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<P align=center>SECURITIES AND EXCHANGE COMMISSION</P>
<P style="FONT-SIZE: 9pt" align=center span>WASHINGTON D.C. 20549</P>
<P align=center span><B>FORM S-8</B></P>
<P style="FONT-SIZE: 9pt" align=center span>REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933</P>
<P align=center></P>
<P style="COLOR: #000000" align=center span>
<P align=center span style="margin-top: 1; margin-bottom: 1"><u><b>HUBEI
PHARMACEUTICAL GROUP LTD.</b></u></P>
<P align=center span style="margin-top: 1; margin-bottom: 1"><FONT size=2>(Exact name of registrant as specified in its
charter)</FONT></P>
<P
style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
align=center span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center></P>
<DIV align=center>
<TABLE
style="BORDER-RIGHT: 1px double; BORDER-TOP: 1px double; BORDER-LEFT: 1px double; BORDER-BOTTOM: 1px double; BORDER-COLLAPSE: collapse"
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  <P TBODY>
  <TR>
    <TD class=table1column1 vAlign=center align=middle width="30%">
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px">
      <P style="MARGIN-TOP: 1px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 1px" span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>Nevada </P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P></TD>
    <TD class=table1column2 vAlign=center align=middle width="30%">
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; TEXT-ALIGN: center">
      <P style="MARGIN-TOP: 1px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 1px" span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>000-25553</P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P></TD>
    <TD class=table1column3 vAlign=center align=middle width="40%">
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px">
      <P style="MARGIN-TOP: 1px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 1px" span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>88-0419476</P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P></TD></TR>
  <TR>
    <TD class=table1column1 vAlign=center align=middle width="30%">
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px">
      <P style="MARGIN-TOP: 1px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 1px" span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span><font size="2">(State of Incorporation) </font> </P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P></TD>
    <TD class=table1column2 align=middle width="30%">
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px">
      <P style="MARGIN-TOP: 1px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 1px" span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span><font size="2">(Commission File Number) </font> </P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P></TD>
    <TD class=table1column3 vAlign=center align=middle width="40%">
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px">
      <P style="MARGIN-TOP: 1px; FONT-SIZE: 12pt; MARGIN-BOTTOM: 1px" span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span>
      <P
      style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; FONT-FAMILY: 'Times New Roman', serif"
      span><font size="2">(IRS Employer Identification No.) </font> </P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P>
      <P
style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px"></P></TD></TR></P TBODY></TABLE></DIV>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center><BR><BR></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center><u>410 Park Avenue,
15th Floor, New York, NY 10022</u></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center><font size="2">(Address of
principal executive offices)</font></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center><u>(604) 881-2899</u></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center><font size="2">(Issuer's telephone
number, including area code)</font></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center>
<u>Pan Asia Communications Corp.</u><P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center>
<font size="2">(Former name, former
address and former fiscal year, if changed since last report)</font></P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center></P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center></P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center span>&nbsp;</P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center span><u><b>2003
EMPLOYEE STOCK OPTION PLAN</b></u></P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center span><FONT
size=2>(Full title of plan)</FONT></P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center></P>
<P style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 2px" align=center span>&nbsp;</P>
<P align=center span><FONT size=2>CALCULATION OF REGISTRATION
FEE</FONT><BR>&nbsp;</P>
<DIV align=center>
<TABLE style="MARGIN-TOP: 2px; MARGIN-BOTTOM: 3px" height=168 cellSpacing=1
width=624 border=5>&nbsp;
  <P TBODY>
  <TR>
    <TD vAlign=center align=middle width="20%" height=99>
      <P span><FONT size=2>Title of Securities to be Registered</FONT></P></TD>
    <TD align=middle width="20%" height=99>
      <P span><FONT size=2>Amount to be registered</FONT></P></TD>
    <TD vAlign=center align=middle width="20%" height=99>
      <P span><FONT size=2>Proposed Maximum Offering Price Per
    Share</FONT></P></TD>
    <TD vAlign=center align=middle width="20%" height=99>
      <P span><FONT size=2>Proposed Maximum Aggregate Offering
    Price</FONT></P></TD>
    <TD vAlign=center align=middle width="20%" height=99>
      <P span><FONT size=2>Amount of Registration Fee</FONT></P></TD></TR>
  <TR>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">Common</font></TD>
    <TD align=middle width="20%" height=68><font size="2">3,000,000</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">$0.70</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">$2,100,000</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">$169.89</font></TD></TR>
  <TR>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">Common Stock Underlying Stock Options</font></TD>
    <TD align=middle width="20%" height=68><font size="2">1,250,000</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">$0.22</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">$275,000</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <font size="2">$22.25</font></TD></TR>
  <TR>
    <TD vAlign=center align=middle width="20%" height=68>
      <P span><font size="2">Total</font></P></TD>
    <TD align=middle width="20%" height=68><font size="2">4,250,000</font></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <P span><font size="2">$0.56</font></P></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <P span><font size="2">$2,375,000</font></P></TD>
    <TD vAlign=center align=middle width="20%" height=68>
      <P span><font size="2">$192.14</font></P></TD></TR></P TBODY></TABLE></DIV>
<BLOCKQUOTE>
  <P align=left
  span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  <FONT size=2>(1) Estimated solely for the purpose of calculating the
  registration fee pursuant to Rule 457 under the Securities Act of
  1933</FONT></P></BLOCKQUOTE>
<P span>PART I. INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS</P>
<P span><I><B>Item 1. Plan Information</B></I></P>
<P span>This Prospectus is part of a Registration Statement which registers an
aggregate 4,250,000 shares of common stock, $.001 par value, of Hubei
Pharmaceutical Group Ltd.&nbsp; (the "Company") 3,000,000 of which will be set
aside for distribution pursuant to the Company's 2003 Stock Option Plan (Please
See Item 2) and 1,250,000 of which have been reserved for issuance upon the
conversion of stock options granted to
the following named persons who are "Selling Shareholder":</P>
<DIV align=center>
<CENTER>
<TABLE style="BORDER-COLLAPSE: collapse" borderColor=#111111 height=177
cellSpacing=1 width="90%" border=2>
  <P TBODY>
  <TR>
    <TD align=middle width="23%" height=30>Name</TD>
    <TD align=middle width="23%" height=30>Number of Shares</TD>
    <TD align=middle width="54%" height=30>Consideration</TD></TR>
  <TR>
    <TD width="23%" height=4></TD>
    <TD width="23%" height=4></TD>
    <TD width="54%" height=4></TD></TR>
  <TR>
    <TD width="23%" height=30>
    <p align="center"><font size="2">Reid Li</font></TD>
    <TD align=middle width="23%" height=30><font size="2">750,000</font></TD>
    <TD width="54%" height=30><font size="2">Management services rendered to the
    Company.</font></TD></TR>
  <TR>
    <TD width="23%" height=30 align="center"><font size="2">Eric Fletcher</font></TD>
    <TD align=middle width="23%" height=30><font size="2">500,000</font></TD>
    <TD width="54%" height=30><font size="2">Management services rendered to the
    Company.</font></TD></TR>
  <TR>
    <TD width="23%" height=30><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; Total</font></TD>
    <TD align=middle width="23%" height=30><font size="2">1,250,000</font></TD>
    <TD width="54%" height=30>&nbsp;</TD></TR></TABLE></CENTER></DIV>
<P align=justify span>All options listed above expire on August 20, 2008 and
have an exercise price of $0.22.&nbsp; The Company has been advised by the  Employees
that they may sell all or a portion of their shares of common stock from time to
time through securities brokers/dealers only at current market prices and that
no commissions or compensation will be paid in connection therewith in excess of
customary brokers commissions. Advisors and the brokers and dealers through whom
sales of the shares are made may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended, (the "Securities Act"), and
any profits realized by them on the sale of the shares may be considered to be
underwriting compensation.</P>
<P align=justify span>No other person is authorized to give any information or
make any representation not contained or incorporated by reference in this
Prospectus, in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representation must not be relied upon
as having been authorized by the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the date hereof.</P>
<P align=justify span>The shares of common stock offered hereby (the &quot;Shares&quot;)
will be sold from time to time by the individuals listed under the Selling
Shareholder section of this document (the &quot;Selling Shareholder&quot;).&nbsp; The
Selling Shareholder acquired the Shares pursuant to compensatory benefit plans
for consulting and employment services that the Selling Shareholder provided to
Hubei Pharmaceutical Group Ltd.</P>
<P align=justify span>The sales may occur in transactions on the NASD
over-the-counter market at prevailing market prices or in negotiated
transactions.&nbsp; Hubei Pharmaceutical Group Ltd. will not receive proceeds from
the sale of any of the Shares.&nbsp; Hubei Pharmaceutical Group Ltd. is paying for the
expenses incurred in registering the Shares.</P>
<P align=justify span>The Shares are "restricted securities" under the
Securities Act of 1933 (the "1933 Act") before their sale under this Reoffer
Prospectus.&nbsp; This Reoffer Prospectus has been prepared for the purpose of
registering the Shares under the 1933 Act to allow for future sales by the
Selling Shareholder to the public without restriction.&nbsp; To the knowledge of
the Company, the Selling Shareholder have no arrangement with any brokerage firm
for the sale of the Shares.&nbsp; The Selling Shareholder may be deemed to be an
"underwriter" within the meaning of the 1933 Act.&nbsp; Any commissions received
by a broker or dealer in connection with resales of the Shares may be deemed to
be underwriting commissions or discounts under the 1933 Act.</P>
<P align=justify span>This Reoffer Prospectus does not constitute an offer to
sell or the solicitation of any offer to buy any security other than the
securities covered by this Prospectus, nor does it constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized, or in which the person making such offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation.</P>
<P span><I><B>Item 2. Registrant Information and Employee Plan Annual
Information.</B></I></P>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The documents containing the information specified in Part I, Items 1 and 2, will be
delivered to each of the participants in accordance with Form S-8 and Rule 428
promulgated under the Securities Act of 1933. The participants shall be provided a
written statement notifying them that upon written or oral request they will be provided,
without charge, (i) the documents incorporated by reference in Item 3 of Part II of the
registration statement, and (ii) other documents required to be delivered pursuant to Rule
428(b). The statement will inform the participants that these documents are incorporated
by reference in the Section 10(a) prospectus, and shall include the address (giving title or
department) and telephone number to which the request is to be directed.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<P align=justify span>THE COMPANY HEREBY UNDERTAKES TO FURNISH WITHOUT CHARGE TO
EACH SUCH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS DESCRIBED IN ITEM
3, PART II OF THIS REGISTRATION STATEMENT, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO MR. REID LI, 410 PARK AVENUE, 15TH
FLOOR, NEW YORK, NEW YORK 10022, (604) 881-2899.</P>
<P></P>
<P span>PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</P>
<P span><I><B>Item 3. Incorporation of Documents by Reference.</B></I></P>
<P align=justify span>The Company has filed the following documents with the
Securities and Exchange Commission within the preceding fiscal year: Quarterly
Reports on Form 10QSB, for the quarters ended April 30, 2002, July 31, 2002,
October 31, 2002, and April 30, 2003 and filed, respectively, on June 25, 2002,
September 23, 2002, December 19, 2003 and June 25, 2003 and ; Annual Report on Form 10KSB, filed
May 15, 2003 for the fiscal year ended January 31, 2003. The Company also filed reports on Form 8K on
May 15, 2002, May 28, 2002, September 23, 2002, December 10, 2002, February 4,
2003, February 7, 2003 and June 25, 2003.&nbsp; The above referenced reports, which were
previously filed with the Commission are incorporated herein by reference.</P>
<P align=justify span>All documents filed by the Company pursuant to Section 13,
or 15 (d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus. </P>
<P span><I><B>Item 4. Description of Securities</B></I></P>
<P align=justify span>The Company is authorized to issue 100,000,000 shares of
Common Stock, $0.001 par value. The Company's stock is currently traded on the OTCBB, under symbol
HBEI. The presently outstanding shares of Common Stock are
fully paid and non-assessable. </P>
<P align=justify span>COMMON STOCK&nbsp; As of July 28, 2003, approximately
27,687,700 shares of Common Stock were outstanding. </P>
<P align=justify span>VOTING RIGHTS. Each holder of the Common Stock shall be
entitled to one vote for each share of stock standing in his name on the books
of the Corporation.</P>
<P align=justify span>DIVIDEND RIGHTS. Dividends may be declared, subject to the
provisions of the laws of the State of Nevada and the Articles of Incorporation,
by the Board of Directors at any regular or special meeting and may be paid in
cash, property, shares of corporate stock, or any other medium. The Board of
Directors may fix in advance a record date, as provided in Section 1.06 of the
By-laws, prior to the dividend payment for the purposes of determining
shareholders entitled to receive payment of any dividend. The Board of Directors
may close the stock transfer books for such purpose for a period of not more
than ten (10) days prior to the payment date of such dividend.</P>
<P align=justify span>PREEMPTIVE RIGHTS. Except as may otherwise be provided by
the Board of Directors, no holder of any shares of the stock of the Corporation,
shall have any preemptive right to purchase, subscribe for, or otherwise acquire
any shares of stock of the Corporation of any class now or hereafter authorized,
or any securities exchangeable for or convertible into such shares, or any
warrants or other instruments evidencing rights or options to subscribe for,
purchase or otherwise acquire such shares.</P>
<P align=justify span>REGISTRAR AND TRANSFER AGENT:&nbsp; The Company's
registrar and transfer agent is Pacific Stock Transfer Company, 500 E. Warm
Springs Road, Suite 240, Las Vegas, Nevada 89119.</P>
<P align=justify span>DISSENTERS' RIGHTS:&nbsp; Under current Nevada law, a
shareholder is afforded dissenters' rights which, if properly exercised, may
require the Company to purchase his shares dissenters' rights commonly arise in
extraordinary transactions such as mergers, consolidations, reorganizations,
substantial asset sales, liquidating distributions, and certain amendments to
the Company's certificate of incorporation.</P>
<P span>PREFERRED STOCK&nbsp; There are no shares of preferred stock
authorized..</P>
<P span><I><B>Item 5. Interests of Named Experts and Counsel.</B></I></P>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Other than as set forth below, no named expert or counsel was hired on a contingent
basis, will receive a direct or indirect interest in the small business issuer, or was a
promoter, underwriter, voting trustee, director, officer, or employee of the Registrant.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Dieterich &amp; Associates has given an opinion on the validity of the securities being
registered hereunder. Principals in this law firm are eligible to receive shares of the
Company's common stock pursuant to this Form S-8 registration statement.</p span>
<P span><I><B>Item 6. Indemnification of Directors and Officers.</B></I></P>
<P align=justify span>Pursuant to Section 78.7502 of the Nevada Revised
Statutes, the Company has the power to indemnify any person made a party to any
lawsuit by reason of being a director or officer of the Company, or serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
actions suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.</P>
<P align=justify span>Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.</P>
<P span><I><B>Item 7. Exemption from Registration Claimed.</B></I></P>
<P align=justify span>Not applicable.</P>
<P span><I><B>Item 8. Exhibits.</B></I></P>
<P span>The following documents are filed as Exhibits to this Registration
Statement:</P>
<P span>&nbsp; 4.1 -- 2003 Stock Option Plan</P>
<P span>&nbsp; 5.1&nbsp;-- Opinion of Dieterich &amp; Associates as to the
validity of the shares being registered.</P>
<P span>23.1 -- Consent of Dieterich &amp; Associates (included in Exhibit
5.1)</P>
<P span>23.2 -- Consent of Morgan &amp; Company</P>
<P span><I><B>Item 9. Undertakings.</B></I></P>
<P span>The undersigned registrant hereby undertakes:</P>
<P align=justify span>(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.</P>
<P align=justify span>(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.</P>
<P align=justify span>(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.</P>
<P align=justify span>The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.</P>
<P align=justify span>Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Pursuant to
the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York on December 8, 2003.</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span><B>
<p span
style="TEXT-TRANSFORM: uppercase; margin-top:1; margin-bottom:1" align="center">
<u>HUBEI PHARMACEUTICAL GROUP LTD.</u></p span>
<p span
style="TEXT-TRANSFORM: uppercase; margin-top:1; margin-bottom:1" align="center">
(Registrant)</p span>
<p span
style="TEXT-TRANSFORM: uppercase; margin-top:1; margin-bottom:1" align="center">&nbsp;</p span>
<p span
style="TEXT-TRANSFORM: uppercase; margin-top:1; margin-bottom:1" align="center"></B></p span></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>By: <u>/s/
Reid Li</u><P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>
Reid Li,<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>
President<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Pursuant to
the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>By: <u>/s/
Reid Li</u><P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>
Reid Li,<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>
President<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<hr color="#808000" size="4">
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Exhibit 4.1</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<b>2003 STOCK OPTION PLAN</b></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-align: center; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>1.&nbsp;&nbsp;&nbsp; GRANT OF AWARDS GENERALLY.
</b>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">In accordance with the provisions hereinafter set forth in this stock option plan, the name
of which is the HUBEI PHARMACEUTICAL GROUP LTD.  2003 STOCK OPTION
PLAN (the &#8220;Plan&#8221;), the Board of Directors (the &#8220;Board&#8221;) or, the Compensation
Committee (the &#8220;Committee&#8221;) of the HUBEI PHARMACEUTICAL GROUP LTD. (the
&#8220;Corporation&#8221;) is hereby authorized to issue from time to time on the Corporation&#8217;s
behalf to any one or more Eligible Persons, as hereinafter defined, Awards to acquire
shares of the Corporation&#8217;s $.001 par value common stock (the &#8220;Stock&#8221;).</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>2.&nbsp;&nbsp;&nbsp; TYPE OF AWARDS</b><p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; The Board and the Committee are authorized under this Plan to enter into any type
of arrangement with a Participant that is not inconsistent with the provisions of
this Plan and that, by its terms, involves or might involve the issuance of (i) shares
of  Stock, or (ii) a Derivative Security (as such term is defined in Rule 16a-1
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as such Rule may be amended from time to time) with an
exercise or conversion privilege at a price related to the Stock or with a value
derived from the value of the Stock.  The entering into of any such arrangement is
referred to herein as the "grant" of an "Award."<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; Awards are not restricted to any specified form or structure and may include,
without limitation, sales or bonuses of stock, restricted stock, stock options
(including options which meet the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the &#8220;Code&#8221;), (&#8220;ISOs&#8221;) and options which are
not ISOs (NSOs),  reload stock options in accordance with Paragraph 8 herein
(&#8220;Reload Options&#8221;), stock purchase warrants, other rights to acquire stock,
securities convertible into or redeemable for stock, stock appreciation rights,
limited stock appreciation rights, phantom stock, dividend equivalents,
performance units or performance shares, and an Award may consist of one such
security or benefit, or two or more of them in tandem or in the alternative.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -1in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; Stock and Derivative Securities may be issued pursuant to an Award for any
lawful consideration as determined by the Board or the Committee, including,
without limitation, services rendered by the recipient of such Award.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-left: 0.5in; margin-top: 1; margin-bottom:1">&#160;</p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>3.&nbsp;&nbsp;&nbsp; AMOUNT OF STOCK.
</b>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The aggregate number of shares of Stock which may be purchased pursuant to the
exercise of Awards shall be 3,000,000 shares of Stock. Of this amount, the Board or the
Committee shall have the power and authority to designate whether any options so issued
shall be ISOs or NSOs, subject to the restrictions on ISOs contained elsewhere herein. If
an Award ceases to be exercisable, in whole or in part, the shares of Stock underlying
such option shall continue to be available under this Plan. Further, if shares of Stock are
delivered to the Corporation as payment for shares of Stock purchased by the exercise of
an Award granted under this Plan, such shares of Stock shall also be available under this
Plan. If there is any change in the number of shares of Stock on account of the declaration
of stock dividends, recapitalization resulting in stock split-ups, or combinations or
exchanges of shares of Stock, or otherwise, the number of shares of Stock available for
purchase upon the exercise of Awards, the shares of Stock subject to any Award and the
exercise price of any outstanding Awards shall be appropriately adjusted by the Board or
the Stock Option Committee. The Board or the Stock Option Committee shall give notice
of any adjustments to each Eligible Person granted an Award under this Plan, and such
adjustments shall be effective and binding on all Eligible Persons. If because of one or
more recapitalizations, reorganizations or other corporate events, the holders of
outstanding Stock receive something other than shares of Stock then, upon exercise of an
Award, the Eligible Person will receive what the holder would have owned if the holder
had exercised the Award immediately before the first such corporate event and not
disposed of anything the holder received as a result of the corporate event.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>4.&nbsp;&nbsp;&nbsp; ELIGIBLE PERSONS</b><p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; With respect to ISOs, an Eligible Person means any individual who has been
employed by the Corporation or by any subsidiary of the Corporation for a
continuous period of at least thirty (30) days.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -1in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; With respect to all other forms of Awards, an Eligible Person means (i) any
individual who has been employed by the Corporation or by any subsidiary of the
Corporation, for a continuous period of at least sixty (60) days, (ii) any director of
the Corporation or any subsidiary of the Corporation (iii) any member of the
Corporations advisory board or of any of the Corporation&#8217;s subsidiary(ies), or (iv)
any consultant of the Corporation or by any subsidiary of the Corporation.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>5.&nbsp;&nbsp;&nbsp; GRANT OF AWARDS.
</b>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Board or the Committee has the right to issue the Awards established by this Plan to
Eligible Persons. The Board or the Committee shall follow the procedures prescribed for
it elsewhere in this Plan. A grant of Awards shall be set forth in a writing signed the
Board or by a majority of the members of the Committee. The writing shall identify
whether the Award being granted includes ISOs and shall set forth the terms which
govern the Awards. The terms shall be determined by the Board or the Committee, and
may include, among other terms, the number of shares of Stock that may be acquired
pursuant to the exercise of the Awards, when the Awards may be exercised, the period for
which the Award is granted and the expiration date, the effect on the Awards if the
Eligible Person terminates employment, and whether the Eligible Person may deliver
shares of Stock to pay for the shares of Stock to be purchased by the exercise of the
Award. However, no term shall be set forth in the writing which is inconsistent with any
of the terms of this Plan. The terms of an Award granted to an Eligible Person may differ
from the terms of an Award granted to another Eligible Person, and may differ from the
terms of an earlier Option granted to the same Eligible Person.<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>6.&nbsp;&nbsp;&nbsp; EXERCISE PRICE.
</b>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The exercise price per share shall be determined by the Board or the Committee at the
time any Award is granted, and shall be not less than (i) in the case of an ISO, the fair
market value, (ii) in the case of an ISO granted to a ten percent or greater stockholder,
shall be determined by the Board, or (iii) in the case of all other Awards, not less than
75% of the fair market value (but in no event less than the par value) of one share of
Stock on the date the Award is granted, as determined by the Board or the Committee.
Fair market value as used herein shall be:</p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; If shares of Stock shall be traded on an exchange or over-the-counter market, the
closing price or the closing bid price of such Stock on such exchange or over-the-counter market on which such shares shall be traded on that date, or if such
exchange or over-the-counter market is closed or if no shares shall have traded on
such date, on the last preceding date on which such shares shall have traded, or
such other value as determined by the Board or the Committee.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; If shares of Stock shall not be traded on an exchange or over-the-counter market,
the value as determined by the Board or the Committee.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">7.&nbsp;&nbsp;&nbsp;&nbsp; PAYMENT OF EXERCISE PRICE<p span style="font-weight: bold; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; Except as otherwise provided below, payment of the exercise price for the number
of shares of Stock being purchased pursuant to any Award shall be made (i) in
cash, by certified check, or bank draft, (ii) by tender to the Corporation of shares
of Stock owned by the holder of the Award having a Fair Market Value (as
determined by the Corporation without regard to any restrictions on transferability
applicable to such stock by reason of federal or state securities laws or agreements
with an underwriter for the Corporation) not less than the exercise price, (iii) by
the assignment of the proceeds of a sale or loan with respect to some or all of the
shares being acquired upon the exercise of the Award (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "Cashless Exercise"), (iv) by the holder of the Award&#8217;s promissory
note in a form approved by the Board or the Committee, (v) by such other
consideration as may be approved by the Board or the Committee from time to
time to the extent permitted by applicable law, or (vi) by any combination thereof.
The Board or the Committee may at any time or from time to time, by adoption of
or by amendment to the standard forms of Awards described in Section 7, or by
other means, grant Awards which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or which otherwise
restrict one or more forms of consideration.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p class="BodyText2" style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; Notwithstanding the foregoing, an Award may not be exercised by tender to the
Corporation of shares of Stock to the extent such tender of Stock would constitute
a violation of the provisions of any law, regulation or agreement restricting the
redemption of the Corporation's stock.  Unless otherwise provided by the Board or
the Committee, an Award may not be exercised by tender to the Corporation of
shares of Stock unless such shares either have been owned by the holder for more
than six (6) months or were not acquired, directly or indirectly, from the
Corporation.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: 0.5in; margin-top: 1; margin-bottom:1">&#160;</p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; The Corporation reserves, at any and all times, the right, in the Corporation's sole
and absolute discretion, to establish, decline to approve or terminate any program
or procedures for the exercise of Awards by means of a Cashless Exercise.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: 1.5in; margin-top: 1; margin-bottom:1">&#160;</p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; No promissory note shall be permitted if the exercise of an Award using a
promissory note would be a violation of any law.  Any permitted promissory note
shall be on such terms as the Board or Committee shall determine. The Board and
the Committee shall have the authority to permit or require the Award holder to
secure any promissory note used to exercise an Award with the shares of Stock
acquired upon the exercise of the Award or with other collateral acceptable to the
Board or the Committee.  Unless otherwise provided by the Board or the
Committee, if the Corporation at any time is subject to the regulations
promulgated by the Board of Governors of the Federal Reserve System or any
other governmental entity affecting the extension of credit in connection with the
Corporation's securities, any promissory note shall comply with such applicable
regulations, and the Award holder shall pay the unpaid principal and accrued
interest if any, to the extent necessary to comply with such applicable regulations.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp; The Corporation shall have the right, but not the obligation, to deduct from the
shares of Stock issuable upon the exercise of any Award Option, or to accept from
the Award holder the tender of, a number of whole shares of Stock having a Fair
Market Value, as determined by the Corporation, equal to all or any part of the
federal, state, local and foreign taxes, if any, required by law to be withheld by the
Corporation with respect to such Award or the shares acquired upon the exercise
thereof.  Alternatively or in addition, in its sole discretion, the Corporation shall
have the right to require the Award holder, through payroll withholding, cash
payment or otherwise, including by means of a Cashless Exercise, to make
adequate provision for any such tax withholding obligations of the Corporation
arising in connection with the Awards or the shares of Stock acquired upon the
exercise thereof.  The Corporation shall have no obligation to deliver share of
Stock or to release shares of Stock from an escrow established pursuant to the
Award until the Corporation's tax withholding obligations have been satisfied by
the Award holder.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>8.&nbsp;&nbsp;&nbsp; GRANT OF RELOAD OPTIONS</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">In granting stock options under this Plan, the Board or the Committee may, but shall not
be obligated to, include a Reload Option provision therein, subject to the provisions set
forth in Paragraphs 20 and 21 herein. A Reload Option provision provides that if the
Eligible Person pays the exercise price of shares of Stock to be purchased by the exercise
of an Award (the &#8220;Original Option&#8221;) by delivering to the Corporation shares of Stock
already owned by the Eligible Person (the &#8220;Tendered Shares&#8221;), the Eligible Person shall
receive a Reload Option which shall be a new Option to purchase shares of Stock equal in
number to the tendered shares. The terms of any Reload Option shall be determined by
the Board or the Committee consistent with the provisions of this Plan.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>9.&nbsp;&nbsp;&nbsp; COMMITTEE</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Committee may be appointed from time to time by the Board. The Board may from
time to time remove members from or add members to the Committee. The Committee
shall be constituted so as to permit the Plan to comply in all respects with the provisions
set forth in Paragraph 20 herein. The members of the Committee may elect one to its
members as its chairman. The Committee shall hold its meetings at such time and places
as its chairman shall determine. A majority of the Committee&#8217;s members present in
person shall constitute a quorum for the transaction of business. All determinations of the
Committee will be made by the majority vote of the members constituting the quorum.
The members may participate in a meeting of the Committee by conference telephone or
similar communications equipment by means of which all members participating in the
meeting can hear each other. Participation in a meeting in that manner will constitute
presence in person at the meeting. Any decision or determination reduced to writing and
signed by all members of the Committee will be effective as if it had been made by a
majority vote of all members of the Committee at a meeting which is duly called and
held.<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>10.&nbsp;&nbsp;&nbsp; ADMINISTRATION OF PLAN</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">In addition to granting Awards and to exercising the authority granted to it elsewhere in
this Plan, the Board or the Committee is granted the full right and authority to interpret
and construe the provisions of this Plan, promulgate, amend and rescind rules and
procedures relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan, consistent,
however, with the intent of the Corporation that Awards granted or awarded pursuant to
the Plan comply with the provisions of Paragraph 20 and 21 herein. All determinations
made by the Board or the Committee shall be final, binding and conclusive on all persons
including the Eligible Person, the Corporation and its stockholders, employees, officers
and directors and consultants. No member of the Board or the Committee will be liable
for any act or omission in connection with the administration of this Plan unless it is
attributable to that member&#8217;s willful misconduct.<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>11.&nbsp;&nbsp;&nbsp; PROVISIONS APPLICABLE TO ISOs.</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The following provisions shall apply to all ISOs granted by the Board or the Committee
and shall be incorporated by reference into any writing granting an ISO:</p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; An ISO may only be granted within ten (10) years from ________________, the
date that this Plan was originally adopted by the Board.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; An ISO may not be exercised after the expiration of ten (10) years from the date
the ISO is granted.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp; The option price may not be less than the fair market value of the Stock at the
time the ISO is granted.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; An ISO is not transferable by the Eligible Person to whom it is granted except by
will, or the laws of descent and distribution, and is exercisable during his or her
lifetime only by the Eligible Person.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp; If the Eligible Person receiving the ISO owns at the time of the grant stock
possessing more than ten (10%) percent of the total combined voting power of all
classes of stock of the employer corporation or of its parent or subsidiary
corporation (as those terms are defined in the Code), then the option price shall be
at least 110% of the fair market value of the Stock, and the ISO shall not be
exercisable after the expiration of five (5) years from the date the ISO is granted.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp; The aggregate fair market value (determined at the time the ISO is granted) of the
Stock with respect to which the ISO is first exercisable by the Eligible Person
during any calendar year (under this Plan and any other incentive stock option
plan of the Corporation) shall not exceed $_________.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp; Even if the shares of Stock which are issued upon exercise of an ISO are sold
within one year following the exercise of such ISO so that the sale constitutes a
disqualifying disposition for ISO treatment under the Code, no provision of this
Plan shall be construed as prohibiting such a sale.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp; This Plan was adopted by the Corporation on __________________, by virtue of
its approval by the Board.  Approval by the stockholders of the Corporation was
obtained on __________________.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>12.&nbsp;&nbsp;&nbsp; DETERMINATION OF FAIR MARKET VALUE</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">In granting ISOs under this Plan, the Board or the Committee shall make a good faith
determination as to the fair market value of the Stock at the time of granting the ISO in
accordance with the provisions of Section 6 above.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>13.&nbsp;&nbsp;&nbsp; RESTRICTIONS ON ISSUANCE OF STOCK</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Corporation shall not be obligated to sell or issue any shares of Stock pursuant to the
exercise of an Award unless the Stock with respect to which the Award is being exercised
is at that time effectively registered or exempt from registration under the Securities Act
of 1933, as amended, and any other applicable laws, rules and regulations. The
Corporation may condition the exercise of an Award granted in accordance herewith upon
receipt from the Eligible Person, or any other purchaser thereof, of a written
representation that at the time of such exercise it is his or her then present intention to
acquire the shares of Stock for investment and not with a view to, or for sale in
connection with, any distribution thereof; except that, in the case of a legal representative
of an Eligible Person, &#8220;distribution&#8221; shall be defined to exclude distribution by will or
under the laws of descent and distribution. Prior to issuing any shares of Stock pursuant
to the exercise of an Award, the Corporation shall take such steps as it deems necessary to
satisfy any withholding tax obligations imposed upon it by any level of government.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>14.&nbsp;&nbsp;&nbsp; EXERCISE IN THE EVENT OF DEATH OR TERMINATION OF
EMPLOYMENT</b><p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp; If an Award holder shall die (i) while an employee of the Corporation or a
Subsidiary or within three months after termination of his employment with the
Corporation or a Subsidiary because of his disability, or retirement or otherwise,
his Awards may be exercised, to the extent that the Award holder shall have been
entitled to do so on the date of his death or such termination of employment by the
person or persons to whom the Award holder&#8217;s right under the Award pass by will
or applicable law, or if no such person has such right, by his executors or
administrators, at any time, or from time to time. In the event of termination of
employment because of his death while an employee or because of disability, his
Awards may be exercised not later than the expiration date specified in Paragraph
5 or one year after the Award holder&#8217;s death, whichever date is earlier, or in the
event of termination of employment because of retirement or otherwise, not later
than the expiration date specified in Paragraph 5 hereof or one year after the
Award holder&#8217;s death, whichever date is earlier.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; If an Award holder's employment by the Corporation or a Subsidiary shall
terminate because of his disability and such Award holder has not died within the
following three months, he may exercise his Awards, to the extent that he shall
have been entitled to do so at the date of the termination of his employment, at any
time, or from time to time, but not later than the expiration date specified in
Paragraph 5 hereof or one year after termination of employment, whichever date
is earlier.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp; If an Award holder&#8217;s employment shall terminate by reason of his retirement in
accordance with the terms of the Corporation&#8217;s retirement plans or with the
consent of the Board or the Committee or involuntarily other than by termination
for cause, and such Award holder had not died within the following three months,
he may exercise his Award to the extent he shall have been entitled to do so at the
date of the termination of his employment, at any time and from time to time, but
not later than the expiration date specified in Paragraph 5 hereof.<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp; If an Award holder&#8217;s employment shall terminate for cause, all right to exercise
his Awards shall terminate at the date of such termination of employment.<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent2" style="margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>15.&nbsp;&nbsp;&nbsp; CORPORATE EVENTS</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">In the event of the proposed dissolution or liquidation of the Corporation, a proposed sale
of all or substantially all of the assets of the Corporation, a merger or tender for the
Corporation&#8217;s shares of  Stock, the Board or the Committee shall declare that each Award
granted under this Plan shall terminate as of a date to be fixed by the Board; provided that
not less than thirty (30) days written notice of the date so fixed shall be given to each
Eligible Person holding an Award, and each such Eligible Person shall have the right,
during the period of thirty (30) days preceding such termination, to exercise his Award as
to all or any part of the shares of Stock covered thereby, including shares of Stock as to
which such Award would not otherwise be exercisable. Nothing set forth herein shall
extend the term set for purchasing the shares of Stock set forth in the Award.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>16.&nbsp;&nbsp;&nbsp; NO GUARANTEE OF EMPLOYMENT</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Nothing in this Plan or in any writing granting an Award will confer upon any Eligible
Person the right to continue in the employ of the Eligible Person&#8217;s employer, or will
interfere with or restrict in any way the right of the Eligible Person&#8217;s employer to
discharge such Eligible Person at any time for any reason whatsoever, with or without
cause.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>17.&nbsp;&nbsp;&nbsp; NONTRANSFERABILITY</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">No Award granted under the Plan shall be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Award holder, an Award shall be
exercisable only by him, or by his guardian or legal representative.<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>18.&nbsp;&nbsp;&nbsp; NO RIGHTS AS STOCKHOLDER</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">No Award holder shall have any rights as a stockholder with respect to any shares subject
to his Award prior to the date of issuance to him of a certificate or certificates for such
shares.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>19.&nbsp;&nbsp;&nbsp; AMENDMENT AND DISCONTINUANCE OF PLAN</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Board may amend, suspend or discontinue this Plan at any time. However, no such
action may prejudice the rights of any Eligible Person who has prior thereto been granted
Awards under this Plan. Further, no amendment to this Plan which has the effect of (a)
increasing the aggregate number of shares of Stock subject to this Plan (except for
adjustments pursuant to Paragraph 3 herein), or (b) changing the definition of Eligible
Person under this Plan, may be effective unless and until approval of the stockholders of
the Corporation is obtained in the same manner as approval of this Plan is required. The
Board is authorized to seek the approval of the Corporation&#8217;s stockholders for any other
changes it proposes to make to this Plan which require such approval, however, the Board
may modify the Plan as necessary, to effectuate the intent of the Plan as a result of any
changes in the tax, accounting or securities laws treatment of Eligible Persons and the
Plan, subject to the provisions set forth in this Paragraph 19, and Paragraphs 20 and 21.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>20.&nbsp;&nbsp;&nbsp; COMPLIANCE WITH RULE 16B-3</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">This Plan is intended to comply in all respects with Rule 16b-3 (&#8220;Rule 16b-3&#8221;)
promulgated by the Securities and Exchange Commission under the Exchange Act, with
respect to participants who are subject to Section 16 of the Exchange Act, and any
provision(s) herein that is/are contrary to Rule 16b-3 shall be deemed null and void to the
extent appropriate by either the Committee or the Board.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>21.&nbsp;&nbsp;&nbsp; COMPLIANCE WITH CODE</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The aspects of this Plan dealing with ISOs are intended to comply in every respect with
Section 422 of the Code and the regulations promulgated thereunder. in the event any
future statute or regulation shall modify the existing stature, the aspects of this Plan on
ISOs shall be deemed to incorporate by reference such modification. Any stock option
agreement relating to any ISO granted pursuant to this Plan outstanding and unexercised
at the time any modifying statute or regulation becomes effective shall also be deemed to
incorporate by reference such modification and no notice of such modification need to be
given to optionee.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">If any provision of the aspects of this Plan dealing with ISOs is determined to disqualify
the shares purchasable pursuant to the ISOs granted under this Plan from the special tax
treatment provided by Code Section 422, such provision shall be deemed null and void
and to incorporate by reference the modification required to qualify the shares for said tax
treatment.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>22.&nbsp;&nbsp;&nbsp; COMPLIANCE WITH OTHER LAWS AND REGULATIONS</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Plan, the grant and  exercise of Awards thereunder, and the obligation of the
Corporation to sell and deliver Stock under such Awards, shall be subject to all applicable
federal and state laws, rules, and regulations and to such approvals by any government or
regulatory agency as may be required. Moreover, no option may be exercised if its
exercise or the receipt of Stock pursuant thereto would be contrary to applicable laws.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>23.&nbsp;&nbsp;&nbsp; DISPOSITION OF SHARES.
</b>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">In the event any share of Stock acquired by an exercise of an Award granted under the
Plan shall be transferable other than by will or by the laws of descent and distribution
within two years of the date such Award was granted or within one year after the transfer
of such Stock pursuant to such exercise, the Award holder shall give prompt written
notice thereof to the Board or the Committee.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>24.&nbsp;&nbsp;&nbsp; NAME.
</b>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Plan shall be known as the &#8220;HUBEI PHARMACEUTICAL GROUP LTD. 2003
Stock Option Plan.&#8221;</p span>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>25.&nbsp;&nbsp;&nbsp; NOTICES</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Any notice hereunder shall be in writing and sent by certified mail, return receipt
requested or by facsimile transmission (with electronic or written confirmation of receipt)
and when addressed to the Corporation shall be sent to it at its office, 410 Park Avenue,
15<sup>th</sup> Floor, New York, New York 10022, subject to the right of either party to designate at
any time hereafter in writing some other address, facsimile number or person to whose
attention such notice shall be sent.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>26.&nbsp;&nbsp;&nbsp; HEADINGS</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The headings preceding the text of Sections and subparagraphs hereof are inserted solely
for convenience of reference, and shall not constitute a part of this Plan nor shall they
affect its meaning, construction or effect.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 11pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"><b>27.&nbsp;&nbsp;&nbsp; EFFECTIVE DATE</b><p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p class="Indent1" style="text-indent: -0.5in; margin-left: 0.5in; margin-top: 1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Plan, was adopted by the Board on _______________. The effective date of the Plan
shall be _____________, the date on which the Plan was approved by the stockholders of
the Corporation.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Dated as of _________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">HUBEI PHARMACEUTICAL GROUP LTD. </p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="text-indent: -0.5in; margin-left: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">By: /s/ Reid Li&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p>
<p style="margin-top: 1; margin-bottom: 1">Reid Li,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p>
<p style="margin-top: 1; margin-bottom: 1">President</p>
<hr>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;</p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">THE SECURITIES ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THAT ACT OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF
COUNSEL (WHICH COUNSEL AND OPINION SHALL BE SATISFACTORY TO THE
COMPANY) THAT REGISTRATION OF SUCH SECURITIES UNDER THAT ACT
AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>HUBEI PHARMACEUTICAL GROUP LTD.</b></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1" align="center">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="margin-top: 1; margin-bottom: 1" align="center"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT</b></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1" align="center">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="margin-top: 1; margin-bottom: 1" align="center"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>PURSUANT TO THE </b>
</p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1" align="center">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="margin-top: 1; margin-bottom: 1" align="center"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>2003 STOCK OPTION PLAN</b></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p class="BodyText2" style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-weight: bold; margin-top:1; margin-bottom:1">
<p span style="font-size: 10pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">This Employee Incentive Stock Option Agreement (this "Agreement") is made and entered into
as of the Date of Grant indicated below by and between Hubei Pharmaceutical Group Ltd., a
Nevada corporation (the "Company"), and the person named below as Employee.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">WHEREAS, Employee is an employee of the Company and/or one or more of its subsidiaries;
and</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">WHEREAS, pursuant to the 2003 Stock Option Plan (the "Plan"), the committee of the Board of
Directors of the Company administering the Plan (the "Administrator") has approved the grant to
Employee of an option to purchase shares of the Common Stock of the Company (the "Common
Stock"), on the terms and conditions set forth herein;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set forth
herein, the parties hereto hereby agree as follows:</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">1.&nbsp;&nbsp;&nbsp; Grant of Option; Certain Terms and Conditions.  The Company hereby grants to
Employee, and Employee hereby accepts, as of the Date of Grant, an option to purchase the
number of shares of Common Stock indicated below (the "Option Shares") at the Exercise Price
per share indicated below, which option shall expire at 5:00 p.m., Pacific time, on the Expiration
Date indicated below and shall be subject to all of the terms and conditions set forth in this
Agreement (the "Option").  On each anniversary of the Date of Grant, the Option shall become
exercisable to purchase ("vest with respect to") that number of Option Shares (rounded to the
nearest whole share) equal to the total number of Option Shares multiplied by the Annual Vesting
Rate indicated below.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Employee: ______________________<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Date of Grant:&nbsp; ______________________
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Number of shares purchasable: ______________________<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Exercise Price per share:* ______________________<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Expiration Date:* ______________________
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
</p>
<p style="margin-top: 1; margin-bottom: 1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Annual Vesting Rate:&nbsp; ______________________
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1">
<br>
<br>
</p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">The Option is intended to qualify as an incentive stock option under Section 422 of the Internal
Revenue Code (an "Incentive Stock Option").  Employee understands that if the aggregate Fair
Market Value (as defined in the Plan and determined as of the date such options are granted) of
the shares of Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by Employee during any calendar year (under the Plan and all other stock option
plans of the Company and its parent and subsidiary corporations) exceeds $_________, such
excess options (taking into account the order in which they were granted) shall not be treated for
tax purposes as Incentive Stock Options.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">2.&nbsp;&nbsp;&nbsp;
<u>Acceleration of Vesting and Termination of Option</u>.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;
<u>Termination of Employment</u>.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)<i>&nbsp;&nbsp;&nbsp; Retirement</i>.  If Employee ceases to be employed by reason of Employee's retirement in
accordance with the Company's then-current retirement policy ("Retirement"), then (A) the
portion of the Option that has not vested on or prior to the date of such Retirement shall terminate
on such date and (B) the remaining vested portion of the Option shall terminate upon the earlier
of the Expiration Date or the first anniversary of the date of such Retirement.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp; <i>Death or Permanent Disability</i>.  If Employee ceases to be employed by reason of
Employee's death or Permanent Disability (as hereinafter defined), then (A) the portion of the
Option that has not vested on or prior to the date of Employee's death or Permanent Disability
shall terminate on such date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the first anniversary of the date of Employee's death or
Permanent Disability.  "Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.  Employee shall not be deemed to have a
Permanent Disability until proof of the existence thereof shall have been furnished to the Board
in such form and manner, and at such times, as the Board may require.  Any determination by
the Board that Employee does or does not have a Permanent Disability shall be final and binding
upon the Company and Employee.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)<i>&nbsp;&nbsp;&nbsp; Termination for Cause</i>.  If Employee is terminated for Cause, both the vested and
unvested portions of the Option shall terminate immediately.  "Cause" shall mean Employee's (A)
conviction by a court of competent jurisdiction of a felony or serious misdemeanor involving
moral turpitude, (B) willful disregard of any written directive of the Board that is not inconsistent
with the Articles of Incorporation or Bylaws of the Company or applicable law, (C) breach of his
or her fiduciary duty involving personal profit, or (D) neglect of his or her duties that has a
material adverse effect on the Company.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)<i>&nbsp;&nbsp;&nbsp; Other Termination</i>.  If Employee is terminated without Cause or if the Employee
otherwise terminates his/her employment with the Company (other than pursuant to clauses (i),
(ii) and (iii) above), then (A) the portion of the Option that has not vested on or prior to the date
of such termination of employment shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date or the 90th day
following the date of such termination of employment; provided, however, that if Employee is
terminated without Cause within one year after a Change of Control, then (x) the portion of the
Option that has not vested on or prior to the date on which Employee is terminated shall fully
vest as of such date and (y) the Option shall terminate upon the earlier of the Expiration Date or
the 90th day following the date on which Employee is terminated.  A "Change of Control" shall
mean the first to occur of the following:<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;&nbsp; the date upon which the directors of the Company who were nominated by the Board for
election as directors cease to constitute a majority of the directors of the Company;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;&nbsp; the consummation of a reorganization, merger or consolidation of the Company (other
than a reorganization, merger or consolidation the sole purpose of which is to change the
Company's domicile solely within the United States) (a) as a result of which the outstanding
securities of the class then subject to the Option are exchanged for or converted into cash,
property and/or securities not issued by the Company and (b) the terms of which provide that the
Option shall continue in effect thereafter; or<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&#160;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;&nbsp; the date of the first public announcement that any person or entity, together with all
Affiliates and Associates (as such capitalized terms are defined in Rule 12b-2 promulgated under
the Exchange Act of 1934, as amended (the "Exchange Act")) of such person or entity, shall have
become the Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of
voting securities of the Company representing more than 50% of the voting power of the
Company (a "50% Stockholder"); provided, however, that the term "50% Stockholder" shall not
include (a) the Company or any of its subsidiaries, (b) any employee benefit plan of the Company
or any of its subsidiaries, (c) any entity holding voting securities of the Company for or pursuant
to the terms of any such plan, (d) any person or entity who owned beneficially more than 15% of
the outstanding voting stock of the Company prior to such date on which the Company is
required, if at all, to become a reporting company pursuant to Sections 12 or 15 of the Exchange
Act, or (e) any person or entity if the transaction that resulted in such person or entity becoming a
50% Stockholder was approved in advance by the Board.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;
<u>Death Following Termination of Employment</u>.  Notwithstanding anything to the contrary
in this Agreement, if Employee shall die at any time after the termination of his or her
employment and prior to the date on which the Option is terminated pursuant to Section 2(a),
then the vested portion of the Option shall terminate on the earlier of the Expiration Date or the
first anniversary of the date of Optionee's death.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;
<u>Acceleration of Option by Administrator</u>.  The Administrator, in its sole discretion, may
accelerate the exercisability of the Option at any time and for any reason.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;
<u>Other Events Causing Acceleration and Termination of Option</u>.  Notwithstanding
anything to the contrary in this Agreement, the Option shall become fully exercisable
immediately prior to, and shall terminate upon, the consummation of any of the following events:<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p style="margin-top: 1; margin-bottom: 1">&#160;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp; the dissolution or liquidation of the Company;</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp; a reorganization, merger or consolidation of the Company (other than a
reorganization, merger or consolidation the sole purpose of which is to change the Company's
domicile solely within the United States) the consummation of which results in the outstanding
securities of any class then subject to the Option being exchanged for or converted into cash,
property and/or a different kind of securities, unless such reorganization, merger or consolidation
shall have been affirmatively recommended to the shareholders of the Company by the Board and
the terms of such reorganization, merger or consolidation shall provide that the Option shall
continue in effect thereafter on terms substantially similar to those under the Plan; or</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp; a sale of all or substantially all of the property and assets of the Company, unless the
Terms of such sale shall provide otherwise.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p>
<p style="margin-top: 1; margin-bottom: 1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;
<u>Suspension of Vesting on Leave from employment</u>. If for any reason an
employee takes a leave without pay then no vesting will occur during the &#8220;leave&#8221;.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">3.&nbsp;&nbsp;&nbsp;
<u>Adjustments</u>.  In the event that the outstanding securities of the class then subject to the
Option are increased, decreased or exchanged for or converted into cash, property and/or a
different number or kind of securities, or cash, property and/or securities are distributed in
respect of such outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then, unless such event shall
cause the Option to terminate pursuant to Section 2(d) hereof, the Administrator shall make
appropriate and proportionate adjustments in the number and type of shares or other securities or
cash or other property that may thereafter be acquired upon the exercise of the Option; provided,
however, that any such adjustments in the Option shall be made without changing the aggregate
Exercise Price of the then unexercised portion of the Option.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">4.&nbsp;&nbsp;&nbsp;
<u>Exercise</u>.  The Option shall be exercisable during Employee's lifetime only by Employee
or by his or her guardian or legal representative, and after Employee's death only by the person or
entity entitled to do so under Employee's last will and testament or applicable intestate law.  The
Option may only be exercised by the delivery to the Company of a written notice of such exercise
(the "Exercise Notice"), which notice shall specify the number of Option Shares to be purchased
(the "Purchased Shares") and the aggregate Exercise Price for such shares, together with payment
in full of such aggregate Exercise Price in cash or by check payable to the Company; provided,
however, that payment of such aggregate Exercise Price may instead be made, in whole or in
part, by one or more of the following means:<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; by the delivery to the Company of a promissory note in a form and amount satisfactory to
the Administrator, provided that the principal amount of such note shall not exceed the excess of
such aggregate Exercise Price over and above the aggregate par value of the Purchased Shares; or<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; by (i) the delivery to the Company of a certificate or certificates representing shares of
Common Stock, duly endorsed or accompanied by a duly executed stock powers, which delivery
effectively transfers to the Company good and valid title to such shares, free and clear of any
pledge, commitment, lien, claim or other encumbrance (such shares to be valued on the basis of
the aggregate Fair Market Value (as defined in the Plan) thereof on the date of such exercise)
and/or (ii) "pyramiding" of shares issuable upon exercise of the Option, provided that the
Company is not then prohibited from purchasing or acquiring such shares of Common Stock.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">5.&nbsp;&nbsp;&nbsp;
<u>Payment of Withholding Taxes</u>.  If the Company becomes obligated to withhold an
amount on account of any tax imposed as a result of the exercise of the Option, including,
without limitation, any federal, state, local or other income tax, or any F.I.C.A., state disability
insurance tax or other employment tax (the "Withholding Liability"), then Employee shall, on the
date of exercise and as a condition to the issuance of the Option Shares, pay the Withholding
Liability to the Company in cash or by check payable to the Company.  Employee hereby
consents to the Company withholding the full amount of the Withholding Liability from any
compensation or other amounts otherwise payable to Employee if Employee does not pay the
Withholding Liability to the Company on the date of exercise of the Option, and Employee agrees
that the withholding and payment of any such amount by the Company to the relevant taxing
authority shall constitute full satisfaction of the Company's obligation to pay such compensation
or other amounts to Employee.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">6.&nbsp;&nbsp;&nbsp;
<u>Notices</u>.  All notices and other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given if delivered personally
or five days after mailing by certified or registered mail, postage prepaid, return receipt
requested, to the Company, Attention:  President, or to Employee at the address set forth beneath
his or her signature on the signature page hereto, or at such other addresses as they may designate
by written notice in the manner aforesaid.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">7.&nbsp;&nbsp;&nbsp;
<u>Stock Exchange or NASDAQ Requirements; Applicable Laws</u>.  Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be issued or delivered
if (a) such shares have not been admitted to listing upon official notice of issuance on each stock
exchange upon which shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of or to incur
liability under any federal, state or other securities law, or any requirement of any stock exchange
listing agreement to which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.  If required by the
Company, at the time of exercise, Employee shall give to the Company satisfactory assurance in
writing, signed by Employee or his or her legal representative, such assurances as may be
required in order to comply with the provisions of the Securities Act of 1933, as amended or
other applicable securities laws.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">8.&nbsp;&nbsp;&nbsp;
<u>Nontransferability</u>.  Neither the Option nor any interest therein may be sold, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other than by
will or the laws of descent and distribution.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">9.&nbsp;&nbsp;&nbsp;
<u>Plan</u>.  The Option is granted pursuant to the Plan, as in effect on the Date of Grant, and is
subject to all the terms and conditions of the Plan, as the same may be amended from time to
time; provided, however, that no such amendment shall deprive Employee, without his or her
consent, of the Option or of any of Employee's rights under this Agreement.  The interpretation
and construction by the Administrator of the Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Administrator for the purpose of administering the Plan
shall be final and binding upon Employee.  Until the Option shall expire, terminate or be
exercised in full, the Company shall, upon written request therefor, send a copy of the Plan, in its
then-current form, to Employee or any other person or entity then entitled to exercise the Option.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">10.&nbsp;&nbsp;&nbsp;
<u>Shareholder Rights</u>.  No person or entity shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of any Option Shares until the Option shall have been duly
exercised to purchase such Option Shares in accordance with the provisions of this Agreement.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">11.&nbsp;&nbsp;&nbsp;
<u>Employment Rights</u>.  No provision of this Agreement or of the Option granted hereunder
shall (a) confer upon Employee any right to continue in the employ of the Company or any of its
subsidiaries, (b) affect the right of the Company and each of its subsidiaries to terminate the
employment of Employee, with or without cause, or (c) confer upon Employee any right to
participate in any employee welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the Plan.  Employee hereby acknowledges and agrees that the Company
and each of its subsidiaries may terminate the employment of Employee at any time and for any
reason, or for no reason, unless Employee and the Company or such subsidiary are parties to a
written employment agreement that expressly provides otherwise.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p>
<p style="margin-top: 1; margin-bottom: 1">12.&nbsp;&nbsp;&nbsp; <u>Governing Law</u>.  This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the internal laws of the State of
Nevada.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">IN WITNESS WHEREOF, the Company and Employee have duly executed this Agreement as of
the Date of Grant.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">NAME_________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">By:_______________________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Title:</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">OPTIONEE:</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">__________________________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Signature</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">__________________________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Street Address</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">__________________________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">City, State and Zip Code</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
__________________________________<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Social Security Number</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">NOTE:</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">*The Expiration Date shall not be more than 10 years after the Date of Grant and the
Exercise Price per share shall not be less than the Fair Market Value (as defined in the Plan) per
share on the Date of Grant; provided, however, that if, on the Date of Grant, Employee owns
(after application of the family and other attribution rules of Section 425(d) of the Internal
Revenue Code) more than 10% of the total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporations, then the Expiration Date shall not be more
than five years after the Date of Grant and the Exercise Price per share shall not be less than
110% of the Fair Market Value per share on the Date of Grant.<hr>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">THE SECURITIES ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT ACT OR THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL (WHICH COUNSEL
AND OPINION SHALL BE SATISFACTORY TO THE COMPANY) THAT REGISTRATION
OF SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-align: center; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<b>HUBEI PHARMACEUTICAL GROUP LTD. </b> </p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center"></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1" align="center">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<p span style="margin-top: 1; margin-bottom: 1" align="center"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT</b></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1" align="center">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<p span style="margin-top: 1; margin-bottom: 1" align="center"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>PURSUANT TO THE </b>
</p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="margin-top: 1; margin-bottom: 1" align="center"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1" align="center">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1" align="center">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1" align="center">
<p span style="margin-top: 1; margin-bottom: 1" align="center"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></p span>
<p style="margin-top: 1; margin-bottom: 1" align="center"><b>2003 STOCK OPTION PLAN</b></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">This Employee Non-qualified Stock Option Agreement (this "Agreement") is made and entered
into as of the Date of Grant indicated below by and between Hubei Pharmaceutical Group Ltd., a
Nevada corporation (the "Company"), and the person named below as Employee.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">WHEREAS, Employee is an employee of the Company and/or one or more of its subsidiaries;
and</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">WHEREAS, pursuant to the 2003 Stock Option Plan (the "Plan"), the committee of the Board of
Directors of the Company administering the Plan (the "Administrator") has approved the grant to
Employee of an option to purchase shares of the Common Stock of the Company (the "Common
Stock"), on the terms and conditions set forth herein;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set forth
herein, the parties hereto hereby agree as follows:</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">1.&nbsp;&nbsp;&nbsp;
<u>Grant of Option; Certain Terms and Conditions</u>.  The Company hereby grants to Employee,
and Employee hereby accepts, as of the Date of Grant, an option to purchase the number of
shares of Common Stock indicated below (the "Option Shares") at the Exercise Price per share
indicated below, which option shall expire at 5:00 p.m., Pacific time, on the Expiration Date
indicated below and shall be subject to all of the terms and conditions set forth in this Agreement
(the "Option").  At the end of each month after the Date of Grant, the Option shall become
exercisable to purchase ("vest with respect to") that number of Option Shares (rounded to the
nearest whole share) equal to the total number of Option Shares multiplied by the Monthly
Vesting Rate indicated below.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">Employee:<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">______________________</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">Date of Grant:<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">______________________</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">Number of shares purchasable:<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">______________________</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">Exercise Price per share:
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">______________________</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">Expiration Date:
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">______________________</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">Monthly Vesting Rate:
<p span style="margin-top: 1; margin-bottom: 1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1">______________________%</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">The Option is not intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">2.&nbsp;&nbsp;&nbsp;
<u>Acceleration and Suspension of Vesting and Termination of Option</u>.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-left: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;
<u>Termination of Employment</u>.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-left: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1.5in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)<i>&nbsp;&nbsp;&nbsp; Retirement</i>.  If Employee ceases to be employed by reason
of Employee's retirement in accordance with the Company's then-current retirement
policy ("Retirement"), then (A) the portion of the Option that has not vested on or prior to
the date of such Retirement shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date or the first
anniversary of the date of such Retirement.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-left: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1.5in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp; <i>Death or Permanent Disability</i>.  If Employee ceases  to be
employed by reason of Employee's death or Permanent Disability (as hereinafter defined),
then (A) the portion of the Option that has not vested on or prior to the date of Employee's
death or Permanent Disability shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date or the first
anniversary of the date of Employee's death or Permanent Disability.  "Permanent
Disability" shall mean the inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be expected to
result in death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.  Employee shall not be deemed to have a Permanent Disability
until proof of the existence thereof shall have been furnished to the Board in such form
and manner, and at such times, as the Board may require.  Any determination by the
Board that Employee does or does not have a Permanent Disability shall be final and
binding upon the Company and Employee.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-left: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1.5in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)<i>&nbsp;&nbsp;&nbsp; Termination for Cause</i>.  If Employee is terminated for
Cause, both the vested and unvested portions of the Option shall terminate immediately.
"Cause" shall mean Employee's (A) conviction by a court of competent jurisdiction of a
felony or serious misdemeanor involving moral turpitude, (B) willful disregard of any
written directive of the Board that is not inconsistent with the Articles of Incorporation or
Bylaws of the Company or applicable law, (C) breach of his or her fiduciary duty
involving personal profit, or (D) neglect of his or her duties that has a material adverse
effect on the Company.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-left: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1.5in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)<i>&nbsp;&nbsp;&nbsp; Other Termination</i>.  If Employee is terminated without
Cause or if the Employee otherwise terminates his/her employment with the Company
(other than pursuant to clauses (i), (ii) and (iii) above), then (A) the portion of the Option
that has not vested on or prior to the date of such termination of employment shall
terminate on such date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the 90th day following the date of such
termination of employment; provided, however, that if Employee is terminated without
Cause within one year after a Change of Control, then (x) the portion of the Option that
has not vested on or prior to the date on which Employee is terminated shall fully vest as
of such date and (y) the Option shall terminate upon the earlier of the Expiration Date or
the 90th day following the date on which Employee is terminated.  A "Change of Control"
shall mean the first to occur of the following:<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-left: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;&nbsp; the date upon which the directors of the Company who were
nominated by the Board for election as directors cease to constitute a majority of the
directors of the Company;<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;&nbsp; the consummation of a reorganization, merger or consolidation of
the Company (other than a reorganization, merger or consolidation the sole purpose of
which is to change the Company's domicile solely within the United States) (a) as a result
of which the outstanding securities of the class then subject to the Option are exchanged
for or converted into cash, property and/or securities not issued by the Company and (b)
the terms of which provide that the Option shall continue in effect thereafter; or<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-left: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&#160;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;&nbsp; the date of the first public announcement that any person or entity,
together with all Affiliates and Associates (as such capitalized terms are defined in Rule
12b-2 promulgated under the Exchange Act of 1934, as amended (the "Exchange Act"))
of such person or entity, shall have become the Beneficial Owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of voting securities of the Company
representing more than 50% of the voting power of the Company (a "50% Shareholder");
provided, however, that the term "50% Shareholder" shall not include (a) the Company or
any of its subsidiaries, (b) any employee benefit plan of the Company or any of its
subsidiaries, (c) any entity holding voting securities of the Company for or pursuant to the
terms of any such plan, (d) any person or entity who owned beneficially more than 15%
of the outstanding voting stock of the Company prior to such date on which the Company
is required, if at all, to become a reporting company pursuant to Sections 12 or 15 of the
Exchange Act, or (e) any person or entity if the transaction that resulted in such person or
entity becoming a 50% Shareholder was approved in advance by the Board.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;
<u>Death Following Termination of Employment</u>.  Notwithstanding anything
to the contrary in this Agreement, if Employee shall die at any time after the termination of his or
her employment and prior to the date on which the Option is terminated pursuant to Section 2(a),
then the vested portion of the Option shall terminate on the earlier of the Expiration Date or the
first anniversary of the date of Optionee's death.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;
<u>Acceleration of Option by Administrator</u>.  The Administrator, in its sole
discretion, may accelerate the exercisability of the Option at any time and for any reason.
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;
<u>Other Events Causing Acceleration and Termination of Option</u>.
Notwithstanding anything to the contrary in this Agreement, the Option shall become fully
exercisable immediately prior to, and shall terminate upon, the consummation of any of the
following events:<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1.5in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp; the dissolution or liquidation of the Company;<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p class="BodyText2" style="border:medium none; text-indent: 1.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 10pt; margin-top:1; margin-bottom:1"></p span>
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp; a reorganization, merger or consolidation of the Company (other
than a reorganization, merger or consolidation the sole purpose of which is to change the
Company's domicile solely within the United States) the consummation of which results in the
outstanding securities of any class then subject to the Option being exchanged for or converted
into cash, property and/or a different kind of securities, unless such reorganization, merger or
consolidation shall have been affirmatively recommended to the shareholders of the Company by
the Board and the terms of such reorganization, merger or consolidation shall provide that the
Option shall continue in effect thereafter on terms substantially similar to those under the Plan; or<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; text-indent: 1.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1"></p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp; a sale of all or substantially all of the property and assets of the
Company, unless the terms of such sale shall provide otherwise.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</p>
<p style="margin-top: 1; margin-bottom: 1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp;&nbsp;&nbsp; Suspension of Vesting on Leave from Employment.  If for any reason
an employee takes a leave without pay then no vesting will occur during the &#8220;leave&#8221;.</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">3.&nbsp;&nbsp;&nbsp;
<u>Adjustments</u>.  In the event that the outstanding securities of the class then subject
to the Option are increased, decreased or exchanged for or converted into cash, property and/or a
different number or kind of securities, or cash, property and/or securities are distributed in
respect of such outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then, unless such event shall
cause the Option to terminate pursuant to Section 2(d) hereof, the Administrator shall make
appropriate and proportionate adjustments in the number and type of shares or other securities or
cash or other property that may thereafter be acquired upon the exercise of the Option; provided,
however, that any such adjustments in the Option shall be made without changing the aggregate
Exercise Price of the then unexercised portion of the Option.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">4.&nbsp;&nbsp;&nbsp;
<u>Exercise</u>.  The Option shall be exercisable during Employee's lifetime only by
Employee or by his or her guardian or legal representative, and after Employee's death only by
the person or entity entitled to do so under Employee's last will and testament or applicable
intestate law.  The Option may only be exercised by the delivery to the Company of a written
notice of such exercise (the "Exercise Notice"), which notice shall specify the number of Option
Shares to be purchased (the "Purchased Shares") and the aggregate Exercise Price for such
shares, together with payment in full of such aggregate Exercise Price in cash or by check
payable to the Company; provided, however, that payment of such aggregate Exercise Price may
instead be made, in whole or in part, by one or more of the following means:<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp; by the delivery to the Company of a promissory note in a form and amount
satisfactory to the Administrator, provided that the principal amount of such note shall not exceed
the excess of such aggregate Exercise Price over and above the aggregate par value of the
Purchased Shares; or<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 1in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp; by (i) the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly executed stock
powers, which delivery effectively transfers to the Company good and valid title to such shares,
free and clear of any pledge, commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value (as defined in the Plan) thereof on the
date of such exercise) and/or (ii) "pyramiding" of shares issuable upon exercise of the Option,
provided that the Company is not then prohibited from purchasing or acquiring such shares of
Common Stock.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">5.&nbsp;&nbsp;&nbsp;
<u>Payment of Withholding Taxes</u>.  If the Company becomes obligated to withhold
an amount on account of any tax imposed as a result of the exercise of the Option, including,
without limitation, any federal, state, local or other income tax, or any F.I.C.A., state disability
insurance tax or other employment tax (the "Withholding Liability"), then Employee shall, on the
date of exercise and as a condition to the issuance of the Option Shares, pay the Withholding
Liability to the Company in cash or by check payable to the Company.  Employee hereby
consents to the Company withholding the full amount of the Withholding Liability from any
compensation or other amounts otherwise payable to Employee if Employee does not pay the
Withholding Liability to the Company on the date of exercise of the Option, and Employee agrees
that the withholding and payment of any such amount by the Company to the relevant taxing
authority shall constitute full satisfaction of the Company's obligation to pay such compensation
or other amounts to Employee.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">6.&nbsp;&nbsp;&nbsp;
<u>Notices</u>.  All notices and other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given if delivered personally
or five days after mailing by certified or registered mail, postage prepaid, return receipt
requested, to the Company, Attention: President, or to Employee at the address set forth beneath
his or her signature on the signature page hereto, or at such other addresses as they may designate
by written notice in the manner aforesaid.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">7.&nbsp;&nbsp;&nbsp;
<u>Stock Exchange or NASDAQ Requirements; Applicable Laws</u>.  Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be issued or delivered
if (a) such shares have not been admitted to listing upon official notice of issuance on each stock
exchange upon which shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of or to incur
liability under any federal, state or other securities law, or any requirement of any stock exchange
listing agreement to which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.  If required by the
Company, at the time of exercise, Employee shall give to the Company satisfactory assurance in
writing, signed by Employee or his or her legal representative, such assurances as may be
required in order to comply with the provisions of the Securities Act of 1933, as amended or
other applicable securities laws.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">8.&nbsp;&nbsp;&nbsp;
<u>Nontransferability</u>.  Neither the Option nor any interest therein may be sold,
assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other
than by will or the laws of descent and distribution.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">9.&nbsp;&nbsp;&nbsp;
<u>Plan</u>.  The Option is granted pursuant to the Plan, as in effect on the Date of Grant,
and is subject to all the terms and conditions of the Plan, as the same may be amended from time
to time; provided, however, that no such amendment shall deprive Employee, without his or her
consent, of the Option or of any of Employee's rights under this Agreement.  The interpretation
and construction by the Administrator of the Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Administrator for the purpose of administering the Plan
shall be final and binding upon Employee.  Until the Option shall expire, terminate or be
exercised in full, the Company shall, upon written request therefor, send a copy of the Plan, in its
then-current form, to Employee or any other person or entity then entitled to exercise the Option.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">10.&nbsp;&nbsp;&nbsp;
<u>Shareholder Rights</u>.  No person or entity shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of any Option Shares until the Option shall
have been duly exercised to purchase such Option Shares in accordance with the provisions of
this Agreement.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">11.&nbsp;&nbsp;&nbsp;
<u>Employment Rights</u>.  No provision of this Agreement or of the Option granted
hereunder shall (a) confer upon Employee any right to continue in the employ of the Company or
any of its subsidiaries, (b) affect the right of the Company and each of its subsidiaries to
terminate the employment of Employee, with or without cause, or (c) confer upon Employee any
right to participate in any employee welfare or benefit plan or other program of the Company or
any of its subsidiaries other than the Plan.  Employee hereby acknowledges and agrees that the
Company and each of its subsidiaries may terminate the employment of Employee at any time
and for any reason, or for no reason, unless Employee and the Company or such subsidiary are
parties to a written employment agreement that expressly provides otherwise.<p style="margin-top: 1; margin-bottom: 1">
</p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">12.&nbsp;&nbsp;&nbsp;
<u>Governing Law</u>.  This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the internal laws of the State of
Nevada.<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; text-indent: 0.5in; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of Grant.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">NAME_________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">&#160;</p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">By:___________________________</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="border:medium none; margin-top:1; margin-bottom:1">
<p span style="font-family: 'Times New Roman', serif; margin-top:1; margin-bottom:1">
<p span style="font-size: 12pt; margin-top:1; margin-bottom:1">Title:</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-top: 1; margin-bottom: 1"></p>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<hr>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Exhibit
5.1</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center
span>
<B>DIETERICH &amp; ASSOCIATES LETTERHEAD</B></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>December 8,
2003</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Securities and
Exchange Commission</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>450 Fifth
Street, N.W.</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Judiciary
Plaza</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Washington, DC
20549</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>&nbsp;&nbsp;&nbsp; Re:&nbsp; Hubei Pharmaceutical Group Ltd.</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Ladies and
Gentlemen:</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>&nbsp;&nbsp;&nbsp;  </P>
<p span style="font-family: 'Times New Roman'; font-size:12pt; margin-top:1; margin-bottom:1">We refer to the Registration Statement on Form S-8 (the "Registration Statement") to be
filed by HUBEI PHARMACEUTICAL GROUP LTD. ("Company") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"). The Registration
Statement relates to an aggregate of 4,250,000 shares of the Common Stock of the
Company (the &quot;Shares&quot;) to be issued upon the exercise of common stock
options issued to various individuals and pursuant to the 2003 Amended Employee Stock Option Plan.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1" align="justify">
<p span style="font-family: 'Times New Roman'; font-size:12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1" align="justify">
<p span style="font-family: 'Times New Roman'; font-size:12pt; margin-top:1; margin-bottom:1">As counsel for the Company, we have examined such corporate records, documents and
such question of law as we have considered necessary or appropriate for purposes of this
opinion and, upon the basis of such examination, advise you that in our opinion, all
necessary corporate proceedings by the Company have been duly taken to authorize the
issuance of the Shares and that the Shares being registered pursuant to the Registration
Statement, when issued will be duly authorized, legally issued, fully paid and non-assessable. This opinion does not cover any matters related to any re-offer or re-sale of
the shares by and Plan Beneficiaries, once properly and legally issued pursuant to the
Plan as described in the Registration Statement.</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1" align="justify">
<p span style="font-family: 'Times New Roman'; font-size:12pt; margin-top:1; margin-bottom:1">&#160;</p span>
<p style="margin-top: 1; margin-bottom: 1"></p>
<p style="margin-bottom: 1; margin-top: 1" align="justify">
<p span style="font-family: 'Times New Roman'; font-size:12pt; margin-top:1; margin-bottom:1">We hereby consent to the filing of this opinion as an exhibit to the Registration
Statement. This consent is not to be construed as an admission that we are a person
whose consent is required to be filed with the Registration Statement under the
provisions of the Act. This opinion is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our prior written consent. This opinion is based
on our knowledge of the law and facts as of the date hereof. This opinion does not
address or relate to any specific state securities laws. We assume no duty to communicate
with the Company in respect to any matter, which comes to our attention hereafter.</p span>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Very truly
yours,</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>/s/
Christopher Dieterich</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>Dieterich
&amp; Associates</P>
<hr color="#808000" size="4">
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>Exhibit 23.1</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp; &nbsp;
Included within Exhibit 5.1 (Opinion of Counsel)</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<hr color="#808000" size="4">
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>Exhibit 23.2</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=center
span><b>INDEPENDENT AUDITOR'S CONSENT</b></P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>We consent to the incorporation by reference in the Registration Statement
of Hubei Pharmaceutical Group Ltd. on Form S-8 relating to the registration of
4,250,000 common share to be issued to various employees upon the exercise of
common stock options and pursuant to the 2003 Stock Option Plan, of our Auditors' Report,
dated April 29, 2003, on the balance sheets of Hubei Pharmaceutical Group Ltd.
as at January 31, 2003 and 2002, and the related statements of loss and deficit
accumulated during the development stage, cash flows, and stockholders' equity
for the years ended January 31, 2003 and 2002, and for the period from
inception, December 18, 1998 to January 31, 2003.</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>&nbsp;</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>Vancouver, Canada&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
/s/ Morgan &amp; Company</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify
span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Chartered Accountants</P>
<P style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px" align=justify span>December 8,
2003</P></BODY></HTML>
[{"type": "S-8", "sequence": "1", "filename": "hubeiesop.htm", "secsgml_size_bytes": 231145}]
{"company-data": {"conformed-name": "HUBEI PHARMACEUTICAL GROUP LTD", "cik": "0001009919", "assigned-sic": "1090", "irs-number": "880419476", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-111023", "film-number": "031044338"}, "business-address": {"street1": "SUITE 201-1166 ALBERNI STREET", "city": "VANCOUVER BRITISH CO", "state": "A1"}, "mail-address": {"street1": "SUITE 201-1166 ALBERNI STREET", "city": "VANCOUVER BRITISH CO", "state": "A1", "zip": "999999999"}, "former-company": {"former-conformed-name": "PAN ASIA COMMUNICATIONS CORP", "date-changed": "19990224"}}
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
HUBEI
PHARMACEUTICAL GROUP LTD.
(Exact name of registrant as specified in its
charter)
Nevada
000-25553
88-0419476
(State of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
410 Park Avenue,
15th Floor, New York, NY 10022
(Address of
principal executive offices)
(604) 881-2899
(Issuer's telephone
number, including area code)
Pan Asia Communications Corp.
(Former name, former
address and former fiscal year, if changed since last report)
2003
EMPLOYEE STOCK OPTION PLAN
(Full title of plan)
CALCULATION OF REGISTRATION
FEE
Title of Securities to be Registered
Amount to be registered
Proposed Maximum Offering Price Per
    Share
Proposed Maximum Aggregate Offering
    Price
Amount of Registration Fee
Common
3,000,000
$0.70
$2,100,000
$169.89
Common Stock Underlying Stock Options
1,250,000
$0.22
$275,000
$22.25
Total
4,250,000
$0.56
$2,375,000
$192.14
(1) Estimated solely for the purpose of calculating the
  registration fee pursuant to Rule 457 under the Securities Act of
  1933
PART I. INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
Item 1. Plan Information
This Prospectus is part of a Registration Statement which registers an
aggregate 4,250,000 shares of common stock, $.001 par value, of Hubei
Pharmaceutical Group Ltd.  (the "Company") 3,000,000 of which will be set
aside for distribution pursuant to the Company's 2003 Stock Option Plan (Please
See Item 2) and 1,250,000 of which have been reserved for issuance upon the
conversion of stock options granted to
the following named persons who are "Selling Shareholder":
Name
Number of Shares
Consideration
Reid Li
750,000
Management services rendered to the
    Company.
Eric Fletcher
500,000
Management services rendered to the
    Company.
Total
1,250,000
All options listed above expire on August 20, 2008 and
have an exercise price of $0.22.  The Company has been advised by the  Employees
that they may sell all or a portion of their shares of common stock from time to
time through securities brokers/dealers only at current market prices and that
no commissions or compensation will be paid in connection therewith in excess of
customary brokers commissions. Advisors and the brokers and dealers through whom
sales of the shares are made may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended, (the "Securities Act"), and
any profits realized by them on the sale of the shares may be considered to be
underwriting compensation.
No other person is authorized to give any information or
make any representation not contained or incorporated by reference in this
Prospectus, in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representation must not be relied upon
as having been authorized by the Company. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the date hereof.
The shares of common stock offered hereby (the "Shares")
will be sold from time to time by the individuals listed under the Selling
Shareholder section of this document (the "Selling Shareholder").  The
Selling Shareholder acquired the Shares pursuant to compensatory benefit plans
for consulting and employment services that the Selling Shareholder provided to
Hubei Pharmaceutical Group Ltd.
The sales may occur in transactions on the NASD
over-the-counter market at prevailing market prices or in negotiated
transactions.  Hubei Pharmaceutical Group Ltd. will not receive proceeds from
the sale of any of the Shares.  Hubei Pharmaceutical Group Ltd. is paying for the
expenses incurred in registering the Shares.
The Shares are "restricted securities" under the
Securities Act of 1933 (the "1933 Act") before their sale under this Reoffer
Prospectus.  This Reoffer Prospectus has been prepared for the purpose of
registering the Shares under the 1933 Act to allow for future sales by the
Selling Shareholder to the public without restriction.  To the knowledge of
the Company, the Selling Shareholder have no arrangement with any brokerage firm
for the sale of the Shares.  The Selling Shareholder may be deemed to be an
"underwriter" within the meaning of the 1933 Act.  Any commissions received
by a broker or dealer in connection with resales of the Shares may be deemed to
be underwriting commissions or discounts under the 1933 Act.
This Reoffer Prospectus does not constitute an offer to
sell or the solicitation of any offer to buy any security other than the
securities covered by this Prospectus, nor does it constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized, or in which the person making such offer or solicitation is
not qualified to do so, or to any person to whom it is unlawful to make such
offer or solicitation.
Item 2. Registrant Information and Employee Plan Annual
Information.
The documents containing the information specified in Part I, Items 1 and 2, will be
delivered to each of the participants in accordance with Form S-8 and Rule 428
promulgated under the Securities Act of 1933. The participants shall be provided a
written statement notifying them that upon written or oral request they will be provided,
without charge, (i) the documents incorporated by reference in Item 3 of Part II of the
registration statement, and (ii) other documents required to be delivered pursuant to Rule
428(b). The statement will inform the participants that these documents are incorporated
by reference in the Section 10(a) prospectus, and shall include the address (giving title or
department) and telephone number to which the request is to be directed.
THE COMPANY HEREBY UNDERTAKES TO FURNISH WITHOUT CHARGE TO
EACH SUCH PERSON TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS DESCRIBED IN ITEM
3, PART II OF THIS REGISTRATION STATEMENT, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO MR. REID LI, 410 PARK AVENUE, 15TH
FLOOR, NEW YORK, NEW YORK 10022, (604) 881-2899.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Company has filed the following documents with the
Securities and Exchange Commission within the preceding fiscal year: Quarterly
Reports on Form 10QSB, for the quarters ended April 30, 2002, July 31, 2002,
October 31, 2002, and April 30, 2003 and filed, respectively, on June 25, 2002,
September 23, 2002, December 19, 2003 and June 25, 2003 and ; Annual Report on Form 10KSB, filed
May 15, 2003 for the fiscal year ended January 31, 2003. The Company also filed reports on Form 8K on
May 15, 2002, May 28, 2002, September 23, 2002, December 10, 2002, February 4,
2003, February 7, 2003 and June 25, 2003.  The above referenced reports, which were
previously filed with the Commission are incorporated herein by reference.
All documents filed by the Company pursuant to Section 13,
or 15 (d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Item 4. Description of Securities
The Company is authorized to issue 100,000,000 shares of
Common Stock, $0.001 par value. The Company's stock is currently traded on the OTCBB, under symbol
HBEI. The presently outstanding shares of Common Stock are
fully paid and non-assessable.
COMMON STOCK  As of July 28, 2003, approximately
27,687,700 shares of Common Stock were outstanding.
VOTING RIGHTS. Each holder of the Common Stock shall be
entitled to one vote for each share of stock standing in his name on the books
of the Corporation.
DIVIDEND RIGHTS. Dividends may be declared, subject to the
provisions of the laws of the State of Nevada and the Articles of Incorporation,
by the Board of Directors at any regular or special meeting and may be paid in
cash, property, shares of corporate stock, or any other medium. The Board of
Directors may fix in advance a record date, as provided in Section 1.06 of the
By-laws, prior to the dividend payment for the purposes of determining
shareholders entitled to receive payment of any dividend. The Board of Directors
may close the stock transfer books for such purpose for a period of not more
than ten (10) days prior to the payment date of such dividend.
PREEMPTIVE RIGHTS. Except as may otherwise be provided by
the Board of Directors, no holder of any shares of the stock of the Corporation,
shall have any preemptive right to purchase, subscribe for, or otherwise acquire
any shares of stock of the Corporation of any class now or hereafter authorized,
or any securities exchangeable for or convertible into such shares, or any
warrants or other instruments evidencing rights or options to subscribe for,
purchase or otherwise acquire such shares.
REGISTRAR AND TRANSFER AGENT:  The Company's
registrar and transfer agent is Pacific Stock Transfer Company, 500 E. Warm
Springs Road, Suite 240, Las Vegas, Nevada 89119.
DISSENTERS' RIGHTS:  Under current Nevada law, a
shareholder is afforded dissenters' rights which, if properly exercised, may
require the Company to purchase his shares dissenters' rights commonly arise in
extraordinary transactions such as mergers, consolidations, reorganizations,
substantial asset sales, liquidating distributions, and certain amendments to
the Company's certificate of incorporation.
PREFERRED STOCK  There are no shares of preferred stock
authorized..
Item 5. Interests of Named Experts and Counsel.
Other than as set forth below, no named expert or counsel was hired on a contingent
basis, will receive a direct or indirect interest in the small business issuer, or was a
promoter, underwriter, voting trustee, director, officer, or employee of the Registrant.
Dieterich & Associates has given an opinion on the validity of the securities being
registered hereunder. Principals in this law firm are eligible to receive shares of the
Company's common stock pursuant to this Form S-8 registration statement.
Item 6. Indemnification of Directors and Officers.
Pursuant to Section 78.7502 of the Nevada Revised
Statutes, the Company has the power to indemnify any person made a party to any
lawsuit by reason of being a director or officer of the Company, or serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
actions suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following documents are filed as Exhibits to this Registration
Statement:
4.1 -- 2003 Stock Option Plan
5.1 -- Opinion of Dieterich & Associates as to the
validity of the shares being registered.
23.1 -- Consent of Dieterich & Associates (included in Exhibit
5.1)
23.2 -- Consent of Morgan & Company
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Pursuant to
the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York on December 8, 2003.
HUBEI PHARMACEUTICAL GROUP LTD.
(Registrant)
By:
/s/
Reid Li
Reid Li,
President
Pursuant to
the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.
By:
/s/
Reid Li
Reid Li,
President
Exhibit 4.1
2003 STOCK OPTION PLAN
1.    GRANT OF AWARDS GENERALLY.
In accordance with the provisions hereinafter set forth in this stock option plan, the name
of which is the HUBEI PHARMACEUTICAL GROUP LTD.  2003 STOCK OPTION
PLAN (the "Plan"), the Board of Directors (the "Board") or, the Compensation
Committee (the "Committee") of the HUBEI PHARMACEUTICAL GROUP LTD. (the
"Corporation") is hereby authorized to issue from time to time on the Corporation's
behalf to any one or more Eligible Persons, as hereinafter defined, Awards to acquire
shares of the Corporation's $.001 par value common stock (the "Stock").
2.    TYPE OF AWARDS
(a)    The Board and the Committee are authorized under this Plan to enter into any type
of arrangement with a Participant that is not inconsistent with the provisions of
this Plan and that, by its terms, involves or might involve the issuance of (i) shares
of  Stock, or (ii) a Derivative Security (as such term is defined in Rule 16a-1
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as such Rule may be amended from time to time) with an
exercise or conversion privilege at a price related to the Stock or with a value
derived from the value of the Stock.  The entering into of any such arrangement is
referred to herein as the "grant" of an "Award."
(b)    Awards are not restricted to any specified form or structure and may include,
without limitation, sales or bonuses of stock, restricted stock, stock options
(including options which meet the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), ("ISOs") and options which are
not ISOs (NSOs),  reload stock options in accordance with Paragraph 8 herein
("Reload Options"), stock purchase warrants, other rights to acquire stock,
securities convertible into or redeemable for stock, stock appreciation rights,
limited stock appreciation rights, phantom stock, dividend equivalents,
performance units or performance shares, and an Award may consist of one such
security or benefit, or two or more of them in tandem or in the alternative.
(c)    Stock and Derivative Securities may be issued pursuant to an Award for any
lawful consideration as determined by the Board or the Committee, including,
without limitation, services rendered by the recipient of such Award.
3.    AMOUNT OF STOCK.
The aggregate number of shares of Stock which may be purchased pursuant to the
exercise of Awards shall be 3,000,000 shares of Stock. Of this amount, the Board or the
Committee shall have the power and authority to designate whether any options so issued
shall be ISOs or NSOs, subject to the restrictions on ISOs contained elsewhere herein. If
an Award ceases to be exercisable, in whole or in part, the shares of Stock underlying
such option shall continue to be available under this Plan. Further, if shares of Stock are
delivered to the Corporation as payment for shares of Stock purchased by the exercise of
an Award granted under this Plan, such shares of Stock shall also be available under this
Plan. If there is any change in the number of shares of Stock on account of the declaration
of stock dividends, recapitalization resulting in stock split-ups, or combinations or
exchanges of shares of Stock, or otherwise, the number of shares of Stock available for
purchase upon the exercise of Awards, the shares of Stock subject to any Award and the
exercise price of any outstanding Awards shall be appropriately adjusted by the Board or
the Stock Option Committee. The Board or the Stock Option Committee shall give notice
of any adjustments to each Eligible Person granted an Award under this Plan, and such
adjustments shall be effective and binding on all Eligible Persons. If because of one or
more recapitalizations, reorganizations or other corporate events, the holders of
outstanding Stock receive something other than shares of Stock then, upon exercise of an
Award, the Eligible Person will receive what the holder would have owned if the holder
had exercised the Award immediately before the first such corporate event and not
disposed of anything the holder received as a result of the corporate event.
4.    ELIGIBLE PERSONS
(a)    With respect to ISOs, an Eligible Person means any individual who has been
employed by the Corporation or by any subsidiary of the Corporation for a
continuous period of at least thirty (30) days.
(b)    With respect to all other forms of Awards, an Eligible Person means (i) any
individual who has been employed by the Corporation or by any subsidiary of the
Corporation, for a continuous period of at least sixty (60) days, (ii) any director of
the Corporation or any subsidiary of the Corporation (iii) any member of the
Corporations advisory board or of any of the Corporation's subsidiary(ies), or (iv)
any consultant of the Corporation or by any subsidiary of the Corporation.
5.    GRANT OF AWARDS.
The Board or the Committee has the right to issue the Awards established by this Plan to
Eligible Persons. The Board or the Committee shall follow the procedures prescribed for
it elsewhere in this Plan. A grant of Awards shall be set forth in a writing signed the
Board or by a majority of the members of the Committee. The writing shall identify
whether the Award being granted includes ISOs and shall set forth the terms which
govern the Awards. The terms shall be determined by the Board or the Committee, and
may include, among other terms, the number of shares of Stock that may be acquired
pursuant to the exercise of the Awards, when the Awards may be exercised, the period for
which the Award is granted and the expiration date, the effect on the Awards if the
Eligible Person terminates employment, and whether the Eligible Person may deliver
shares of Stock to pay for the shares of Stock to be purchased by the exercise of the
Award. However, no term shall be set forth in the writing which is inconsistent with any
of the terms of this Plan. The terms of an Award granted to an Eligible Person may differ
from the terms of an Award granted to another Eligible Person, and may differ from the
terms of an earlier Option granted to the same Eligible Person.
6.    EXERCISE PRICE.
The exercise price per share shall be determined by the Board or the Committee at the
time any Award is granted, and shall be not less than (i) in the case of an ISO, the fair
market value, (ii) in the case of an ISO granted to a ten percent or greater stockholder,
shall be determined by the Board, or (iii) in the case of all other Awards, not less than
75% of the fair market value (but in no event less than the par value) of one share of
Stock on the date the Award is granted, as determined by the Board or the Committee.
Fair market value as used herein shall be:
(a)    If shares of Stock shall be traded on an exchange or over-the-counter market, the
closing price or the closing bid price of such Stock on such exchange or over-the-counter market on which such shares shall be traded on that date, or if such
exchange or over-the-counter market is closed or if no shares shall have traded on
such date, on the last preceding date on which such shares shall have traded, or
such other value as determined by the Board or the Committee.
(b)    If shares of Stock shall not be traded on an exchange or over-the-counter market,
the value as determined by the Board or the Committee.
7.     PAYMENT OF EXERCISE PRICE
(a)    Except as otherwise provided below, payment of the exercise price for the number
of shares of Stock being purchased pursuant to any Award shall be made (i) in
cash, by certified check, or bank draft, (ii) by tender to the Corporation of shares
of Stock owned by the holder of the Award having a Fair Market Value (as
determined by the Corporation without regard to any restrictions on transferability
applicable to such stock by reason of federal or state securities laws or agreements
with an underwriter for the Corporation) not less than the exercise price, (iii) by
the assignment of the proceeds of a sale or loan with respect to some or all of the
shares being acquired upon the exercise of the Award (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "Cashless Exercise"), (iv) by the holder of the Award's promissory
note in a form approved by the Board or the Committee, (v) by such other
consideration as may be approved by the Board or the Committee from time to
time to the extent permitted by applicable law, or (vi) by any combination thereof.
The Board or the Committee may at any time or from time to time, by adoption of
or by amendment to the standard forms of Awards described in Section 7, or by
other means, grant Awards which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or which otherwise
restrict one or more forms of consideration.
(b)    Notwithstanding the foregoing, an Award may not be exercised by tender to the
Corporation of shares of Stock to the extent such tender of Stock would constitute
a violation of the provisions of any law, regulation or agreement restricting the
redemption of the Corporation's stock.  Unless otherwise provided by the Board or
the Committee, an Award may not be exercised by tender to the Corporation of
shares of Stock unless such shares either have been owned by the holder for more
than six (6) months or were not acquired, directly or indirectly, from the
Corporation.
(c)    The Corporation reserves, at any and all times, the right, in the Corporation's sole
and absolute discretion, to establish, decline to approve or terminate any program
or procedures for the exercise of Awards by means of a Cashless Exercise.
(d)    No promissory note shall be permitted if the exercise of an Award using a
promissory note would be a violation of any law.  Any permitted promissory note
shall be on such terms as the Board or Committee shall determine. The Board and
the Committee shall have the authority to permit or require the Award holder to
secure any promissory note used to exercise an Award with the shares of Stock
acquired upon the exercise of the Award or with other collateral acceptable to the
Board or the Committee.  Unless otherwise provided by the Board or the
Committee, if the Corporation at any time is subject to the regulations
promulgated by the Board of Governors of the Federal Reserve System or any
other governmental entity affecting the extension of credit in connection with the
Corporation's securities, any promissory note shall comply with such applicable
regulations, and the Award holder shall pay the unpaid principal and accrued
interest if any, to the extent necessary to comply with such applicable regulations.
(e)    The Corporation shall have the right, but not the obligation, to deduct from the
shares of Stock issuable upon the exercise of any Award Option, or to accept from
the Award holder the tender of, a number of whole shares of Stock having a Fair
Market Value, as determined by the Corporation, equal to all or any part of the
federal, state, local and foreign taxes, if any, required by law to be withheld by the
Corporation with respect to such Award or the shares acquired upon the exercise
thereof.  Alternatively or in addition, in its sole discretion, the Corporation shall
have the right to require the Award holder, through payroll withholding, cash
payment or otherwise, including by means of a Cashless Exercise, to make
adequate provision for any such tax withholding obligations of the Corporation
arising in connection with the Awards or the shares of Stock acquired upon the
exercise thereof.  The Corporation shall have no obligation to deliver share of
Stock or to release shares of Stock from an escrow established pursuant to the
Award until the Corporation's tax withholding obligations have been satisfied by
the Award holder.
8.    GRANT OF RELOAD OPTIONS
In granting stock options under this Plan, the Board or the Committee may, but shall not
be obligated to, include a Reload Option provision therein, subject to the provisions set
forth in Paragraphs 20 and 21 herein. A Reload Option provision provides that if the
Eligible Person pays the exercise price of shares of Stock to be purchased by the exercise
of an Award (the "Original Option") by delivering to the Corporation shares of Stock
already owned by the Eligible Person (the "Tendered Shares"), the Eligible Person shall
receive a Reload Option which shall be a new Option to purchase shares of Stock equal in
number to the tendered shares. The terms of any Reload Option shall be determined by
the Board or the Committee consistent with the provisions of this Plan.
9.    COMMITTEE
The Committee may be appointed from time to time by the Board. The Board may from
time to time remove members from or add members to the Committee. The Committee
shall be constituted so as to permit the Plan to comply in all respects with the provisions
set forth in Paragraph 20 herein. The members of the Committee may elect one to its
members as its chairman. The Committee shall hold its meetings at such time and places
as its chairman shall determine. A majority of the Committee's members present in
person shall constitute a quorum for the transaction of business. All determinations of the
Committee will be made by the majority vote of the members constituting the quorum.
The members may participate in a meeting of the Committee by conference telephone or
similar communications equipment by means of which all members participating in the
meeting can hear each other. Participation in a meeting in that manner will constitute
presence in person at the meeting. Any decision or determination reduced to writing and
signed by all members of the Committee will be effective as if it had been made by a
majority vote of all members of the Committee at a meeting which is duly called and
held.
10.    ADMINISTRATION OF PLAN
In addition to granting Awards and to exercising the authority granted to it elsewhere in
this Plan, the Board or the Committee is granted the full right and authority to interpret
and construe the provisions of this Plan, promulgate, amend and rescind rules and
procedures relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan, consistent,
however, with the intent of the Corporation that Awards granted or awarded pursuant to
the Plan comply with the provisions of Paragraph 20 and 21 herein. All determinations
made by the Board or the Committee shall be final, binding and conclusive on all persons
including the Eligible Person, the Corporation and its stockholders, employees, officers
and directors and consultants. No member of the Board or the Committee will be liable
for any act or omission in connection with the administration of this Plan unless it is
attributable to that member's willful misconduct.
11.    PROVISIONS APPLICABLE TO ISOs.
The following provisions shall apply to all ISOs granted by the Board or the Committee
and shall be incorporated by reference into any writing granting an ISO:
(a)    An ISO may only be granted within ten (10) years from ________________, the
date that this Plan was originally adopted by the Board.
(b)    An ISO may not be exercised after the expiration of ten (10) years from the date
the ISO is granted.
(c)    The option price may not be less than the fair market value of the Stock at the
time the ISO is granted.
(d)    An ISO is not transferable by the Eligible Person to whom it is granted except by
will, or the laws of descent and distribution, and is exercisable during his or her
lifetime only by the Eligible Person.
(e)    If the Eligible Person receiving the ISO owns at the time of the grant stock
possessing more than ten (10%) percent of the total combined voting power of all
classes of stock of the employer corporation or of its parent or subsidiary
corporation (as those terms are defined in the Code), then the option price shall be
at least 110% of the fair market value of the Stock, and the ISO shall not be
exercisable after the expiration of five (5) years from the date the ISO is granted.
(f)    The aggregate fair market value (determined at the time the ISO is granted) of the
Stock with respect to which the ISO is first exercisable by the Eligible Person
during any calendar year (under this Plan and any other incentive stock option
plan of the Corporation) shall not exceed $_________.
(g)    Even if the shares of Stock which are issued upon exercise of an ISO are sold
within one year following the exercise of such ISO so that the sale constitutes a
disqualifying disposition for ISO treatment under the Code, no provision of this
Plan shall be construed as prohibiting such a sale.
(h)    This Plan was adopted by the Corporation on __________________, by virtue of
its approval by the Board.  Approval by the stockholders of the Corporation was
obtained on __________________.
12.    DETERMINATION OF FAIR MARKET VALUE
In granting ISOs under this Plan, the Board or the Committee shall make a good faith
determination as to the fair market value of the Stock at the time of granting the ISO in
accordance with the provisions of Section 6 above.
13.    RESTRICTIONS ON ISSUANCE OF STOCK
The Corporation shall not be obligated to sell or issue any shares of Stock pursuant to the
exercise of an Award unless the Stock with respect to which the Award is being exercised
is at that time effectively registered or exempt from registration under the Securities Act
of 1933, as amended, and any other applicable laws, rules and regulations. The
Corporation may condition the exercise of an Award granted in accordance herewith upon
receipt from the Eligible Person, or any other purchaser thereof, of a written
representation that at the time of such exercise it is his or her then present intention to
acquire the shares of Stock for investment and not with a view to, or for sale in
connection with, any distribution thereof; except that, in the case of a legal representative
of an Eligible Person, "distribution" shall be defined to exclude distribution by will or
under the laws of descent and distribution. Prior to issuing any shares of Stock pursuant
to the exercise of an Award, the Corporation shall take such steps as it deems necessary to
satisfy any withholding tax obligations imposed upon it by any level of government.
14.    EXERCISE IN THE EVENT OF DEATH OR TERMINATION OF
EMPLOYMENT
(a)     If an Award holder shall die (i) while an employee of the Corporation or a
Subsidiary or within three months after termination of his employment with the
Corporation or a Subsidiary because of his disability, or retirement or otherwise,
his Awards may be exercised, to the extent that the Award holder shall have been
entitled to do so on the date of his death or such termination of employment by the
person or persons to whom the Award holder's right under the Award pass by will
or applicable law, or if no such person has such right, by his executors or
administrators, at any time, or from time to time. In the event of termination of
employment because of his death while an employee or because of disability, his
Awards may be exercised not later than the expiration date specified in Paragraph
5 or one year after the Award holder's death, whichever date is earlier, or in the
event of termination of employment because of retirement or otherwise, not later
than the expiration date specified in Paragraph 5 hereof or one year after the
Award holder's death, whichever date is earlier.
(b)    If an Award holder's employment by the Corporation or a Subsidiary shall
terminate because of his disability and such Award holder has not died within the
following three months, he may exercise his Awards, to the extent that he shall
have been entitled to do so at the date of the termination of his employment, at any
time, or from time to time, but not later than the expiration date specified in
Paragraph 5 hereof or one year after termination of employment, whichever date
is earlier.
(c)    If an Award holder's employment shall terminate by reason of his retirement in
accordance with the terms of the Corporation's retirement plans or with the
consent of the Board or the Committee or involuntarily other than by termination
for cause, and such Award holder had not died within the following three months,
he may exercise his Award to the extent he shall have been entitled to do so at the
date of the termination of his employment, at any time and from time to time, but
not later than the expiration date specified in Paragraph 5 hereof.
(d)    If an Award holder's employment shall terminate for cause, all right to exercise
his Awards shall terminate at the date of such termination of employment.
15.    CORPORATE EVENTS
In the event of the proposed dissolution or liquidation of the Corporation, a proposed sale
of all or substantially all of the assets of the Corporation, a merger or tender for the
Corporation's shares of  Stock, the Board or the Committee shall declare that each Award
granted under this Plan shall terminate as of a date to be fixed by the Board; provided that
not less than thirty (30) days written notice of the date so fixed shall be given to each
Eligible Person holding an Award, and each such Eligible Person shall have the right,
during the period of thirty (30) days preceding such termination, to exercise his Award as
to all or any part of the shares of Stock covered thereby, including shares of Stock as to
which such Award would not otherwise be exercisable. Nothing set forth herein shall
extend the term set for purchasing the shares of Stock set forth in the Award.
16.    NO GUARANTEE OF EMPLOYMENT
Nothing in this Plan or in any writing granting an Award will confer upon any Eligible
Person the right to continue in the employ of the Eligible Person's employer, or will
interfere with or restrict in any way the right of the Eligible Person's employer to
discharge such Eligible Person at any time for any reason whatsoever, with or without
cause.
17.    NONTRANSFERABILITY
No Award granted under the Plan shall be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Award holder, an Award shall be
exercisable only by him, or by his guardian or legal representative.
18.    NO RIGHTS AS STOCKHOLDER
No Award holder shall have any rights as a stockholder with respect to any shares subject
to his Award prior to the date of issuance to him of a certificate or certificates for such
shares.
19.    AMENDMENT AND DISCONTINUANCE OF PLAN
The Board may amend, suspend or discontinue this Plan at any time. However, no such
action may prejudice the rights of any Eligible Person who has prior thereto been granted
Awards under this Plan. Further, no amendment to this Plan which has the effect of (a)
increasing the aggregate number of shares of Stock subject to this Plan (except for
adjustments pursuant to Paragraph 3 herein), or (b) changing the definition of Eligible
Person under this Plan, may be effective unless and until approval of the stockholders of
the Corporation is obtained in the same manner as approval of this Plan is required. The
Board is authorized to seek the approval of the Corporation's stockholders for any other
changes it proposes to make to this Plan which require such approval, however, the Board
may modify the Plan as necessary, to effectuate the intent of the Plan as a result of any
changes in the tax, accounting or securities laws treatment of Eligible Persons and the
Plan, subject to the provisions set forth in this Paragraph 19, and Paragraphs 20 and 21.
20.    COMPLIANCE WITH RULE 16B-3
This Plan is intended to comply in all respects with Rule 16b-3 ("Rule 16b-3")
promulgated by the Securities and Exchange Commission under the Exchange Act, with
respect to participants who are subject to Section 16 of the Exchange Act, and any
provision(s) herein that is/are contrary to Rule 16b-3 shall be deemed null and void to the
extent appropriate by either the Committee or the Board.
21.    COMPLIANCE WITH CODE
The aspects of this Plan dealing with ISOs are intended to comply in every respect with
Section 422 of the Code and the regulations promulgated thereunder. in the event any
future statute or regulation shall modify the existing stature, the aspects of this Plan on
ISOs shall be deemed to incorporate by reference such modification. Any stock option
agreement relating to any ISO granted pursuant to this Plan outstanding and unexercised
at the time any modifying statute or regulation becomes effective shall also be deemed to
incorporate by reference such modification and no notice of such modification need to be
given to optionee.
If any provision of the aspects of this Plan dealing with ISOs is determined to disqualify
the shares purchasable pursuant to the ISOs granted under this Plan from the special tax
treatment provided by Code Section 422, such provision shall be deemed null and void
and to incorporate by reference the modification required to qualify the shares for said tax
treatment.
22.    COMPLIANCE WITH OTHER LAWS AND REGULATIONS
The Plan, the grant and  exercise of Awards thereunder, and the obligation of the
Corporation to sell and deliver Stock under such Awards, shall be subject to all applicable
federal and state laws, rules, and regulations and to such approvals by any government or
regulatory agency as may be required. Moreover, no option may be exercised if its
exercise or the receipt of Stock pursuant thereto would be contrary to applicable laws.
23.    DISPOSITION OF SHARES.
In the event any share of Stock acquired by an exercise of an Award granted under the
Plan shall be transferable other than by will or by the laws of descent and distribution
within two years of the date such Award was granted or within one year after the transfer
of such Stock pursuant to such exercise, the Award holder shall give prompt written
notice thereof to the Board or the Committee.
24.    NAME.
The Plan shall be known as the "HUBEI PHARMACEUTICAL GROUP LTD. 2003
Stock Option Plan."
25.    NOTICES
Any notice hereunder shall be in writing and sent by certified mail, return receipt
requested or by facsimile transmission (with electronic or written confirmation of receipt)
and when addressed to the Corporation shall be sent to it at its office, 410 Park Avenue,
15
th
Floor, New York, New York 10022, subject to the right of either party to designate at
any time hereafter in writing some other address, facsimile number or person to whose
attention such notice shall be sent.
26.    HEADINGS
The headings preceding the text of Sections and subparagraphs hereof are inserted solely
for convenience of reference, and shall not constitute a part of this Plan nor shall they
affect its meaning, construction or effect.
27.    EFFECTIVE DATE
The Plan, was adopted by the Board on _______________. The effective date of the Plan
shall be _____________, the date on which the Plan was approved by the stockholders of
the Corporation.
Dated as of _________________
HUBEI PHARMACEUTICAL GROUP LTD.
By: /s/ Reid Li
Reid Li,
President
THE SECURITIES ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THAT ACT OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF
COUNSEL (WHICH COUNSEL AND OPINION SHALL BE SATISFACTORY TO THE
COMPANY) THAT REGISTRATION OF SUCH SECURITIES UNDER THAT ACT
AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS
NOT REQUIRED.
HUBEI PHARMACEUTICAL GROUP LTD.
EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT
PURSUANT TO THE
2003 STOCK OPTION PLAN
This Employee Incentive Stock Option Agreement (this "Agreement") is made and entered into
as of the Date of Grant indicated below by and between Hubei Pharmaceutical Group Ltd., a
Nevada corporation (the "Company"), and the person named below as Employee.
WHEREAS, Employee is an employee of the Company and/or one or more of its subsidiaries;
and
WHEREAS, pursuant to the 2003 Stock Option Plan (the "Plan"), the committee of the Board of
Directors of the Company administering the Plan (the "Administrator") has approved the grant to
Employee of an option to purchase shares of the Common Stock of the Company (the "Common
Stock"), on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set forth
herein, the parties hereto hereby agree as follows:
1.    Grant of Option; Certain Terms and Conditions.  The Company hereby grants to
Employee, and Employee hereby accepts, as of the Date of Grant, an option to purchase the
number of shares of Common Stock indicated below (the "Option Shares") at the Exercise Price
per share indicated below, which option shall expire at 5:00 p.m., Pacific time, on the Expiration
Date indicated below and shall be subject to all of the terms and conditions set forth in this
Agreement (the "Option").  On each anniversary of the Date of Grant, the Option shall become
exercisable to purchase ("vest with respect to") that number of Option Shares (rounded to the
nearest whole share) equal to the total number of Option Shares multiplied by the Annual Vesting
Rate indicated below.
Employee: ______________________
Date of Grant:  ______________________
Number of shares purchasable: ______________________
Exercise Price per share:* ______________________
Expiration Date:* ______________________
Annual Vesting Rate:  ______________________
The Option is intended to qualify as an incentive stock option under Section 422 of the Internal
Revenue Code (an "Incentive Stock Option").  Employee understands that if the aggregate Fair
Market Value (as defined in the Plan and determined as of the date such options are granted) of
the shares of Common Stock with respect to which Incentive Stock Options are exercisable for
the first time by Employee during any calendar year (under the Plan and all other stock option
plans of the Company and its parent and subsidiary corporations) exceeds $_________, such
excess options (taking into account the order in which they were granted) shall not be treated for
tax purposes as Incentive Stock Options.
2.
Acceleration of Vesting and Termination of Option
.
(a)
Termination of Employment
.
(i)
Retirement
.  If Employee ceases to be employed by reason of Employee's retirement in
accordance with the Company's then-current retirement policy ("Retirement"), then (A) the
portion of the Option that has not vested on or prior to the date of such Retirement shall terminate
on such date and (B) the remaining vested portion of the Option shall terminate upon the earlier
of the Expiration Date or the first anniversary of the date of such Retirement.
(ii)
Death or Permanent Disability
.  If Employee ceases to be employed by reason of
Employee's death or Permanent Disability (as hereinafter defined), then (A) the portion of the
Option that has not vested on or prior to the date of Employee's death or Permanent Disability
shall terminate on such date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the first anniversary of the date of Employee's death or
Permanent Disability.  "Permanent Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.  Employee shall not be deemed to have a
Permanent Disability until proof of the existence thereof shall have been furnished to the Board
in such form and manner, and at such times, as the Board may require.  Any determination by
the Board that Employee does or does not have a Permanent Disability shall be final and binding
upon the Company and Employee.
(iii)
Termination for Cause
.  If Employee is terminated for Cause, both the vested and
unvested portions of the Option shall terminate immediately.  "Cause" shall mean Employee's (A)
conviction by a court of competent jurisdiction of a felony or serious misdemeanor involving
moral turpitude, (B) willful disregard of any written directive of the Board that is not inconsistent
with the Articles of Incorporation or Bylaws of the Company or applicable law, (C) breach of his
or her fiduciary duty involving personal profit, or (D) neglect of his or her duties that has a
material adverse effect on the Company.
(iv)
Other Termination
.  If Employee is terminated without Cause or if the Employee
otherwise terminates his/her employment with the Company (other than pursuant to clauses (i),
(ii) and (iii) above), then (A) the portion of the Option that has not vested on or prior to the date
of such termination of employment shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date or the 90th day
following the date of such termination of employment; provided, however, that if Employee is
terminated without Cause within one year after a Change of Control, then (x) the portion of the
Option that has not vested on or prior to the date on which Employee is terminated shall fully
vest as of such date and (y) the Option shall terminate upon the earlier of the Expiration Date or
the 90th day following the date on which Employee is terminated.  A "Change of Control" shall
mean the first to occur of the following:
(1)    the date upon which the directors of the Company who were nominated by the Board for
election as directors cease to constitute a majority of the directors of the Company;
(2)    the consummation of a reorganization, merger or consolidation of the Company (other
than a reorganization, merger or consolidation the sole purpose of which is to change the
Company's domicile solely within the United States) (a) as a result of which the outstanding
securities of the class then subject to the Option are exchanged for or converted into cash,
property and/or securities not issued by the Company and (b) the terms of which provide that the
Option shall continue in effect thereafter; or
(3)    the date of the first public announcement that any person or entity, together with all
Affiliates and Associates (as such capitalized terms are defined in Rule 12b-2 promulgated under
the Exchange Act of 1934, as amended (the "Exchange Act")) of such person or entity, shall have
become the Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of
voting securities of the Company representing more than 50% of the voting power of the
Company (a "50% Stockholder"); provided, however, that the term "50% Stockholder" shall not
include (a) the Company or any of its subsidiaries, (b) any employee benefit plan of the Company
or any of its subsidiaries, (c) any entity holding voting securities of the Company for or pursuant
to the terms of any such plan, (d) any person or entity who owned beneficially more than 15% of
the outstanding voting stock of the Company prior to such date on which the Company is
required, if at all, to become a reporting company pursuant to Sections 12 or 15 of the Exchange
Act, or (e) any person or entity if the transaction that resulted in such person or entity becoming a
50% Stockholder was approved in advance by the Board.
(b)
Death Following Termination of Employment
.  Notwithstanding anything to the contrary
in this Agreement, if Employee shall die at any time after the termination of his or her
employment and prior to the date on which the Option is terminated pursuant to Section 2(a),
then the vested portion of the Option shall terminate on the earlier of the Expiration Date or the
first anniversary of the date of Optionee's death.
(c)
Acceleration of Option by Administrator
.  The Administrator, in its sole discretion, may
accelerate the exercisability of the Option at any time and for any reason.
(d)
Other Events Causing Acceleration and Termination of Option
.  Notwithstanding
anything to the contrary in this Agreement, the Option shall become fully exercisable
immediately prior to, and shall terminate upon, the consummation of any of the following events:
(i)    the dissolution or liquidation of the Company;
(ii)    a reorganization, merger or consolidation of the Company (other than a
reorganization, merger or consolidation the sole purpose of which is to change the Company's
domicile solely within the United States) the consummation of which results in the outstanding
securities of any class then subject to the Option being exchanged for or converted into cash,
property and/or a different kind of securities, unless such reorganization, merger or consolidation
shall have been affirmatively recommended to the shareholders of the Company by the Board and
the terms of such reorganization, merger or consolidation shall provide that the Option shall
continue in effect thereafter on terms substantially similar to those under the Plan; or
(iii)    a sale of all or substantially all of the property and assets of the Company, unless the
Terms of such sale shall provide otherwise.
(e)
Suspension of Vesting on Leave from employment
. If for any reason an
employee takes a leave without pay then no vesting will occur during the "leave".
3.
Adjustments
.  In the event that the outstanding securities of the class then subject to the
Option are increased, decreased or exchanged for or converted into cash, property and/or a
different number or kind of securities, or cash, property and/or securities are distributed in
respect of such outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then, unless such event shall
cause the Option to terminate pursuant to Section 2(d) hereof, the Administrator shall make
appropriate and proportionate adjustments in the number and type of shares or other securities or
cash or other property that may thereafter be acquired upon the exercise of the Option; provided,
however, that any such adjustments in the Option shall be made without changing the aggregate
Exercise Price of the then unexercised portion of the Option.
4.
Exercise
.  The Option shall be exercisable during Employee's lifetime only by Employee
or by his or her guardian or legal representative, and after Employee's death only by the person or
entity entitled to do so under Employee's last will and testament or applicable intestate law.  The
Option may only be exercised by the delivery to the Company of a written notice of such exercise
(the "Exercise Notice"), which notice shall specify the number of Option Shares to be purchased
(the "Purchased Shares") and the aggregate Exercise Price for such shares, together with payment
in full of such aggregate Exercise Price in cash or by check payable to the Company; provided,
however, that payment of such aggregate Exercise Price may instead be made, in whole or in
part, by one or more of the following means:
(a)    by the delivery to the Company of a promissory note in a form and amount satisfactory to
the Administrator, provided that the principal amount of such note shall not exceed the excess of
such aggregate Exercise Price over and above the aggregate par value of the Purchased Shares; or
(b)    by (i) the delivery to the Company of a certificate or certificates representing shares of
Common Stock, duly endorsed or accompanied by a duly executed stock powers, which delivery
effectively transfers to the Company good and valid title to such shares, free and clear of any
pledge, commitment, lien, claim or other encumbrance (such shares to be valued on the basis of
the aggregate Fair Market Value (as defined in the Plan) thereof on the date of such exercise)
and/or (ii) "pyramiding" of shares issuable upon exercise of the Option, provided that the
Company is not then prohibited from purchasing or acquiring such shares of Common Stock.
5.
Payment of Withholding Taxes
.  If the Company becomes obligated to withhold an
amount on account of any tax imposed as a result of the exercise of the Option, including,
without limitation, any federal, state, local or other income tax, or any F.I.C.A., state disability
insurance tax or other employment tax (the "Withholding Liability"), then Employee shall, on the
date of exercise and as a condition to the issuance of the Option Shares, pay the Withholding
Liability to the Company in cash or by check payable to the Company.  Employee hereby
consents to the Company withholding the full amount of the Withholding Liability from any
compensation or other amounts otherwise payable to Employee if Employee does not pay the
Withholding Liability to the Company on the date of exercise of the Option, and Employee agrees
that the withholding and payment of any such amount by the Company to the relevant taxing
authority shall constitute full satisfaction of the Company's obligation to pay such compensation
or other amounts to Employee.
6.
Notices
.  All notices and other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given if delivered personally
or five days after mailing by certified or registered mail, postage prepaid, return receipt
requested, to the Company, Attention:  President, or to Employee at the address set forth beneath
his or her signature on the signature page hereto, or at such other addresses as they may designate
by written notice in the manner aforesaid.
7.
Stock Exchange or NASDAQ Requirements; Applicable Laws
.  Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be issued or delivered
if (a) such shares have not been admitted to listing upon official notice of issuance on each stock
exchange upon which shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of or to incur
liability under any federal, state or other securities law, or any requirement of any stock exchange
listing agreement to which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.  If required by the
Company, at the time of exercise, Employee shall give to the Company satisfactory assurance in
writing, signed by Employee or his or her legal representative, such assurances as may be
required in order to comply with the provisions of the Securities Act of 1933, as amended or
other applicable securities laws.
8.
Nontransferability
.  Neither the Option nor any interest therein may be sold, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other than by
will or the laws of descent and distribution.
9.
Plan
.  The Option is granted pursuant to the Plan, as in effect on the Date of Grant, and is
subject to all the terms and conditions of the Plan, as the same may be amended from time to
time; provided, however, that no such amendment shall deprive Employee, without his or her
consent, of the Option or of any of Employee's rights under this Agreement.  The interpretation
and construction by the Administrator of the Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Administrator for the purpose of administering the Plan
shall be final and binding upon Employee.  Until the Option shall expire, terminate or be
exercised in full, the Company shall, upon written request therefor, send a copy of the Plan, in its
then-current form, to Employee or any other person or entity then entitled to exercise the Option.
10.
Shareholder Rights
.  No person or entity shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of any Option Shares until the Option shall have been duly
exercised to purchase such Option Shares in accordance with the provisions of this Agreement.
11.
Employment Rights
.  No provision of this Agreement or of the Option granted hereunder
shall (a) confer upon Employee any right to continue in the employ of the Company or any of its
subsidiaries, (b) affect the right of the Company and each of its subsidiaries to terminate the
employment of Employee, with or without cause, or (c) confer upon Employee any right to
participate in any employee welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the Plan.  Employee hereby acknowledges and agrees that the Company
and each of its subsidiaries may terminate the employment of Employee at any time and for any
reason, or for no reason, unless Employee and the Company or such subsidiary are parties to a
written employment agreement that expressly provides otherwise.
12.
Governing Law
.  This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the internal laws of the State of
Nevada.
IN WITNESS WHEREOF, the Company and Employee have duly executed this Agreement as of
the Date of Grant.
NAME_________________
By:_______________________________
Title:
OPTIONEE:
__________________________________
Signature
__________________________________
Street Address
__________________________________
City, State and Zip Code
__________________________________
Social Security Number
NOTE:
*The Expiration Date shall not be more than 10 years after the Date of Grant and the
Exercise Price per share shall not be less than the Fair Market Value (as defined in the Plan) per
share on the Date of Grant; provided, however, that if, on the Date of Grant, Employee owns
(after application of the family and other attribution rules of Section 425(d) of the Internal
Revenue Code) more than 10% of the total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporations, then the Expiration Date shall not be more
than five years after the Date of Grant and the Exercise Price per share shall not be less than
110% of the Fair Market Value per share on the Date of Grant.
THE SECURITIES ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT ACT OR THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL (WHICH COUNSEL
AND OPINION SHALL BE SATISFACTORY TO THE COMPANY) THAT REGISTRATION
OF SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
HUBEI PHARMACEUTICAL GROUP LTD.
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
2003 STOCK OPTION PLAN
This Employee Non-qualified Stock Option Agreement (this "Agreement") is made and entered
into as of the Date of Grant indicated below by and between Hubei Pharmaceutical Group Ltd., a
Nevada corporation (the "Company"), and the person named below as Employee.
WHEREAS, Employee is an employee of the Company and/or one or more of its subsidiaries;
and
WHEREAS, pursuant to the 2003 Stock Option Plan (the "Plan"), the committee of the Board of
Directors of the Company administering the Plan (the "Administrator") has approved the grant to
Employee of an option to purchase shares of the Common Stock of the Company (the "Common
Stock"), on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set forth
herein, the parties hereto hereby agree as follows:
1.
Grant of Option; Certain Terms and Conditions
.  The Company hereby grants to Employee,
and Employee hereby accepts, as of the Date of Grant, an option to purchase the number of
shares of Common Stock indicated below (the "Option Shares") at the Exercise Price per share
indicated below, which option shall expire at 5:00 p.m., Pacific time, on the Expiration Date
indicated below and shall be subject to all of the terms and conditions set forth in this Agreement
(the "Option").  At the end of each month after the Date of Grant, the Option shall become
exercisable to purchase ("vest with respect to") that number of Option Shares (rounded to the
nearest whole share) equal to the total number of Option Shares multiplied by the Monthly
Vesting Rate indicated below.
Employee:
______________________
Date of Grant:
______________________
Number of shares purchasable:
______________________
Exercise Price per share:
______________________
Expiration Date:
______________________
Monthly Vesting Rate:
______________________%
The Option is not intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code.
2.
Acceleration and Suspension of Vesting and Termination of Option
.
(a)
Termination of Employment
.
(i)
Retirement
.  If Employee ceases to be employed by reason
of Employee's retirement in accordance with the Company's then-current retirement
policy ("Retirement"), then (A) the portion of the Option that has not vested on or prior to
the date of such Retirement shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date or the first
anniversary of the date of such Retirement.
(ii)
Death or Permanent Disability
.  If Employee ceases  to be
employed by reason of Employee's death or Permanent Disability (as hereinafter defined),
then (A) the portion of the Option that has not vested on or prior to the date of Employee's
death or Permanent Disability shall terminate on such date and (B) the remaining vested
portion of the Option shall terminate upon the earlier of the Expiration Date or the first
anniversary of the date of Employee's death or Permanent Disability.  "Permanent
Disability" shall mean the inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be expected to
result in death or which has lasted or can be expected to last for a continuous period of
not less than 12 months.  Employee shall not be deemed to have a Permanent Disability
until proof of the existence thereof shall have been furnished to the Board in such form
and manner, and at such times, as the Board may require.  Any determination by the
Board that Employee does or does not have a Permanent Disability shall be final and
binding upon the Company and Employee.
(iii)
Termination for Cause
.  If Employee is terminated for
Cause, both the vested and unvested portions of the Option shall terminate immediately.
"Cause" shall mean Employee's (A) conviction by a court of competent jurisdiction of a
felony or serious misdemeanor involving moral turpitude, (B) willful disregard of any
written directive of the Board that is not inconsistent with the Articles of Incorporation or
Bylaws of the Company or applicable law, (C) breach of his or her fiduciary duty
involving personal profit, or (D) neglect of his or her duties that has a material adverse
effect on the Company.
(iv)
Other Termination
.  If Employee is terminated without
Cause or if the Employee otherwise terminates his/her employment with the Company
(other than pursuant to clauses (i), (ii) and (iii) above), then (A) the portion of the Option
that has not vested on or prior to the date of such termination of employment shall
terminate on such date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the 90th day following the date of such
termination of employment; provided, however, that if Employee is terminated without
Cause within one year after a Change of Control, then (x) the portion of the Option that
has not vested on or prior to the date on which Employee is terminated shall fully vest as
of such date and (y) the Option shall terminate upon the earlier of the Expiration Date or
the 90th day following the date on which Employee is terminated.  A "Change of Control"
shall mean the first to occur of the following:
(1)    the date upon which the directors of the Company who were
nominated by the Board for election as directors cease to constitute a majority of the
directors of the Company;
(2)    the consummation of a reorganization, merger or consolidation of
the Company (other than a reorganization, merger or consolidation the sole purpose of
which is to change the Company's domicile solely within the United States) (a) as a result
of which the outstanding securities of the class then subject to the Option are exchanged
for or converted into cash, property and/or securities not issued by the Company and (b)
the terms of which provide that the Option shall continue in effect thereafter; or
(3)    the date of the first public announcement that any person or entity,
together with all Affiliates and Associates (as such capitalized terms are defined in Rule
12b-2 promulgated under the Exchange Act of 1934, as amended (the "Exchange Act"))
of such person or entity, shall have become the Beneficial Owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of voting securities of the Company
representing more than 50% of the voting power of the Company (a "50% Shareholder");
provided, however, that the term "50% Shareholder" shall not include (a) the Company or
any of its subsidiaries, (b) any employee benefit plan of the Company or any of its
subsidiaries, (c) any entity holding voting securities of the Company for or pursuant to the
terms of any such plan, (d) any person or entity who owned beneficially more than 15%
of the outstanding voting stock of the Company prior to such date on which the Company
is required, if at all, to become a reporting company pursuant to Sections 12 or 15 of the
Exchange Act, or (e) any person or entity if the transaction that resulted in such person or
entity becoming a 50% Shareholder was approved in advance by the Board.
(b)
Death Following Termination of Employment
.  Notwithstanding anything
to the contrary in this Agreement, if Employee shall die at any time after the termination of his or
her employment and prior to the date on which the Option is terminated pursuant to Section 2(a),
then the vested portion of the Option shall terminate on the earlier of the Expiration Date or the
first anniversary of the date of Optionee's death.
(c)
Acceleration of Option by Administrator
.  The Administrator, in its sole
discretion, may accelerate the exercisability of the Option at any time and for any reason.
(d)
Other Events Causing Acceleration and Termination of Option
.
Notwithstanding anything to the contrary in this Agreement, the Option shall become fully
exercisable immediately prior to, and shall terminate upon, the consummation of any of the
following events:
(i)    the dissolution or liquidation of the Company;
(ii)    a reorganization, merger or consolidation of the Company (other
than a reorganization, merger or consolidation the sole purpose of which is to change the
Company's domicile solely within the United States) the consummation of which results in the
outstanding securities of any class then subject to the Option being exchanged for or converted
into cash, property and/or a different kind of securities, unless such reorganization, merger or
consolidation shall have been affirmatively recommended to the shareholders of the Company by
the Board and the terms of such reorganization, merger or consolidation shall provide that the
Option shall continue in effect thereafter on terms substantially similar to those under the Plan; or
(iii)    a sale of all or substantially all of the property and assets of the
Company, unless the terms of such sale shall provide otherwise.
(iv)    Suspension of Vesting on Leave from Employment.  If for any reason
an employee takes a leave without pay then no vesting will occur during the "leave".
3.
Adjustments
.  In the event that the outstanding securities of the class then subject
to the Option are increased, decreased or exchanged for or converted into cash, property and/or a
different number or kind of securities, or cash, property and/or securities are distributed in
respect of such outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then, unless such event shall
cause the Option to terminate pursuant to Section 2(d) hereof, the Administrator shall make
appropriate and proportionate adjustments in the number and type of shares or other securities or
cash or other property that may thereafter be acquired upon the exercise of the Option; provided,
however, that any such adjustments in the Option shall be made without changing the aggregate
Exercise Price of the then unexercised portion of the Option.
4.
Exercise
.  The Option shall be exercisable during Employee's lifetime only by
Employee or by his or her guardian or legal representative, and after Employee's death only by
the person or entity entitled to do so under Employee's last will and testament or applicable
intestate law.  The Option may only be exercised by the delivery to the Company of a written
notice of such exercise (the "Exercise Notice"), which notice shall specify the number of Option
Shares to be purchased (the "Purchased Shares") and the aggregate Exercise Price for such
shares, together with payment in full of such aggregate Exercise Price in cash or by check
payable to the Company; provided, however, that payment of such aggregate Exercise Price may
instead be made, in whole or in part, by one or more of the following means:
(a)    by the delivery to the Company of a promissory note in a form and amount
satisfactory to the Administrator, provided that the principal amount of such note shall not exceed
the excess of such aggregate Exercise Price over and above the aggregate par value of the
Purchased Shares; or
(b)    by (i) the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly executed stock
powers, which delivery effectively transfers to the Company good and valid title to such shares,
free and clear of any pledge, commitment, lien, claim or other encumbrance (such shares to be
valued on the basis of the aggregate Fair Market Value (as defined in the Plan) thereof on the
date of such exercise) and/or (ii) "pyramiding" of shares issuable upon exercise of the Option,
provided that the Company is not then prohibited from purchasing or acquiring such shares of
Common Stock.
5.
Payment of Withholding Taxes
.  If the Company becomes obligated to withhold
an amount on account of any tax imposed as a result of the exercise of the Option, including,
without limitation, any federal, state, local or other income tax, or any F.I.C.A., state disability
insurance tax or other employment tax (the "Withholding Liability"), then Employee shall, on the
date of exercise and as a condition to the issuance of the Option Shares, pay the Withholding
Liability to the Company in cash or by check payable to the Company.  Employee hereby
consents to the Company withholding the full amount of the Withholding Liability from any
compensation or other amounts otherwise payable to Employee if Employee does not pay the
Withholding Liability to the Company on the date of exercise of the Option, and Employee agrees
that the withholding and payment of any such amount by the Company to the relevant taxing
authority shall constitute full satisfaction of the Company's obligation to pay such compensation
or other amounts to Employee.
6.
Notices
.  All notices and other communications required or permitted to be given
pursuant to this Agreement shall be in writing and shall be deemed given if delivered personally
or five days after mailing by certified or registered mail, postage prepaid, return receipt
requested, to the Company, Attention: President, or to Employee at the address set forth beneath
his or her signature on the signature page hereto, or at such other addresses as they may designate
by written notice in the manner aforesaid.
7.
Stock Exchange or NASDAQ Requirements; Applicable Laws
.  Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon exercise of the
Option, and no certificate representing all or any part of such shares, shall be issued or delivered
if (a) such shares have not been admitted to listing upon official notice of issuance on each stock
exchange upon which shares of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of or to incur
liability under any federal, state or other securities law, or any requirement of any stock exchange
listing agreement to which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.  If required by the
Company, at the time of exercise, Employee shall give to the Company satisfactory assurance in
writing, signed by Employee or his or her legal representative, such assurances as may be
required in order to comply with the provisions of the Securities Act of 1933, as amended or
other applicable securities laws.
8.
Nontransferability
.  Neither the Option nor any interest therein may be sold,
assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other
than by will or the laws of descent and distribution.
9.
Plan
.  The Option is granted pursuant to the Plan, as in effect on the Date of Grant,
and is subject to all the terms and conditions of the Plan, as the same may be amended from time
to time; provided, however, that no such amendment shall deprive Employee, without his or her
consent, of the Option or of any of Employee's rights under this Agreement.  The interpretation
and construction by the Administrator of the Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Administrator for the purpose of administering the Plan
shall be final and binding upon Employee.  Until the Option shall expire, terminate or be
exercised in full, the Company shall, upon written request therefor, send a copy of the Plan, in its
then-current form, to Employee or any other person or entity then entitled to exercise the Option.
10.
Shareholder Rights
.  No person or entity shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of any Option Shares until the Option shall
have been duly exercised to purchase such Option Shares in accordance with the provisions of
this Agreement.
11.
Employment Rights
.  No provision of this Agreement or of the Option granted
hereunder shall (a) confer upon Employee any right to continue in the employ of the Company or
any of its subsidiaries, (b) affect the right of the Company and each of its subsidiaries to
terminate the employment of Employee, with or without cause, or (c) confer upon Employee any
right to participate in any employee welfare or benefit plan or other program of the Company or
any of its subsidiaries other than the Plan.  Employee hereby acknowledges and agrees that the
Company and each of its subsidiaries may terminate the employment of Employee at any time
and for any reason, or for no reason, unless Employee and the Company or such subsidiary are
parties to a written employment agreement that expressly provides otherwise.
12.
Governing Law
.  This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the internal laws of the State of
Nevada.
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of Grant.
NAME_________________
By:___________________________
Title:
Exhibit
5.1
DIETERICH & ASSOCIATES LETTERHEAD
December 8,
2003
Securities and
Exchange Commission
450 Fifth
Street, N.W.
Judiciary
Plaza
Washington, DC
20549
Re:  Hubei Pharmaceutical Group Ltd.
Ladies and
Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration Statement") to be
filed by HUBEI PHARMACEUTICAL GROUP LTD. ("Company") with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"). The Registration
Statement relates to an aggregate of 4,250,000 shares of the Common Stock of the
Company (the "Shares") to be issued upon the exercise of common stock
options issued to various individuals and pursuant to the 2003 Amended Employee Stock Option Plan.
As counsel for the Company, we have examined such corporate records, documents and
such question of law as we have considered necessary or appropriate for purposes of this
opinion and, upon the basis of such examination, advise you that in our opinion, all
necessary corporate proceedings by the Company have been duly taken to authorize the
issuance of the Shares and that the Shares being registered pursuant to the Registration
Statement, when issued will be duly authorized, legally issued, fully paid and non-assessable. This opinion does not cover any matters related to any re-offer or re-sale of
the shares by and Plan Beneficiaries, once properly and legally issued pursuant to the
Plan as described in the Registration Statement.
We hereby consent to the filing of this opinion as an exhibit to the Registration
Statement. This consent is not to be construed as an admission that we are a person
whose consent is required to be filed with the Registration Statement under the
provisions of the Act. This opinion is not to be used, circulated, quoted or otherwise
referred to for any other purpose without our prior written consent. This opinion is based
on our knowledge of the law and facts as of the date hereof. This opinion does not
address or relate to any specific state securities laws. We assume no duty to communicate
with the Company in respect to any matter, which comes to our attention hereafter.
Very truly
yours,
/s/
Christopher Dieterich
Dieterich
& Associates
Exhibit 23.1
Included within Exhibit 5.1 (Opinion of Counsel)
Exhibit 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration Statement
of Hubei Pharmaceutical Group Ltd. on Form S-8 relating to the registration of
4,250,000 common share to be issued to various employees upon the exercise of
common stock options and pursuant to the 2003 Stock Option Plan, of our Auditors' Report,
dated April 29, 2003, on the balance sheets of Hubei Pharmaceutical Group Ltd.
as at January 31, 2003 and 2002, and the related statements of loss and deficit
accumulated during the development stage, cash flows, and stockholders' equity
for the years ended January 31, 2003 and 2002, and for the period from
inception, December 18, 1998 to January 31, 2003.
Vancouver, Canada                                                                           
/s/ Morgan & Company
Chartered Accountants
December 8,
2003