Document:

EXHIBIT 10.9

                              CONSULTING AGREEMENT

THIS AGREEMENT made effective May 1, 2000 (the "Effective Date").

BETWEEN:

         CHINA BROADBAND CORP., a body corporate,  incorporated  pursuant to the
         laws of the State of Nevada, United States of America

         (hereinafter referred to as the "Corporation")
                                                               OF THE FIRST PART
                                     - and -

         M. H. FINANCIAL MANAGEMENT LIMITED, a body corporate, incorporated
         pursuant to the laws of the Province of Alberta

         (hereinafter referred to as the "Consultant")
                                                              OF THE SECOND PART

         WHEREAS the Corporation  wishes to engage the services and expertise of
the  Consultant  on the terms and  conditions  hereinafter  set  forth,  and the
Consultant wishes to accept such an engagement;

         NOW THEREFORE in  consideration of the covenants of each of the parties
given to the other and for other good and  valuable  consideration,  the receipt
and  sufficiency  of which is hereby  acknowledged,  the parties hereto agree as
follows:

1.       SERVICES

1.1      Effective  as of  the  Effective  Date,  the  Corporation  engages  the
         Consultant   and  the  Consultant   accepts  an  engagement   with  the
         Corporation  to render the consulting  services for the  Corporation as
         set  out in  Schedule  A.  During  the  term  of  this  Agreement,  the
         Consultant  shall  provide  the  services  of Matthew  Heysel who shall
         devote such of his time, attention and abilities to the business of the
         Corporation  as  may  be  necessary  for  the  proper  exercise  of the
         Consultant's  duties  hereunder.  Nothing  in this  Agreement  shall be
         interpreted or construed as creating or  establishing a relationship of
         employer and/or employee between the Corporation and Matthew Heysel.

2.       DUTIES

2.1      The  Consultant  shall  devote   reasonable  time  and  effort  to  the
         performance of this Agreement.  The Corporation  acknowledges  that the
         Consultant and Matthew Heysel shall also be entitled to render services
         to others during the term hereof.

2.2      The Consultant's duties shall be to provide the services more particu-
         larly set forth on Schedule "A" hereto.

<PAGE>

                                       2

3.       REMUNERATION

         The Corporation agrees to pay the Consultant as set out in Schedule "B"
         attached hereto.

4.       CONFIDENTIALITY

4.1      This Consultant  acknowledges  the Corporation  will have reporting and
         disclosure obligations under all applicable securities legislation. The
         Consultant  covenants and agrees that it shall not any time,  during or
         after  the   termination   of  the   Consultant's   engagement  by  the
         Corporation,  reveal,  divulge, or make known to any person (other than
         the  Corporation  or its  affiliates)  or use for its own  account  any
         customer's lists, trade secrets, or secret or confidential  information
         used by the  Corporation  or its  Affiliates  during  the  Consultant's
         engagement  by any of them  and  made  known  (whether  or not with the
         knowledge and permission of the Corporation,  whether or not developed,
         devised or otherwise  created in whole or in part by the efforts of the
         Consultant, and whether or not a matter of public knowledge unless as a
         result of  authorized  disclosure)  to the  Consultant by reason of its
         engagement by the Corporation of any of its Affiliates.  The Consultant
         further covenants and agrees that all knowledge and information,  which
         is acquired or developed for the  Corporation  or any of its Affiliates
         by the Consultant,  is the property of the Corporation.  The Consultant
         further  covenants  and agrees that it shall retain all such  knowledge
         and  information  which  it  shall  acquire  and  develop  during  such
         engagement  respecting such customer lists, trade secrets and secret or
         confidential   information  in  trust  for  the  sole  benefit  of  the
         Corporation, its affiliates, and their successors and assigns.

4.2      The  Consultant   shall  promptly   communicate  and  disclose  to  the
         Corporation all observations made and data obtained by it in the course
         of its engagement by the Corporation.  All written  materials,  records
         and documents  created by the  Consultant or coming into its possession
         concerning  the  business or affairs of the  Corporation  or any of its
         Affiliates shall,  upon the termination of this Agreement,  promptly be
         returned to the Corporation.  Upon the request of the Corporation until
         termination of its engagement by the Corporation,  the Consultant shall
         render to the  Corporation  or to any  Affiliate  designated by it such
         reports of the  activities  undertaken  by the  Consultant or conducted
         under the Consultant's direction for the Corporation and its Affiliates
         as the Corporation may request.

4.3      The  Consultant  warrants and  represents  that it is duly qualified to
         perform its duties hereunder,  and further covenants that in performing
         its  duties  hereunder,  it will  not  engage  in  activity  that is in
         violation of applicable  securities  laws or subject the Corporation to
         liability thereunder.

4.4      The  Consultant  agrees  that for a period  of one (1) year  after  the
         termination of work with the  Corporation,  it will not do any business
         whatsoever with clients of the Corporation  for  substantially  similar
         work.

5.       TERM

5.1      This Agreement shall be for a term commencing May 1, 2000 and terminat-
         ing October 31, 2000.

5.2      This Agreement may, by the mutual agreement of the parties,  be renewed
         for a further term of five (5) years,  or for such other term as may be
         agreed.

<PAGE>

                                       3

5.3      In the event the Corporation terminates this Agreement, the Corporation
         shall pay to the  Consultant as a genuine  pre-estimate  of damages and
         not as a penalty $60,000 (US) at the time of the termination. If at the
         time of any such termination,  the Consultant is in fundamental  breach
         of this  Agreement,  the  Corporation  shall not be required to pay any
         damages.

6.       CHANGE OF CONTROL AND SALE OF CORPORATION

6.1      The Corporation  acknowledges the valuable services that the Consultant
         has  provided  and will  continue  to  provide  to the  Corporation  in
         providing the services of Matthew  Heysel in his capacity as an officer
         thereof and an authorized representative thereof.

6.2      The Corporation  acknowledges  that in the event of a change of control
         of the Corporation or a sale of all or substantially  all of the assets
         of the  Corporation,  there is a  possibility  that the  service of the
         Consultant  would no longer be required and that this contract might be
         determined.

6.3      The directors of the  Corporation  have  determined that it would be in
         the best  interests  of the  Corporation  to induce the  Consultant  to
         provide the services of Matthew Heysel to the Corporation by indicating
         that,  in the  event of a change of  control  of the  Corporation,  the
         Consultant would have certain automatic and guaranteed rights.

6.4      In the event of a takeover of the control of the  Corporation or a sale
         of all or substantially all of the assets of the Corporation during the
         term of this Contract, the Corporation agrees that the Consultant shall
         be paid five  percent (5%) of the value of the sale of the assets or of
         the  value of the  transaction  which  constitutes  a  takeover  of the
         Corporation, as the case may be, such amount to be paid within ten (10)
         days of the sale of the assets or the takeover of the  Corporation,  as
         the case may be.

6.5      "Takeover of the control of the Corporation" means:

         (a)      any  change in the  holding,  either  direct or  indirect,  of
                  shares   of   the   Corporation,    or   any   reconstruction,
                  reorganization, recapitalization, consolidation, amalgamation,
                  merger,  arrangement or other  transaction,  that results in a
                  person who was,  or a group of persons  acting in concert  who
                  were,  not  previously  in a position  to  exercise  effective
                  control of the  Corporation  (or any Associate or Affiliate of
                  any such person or group of  persons),  being in a position to
                  exercise  such  effective  control  either in  respect  of the
                  Corporation or the successor to the  Corporation  (and for the
                  purposes  of this  Agreement,  a person  or  group of  persons
                  acting in concert,  or any  Associate or Affiliate of any such
                  person or group of persons, holding shares of the Corporation,
                  or shares of the  successor to the  Corporation,  in excess of
                  the number  that would  entitle  the  holders  thereof to cast
                  twenty  (25%)  percent or more of the votes  attaching  to all
                  shares of the  Corporation,  or to shares of the  successor to
                  the  Corporation,  shall  be  deemed  to be in a  position  to
                  exercise   effective  control  of  the  Corporation,   or  the
                  successor to the Corporation, as the case may be); and

         (b)      the exercise of such  effective  control to cause or result in
                  the election or  appointment  of two or more  directors of the
                  Corporation, or of the successor to the Corporation,  who were
                  not previously directors of the Corporation.

<PAGE>

                                       4

7.       NOTICES

         Any notices  delivered or received between either party shall be deemed
         to have been received:

         (a)      if it was delivered in person, on the date it was delivered;

         (b)      if it was sent by electronic  facsimile  transmission,  on the
                  date it was delivered;  (c) it was sent by mail, on the day it
                  was received to the following address:

                  CHINA BROADBAND CORP.
                  2080, 440 - 2nd Avenue SW
                  Calgary AB  T2P 5E9
                  Attention:  Chairman and CEO
                  By Facsimile:  (403) 265-8808

                  M. H. FINANCIAL MANAGEMENT LIMITED
                  624 Wilderness Drive S.E.
                  Calgary, AB  T2J 1Z2
                  Attention:  Matthew Heysel
                  By Facsimile:  (403) 225.2198

8.       MODIFICATION OF AGREEMENT

8.1      Any  modification  of this Agreement must be made in writing signed by
         the Consultant and an officer of the  Corporation or it shall have no
         effect and shall be void.

9.       GOVERNING LAW

         This  Agreement  shall be governed by and construed in accordance  with
         the laws of the  Province of Alberta,  Canada and the parties  agree to
         attorn to the jurisdiction of the courts of the Province of Alberta.

10.      HEADINGS

         The headings  utilized in this Agreement are for  convenience  only and
         are not to be construed in any way as additions or  limitations  of the
         covenants and agreements contained in this Agreement.

11.      ENTIRE AGREEMENT

         The  covenants  in this  Agreement  shall be  construed as an agreement
         independent  of any other  provision  in this  Agreement.  The  parties
         acknowledge  that it is their  intention  that the  provisions  of this
         Agreement  be binding  only to the extent that they may be lawful under
         the  existing  applicable  laws and in the event that any  provision of
         this  Agreement is  determined  by a court of law to be overly broad or
         unenforceable,  the  remaining  valid  provisions  shall remain in full
         force and effect. This Agreement constitutes the sole agreement between
         the parties hereto for services to be performed as herein described and
         the mutual  covenants  contained  herein  constitute  due and  adequate
         consideration for the full performance by each party of its obligations
         under this  Agreement and any and all previous  agreements,  written or
         oral,  expressed or implied,  between the parties or on their  releases
         and  forever  discharges  the other of and

<PAGE>

                                       5

         from all manner of action, causes of action, claims or demands whatso-
         ever under or in respect of any agreement.

12.      GENERAL MATTERS

12.1     The  waiver by any party  hereto of a breach of any  provision  of this
         Agreement  shall  not  operate  or be  construed  as a  waiver  of  any
         subsequent  breach  of the  same  or of any  other  provisions  of this
         Agreement.

12.2     This  Agreement  shall be binding upon the parties  hereto and shall
         enure to the benefit of and be enforceable by each of the parties
         hereto and their respective successors and assigns.

         IN WITNESS  WHEREOF the parties  hereto have executed this Agreement as
of the 19th day of May, 2000.

CHINA BROADBAND CORP.                       M. H. FINANCIAL MANAGEMENT
                                            LIMITED

per:                                       per:
    ------------------------------------      ----------------------------------

<PAGE>

                                  SCHEDULE "A"

Services:

o        Provide the  services of Chairman  and Chief  Executive  Officer of the
         Corporation  and,  in  this  regard,  to  have  responsibility  for the
         supervision,  direction,  control and operation of the Corporation with
         the obligation,  duty, authority and power to do all acts and things as
         are  customarily  done by persons  holding the position of Chairman and
         Chief  Executive  Officer  in  corporations  of  similar  size  to  the
         Corporation  and to do all acts and things as are reasonably  necessary
         for  the  efficient  and  proper   operation  and  development  of  the
         Corporation.

<PAGE>

                                  SCHEDULE "B"

Remuneration

o        As  full   consideration   for  performance  of  the  services  by  the
         Consultant,  the  Corporation  shall pay the  Consultant at the rate of
         $500.00 (U.S.) per day to a minimum of $10,000.00 (U.S.) for each month
         for which services are provided. The said rate shall not, in any event,
         be less than $750.00  (Cdn.) per day to a minimum of  $15,000.00  (Cdn)
         per month and shall be  inclusive of all claims by the  Consultant  for
         its  services,  but shall be  exclusive  of GST and of travel  expenses
         incurred by the  Consultant and properly  claimable in accordance  with
         the provisions hereof.

o        The  Corporation  shall not be required to provide any  benefits to the
         Consultant including,  without limitation,  dental, medical, disability
         or life insurance.

o        The Consultant  shall submit invoices to the Corporation for each month
         or portion  thereof for which  services are provided  during the period
         covered by the invoice and also  including  any proper claim for travel
         expenses.  Each invoice shall indicate the period covered, the month or
         portion  of  a  month  worked,  the  rate  and  the  total  charge  for
         consultancy services. GST, if applicable, shall be shown separately and
         the  Consultant's  GST  registration  number  shall  be  shown  on each
         invoice.

o        The  Corporation  will  reimburse the  Consultant,  at actual cost, for
         out-of-pocket  expenses  incurred in accordance with the  Corporation's
         standard  practice for the  reimbursement of reasonable travel expenses
         incurred by its contractors or its own personnel.  The Corporation will
         also  reimburse  the  Consultant  for  any  reasonable   long  distance
         telephone,  fax or  photocopying  charges  incurred by the  Consultant.
         Expenses claimed must be supported by the applicable receipts.

o        The Consultant  will be responsible for the payment of the income taxes
         of all of its employees including, without limitation,  Matthew Heysel,
         as well as Canada Pension Plan premiums and any and all other taxes and
         contributions  imposed by law with respect to such employees,  with the
         sole exception of GST. In the event the Consultant  should fail to make
         any such payments,  the Consultant  indemnifies the Corporation for any
         claims, causes or action, or liabilities which may be made, advanced or
         incurred against the Corporation as a result of such  non-payment,  and
         agrees to be responsible for the Corporation's  solicitor-client  costs
         in defending or protecting itself.

o        The  Corporation  will  pay  all  proper  invoices  received  from  the
         Consultant promptly following receipt of the applicable invoice and any
         necessary supported documentation.

o        The Consultant  will be entitled to  participate  (at the discretion of
         the Corporation) in any bonus program of the Corporation resulting from
         achieving  milestones  in the  business  of the  Corporation  (such  as
         commercial stage of development in 10 or more cities, 1 million or more
         subscribers,  revenue  in  excess of U.S.  $100  million  per year,  or
         strategic   alliances  and   partnerships   with  other   companies  to
         significantly enhance the products and services of the Corporation).

o        The Corporation  will, if it determines it to be necessary in its total
         discretion,  ensure that appropriate  liability  insurance  coverage is
         provided to Matthew  Heysel at no cost to the  Consultant or to Matthew
         Heysel,  which coverage should be the same in all material  respects as
         insurance   coverage   provided  to  Directors   and  Officers  of  the
         Corporation.

<PAGE>

                                       2

o        In any dispute  arising from the  enforcement  of this  Agreement,  the
         Corporation  shall pay all reasonable legal fees and expenses  incurred
         by the  Consultant  in  contesting  or  disputing  the  position of the
         Consultant or seeking to obtain  enforcement  of or retaining any right
         of payment or benefit provided for in this Agreement.EXHIBIT 10.10

                              CHINA BROADBAND CORP.

                                 2000 STOCK PLAN

                               SECTION 1. PURPOSE

         The purposes of this 2000 Stock Plan are to attract and retain the best
available  personnel for  positions of  substantial  responsibility,  to provide
additional  incentive to certain  individuals  providing services to the Company
and its Subsidiaries,  and to promote the success of the Company's  business and
thereby enhance long-term  shareholder value. Options granted under the Plan may
be  incentive  stock  options  (as  defined  under  Section  422 of the Code) or
nonqualified  stock options,  as determined by the  Administrator at the time of
grant of an option and subject to the applicable provisions of the Code, and the
regulations promulgated thereunder.  Awards of Restricted Stock may also be made
under this Plan.

                             SECTION 2. DEFINITIONS

         As used herein, the following definitions shall apply:

2.1      "Administrator" means the Board or any of its Committees appointed as
          -------------
permitted under this Plan.

2.2      "Applicable  Laws" means the legal  requirements  relating to stock
          ----------------
option plans, if any,  pursuant to U.S. state  corporate laws, U.S.  federal and
state securities laws, the Code and the rules of any applicable Stock Exchange.

2.3      "Award" means the grant of Restricted Stock or an Option to an Employee
          -----
or Consultant.

2.4      "Award Agreement" means a written agreement between the Company and a
          ---------------
Participant relating to an Award under the Plan.

2.5      "Board" means the Board of Directors of the Company.
          -----

2.6      "Cause" means willful misconduct with respect to, or that is harmful
          -----
to,  the  Company  or any  of  its  affiliates  including,  without  limitation,
dishonesty, fraud, unauthorized use or disclosure of confidential information or
trade secrets or other misconduct (including, without limitation, conviction for
a felony), in each case as reasonably determined by the Administrator.

                                      -1-

<PAGE>

2.7      "Change in Control" shall mean any of the following:
          -----------------

                  (a) the acquisition of securities of the Company  representing
         more  than  50% of the  combined  voting  power of the  Company's  then
         outstanding  securities  by any  person or group of  persons,  except a
         Permitted   Shareholder  (as  defined  below),  acting  in  concert.  A
         "Permitted  Shareholder"  means  a  holder,  as of  the  date  of  this
         Agreement, of voting capital stock of the Company;

                  (b) a  consolidation  or  merger of the  Company  in which the
         Company is not the  continuing or surviving  corporation or pursuant to
         which shares of the Company's  outstanding  capital stock are converted
         into cash, securities or other property,  other than a consolidation or
         merger of the Company in which the Company's  shareholders  immediately
         prior to the  consolidation  or  merger  have  the  same  proportionate
         ownership  of  voting  capital  stock  of  the  surviving   corporation
         immediately after the consolidation or merger;

                  (c) the sale, transfer or other disposition of all or  sub-
         stantially all of the assets of the Company; or

                  (d) in the event  that the shares of voting  capital  stock of
         the Company are traded on an established  securities  market:  a public
         announcement  that any person has  acquired or has the right to acquire
         beneficial  ownership of  securities of the Company  representing  more
         than 50% of the combined voting power of the Company's then outstanding
         securities,  and for this purpose the terms  "person"  and  "beneficial
         ownership"  shall have the  meanings  provided in Section  13(d) of the
         Exchange  Act  or  related  rules  promulgated  by the  Securities  and
         Exchange  Commission;  or the commencement of or public announcement of
         an intention to make a tender offer or exchange offer for securities of
         the Company  representing more than 50% of the combined voting power of
         the Company's then outstanding securities.

2.8      "Code" means the Internal Revenue Code of 1986, as amended.
          ----

2.9      "Committee"  means a  committee of  Directors  designated  by the Board
          ---------
to  administer  the Plan.  To the extent Rule 16b-3 and/or Code  Section  162(m)
apply to the  Company,  the  Committee  shall be comprised of not less than such
number of Directors as shall be required to permit Awards granted under the Plan
to qualify  under  Rule  16b-3,  and each  member of the  Committee  shall be an
"outside director" within the meaning of Section 162(m) of the Code. The Company
expects to have the Plan  administered in accordance with the  requirements  for
the award of "qualified  performance-based  compensation"  within the meaning of
Section 162(m) of the Code.

2.10     "Common Stock" means the Common Stock of the Company.
          ------------

2.11     "Company" means China Broadband Corp., a Nevada corporation.
          -------

                                      -2-

<PAGE>

2.12     "Consultant" means any person, including an advisor, an advisory  board
          ----------
member or director, who is engaged by the Company or any Parent or Subsidiary to
render services.

2.13     "Continuous  Status as an Employee or Consultant"  means the absence of
          -----------------------------------------------
any  interruption  or  termination  of service  as an  Employee  or  Consultant.
Continuous  Status  as  an  Employee  or  Consultant  shall  not  be  considered
interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other
leave of absence approved by the Administrator,  provided that such leave is for
a period  of not more than  ninety  (90)  days,  unless  re-employment  upon the
expiration  of such  leave is  guaranteed  by  contract  or  statute,  or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
transfers  between  locations  of  the  Company  or  between  the  Company,  its
Subsidiaries or their respective successors. For purposes of this Plan, a change
in status from an Employee to a Consultant  or from a Consultant  to an Employee
will not  constitute  an  interruption  of  Continuous  Status as an Employee or
Consultant.

2.14     "Disability" means permanent and total disability as defined in Code
          ----------
section 22(e)(3).

2.15     "Employee" means any person, including officers and directors, employed
          --------
by the Company or any Parent or  Subsidiary  of the Company,  with the status of
employment  determined based upon such minimum number of hours or periods worked
as shall be determined by the  Administrator  in its discretion,  subject to any
requirements  of the Code.  The payment of a director's  fee by the Company to a
director shall not be sufficient to constitute  "employment" of such director by
the Company.

2.16     "Exchange Act" means the Securities Exchange Act of 1934, as amended.
          ------------

2.17     "Fair Market Value" means, as of any date, the fair market value of
          -----------------
Common Stock determined as follows:

                  (a) If the  Common  Stock is listed on any  established  stock
         exchange or a national market system including  without  limitation the
         National Market of the National Association of Securities Dealers, Inc.
         Automated  Quotation System ("Nasdaq"),  its Fair Market Value shall be
         the closing sales price for such stock (or the closing bid, if no sales
         were reported),  as quoted on such system or exchange,  or the exchange
         with the greatest volume of trading in Common Stock for the last market
         trading day prior to the time of determination, as reported in The Wall
         Street  Journal  or  such  other  source  as  the  Administrator  deems
         reliable;

                  (b) If the Common  Stock is quoted on the  Nasdaq  (but not on
         the  National  Market  thereof)  or  regularly  quoted by a  recognized
         securities dealer but selling prices are not reported,  its Fair Market
         Value shall be the mean  between the high bid and low asked  prices for
         the Common  Stock for the last market  trading day prior to the time of
         determination,  as reported in The Wall Street  Journal,  Bloomberg  or
         such other source as the Administrator deems reliable; or

                  (c) In the  absence  of an  established  market for the Common
         Stock,  the Fair Market Value thereof shall be determined in good faith
         by the Administrator.

                                      -3-

<PAGE>

2.18     "Good Reason" means the occurrence of any of the following events or
          -----------
conditions without the Participant's consent:

                  (a) a change in the Participant's  status,  title, position or
         responsibilities  (including reporting  responsibilities)  that, in the
         Participant's  reasonable judgment,  represents a substantial reduction
         in  the  status,  title,  position  or  responsibilities  as in  effect
         immediately prior thereto;

                  (b) a significant  reduction in the Participant's  annual base
         salary that is not part of a Company-wide reduction of salaries;

                  (c) the Company's requiring the Participant to be based at any
         place outside a 50-mile radius of his or her place of employment  prior
         to a Change in Control,  except for reasonably  required  travel on the
         Company's  business  that is not  materially  greater  than such travel
         requirements prior to the Change in Control; or

                  (d) the  Company's  failure  to (i)  continue  in  effect  any
         material  compensation or benefit plan (or the  substantial  equivalent
         thereof) in which the  Participant was  participating  at the time of a
         Change in Control,  including,  but not  limited to, the Plan,  or (ii)
         provide the Participant  with  compensation and benefits at least equal
         (in terms of  benefit  levels  and/or  reward  opportunities)  to those
         provided for under each employee benefit plan,  program and practice as
         in effect  immediately  prior to the Change in Control (or as in effect
         following the Change in Control, if greater).

2.19     "Incentive Stock  Option"  means an Option intended  to  qualify  as an
          -----------------------
incentive  stock  option  within  the  meaning of  Section  422 of the Code,  as
designated in the applicable Option Agreement.

2.20    "Nonqualified  Stock Option" means an Option not intended to qualify as
         --------------------------
an Incentive Stock Option, as designated in the applicable Option Agreement.

2.21     "Option" means a stock option granted pursuant to the Plan.
          ------

2.22     "Option Agreement" means a written option agreement between the Company
          ----------------
and an Optionee.

2.23     "Optioned Stock" means the Common Stock subject to an Option.
          --------------

2.24     "Optionee" means an Employee or Consultant who receives an Option.
          --------

2.25     "Parent" means a "parent corporation", whether now or hereafter exist-
          -----
ing, as defined in Section 424(e) of the Code, or any successor provision.

2.26     "Participant" means an Employee or Consultant designated to be granted
          -----------
an Award under the Plan.

                                      -4-

<PAGE>

2.27     "Plan" means this 2000 Stock Plan.
          ----

2.28     "Reporting Person" means an officer,  director, or greater than ten
          ----------------
percent (10%)  shareholder of the Company within the meaning of Rule 16a-2 under
the Exchange  Act, who is required to file reports  pursuant to Rule 16a-3 under
the Exchange Act.

2.29     "Restricted Stock" means Common Stock awarded to a Participant under
          ----------------
this Plan, subject to applicable restrictions.

2.30     "Restricted Stock Agreement" means a written restricted stock agreement
          --------------------------
between the Company and the Restricted Stock Holder.

2.31     "Restricted Stock Award" means the grant of Restricted Stock pursuant
          ----------------------
to the Plan.

2.32     "Restricted Stock Holder" means a Participant who receives Restricted
          -----------------------
Stock pursuant to the Plan.

2.33     "Rule 16b-3" means Rule 16b-3  promulgated  under the Exchange  Act, as
          ----------
the same may be amended from time to time, or any successor provision.

2.34     "Securities Act" means the Securities Act of 1933, as amended.
          --------------

2.35     "Share" means a share of the Common Stock, as may be adjusted as
          -----
permitted under the Plan.

2.36     "Stock  Exchange"  means any stock  exchange or  consolidated  stock
          ---------------
price reporting  system on which  prices for the Common  Stock are quoted at any
given time.

2.37     "Subsidiary"means a "subsidiary  corporation," whether now or hereafter
          ----------
existing, as defined in Section 424(f) of the Code, or any successor provision.

                      SECTION 3. STOCK SUBJECT TO THE PLAN

         Subject to the provisions for adjustment  under the terms of this Plan,
the maximum  aggregate  number of shares that may be optioned and sold under the
Plan is Eight  Million  (8,000,000)  shares of Common  Stock.  The shares may be
authorized,  but unissued, or reacquired Common Stock. If an Award should expire
or become  unexercisable  for any reason  without having been exercised in full,
the unpurchased  Shares that were subject  thereto shall,  unless the Plan shall
have been  terminated,  become  available  for future  grant under the Plan.  In
addition,  any shares of Common  Stock which are  retained  by the Company  upon
exercise  of an Award in order to satisfy the  exercise  price for such Award or
any withholding  taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available under the Plan. Shares  repurchased by
the Company  pursuant to any  repurchase  right which the Company may have shall
not be available for future grant under the Plan. Notwithstanding the foregoing,

                                      -5-

<PAGE>

the number of Shares  available for granting  Incentive  Stock Options under the
Plan shall not exceed Eight Million (8,000,000) shares of Common Stock,  subject
to adjustment  as provided in the Plan and subject to the  provisions of Section
422 or 424 of the Code or any successor provision.

                      SECTION 4. ADMINISTRATION OF THE PLAN

4.1      Powers of the  Administrator.  Subject to the provisions of the Plan
         ----------------------------
and, in the case of a Committee,  the specific duties  delegated by the Board to
such  Committee,  and  subject  to the  approval  of any  relevant  authorities,
including the approval,  if required,  of any Stock Exchange,  the Administrator
shall have the authority, in its discretion:

                  (a) to determine the Fair Market Value of the Common Stock, in
         accordance with the provisions of the Plan;

                  (b) to select the Consultants and Employees to whom Awards may
         from time to time be granted hereunder;

                  (c) to determine whether and to what extent Awards are granted
         hereunder;

                  (d) to  determine  the number of shares of Common  Stock to be
         covered by each such Award granted hereunder;

                  (e) to approve forms of agreement for use under the Plan;

                  (f) to determine the number of shares of  Restricted  Stock to
         be granted hereunder;

                  (g) to construe and interpret the terms of the Plan and Awards
         granted under the Plan;

                  (h) to determine vesting schedules;

                  (i) to determine whether and under what circumstances an Award
         may be settled in Common Stock or other consideration  instead of cash;
         and

                  (j) to make any other  determination and take any other action
         that  the   Administrator   deems   necessary  or  desirable   for  the
         administration of the Plan.

4.2      Effect of Administrator's  Decision.  All decisions,  determinations
         -----------------------------------
and  interpretations  of the  Administrator  shall be final and  binding  on all
Participants.

4.3      Administration  Pursuant to Section 162(m). The Company expects to have
         ------------------------------------------
the Plan  administered  in  accordance  with the  requirements  for the award of
"qualified performance-based  compensation" within the meaning of Section 162(m)
of the Code, as applicable.

                                      -6-

<PAGE>

                        SECTION 5. ELIGIBILITY FOR AWARDS

5.1      Recipients  of  Grants.  Restricted  Stock and  Nonqualified  Stock
         ----------------------
Options may be granted to Employees and Consultants. Incentive Stock Options may
be granted only to Employees.  An Employee or Consultant who has been granted an
Award may, if he or she is otherwise eligible, be granted additional Awards.

5.2      Type of Award.  Each Award shall be  designated  in the Award Agreement
         -------------
as either an  Incentive  Stock  Option or a  Nonqualified  Stock  Option,  or as
Restricted  Stock.  If not  so  designated,  the  Award  will  be  treated  as a
Nonqualified Stock Option.  Notwithstanding any 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 or any Parent
or  Subsidiary)  exceeds  $100,000,  such  excess  Options  shall be  treated as
Nonqualified  Stock Options.  For purposes of this requirement,  Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares  subject to an Incentive  Stock Option shall
be determined as of the date of the grant of such Option.

                          SECTION 6. AWARDS OF OPTIONS

6.1      Term of  Option.  The term of each  Option shall be the term  stated in
         ---------------
the Option Agreement; provided, however, that the term shall be no more than ten
(10)  years  from the  date of  grant  thereof  or such  shorter  term as may be
provided in the Option  Agreement.  However,  in the case of an Incentive  Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing  more than ten percent (10%) of the total combined  voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Option  shall be five (5) years from the date of grant  thereof or such  shorter
term as may be provided in the Option Agreement.

6.2      Option  Exercise  Price.  The per share  exercise price for the Shares
         -----------------------
to be  issued  pursuant  to  exercise  of an  Option  shall be such  price as is
determined  by the  Administrator,  except that (i) in the case of an  Incentive
Stock  Option  that is granted to an  Employee  who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or any
Parent or  Subsidiary,  the per Share  exercise  price shall be no less than one
hundred  ten percent  (110%) of the Fair  Market  Value per Share on the date of
grant,  and (ii) in the case of an Incentive Stock Option that is granted to any
other  Employee,  the per Share exercise price shall be no less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant.

6.3      Consideration. 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  Administrator  (and, in the case of an Incentive Stock Option,  shall be
determined at the time of grant) and may consist

                                      -7-

<PAGE>

entirely of (i) cash or check,  (ii) cancellation of indebtedness of the Company
to Optionee,  (iii)  promissory note (subject to approval by the Company),  (iv)
surrender of other Shares that (A) have been owned by Optionee for more than six
months on the date of surrender or such other period as may be required to avoid
a charge to the Company's earnings, and (B) have a Fair Market Value on the date
of surrender equal to the aggregate  exercise price of Shares to be purchased by
Optionee as to which such Option  shall be  exercised,  (v) if there is a public
market for the Shares and they are registered under the Securities Act, delivery
of a properly executed exercise notice together with such other documentation as
the  Administrator  and the broker,  if  applicable,  shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan  proceeds
required  to pay the  aggregate  exercise  price  and any  applicable  income or
employment taxes,  (vi) any combination of the foregoing methods of payment,  or
(vii) such other  consideration and method of payment for the issuance of Shares
to the extent permitted under Applicable Laws. In making its determination as to
the type of  consideration  to  accept,  the  Administrator  shall  consider  if
acceptance  of such  consideration  may be  reasonably  expected  to benefit the
Company or result in the  recognition  of  compensation  expense (or  additional
compensation expense) for financial reporting purposes.

6.4      Vesting of Options
         ------------------

                  (a) Vesting  Schedule.  No Option will be exercisable until it
                      -----------------
         has vested.  The  Administrator  will specify the vesting  schedule for
         each Option at the time of grant of the Option,  prior to the provision
         of services with respect to which such Option is granted; provided that
         if no vesting  schedule is specified  at the time of grant,  the Option
         shall  vest in full over the course of four years from date of grant as
         follows:  twenty  five  percent  (25%) of the  total  number  of Shares
         granted  under the Option  shall vest after one (1) year of  Continuous
         Status as an Employee or  Consultant;  and the  remaining  seventy-five
         percent  (75%) of the Shares  granted  under the Option  shall vest pro
         rata monthly, on the same date of the month as the date of grant of the
         option, over the following  thirty-six (36) months of Continuous Status
         as an Employee or Consultant.  The  Administrator may specify a vesting
         schedule for all or any portion of an Option  based on the  achievement
         of  performance  objectives  with respect to the  Company,  a Parent or
         Subsidiary,  and/or  Optionee,  and as shall be  permissible  under the
         terms of the Plan.

                  (b) Acceleration of Vesting. The vesting of one or more
                      -----------------------
         outstanding  Options may be  accelerated by the  Administrator  at such
         times and in such amounts as it determines in its sole discretion.  The
         vesting  of  Options  may  also be  accelerated  in  connection  with a
         corporate transaction, as described below.

6.5      Procedure for Exercise;  Rights as a Shareholder.  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 the Company has  received  full  payment for the Shares
with  respect to which the Option is  exercised.  An Option may not be exercised
for a fraction of a Share. Full payment may, as authorized by the Administrator,
consist of any consideration and method of payment as described above. Until the
issuance (as evidenced by the  appropriate  entry on the books of the Company or
of a duly

                                      -8-

<PAGE>

authorized  transfer agent of the Company) of the stock  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
stock  certificate  promptly upon exercise of the Option.  No adjustment will be
made for a dividend  or other  right for which the  record  date is prior to the
date the stock  certificate  is issued,  except as  provided in Section 9 of the
Plan.  Exercise  of an Option in any manner  shall  result in a decrease  in the
number of Shares that 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.

6.6      Exercise After Termination of Employment or Consulting Relationship
         -------------------------------------------------------------------

                  (a)  Termination  of Employment  or  Consulting  Relationship.
                       --------------------------------------------------------
         Except as otherwise  provided herein,  in the event of termination of a
         Participant's  Continuous  Status as an Employee or Consultant with the
         Company,  such Participant may exercise his or her Option to the extent
         that  Participant  was  entitled  to  exercise  it at the  date of such
         termination,  but only within  three (3) months  after the date of such
         termination,  or such other longer  period of time as is  determined by
         the  Administrator,  provided  that no Option which is exercised  after
         such three month period will be treated as an Incentive  Stock  Option,
         and  that in no  event  may an  Option  be  exercised  later  than  the
         expiration  date of the term of such  Option as set forth in the Option
         Agreement.  To the extent that Participant was not entitled to exercise
         the Option at the date of such termination,  or if Participant does not
         exercise  such  Option  to the  extent  so  entitled  within  the  time
         specified herein,  the Option shall terminate.  No termination shall be
         deemed to occur and this paragraph  shall not apply if (i)  Participant
         is a Consultant  who becomes an  Employee;  or (ii)  Participant  is an
         Employee  who  becomes a  Consultant;  or (iii)  Participant  transfers
         employment among the company and its subsidiaries.

                  (b) Disability of Participant.  Notwithstanding the provisions
                      -------------------------
         set  forth  above,  in the  event  of  termination  of a  Participant's
         Continuous  Status as an Employee or  Consultant  as a result of his or
         her  Disability,  Participant  may, but only within  twelve (12) months
         (or, with respect to a  Nonqualified  Stock  Option,  such other longer
         period of time, if any, as is determined  by the  Administrator)  after
         the date of such termination (but in no event later than the expiration
         date of the term of such Option as set forth in the Option  Agreement),
         exercise  the Option to the extent he or she is  otherwise  entitled to
         exercise  it at the  date  of  such  termination.  To the  extent  that
         Participant  was not  entitled  to  exercise  the Option at the date of
         termination,  or if  Participant  does not exercise  such Option to the
         extent so entitled within the time specified  herein,  the Option shall
         terminate.

                  (c)  Death of  Participant.  In the  event  of the  death of a
                       ---------------------
         Participant  during the period of  Continuous  Status as an Employee or
         Consultant,  or within thirty (30) days  following the  termination  of
         Participant's  Continuous  Status as an  Employee  or  Consultant,  the
         Option may be  exercised,  at any time  within  twelve (12) months (or,
         with respect to a Nonqualified  Stock Option,  such other longer period
         of time, if any, as is

                                      -9-

<PAGE>

         determined by the Administrator)  after the date of death (but in no
         event later than the expiration date of the term of such  Option as set
         forth in the Option  Agreement),  by  Participant's estate or by a
         person who  acquired the right to exercise the Option by bequest or
         inheritance, but only to the extent Participant was entitled to
         exercise the Option at the date of death or, if earlier, the date of
         termination of the Continuous  Status as an Employee or Consultant.  To
         the extent that  Participant was not entitled to exercise the Option at
         the date of death or termination, as the case may be, or if Participant
         or  the  Participant's  estate  (or,  as  applicable,  heirs,  personal
         representative,  executor  or  administrator)  does not  exercise  such
         Option to the extent so entitled within the time specified herein,  the
         Option shall terminate.

6.7      Rule 16b-3.  Options  granted to  Reporting  Persons  shall comply with
         ----------
Rule 16b-3 and shall contain such  additional  conditions or restrictions as may
be  required   thereunder  to  qualify  for  the  maximum   exemption  for  Plan
transactions.

6.8      Buyout Provisions.  The Administrator may at any time offer to buy out
         -----------------
for a payment in cash or Shares,  an Option  previously  granted,  based on such
terms and conditions as the  Administrator  shall  establish and  communicate to
Optionee at the time that such offer is made.

6.9      Repurchase  Rights.  Prior to the Company's  listing on a recognized
         ------------------
Stock  Exchange,  the  Company  may have the  right,  as  detailed  in the Award
Agreement,  to repurchase  any Shares  issued in connection  with an Award under
this Plan upon  Participant's  cessation of Continuous  Status as an Employee or
Consultant.   Furthermore,  the  Administrator  shall  have  the  discretion  to
authorize the issuance of unvested Shares pursuant to the exercise of an Option.
In the event of termination of the Optionee's employment or services, all Shares
issued upon exercise of an Option which are unvested at the time of cessation of
employment or services shall be subject to repurchase at the exercise price paid
for such Shares. The terms and conditions upon which such repurchase right shall
be  exercisable  (including  the period and  procedure  for  exercise)  shall be
established by the Administrator and set forth in the agreement  evidencing such
right. All of the Company's outstanding repurchase rights under this Section are
assignable  by the Company at any time and shall remain in full force and effect
in the event of a Change in Control;  provided that if the vesting of Options is
accelerated  as  permitted  under the Plan,  the  repurchase  rights  under this
Section shall terminate and all Shares subject to such  terminated  rights shall
immediately  vest in  full.  The  Administrator  shall  have  the  discretionary
authority,  exercisable  either  before or after  the  Optionee's  cessation  of
employment or services,  to cancel the Company's  outstanding  repurchase rights
with  respect to one or more Shares  purchased  or  purchasable  by the Optionee
under an Option and thereby accelerate the vesting of such Shares in whole or in
part at any time.

                       SECTION 7. RESTRICTED STOCK AWARDS

7.1      Grant of Restricted  Stock Awards.  Each Restricted Stock Award (i)
         ---------------------------------
shall be for a number of Shares determined by the Administrator,  and (ii) shall
require the Restricted Stock Holder to

                                      -10-

<PAGE>

maintain  Continuous Status as an Employee or Consultant for a restricted period
determined by the  Administrator in order for the  restrictions  related to such
Shares to lapse. The restrictions and the duration of the restricted period will
be set forth in the Restricted Stock Agreement.  The restricted  period need not
be the same for all Shares  subject to the Restricted  Stock Award.  For vesting
purposes,  credit for service as an Employee or  Consultant  prior to the actual
grant of the Restricted Stock Award may be given as part of the Restricted Stock
Award.

7.2      Consideration for Restricted Stock Awards. Restricted Stock may be sold
         -----------------------------------------
or  awarded  under  the Plan for such  consideration  as the  Administrator  may
determine, including (without limitation) cash, cash equivalents,  full-recourse
promissory notes (subject to approval by the Plan Administrator),  past services
and future services.

7.3      Rights of a  Restricted  Stock  Holder.  Except for such  restrictions,
         --------------------------------------
and subject to  provisions  under the Plan  relating to  adjustments  to Awards,
conditions  on  issuance  of  shares,   and  termination  of  the  Participant's
relationship  with the  Company,  a  Restricted  Stock Holder shall have all the
rights of a  shareholder,  including but not limited to the right to receive all
cash  dividends  paid on  such  Restricted  Stock  and the  right  to vote  such
Restricted  Stock.  Dividends  paid in  securities  or other  property  or stock
received in connection with a stock split or other  distribution with respect to
the Restricted Stock shall be subject to the same restrictions as the Restricted
Stock.

7.4      Vesting of Restricted  Stock. The  restrictions  imposed herein shall
         ----------------------------
lapse,  and the  Participant's  rights in the  Restricted  Stock shall vest,  in
accordance with the schedule provided in the Restricted Stock Agreement.  If not
so specified in such Restricted  Stock Agreement,  the restrictions  shall lapse
according to the  following  schedule:  restrictions  on 25% of the Shares shall
lapse after one year of  Continuous  Service as an Employee or  Consultant;  the
remaining  75% of Shares  shall  vest pro rata  monthly  on the last day of each
calendar month over the following 36 months of Continuous Service as an Employee
or Consultant.  Upon the vesting of the Restricted Stock awarded under the Plan,
the  Restricted  Stock  Holder  shall  be  entitled  to  receive  a  certificate
representing the number of shares of Restricted  Stock as to which  restrictions
no longer apply,  with the remaining  shares of Restricted  Stock subject to the
foregoing  restrictions.  The Restricted  Stock Holder shall execute a new stock
power with respect to any remaining Shares which are restricted.  The Restricted
Stock Holder shall be entitled to receive  certificates for any Restricted Stock
as to which the Restricted Stock Holder's interest has become vested as provided
herein,   and  the  Company  shall  issue  the  Restricted   Stock  Holder  such
certificates.

7.5      Termination of Employment or Consulting Relationship.  If a Restricted
         ----------------------------------------------------
Stock Holder ceases to maintain his or her  Continuous  Status as an Employee or
Consultant  for any reason (other than death or  Disability),  Restricted  Stock
theretofore  awarded to such  Restricted  Stock  Holder and which at the time of
such termination of his or her Continuous Status as an Employee or Consultant is
subject to the restrictions imposed by this Section shall, upon such termination
of his or her Continuous  Status as an Employee or Consultant,  be forfeited and
returned to the Company and the  Restricted  Stock  Holder shall have no further
claim to or interest in such  Restricted  Stock.  If a  Restricted  Stock Holder
ceases to maintain his or her Continuous  Status as

                                      -11-

<PAGE>

an Employee or  Consultant  by reason of death or  Disability,  such  Restricted
Stock  awarded  to such  Restricted  Stock  Holder  which,  at the  time of such
termination  of his or her Continuous  Status as an Employee or  Consultant,  is
subject  to  the  restrictions  imposed  by  this  Section,  shall  be  free  of
restrictions and shall not be forfeited.

7.6      Issuance of Restricted Stock. The Administrator shall request of the
         ----------------------------
Company that each  certificate in respect of Restricted  Stock awarded under the
Plan be registered in the name of the  Restricted  Stock Holder.  The Restricted
Stock  Holder shall  provide a stock power  endorsed in blank to the Company and
any certificate representing the Restricted Stock shall bear the following (or a
similar) legend:

                  "The  transferability  of this  certificate and the securities
         represented  hereby are subject to the terms and conditions  (including
         forfeiture)  contained in the 2000 Stock Plan of China  Broadband Corp.
         Copies  of such  Plan are on file in the  offices  of  China  Broadband
         Corp."

7.7      Adjustments  to  Restricted  Stock  Awards.   The  Administrator   may,
         ------------------------------------------
in anticipation of a Change in Control,  make such  adjustments in the terms and
conditions of outstanding  Restricted  Stock, as the  Administrator  in its sole
discretion determines are equitably warranted under the circumstances, including
declaring that any Restricted  Stock Award not vested shall become fully vested.
The  Administrator in its discretion shall have the right to accelerate the time
at which the  Restricted  Stock shall  become  vested and may do so as to one or
more Restricted Stock Holders.

7.8      Restricted  Stock  Agreement.  At the time of a Restricted Stock Award,
         ----------------------------
the Participant  shall enter into a Restricted  Stock Agreement with the Company
agreeing  to the terms and  conditions  of the  Restricted  Stock Award and such
other matters as the Company shall in its sole discretion determine.

7.9      Return of Unvested  Restricted  Stock.  Any Shares of Restricted Stock
         -------------------------------------
as to which rights have not vested in accordance  with this Plan and as to which
a  Restricted  Stock  Holder no longer has any  rights  under this Plan shall be
returned to the Company which  thereafter shall have all rights of ownership and
which may use such shares for further Awards under this Plan.

                     SECTION 8. STOCK WITHHOLDING TO SATISFY
                           WITHHOLDING TAX OBLIGATIONS

8.1      Withholding  Tax. At the discretion of the  Administrator, Participants
         ----------------
may  satisfy  withholding  obligations  as provided  in this  paragraph.  When a
Participant  incurs  tax  liability  in  connection  with an  Award,  which  tax
liability is subject to tax withholding  under  applicable tax laws  (including,
without  limitation,  income and payroll  withholding taxes), and Participant is
obligated to pay the Company an amount required to be withheld under  applicable
tax laws,  Participant may satisfy the withholding tax obligation by one or some
combination  of  the  following  methods:  (a)  by  cash  payment,  (b)  out  of
Participant's  current compensation,  (c) if permitted by the Administrator,  in
its  discretion,  by surrendering to the Company Shares that (i)

                                      -12-

<PAGE>

have  been  owned by  Participant  for more  than six (6)  months on the date of
surrender  or such  other  period  as may be  required  to avoid a charge to the
Company's  earnings,  and (ii) have a fair market value on the date of surrender
equal to (or less than, if other consideration is paid to the Company to satisfy
the withholding  obligation)  Participant's marginal tax rate times the ordinary
income  recognized,  plus an  amount  equal  to the  Participant's  share of any
applicable payroll  withholding taxes, or (d) if permitted by the Administrator,
in its discretion,  by electing to have the Company  withhold from the Shares to
be issued upon  exercise of the Award,  if any,  that number of Shares  having a
Fair Market Value equal to the amount required to be withheld. For this purpose,
the Fair Market Value of the Shares to be withheld  shall be  determined  on the
date that the amount of tax to be withheld is to be determined (the "Tax Date").
In making its  determination  as to the type of  consideration  to  accept,  the
Administrator  shall  consider  if  acceptance  of  such  consideration  may  be
reasonably  expected  to benefit  the  Company or result in the  recognition  of
compensation  expense  (or  additional   compensation   expense)  for  financial
reporting purposes.

8.2      Reporting  Persons.  Any surrender by a Reporting Person of previously
         ------------------
owned Shares to satisfy tax  withholding  obligations  arising upon  exercise of
this Award must comply with the applicable provisions of Rule 16b-3 and shall be
subject  to  such  additional  conditions  or  restrictions  as may be  required
thereunder to qualify for the maximum  exemption from Section 16 of the Exchange
Act with respect to Plan transactions.

8.3      Form of Election.  All elections by a Participant to have Shares with-
         ----------------
held to satisfy tax withholding  obligations  shall be made in writing in a form
acceptable to the Administrator and shall be subject to the following additional
restrictions:

                  (a) the  election  must be made on or prior to the  applicable
         Tax Date;

                  (b) once made,  the election  shall be  irrevocable  as to the
         particular Shares of the Award as to which the election is made;

                  (c) if  Participant is a Reporting  Person,  the election must
         comply with the
applicable  provisions  of Rule 16b-3 and shall be  subject  to such  additional
conditions  or  restrictions  as may be required  thereunder  to qualify for the
maximum  exemption  from  Section 16 of the  Exchange  Act with  respect to Plan
transactions; and

                  (d)  all  elections   shall  be  subject  to  the  consent  or
         disapproval of the Administrator.

8.4      Deferral of Tax Date.  In the event the election to have Shares  with-
         --------------------
held is made by a Participant  and the Tax Date is deferred  under Section 83 of
the  Code  because  no  election  is filed  under  Section  83(b)  of the  Code,
Participant  shall  receive the full number of Shares with  respect to which the
Award is exercised but such Participant  shall be  unconditionally  obligated to
tender back to the Company the proper number of Shares on the Tax Date.

                                      -13-

<PAGE>

                       SECTION 9. ADJUSTMENTS UPON CHANGES
                    IN CAPITALIZATION; CORPORATE TRANSACTIONS

9.1      Changes  in   Capitalization.   Subject  to  any  required  action  by
         ----------------------------
the  shareholders  of  the  Company,  the  number  of  Shares  covered  by  each
outstanding  Option,  and the  number of Shares  that have been  authorized  for
issuance  under the Plan but as to which no Awards have yet been granted or that
have been returned to the Plan upon  cancellation  or expiration of an Award, as
well as the price per Share  covered by each such  outstanding  Award,  shall be
proportionately  adjusted  for any  increase or decrease in the number of issued
shares of Common Stock resulting from a stock split,  reverse stock split, stock
dividend, combination, recapitalization or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common Stock
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
be made by the  Administrator,  whose  determination  in that  respect  shall be
final, binding and conclusive.  Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities  convertible  into
shares of stock of any class,  shall affect, and no adjustment by reason thereof
shall be made with  respect  to, the  number or price of shares of Common  Stock
subject to an Award.

9.2      Dissolution  or  Liquidation.  In the event of the proposed dissolution
         ----------------------------
or liquidation of the Company,  the Administrator  shall notify  Participants at
least  fifteen  (15) days  prior to such  proposed  action.  To the  extent  not
previously   exercised,   Awards  will  terminate   immediately   prior  to  the
consummation of such proposed action.

9.3      Change  in  Control  Transactions.  Except  as  otherwise  provided  in
         ---------------------------------
the instrument that evidences the Option, in the event of any Change in Control,
each Option that is at the time outstanding  shall  automatically  accelerate so
that each such Option shall,  immediately prior to the specified  effective date
for the Change in Control,  become 100% vested.  Notwithstanding  the foregoing,
vesting of shares  subject to such Option shall not so  accelerate if and to the
extent that (i) in the opinion of the  Company's  accountants,  it would  render
unavailable  "pooling  of  interest"  accounting  for a  transaction  that would
otherwise  qualify  for such  accounting  treatment;  or (ii) such Option is, in
connection  with the Change in  Control,  either to be assumed by the  successor
corporation or parent thereof or to be replaced with a comparable  award for the
purchase  of shares of the capital  stock of the  successor  corporation  or its
parent corporation.  If the Administrator  determines that such an assumption or
replacement  will  be  made,  the  Administrator   shall  give  notice  of  such
determination  to the  Participants  and of the provisions of such assumption or
replacement,  and any  adjustments  made (i) to the  number  and kind of  shares
subject to the outstanding Awards (or to the options in substitution therefore),
(ii) to the exercise  prices,  and/or (iii) to the terms and  conditions  of the
stock options.  Any such  determination  shall be made in the sole discretion of
the   Administrator   and  shall  be  final,   conclusive  and  binding  on  all
Participants.  If such Award is assumed or replaced in the Change in Control and
is not otherwise accelerated at that time, vesting of all of the unvested shares
subject  to such  Award  shall be  accelerated  in the event  the  Participant's
employment or services should subsequently terminate within six months following
such Change in Control, unless such employment or

                                      -14-

<PAGE>

services  are  terminated  by  the  Company  for  Cause  or by  the  Participant
voluntarily  without Good Reason.  All  unexercised  Awards shall  terminate and
cease to remain outstanding immediately following the consummation of the Change
in Control,  except to the extent  assumed by the  successor  corporation  or an
affiliate thereof.

9.4      Certain  Distributions.  In the event of any  distribution  to the
         ----------------------
Company's  shareholders of securities of any other entity or other assets (other
than  dividends  payable  in cash or stock of the  Company)  without  receipt of
consideration  by  the  Company,  the  Administrator  may,  in  its  discretion,
appropriately  adjust  the  price  per share of  Common  Stock  covered  by each
outstanding Option to reflect the effect of such distribution.

                               SECTION 10. GENERAL

10.1     Non-Transferability Of Options. Unless otherwise provided under the
         ------------------------------
Option  Agreement,  Options 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 or purchased during the lifetime
of Optionee, only by Optionee.

10.2     Time Of Granting Options. The date of grant of an Award shall,  for all
         ------------------------
purposes,  be the  date on  which  the  Administrator  makes  the  determination
granting such Award,  or such later date as is determined by the  Administrator.
Notice of the  determination  shall be given to each  Employee or  Consultant to
whom an Award is so  granted  within a  reasonable  time  after the date of such
grant.

10.3     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, the
Exchange  Act,  the  rules  and  regulations  promulgated  thereunder,  and  the
requirements of any Stock Exchange. As a condition to the exercise of an Option,
the  Company  may require the person  exercising  such Option to  represent  and
warrant at the time of any such  exercise  that the  Shares are being  purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company,  such a representation  is
required by law.

10.4     Amendment and Termination.  The Board may at any time amend, alter,
         -------------------------
suspend or  discontinue  the Plan, but no amendment,  alteration,  suspension or
discontinuation  shall be made that would  impair the rights of any  Participant
under any grant  theretofore  made,  unless  mutually  agreed  otherwise,  which
agreement  must be in writing  and signed by  Participant  and the  Company.  In
addition,  to the extent  necessary  and  desirable to comply with Rule 16b-3 or
with  Section  422 of the  Code  (or any  other  applicable  law or  regulation,
including  the  requirements  of any Stock  Exchange),  the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.

                                      -15-

<PAGE>

10.5     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. The inability of the Company
to  obtain  authority  from  any  regulatory  body  having  jurisdiction,  which
authority  is deemed by the  Company's  counsel  to be  necessary  to the lawful
issuance  and sale of any Shares  hereunder,  shall  relieve  the Company of any
liability  in  respect of the  failure to issue or sell such  Shares as to which
such requisite authority shall not have been obtained.

10.6     Information To Optionees.  At the time of issuance of any securities
         ------------------------
under the Plan,  the Company  shall provide to Optionee a copy of the Plan and a
copy of any agreement(s) pursuant to which securities granted under the Plan are
issued.

10.7     Employment Relationship. The Plan shall not confer upon any Participant
         -----------------------
any right with respect to continuation of employment or consulting  relationship
with the  Company,  nor shall it  interfere  in any way with such  Participant's
right or the Company's  right to terminate  his or her  employment or consulting
relationship at any time, with or without cause.

10.8     Term Of Plan. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders of
the  Company.  It shall  continue in effect for a term of ten (10) years  unless
sooner terminated as permitted herein.

10.9     Shareholder Approval.  Continuance of the Plan shall be subject to
         --------------------
approval by the  shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law and the
rules of any Stock  Exchange  upon  which  the  Common  Stock is  listed  and in
accordance with the Company's bylaws. In the event such approval is not obtained
in a timely manner, no Option granted hereunder shall be treated as an Incentive
Stock Option.

This Plan was adopted by the Board on ____________________________.

This Plan was approved by the shareholders of the Company on __________________.

                                      -16-

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