option,  and shall identify
each such certificate  accordingly in its share transfer records.  No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the share  certificate  is issued,  except as provided in Section 11 of
the Plan.

                Exercise of an Option in any manner  shall  result in a decrease
in the number of Shares which thereafter may be available,  both for purposes of
the Plan and for sale under the Option,  by the number of Shares as to which the
Option is exercised.

        (b) Termination of Status as Employee. In the event of termination of an
Optionee's  Continuous  Status as an Employee,  such Optionee may exercise stock
options to the extent exercisable on the date of termination. Such exercise must
occur  within  thirty (30) days (or such shorter time as may be specified in the
grant),  after the date of such termination (but in no event later than the date
of expiration of the term of such Option as set forth in the Option  Agreement).
To the extent that the  Optionee  was not entitled to exercise the Option at the
date of such  termination,  or does not  exercise  such  Option  within the time
specified herein, the Option shall terminate.

        (c)  Disability of Optionee.  Notwithstanding  the provisions of Section
9(b) above, in the event of termination of an Optionee's Continuous Status as an
Employee as a result of total and permanent  disability  (i.e., the inability to
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
twelve (12)  months),  the Optionee  may  exercise  the Option,  but only to the
extent of the  right to  exercise  that  would  have  accrued  had the  Optionee
remained in Continuous  Status as an Employee for a period of twelve (12) months
after the date on which the Employee ceased working as a result of the total and
permanent  disability.  Such exercise must occur within eighteen (18) months (or
such  shorter  time as is  specified  in the  grant)  from the date on which the
Employee  ceased working as a result of the total and permanent  disability (but
in no event later than the date of  expiration of the term of such Option as set
forth in the Option Agreement). To the extent that the Optionee was not entitled
to exercise  such Option  within the time  specified  herein,  the Option  shall
terminate.

<PAGE>

(d)  Death of Optionee. Notwithstanding the provisions of Section 9(b) above, in
     the event of the death of an Optionee:

                (i) who is at the time of death an Employee of the Company,  the
Option may be exercised, at any time within six (6) months following the date of
death  (but in no event  later than the date of  expiration  of the term of such
Option as set forth in the Option  Agreement),  by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or  inheritance,
but only to the extent of the right to exercise  that would have accrued had the
Optionee  continued  living and  remained  in  Continuous  Status as an Employee
twelve (12) months after the date of death; or

                (ii)  whose  Option  has not yet  expired  but whose  Continuous
Status as an Employee  terminated  prior to the date of death, the Option may be
exercised, at any time within six (6) months following the date of death (but in
no event  later than the date of  expiration  of the term of such  Option as set
forth in the  Option  Agreement),  by the  Optionee's  estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of termination.

        (e) Notwithstanding subsections (b), (c), and (d) above, the Board shall
have the authority to extend the expiration  date of any  outstanding  option in
circumstances in which it deems such action to be appropriate  (provided that no
such  extension  shall extend the term of an option beyond the date on which the
option would have expired if no termination of the Employee's  Continuous Status
as an Employee had occurred).

10.  Non-Transferability  of  Options.  The  Option  may not be  sold,  pledged,
assigned, hypothecated,  transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised,  during the
lifetime of the  Optionee,  only by the  Optionee;  provided  that the Board may
permit further  transferability,  on a general or specific basis, and may impose
conditions and limitations on any permitted transferability.

11.  Adjustments  Upon  Changes  in  Capitalization  or  Merger.  Subject to any
required action by the shareholders of the Company, the number of Shares covered
by each outstanding  Option, the Maximum Annual Employee Grant and the number of
Shares which have been authorized for issuance under the Plan but as to which no
Options  have yet been  granted  or which  have been  returned  to the Plan upon
cancellation or expiration of an Option,  as well as the price per Share covered
by each such  outstanding  Option,  shall be  proportionately  adjusted  for any
increase  or  decrease  in the number of issued  Shares  resulting  from a stock
split, reverse stock split, stock dividend,  combination, or reclassification of
the Shares,  or any other  increase  or decrease in the number of issued  Shares
effected  without receipt of consideration  by the Company;  provided,  however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration."  Such adjustment shall

<PAGE>

be made by the  Board,  whose  determination  in that  respect  shall be  final,
binding, and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of any class,  or  securities  convertible  into shares of any
class,  shall affect,  and no  adjustment  by reason  thereof shall be made with
respect to, the number or price of Shares subject to an Option.

        In the event of the proposed  dissolution or liquidation of the Company,
the Option will terminate immediately prior to the consummation of such proposed
action,  unless otherwise  provided by the Board. The Board may, in the exercise
of its  sole  discretion  in such  instances,  declare  that  any  Option  shall
terminate  as of a date fixed by the Board and give each  Optionee  the right to
exercise  an  Option  as to all or any part of the  Optioned  Shares,  including
Shares as to which the Option would not otherwise be  exercisable.  In the event
of a proposed sale of all or substantially all of the assets of the Company,  or
the merger of the Company with or into another corporation, each Option shall be
assumed  or  an  equivalent  option  shall  be  substituted  by  such  successor
corporation or a parent or subsidiary of such successor corporation, unless such
successor  corporation  does not agree to assume the Option or to  substitute an
equivalent  option, in which case the Board shall, in lieu of such assumption or
substitution,  provide for the Optionee to have the right to exercise the Option
as to all of the Optioned Shares,  including Shares as to which the Option would
not otherwise be exercisable.  If the Board makes an Option fully exercisable in
lieu of assumption or  substitution  in the event of a merger or sale of assets,
the Board shall notify the Optionee  that the Option shall be fully  exercisable
for a period of fifteen (15) days from the date of such  notice,  and the Option
will terminate upon the expiration of such period.

12.  Time of Granting  Options.  The date of grant of an Option  shall,  for all
purposes,  be the date on which  the  Company  completes  the  corporate  action
relating  to the grant of an option  and all  conditions  to the grant have been
satisfied, provided that conditions to the exercise of an option shall not defer
the date of grant.  Notice of a grant shall be given to each Employee to whom an
Option is so granted within a reasonable time after the  determination  has been
made.

13. Substitutions and Assumptions.  The Board shall have the right to substitute
or assume Options in connection with mergers,  reorganizations,  separations, or
other  transactions  to which Section 424(a) of the Code applies,  provided such
substitutions  and  assumptions are permitted by Section 424 of the Code and the
regulations  promulgated  thereunder.  The number of Shares reserved pursuant to
Section 3 may be increased by the  corresponding  number of Options assumed and,
in the case of a  substitution,  by the net  increase  in the  number  of Shares
subject to Options before and after the substitution.

<PAGE>

14.     Amendment and Termination of the Plan.
        -------------------------------------

        (a) Amendment and Termination. The Board may amend or terminate the Plan
from time to time in such respects as the Board may deem  advisable  (including,
but not limited to amendments  which the Board deems  appropriate to enhance the
Company's ability to claim deductions related to stock option exercises).

        (b) Employees in Foreign  Countries.  The Board shall have the authority
to adopt such  modifications,  procedures,  and  subplans as may be necessary or
desirable to comply with  provisions  of the laws of foreign  countries in which
the  Company or its  Subsidiaries  may  operate to assure the  viability  of the
benefits  from Options  granted to Employees  employed in such  countries and to
meet the objectives of the Plan.

        (c)  Effect  of  Amendment  or   Termination.   Any  such  amendment  or
termination  of the Plan  shall not  affect  Options  already  granted  and such
Options  shall  remain  in full  force  and  effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

15.  Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to
the  exercise of an Option  unless the  exercise of such Option and the issuance
and  delivery of such Shares  pursuant  thereto  shall  comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, the
British Columbia  Securities Act and the requirements of any stock exchange upon
which the  Shares  may then be  listed,  and  shall be  further  subject  to the
approval of counsel for the Company with respect to such compliance.

16.  Reservation of Shares.  The Company,  during the term of this Plan, will at
all  times  reserve  and  keep  available  such  number  of  Shares  as shall be
sufficient to satisfy the requirements of the Plan.

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