THE STALLION GROUP

2006 STOCK OPTION PLAN

This 2006 Stock Option Plan (the “Plan”) provides for the grant of options to
acquire shares of common stock, (the “Common Stock”), of THE STALLION GROUP., a
Nevada corporation (the “Company”).  Stock options granted under this Plan that
qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”), are referred to in this Plan as “Incentive Stock Options.”  Incentive
Stock Options and stock options that do not qualify under Section 422 of the
Code (“Non-Qualified Stock Options”) granted under this Plan are referred to
collectively as “Options.”

1.

PURPOSES.

The purposes of this Plan are to retain the services of valued key employees and
consultants of the Company and such other persons as the Plan Administrator
shall select in accordance with Section 3 below, to encourage such persons to
acquire a greater proprietary interest in the Company, thereby strengthening
their incentive to achieve the objectives of the shareholders of the Company,
and to serve as an aid and inducement in the hiring of new employees and to
provide an equity incentive to consultants and other persons selected by the
Plan Administrator.

2.

ADMINISTRATION.

This Plan shall be administered initially by the Board of Directors of the
Company (the “Board”), except that the Board may, in its discretion, establish a
committee composed of two (2) or more members of the Board or  two (2) or more
other persons to administer the Plan, which committee (the “Committee”) may be
an executive, compensation or other committee, including a separate committee
especially created for this purpose.  The Committee shall have the powers and
authority vested in the Board hereunder (including the power and authority to
interpret any provision of the Plan or of any Option).  The members of any such
Committee shall serve at the pleasure of the Board.  A majority of the members
of the Committee shall constitute a quorum, and all actions of the Committee
shall be taken by a majority of the members present.  Any action may be taken by
a written instrument signed by all of the members of the Committee and any
action so taken shall be fully effective as if it had been taken at a meeting.
 The Board or, if applicable, the Committee is referred to herein as the “Plan
Administrator.”

If and when the Company becomes subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Plan
Administrator will be either the full Board of Directors or a committee composed
of two (2) or more members of the Board who are “Non-Employee Directors” as
defined under Rule 16b-3 (as amended from time to time) promulgated under the
Exchange Act or any successor rule or regulatory requirement.  In addition, if
the Board decides to maintain eligibility for the benefits of Section 162(m) of
the Code, the Plan Administrator will be either the full Board of Directors if
each director is an “Outside Director,” as defined under Section 162(m) of the
Code (as amended from time to time) and the regulations (or any successor
regulations) promulgated thereunder (“Section 162(m) of the Code” or the
Committee which will be composed of two (2) or more members of the Board who are
Outside Directors.

Subject to the provisions of this Plan, and with a view to effecting its
purpose, the Plan Administrator shall have sole authority, in its absolute
discretion, to (i) construe and interpret this Plan; (ii) define the terms used
in the Plan; (iii) prescribe, amend and rescind the rules and regulations
relating to this Plan; (iv) correct any defect, supply any omission or reconcile
any inconsistency in this Plan; (v) grant Options under this Plan;
(vi) determine the individuals to whom Options shall be granted under this Plan
and whether the Option is an Incentive Stock Option or a Non-Qualified Stock
Option; (vii) determine the time or times at which Options shall be granted
under this Plan; (viii) determine the number of shares of Common Stock subject
to each Option, the exercise price of each Option, the duration of each Option
and the times at which each Option shall become exercisable; (ix) determine all
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terms and conditions of the Options; and (x) make all other determinations and
interpretations necessary and advisable for the administration of the Plan.  All
decisions, determinations and interpretations made by the Plan Administrator
shall be binding and conclusive on all participants in the Plan and on their
legal representatives, heirs and beneficiaries.

The Board or, if applicable, the Committee may delegate to one or more executive
officers of the Company the authority to grant Options under this Plan to
employees of the Company who, on the Date of Grant, are not subject to Section
16 of the Exchange Act with respect to the Common Stock (“Insiders”), and are
not “covered employees” as such term is defined for purposes of Section 162(m)
of the Code (“Covered Employees”), and in connection therewith the authority to
determine: (i) the number of shares of Common Stock subject to such Options;
(ii) the duration of the Option; (iii) the vesting schedule for determining the
times at which such Option shall become exercisable; and (iv) all other terms
and conditions of such Options.  The exercise price for any Option granted by
action of an executive officer or officers pursuant to such delegation of
authority shall not be less than the fair market value per share of the Common
Stock on the Date of Grant.  Unless expressly approved in advance by the Board
or the Committee, such delegation of authority shall not include the authority
to accelerate vesting, extend the period for exercise or otherwise alter the
terms of outstanding Options.  The term “Plan Administrator” when used in any
provision of this Plan other than Sections 2, 5(f), 5(m), and 11 shall be deemed
to refer to the Board or the Committee, as the case may be, and an executive
officer who has been authorized to grant Options pursuant thereto, insofar as
such provisions may be applied to persons that are not Insiders and not Covered
Employees and Options granted to such persons.

3.

ELIGIBILITY.

Incentive Stock Options may be granted to any individual who, at the time the
Option is granted, is an employee of the Company or any Related Corporation (as
defined below) (“Employees”).  Non-Qualified Stock Options may be granted to
Employees and to such other persons other than directors who are not Employees
as the Plan Administrator shall select.  Options may be granted in substitution
for outstanding Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other reorganization between
such other corporation and the Company or any subsidiary of the Company.
 Options also may be granted in exchange for outstanding Options. .  Any person
to whom an Option is granted under this Plan is referred to as an “Optionee.”
Any person who is the owner of an Option is referred to as a “Holder.”

As used in this Plan, the term “Related Corporation” shall mean any corporation
(other than the Company) that is a “Parent Corporation” of the Company or
“Subsidiary Corporation” of the Company, as those terms are defined in Sections
424(e) and 424(f), respectively, of the Code (or any successor provisions) and
the regulations thereunder (as amended from time to time).

4.

STOCK.

The Plan Administrator is authorized to grant Options to acquire up to a total
of three million (3,000,000) shares of the Company’s authorized but unissued, or
reacquired, Common Stock.  The number of shares with respect to which Options
may be granted hereunder is subject to adjustment as set forth in Section 5(m)
hereof.  If any outstanding Option expires or is terminated for any reason, the
shares of Common Stock allocable to the unexercised portion of such Option may
again be subject to an Option granted to the same Optionee or to a different
person eligible under Section 3 of this Plan.

5.

TERMS AND CONDITIONS OF OPTIONS.

Each Option granted under this Plan shall be evidenced by a written agreement
approved by the Plan Administrator (the “Agreement”).  Agreements may contain
such provisions, not inconsistent with this Plan, as the

 

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Plan Administrator in its discretion may deem advisable.  All Options also shall
comply with the following requirements:

(a)

Number of Shares and Type of Option.

Each Agreement shall state the number of shares of Common Stock to which it
pertains and whether the Option is intended to be an Incentive Stock Option or a
Non-Qualified Stock Option.  In the absence of action to the contrary by the
Plan Administrator in connection with the grant of an Option, all Options shall
be Non-Qualified Stock Options.  The aggregate fair market value (determined at
the Date of Grant, as defined below) of the stock with respect to which
Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (granted under this Plan and all other Incentive Stock
Option plans of the Company, a Related Corporation or a predecessor corporation)
shall not exceed $100,000, or such other limit as may be prescribed by the Code
as it may be amended from time to time.  Any portion of an Option which exceeds
the annual limit shall not be void but rather shall be a Non-Qualified Stock
Option.

(b)

Date of Grant.

Each Agreement shall state the date the Plan Administrator has deemed to be the
effective date of the Option for purposes of this Plan (the “Date of Grant”).

(c)

Option Price.

Each Agreement shall state the price per share of Common Stock at which it is
exercisable.  The exercise price shall be fixed by the Plan Administrator at
whatever price the Plan Administrator may determine in the exercise of its sole
discretion; provided that the per share exercise price for an Incentive Stock
Option or any Option granted to a “covered employee” as such term is defined for
purposes of Section 162(m) of the Code (“Covered Employee”) shall not be less
than the fair market value per share of the Common Stock at the Date of Grant as
determined by the Plan Administrator in good faith; provided further, that with
respect to Incentive Stock Options granted to greater-than-ten percent (> 10%)
shareholders of the Company (as determined with reference to Section 424(d) of
the Code), the exercise price per share shall not be less than one hundred ten
percent (110%) of the fair market value per share of the Common Stock at the
Date of Grant as determined by the Plan Administrator in good faith; and,
provided further, that Options granted in substitution for outstanding options
of another corporation in connection with the merger, consolidation, acquisition
of property or stock or other reorganization involving such other corporation
and the Company or any subsidiary of the Company may be granted with an exercise
price equal to the exercise price for the substituted option of the other
corporation, subject to any adjustment consistent with the terms of the
transaction pursuant to which the substitution is to occur.

(d)

Duration of Options.

At the time of the grant of the Option, the Plan Administrator shall designate,
subject to paragraph 5(g) below, the expiration date of the Option, which date
shall not be later than ten (10) years from the Date of Grant in the case of
Incentive Stock Options; provided, that the expiration date of any Incentive
Stock Option granted to a greater-than-ten percent ( > 10%) shareholder of the
Company (as determined with reference to Section 424(d) of the Code) shall not
be later than five (5) years from the Date of Grant.  In the absence of action
to the contrary by the Plan Administrator in connection with the grant of a
particular Option, and except in the case of Incentive Stock Options as
described above, all Options granted under this Section 5 shall expire ten (10)
years from the Date of Grant.

(e)

Vesting Schedule.

No Option shall be exercisable until it has vested.  The vesting schedule for
each Option shall be specified by the Plan Administrator at the time of grant of
the Option prior to the provision of services with respect to which such Option
is granted; provided, that if no vesting schedule is specified at the time of
grant, the Option shall vest according to the following schedule:

 

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Number of Years
Following Date of Grant

 

Percentage of Total
Option Vested

One

 

100%

The Plan Administrator may specify a vesting schedule for all or any portion of
an Option based on the achievement of performance objectives established in
advance of the commencement by the Optionee of services related to the
achievement of the performance objectives.  Performance objectives shall be
expressed in terms of one or more of the following: return on equity, return on
assets, share price, market share, sales, earnings per share, costs, net
earnings, net worth, inventories, cash and cash equivalents, gross margin or the
Company’s performance relative to its internal business plan.  Performance
objectives may be in respect of the performance of the Company as a whole
(whether on a consolidated or unconsolidated basis), a Related Corporation, or a
subdivision, operating unit, product or product line of either of the foregoing.
 Performance objectives may be absolute or relative and may be expressed in
terms of a progression or a range.  An Option that is exercisable (in full or in
part) upon the achievement of one or more performance objectives may be
exercised only following written notice to the Optionee and the Company by the
Plan Administrator that the performance objective has been achieved.

(f)

Acceleration of Vesting.

The vesting of one or more outstanding Options may be accelerated by the Plan
Administrator at such times and in such amounts as it shall determine in its
sole discretion.  The vesting of Options also shall be accelerated under the
circumstances described in Section 5(m) below.

(g)

Term of Option.

Vested Options shall terminate, to the extent not previously exercised, upon the
occurrence of the first of the following events: (i) the expiration of the
Option, as designated by the Plan Administrator in accordance with Section 5(d)
above; (ii) the date of an Optionee’s termination of employment or contractual
relationship with the Company or any Related Corporation for cause (as
determined in the sole discretion of the Plan Administrator); (iii) the
expiration of three (3) months from the date of an Optionee’s termination of
employment or contractual relationship with the Company or any Related
Corporation for any reason whatsoever other than cause, death or Disability (as
defined below) unless, in the case of a Non-Qualified Stock Option, the exercise
period is extended by the Plan Administrator until a date not later than the
expiration date of the Option; or (iv) the expiration of one year from
termination of an Optionee’s employment or contractual relationship by reason of
death or Disability (as defined below) unless, in the case of a Non-Qualified
Stock Option, the exercise period is extended by the Plan Administrator until a
date not later than the expiration date of the Option.  Upon the death of an
Optionee, any vested Options held by the Optionee shall be exercisable only by
the person or persons to whom such Optionee’s rights under such Option shall
pass by the Optionee’s will or by the laws of descent and distribution of the
state or county of the Optionee’s domicile at the time of death and only until
such Options terminate as provided above.  For purposes of the Plan, unless
otherwise defined in the Agreement, “Disability” shall mean medically
determinable physical or mental impairment which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months or that can
be expected to result in death.  The Plan Administrator shall determine whether
an Optionee has incurred a Disability on the basis of medical evidence
acceptable to the Plan Administrator.  Upon making a determination of
Disability, the Plan Administrator shall, for purposes of the Plan, determine
the date of an Optionee’s termination of employment or contractual relationship.

Unless accelerated in accordance with Section 5(f) above, unvested Options shall
terminate immediately upon termination of employment of the Optionee by the
Company for any reason whatsoever, including death or Disability.  For purposes
of this Plan, transfer of employment between or among the Company and/or any
Related Corporation shall not be deemed to constitute a termination of
employment with the Company or any Related Corporation.  For purposes of this
subsection, employment shall be deemed to continue while the Optionee is on
military leave, sick leave or other bona fide leave of absence (as determined by
the Plan Administrator).  The

 

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foregoing notwithstanding, employment shall not be deemed to continue beyond the
first ninety (90) days of such leave, unless the Optionee’s re-employment rights
are guaranteed by statute or by contract.

(h)

Exercise of Options.

Options shall be exercisable, in full or in part, at any time after vesting,
until termination.  If less than all of the shares included in the vested
portion of any Option are purchased, the remainder may be purchased at any
subsequent time prior to the expiration of the Option term.  No portion of any
Option for less than fifty (50) shares (as adjusted pursuant to Section 5(m)
below) may be exercised; provided, that if the vested portion of any Option is
less than fifty (50) shares, it may be exercised with respect to all shares for
which it is vested.  Only whole shares may be issued pursuant to an Option, and
to the extent that an Option covers less than one (1) share, it is
unexercisable.

Options or portions thereof may be exercised by giving written notice to the
Company, which notice shall specify the number of shares to be purchased, and be
accompanied by payment in the amount of the aggregate exercise price for the
Common Stock so purchased, which payment shall be in the form specified in
Section 5(i) below.  The Company shall not be obligated to issue, transfer or
deliver a certificate of Common Stock to the Holder of any Option, until
provision has been made by the Holder, to the satisfaction of the Company, for
the payment of the aggregate exercise price for all shares for which the Option
shall have been exercised and for satisfaction of any tax withholding
obligations associated with such exercise.  During the lifetime of an Optionee,
Options are exercisable only by the Optionee or in the case of a Non-Qualified
Stock Option, transferee who takes title to such Option in the manner permitted
by subsection 5(k) hereof.  It shall be a condition precedent to the exercise of
any Option granted hereunder that the Holder shall enter into a Stock Transfer
Agreement with the Company.

(i)

Payment upon Exercise of Option.

Upon the exercise of any Option, the aggregate exercise price shall be paid to
the Company in cash or by certified or cashier’s check.  In addition, the Holder
may pay for all or any portion of the aggregate exercise price by complying with
one or more of the following alternatives:

(1)

by delivering to the Company shares of Common Stock previously held by such
Holder, or by the Company withholding shares of Common Stock otherwise
deliverable pursuant to exercise of the Option, which shares of Common Stock
received or withheld shall have a fair market value at the date of exercise (as
determined by the Plan Administrator) equal to the aggregate exercise price to
be paid by the Optionee upon such exercise;

(2)

by delivering a properly executed exercise notice together with irrevocable
instructions to a broker promptly to sell or margin a sufficient portion of the
shares and deliver directly to the Company the amount of sale or margin loan
proceeds to pay the exercise price; or

(3)

by complying with any other payment mechanism approved by the Plan Administrator
at the time of exercise.

(j)

Rights as a Shareholder.

A Holder shall have no rights as a shareholder with respect to any shares
covered by an Option until such Holder becomes a record holder of such shares,
irrespective of whether such Holder has given notice of exercise.  Subject to
the provisions of Section 5(m) hereof, no rights shall accrue to a Holder and no
adjustments shall be made on account of dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
declared on, or created in, the Common Stock for which the record date is prior
to the date the Holder becomes a record holder of the shares of Common Stock
covered by the Option, irrespective of whether such Holder has given notice of
exercise.

 

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(k)

Transfer of Option.

Options granted under this Plan and the rights and privileges conferred by this
Plan may not be transferred, assigned, pledged or hypothecated in any manner
(whether by operation of law or otherwise) other than by will, by applicable
laws of descent and distribution or (except in the case of an Incentive Stock
Option) pursuant to a qualified domestic relations order, and shall not be
subject to execution, attachment or similar process; provided however, that any
Agreement may provide or be amended to provide that a Non-Qualified Stock Option
to which it relates is transferable without payment of consideration to
immediate family members of the Optionee or to trusts or partnerships or limited
liability companies established exclusively for the benefit of the Optionee and
the Optionee’s immediate family members.  Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of any Option or of any right or
privilege conferred by this Plan contrary to the provisions hereof, or upon the
sale, levy or any attachment or similar process upon the rights and privileges
conferred by this Plan, such Option shall thereupon terminate and become null
and void.

(l)

Securities Regulation and Tax Withholding.

(1)

Shares shall not be issued with respect to an Option unless the exercise of such
Option and the issuance and delivery of such shares shall comply with all
relevant provisions of law, including, without limitation, Section 162(m) of the
Code, any applicable state securities laws, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations thereunder and the
requirements of any stock exchange or automated inter-dealer quotation system of
a registered national securities association upon which such shares may then be
listed, and such issuance shall be further subject to the approval of counsel
for the Company with respect to such compliance, including the availability of
an exemption from registration for the issuance and sale of such shares.  The
inability of the Company to obtain from any regulatory body the authority deemed
by the Company to be necessary for the lawful issuance and sale of any shares
under this Plan, or the unavailability of an exemption from registration for the
issuance and sale of any shares under this Plan, shall relieve the Company of
any liability with respect to the non-issuance or sale of such shares.

As a condition to the exercise of an Option, the Plan Administrator may require
the Holder to represent and warrant in writing at the time of such exercise that
the shares are being purchased only for investment and without any then-present
intention to sell or distribute such shares.  At the option of the Plan
Administrator, a stop-transfer order against such shares may be placed on the
stock books and records of the Company, and a legend indicating that the stock
may not be pledged, sold or otherwise transferred unless an opinion of counsel
is provided stating that such transfer is not in violation of any applicable law
or regulation, may be stamped on the certificates representing such shares in
order to assure an exemption from registration.  The Plan Administrator also may
require such other documentation as may from time to time be necessary to comply
with federal and state securities laws.  THE COMPANY HAS NO OBLIGATION TO
UNDERTAKE REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE
EXERCISE OF OPTIONS.

(2)

The Holder must pay to the Company by certified or cashier’s check, promptly
upon exercise of an Option or, if later, the date that the amount of such
obligations becomes determinable, all applicable federal, state, local and
foreign withholding taxes that the Plan Administrator, in its discretion,
determines to result upon exercise of an Option or from a transfer or other
disposition of shares of Common Stock acquired upon exercise of an Option or
otherwise related to an Option or shares of Common Stock acquired in connection
with an Option.  Upon approval of the Plan Administrator, a Holder may satisfy
such obligation by complying with one or more of the following alternatives
selected by the Plan Administrator:

(A)

by delivering to the Company shares of Common Stock previously held by such
Holder or by the Company withholding shares of Common Stock otherwise
deliverable pursuant to the exercise of the Option, which shares of Common Stock
received or withheld shall have a fair market value at the date of exercise (as
determined by the Plan Administrator) equal to any withholding tax obligations
arising as a result of such exercise, transfer or other disposition;

 

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(B)

by executing appropriate loan documents approved by the Plan Administrator by
which the Holder borrows funds from the Company to pay any withholding taxes due
under this Paragraph 2, with such repayment terms as the Plan Administrator
shall select; or

(C)

by complying with any other payment mechanism approved by the Plan Administrator
from time to time.

(3)

The issuance, transfer or delivery of certificates of Common Stock pursuant to
the exercise of Options may be delayed, at the discretion of the Plan
Administrator, until the Plan Administrator is satisfied that the applicable
requirements of the federal and state securities laws and the withholding
provisions of the Code have been met and that the Holder has paid or otherwise
satisfied any withholding tax obligation as described in (2) above.

(m)

Stock Dividend or Reorganization.

(1)

If (i) the Company shall at any time be involved in a transaction described in
Section 424(a) of the Code (or any successor provision) or any “corporate
transaction” described in the regulations thereunder; (ii) the Company shall
declare a dividend payable in, or shall subdivide or combine, its Common Stock
or (iii) any other event with substantially the same effect shall occur, the
Plan Administrator shall, subject to applicable law, with respect to each
outstanding Option, proportionately adjust the number of shares of Common Stock
subject to such Option and/or the exercise price per share so as to preserve the
rights of the Holder substantially proportionate to the rights of the Holder
prior to such event, and to the extent that such action shall include an
increase or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under Section 4 of this Plan
shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Plan Administrator,
the Company, the Company’s shareholders, or any Holder.

(2)

In the event that the presently authorized capital stock of the Company is
changed into the same number of shares with a different par value, or without
par value, the stock resulting from any such change shall be deemed to be Common
Stock within the meaning of the Plan, and each Option shall apply to the same
number of shares of such new stock as it applied to old shares immediately prior
to such change.

(3)

If the Company shall at any time declare an extraordinary dividend with respect
to the Common Stock, whether payable in cash or other property, the Plan
Administrator may, subject to applicable law, in the exercise of its sole
discretion and with respect to each outstanding Option, proportionately adjust
the number of shares of Common Stock subject to such Option and/or adjust the
exercise price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to such event, and
to the extent that such action shall include an increase or decrease in the
number of shares of Common Stock subject to outstanding Options, the number of
shares available under Section 4 of this Plan shall automatically be increased
or decreased, as the case may be, proportionately, without further action on the
part of the Plan Administrator, the Company, the Company’s shareholders, or any
Holder.

(4)

The foregoing adjustments in the shares subject to Options shall be made by the
Plan Administrator, or by any successor administrator of this Plan, or by the
applicable terms of any assumption or substitution document.

(5)

The grant of an Option shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge, consolidate or dissolve, to
liquidate or to sell or transfer all or any part of its business or assets.

 

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6.

EFFECTIVE DATE; TERM.

Incentive Stock Options may be granted by the Plan Administrator from time to
time on or after the date on which this Plan is adopted (the “Effective Date”)
through the day immediately preceding the tenth anniversary of the Effective
Date.  Non-Qualified Stock Options may be granted by the Plan Administrator on
or after the Effective Date and until this Plan is terminated by the Board in
its sole discretion.  Termination of this Plan shall not terminate any Option
granted prior to such termination.  Any Incentive Stock Options granted by the
Plan Administrator prior to the approval of this Plan by the shareholders of the
Company in accordance with Section 422 of the Code shall be granted subject to
ratification of this Plan by the shareholders of the Company within twelve (12)
months before or after the Effective Date.  If such shareholder ratification is
sought and not obtained, all Options granted prior thereto and thereafter shall
be considered Non-Qualified Stock Options and any Options granted to Covered
Employees will not be eligible for the exclusion set forth in Section 162(m) of
the Code with respect to the deductibility by the Company of certain
compensation.

7.

NO OBLIGATIONS TO EXERCISE OPTION.

The grant of an Option shall impose no obligation upon the Optionee to exercise
such Option.

8.

NO RIGHT TO OPTIONS OR TO EMPLOYMENT.

The Plan Administrator will determine whether or not any Options are to be
granted under this Plan in its sole discretion, and nothing contained in this
Plan shall be construed as giving any person any right to participate under this
Plan.  The grant of an Option shall in no way constitute any form of agreement
or understanding binding on the Company or any Related Company, express or
implied, that the Company or any Related Company will employ or contract with an
Optionee for any length of time, nor shall it interfere in any way with the
Company’s or, where applicable, a Related Company’s right to terminate
Optionee’s employment at any time, which right is hereby reserved.

9.

APPLICATION OF FUNDS.

The proceeds received by the Company from the sale of Common Stock issued upon
the exercise of Options shall be used for general corporate purposes, unless
otherwise directed by the Board.

10.

INDEMNIFICATION OF PLAN ADMINISTRATOR.

In addition to all other rights of indemnification they may have as members of
the Board, members of the Plan Administrator shall be indemnified by the Company
for all reasonable expenses and liabilities of any type or nature, including
attorneys’ fees, incurred in connection with any action, suit or proceeding to
which they or any of them are a party by reason of, or in connection with, this
Plan or any Option granted under this Plan, and against all amounts paid by them
in settlement thereof (provided that such settlement is approved by independent
legal counsel selected by the Company), except to the extent that such expenses
relate to matters for which it is adjudged that such Plan Administrator member
is liable for willful misconduct; provided, that within fifteen (15) days after
the institution of any such action, suit or proceeding, the Plan Administrator
member involved therein shall, in writing, notify the Company of such action,
suit or proceeding, so that the Company may have the opportunity to make
appropriate arrangements to prosecute or defend the same.

 

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11.

AMENDMENT OF PLAN.

The Plan Administrator may, at any time, modify, amend or terminate this Plan or
modify or amend Options granted under this Plan, including, without limitation,
such modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; provided however, no amendment with
respect to an outstanding Option which has the effect of reducing the benefits
afforded to the Holder thereof shall be made over the objection of such Holder;
further provided, that the events triggering acceleration of vesting of
outstanding Options may be modified, expanded or eliminated without the consent
of Holders.  The Plan Administrator may condition the effectiveness of any such
amendment on the receipt of shareholder approval at such time and in such manner
as the Plan Administrator may consider necessary for the Company to comply with
or to avail the Company and/or the Optionees of the benefits of any securities,
tax, market listing or other administrative or regulatory requirement.  Without
limiting the generality of the foregoing, the Plan Administrator may modify
grants to persons who are eligible to receive Options under this Plan who are
foreign nationals or employed outside the United States to recognize differences
in local law, tax policy or custom.

Effective Date: September  5 , 2006___________.

APPROVED AND ADOPTED this 6 day of September, 2006

“Gerald Williams”

Gerald Williams, Director and Secretary

CERTIFICATE OF SECRETARY

I, Gerald Wiliams, hereby certify that I am the duly appointed Secretary of the
STALLION GROUP. and that the foregoing THE STALLION GROUP. 2006 Stock Option
Plan constitutes the 2006 Stock Option Plan of THE STALLION GROUP as duly
adopted at a regular meeting of the Board of Directors of the Corporation.

DATED this 6 day of September, 2006.

“Gerald Williams”

Gerald Williams, Director and Secretary

 

2006- Stock Option Plan

The Stallion Group

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