Long-term share ownership plans are intended to reward management based on increases in the value of Brascan’s common shares. The purpose of these arrangements is to achieve a commonality of interest between shareholders and management and to motivate executives to improve the Company’s long-term financial success, measured in terms of enhanced shareholder wealth over the long term. Brascan’s long-term share ownership plan consists of a stock option plan.

At the shareholder meeting held on May 22, 2006, Brascan’s shareholders approved a stock option plan for its executives, which was amended at its shareholder meeting held August 15, 2006. Under the terms of the Company’s stock option plan, which is managed by its board of directors, Brascan has granted and may in the future grant additional options to purchase common shares to members of its board of directors, executive officers, employees, consultants, or any other persons providing services to the Company or any of Brascan’s subsidiaries.

The stock option plan expires on March 31, 2016. The options are granted without cost to the recipient and cannot be transferred, except under limited circumstances. The timing of vesting of the options granted under the plan is at the discretion of its board of directors. Options are granted at the exercise price established by the board of directors.

Options granted after its listing on the Novo Mercado segment may only be awarded at an exercise price not lower than the last regular sale price for common shares on the Novo Mercado segment of the BOVESPA on the date the options are granted. The maximum number of common shares with respect to which options may be granted under the stock option plan may not exceed the lesser of 15 million shares or 10% of the outstanding common shares. Options may not be exercised later than 10 years after the date of grant.

Upon exercise of a vested option and upon the payment of the exercise price, participants will receive one common share of Brascan’s capital stock. Except in limited circumstances, the options cease to be exercisable after the date of termination of employment.

It is the intention of its board of directors to annually grant to its executive officers a number of options with an exercise value that is based on a multiple of the executive's base salary of up to 3.0 times, divided by the market price, plus a discretionary amount for performance. On August 18, 2006, Brascan’s board of directors awarded 1,427,439 options to its executive officers, all of which are subject to the completion of the October offering and have a term of 10 years.

Of these options, 610,109 have an exercise price equal to the initial offering price for this offering, with 20% of these options becoming exercisable on the first anniversary and on each anniversary thereafter until 100% exercisable. The balance of the options become exercisable five years from the date of grant and each such option has an exercise price of R$1.17.