2006 DIRECTOR AND KEY EMPLOYEES STOCK OPTION PLAN




2006 DIRECTOR AND KEY EMPLOYEES STOCK OPTION PLAN




 


I. PURPOSES



COFFEE PACIFICA, INC., a Nevada corporation (the "Company")
desires to afford certain of its directors, key employees and certain directors
of any subsidiary corporation or parent corporation of the Company now existing
or hereafter formed or acquired an opportunity to acquire a proprietary interest
in the Company, and thus to create in such directors and key employees an
increased interest in and a greater concern for the welfare of the Company and
its subsidiaries.



The Company seeks to retain the services of certain persons
now serving as directors and key employees and to secure the services of persons
capable of filling such positions.



The stock options ("Options") offered pursuant to the Plan
are a matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any director.



The Options granted under the Plan are intended to be options
that do not meet the requirements for incentive stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").



II. AMOUNT OF STOCK SUBJECT TO THE PLAN



The total number of shares of common stock of the Company
which may be purchased or acquired pursuant to the exercise of Options granted
under the Plan shall not exceed, in the aggregate, 5,000,000 shares of the
authorized common stock, $.001 par value per share, of the Company (the
"Shares"), such number subject to adjustment as provided in Article XII hereof.
Shares that are the subject of Options shall be counted only once in determining
whether the maximum number of Shares that may be purchased or awarded under the
Plan has been exceeded.



Shares acquired under the Plan may be either authorized but
unissued Shares or Shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company. If and to the extent that Options
granted under the Plan expire or terminate without having been exercised, the
Shares covered by such expired or terminated Options shall again become
available for award under the Plan.



Except as provided in Article XVII and subject to Article II,
the Company may, from time to time, grant to certain directors and key employees
of the Company, or of any subsidiary corporation or parent corporation of the
Company now existing or hereafter formed or acquired, Options under the terms
hereinafter set forth.



 

As used in the Plan, the term "subsidiary corporation" and
"parent corporation" shall mean, respectively, a corporation coming within the
definition of such terms contained in Sections 424(f) and 424(e) of the Code.



III. ADMINISTRATION



The board of directors of the Company (the "Board") may
designate from among its members a director stock option committee, (the
"Committee") to administer the Plan. The Committee shall consist of no fewer
than two members of the Board. A majority of the members of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Any member of the Committee may be removed at
any time either with or without cause by resolution adopted by the Board, and
any vacancy on the Committee at any time may be filled by resolution adopted by
the Board.



Subject to the express provisions of the Plan, the Board and
the Committee shall have authority, in their discretion, to determine the
directors and key employees to whom Options shall be granted, the time when such
Options shall be granted, the number of Shares which shall be subject to each
Option, the purchase price or exercise price of each Option, the period(s)
during which such Options shall become exercisable (whether in whole or in part)
and the other terms and provisions thereof (which need not be identical).



Subject to the express provisions of the Plan, the Board and
the Committee also shall have authority to construe the Plan and the Options
granted thereunder, to amend the Plan and the Options granted thereunder, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the Options (which need not be identical)
granted thereunder and to make all other determinations necessary or advisable
for administering the Plan. The Board and the Committee also shall have the
authority to require, in its discretion, as a condition of the granting of any
such Option, that the director or key employee agree (i) not to sell or
otherwise dispose of Shares acquired pursuant to the exercise of such Option for
a period of six (6) months following the date of the acquisition of such Option
and (ii) that in the event of termination of service of such director, other
than as a result of removal without cause, such director or key employee will
not, for a period to be fixed at the time of the grant of the Option, enter into
any other employment or participate directly or indirectly in any other business
or enterprise which is competitive with the business of the Company or any
subsidiary corporation or parent corporation of the Company, or enter into any
employment in which such director or key employee will be called upon to utilize
special knowledge obtained through service as a director or key employee of the
Company or any subsidiary corporation or parent corporation thereof. In no event
will a director or key employee who is subject to the reporting requirements of
Section 16(a) of the Exchange Act be entitled to sell or otherwise dispose of
any Shares acquired pursuant to exercise of any such Options for a period of six
(6) months from the date of the acquisition of such Options.



The determination of the Board or Committee on matters
referred to in this Article III shall be conclusive.



The Board or Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration of the
Plan and may rely upon any opinion or computation received from any such legal
counsel, consultant or agent. Expenses incurred in the engagement of such
counsel, consultant or agent shall be paid by the Company. No member or former
member of the Board or Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any award of Options granted
hereunder. 



IV. ELIGIBILITY



The Plan does not create a right in any director or key
employee to participate in the Plan, nor does it create a right in any director
or key employee to have any Options granted to him or her.



V. OPTION PRICE AND PAYMENT



The price for each Share purchasable under any Option granted
hereunder shall be such amount as the Committee shall deem appropriate but not
less than one hundred percent (100%) of the fair market value per share at the
date the Option is granted.



If the Shares are listed on a national securities quotation
medium and exchange in the United States (which, for purposes of this Article V,
shall be deemed to include any last sale reported over-the-counter market), on
any date on which the fair market value per Share shall be deemed to be the
average of the high and low quotations at which such Shares are sold on such
national securities exchange or over-the-counter market on the date such Option
is granted. If the Shares are listed on a national securities exchange or
over-the-counter market in the United States on such date, but the Shares are
not traded on such date, or such national securities exchange or
over-the-counter market is not open for business on such date, the fair market
value per Share shall be determined as of the closest preceding date on which
such exchange or over-the-counter market shall have been open for business and
the Shares shall have been traded. 



If a public market exists for the Shares on any date on which
the fair market value per Share is to be determined but the Shares are not
listed on a national securities exchange in the United States, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on such date. If there
are no bid and asked quotations for the Shares on such date, the fair market
value per Share shall be deemed to be the mean between the closing bid and asked
quotations in the over-the-counter market for the Shares on the closest date
preceding such date for which such quotations are available.



If no public market exists for the Shares on any date on
which the fair market value per Share is to be determined, the Committee shall,
in its sole discretion and best judgment, determine the fair market value of a
Share.



For purposes of this Plan, the determination by the Committee
of the fair market value of a Share shall be conclusive.



Upon the exercise of an Option granted hereunder, the Company
shall cause the purchased Shares to be issued only when it shall have received
the full purchase price for the Shares in cash or by certified check; provided,
however, that in lieu of cash, the holder of an Option may, if and to the extent
the terms of such Option so provide and to the extent permitted by applicable
law, exercise an Option (a) in whole or in part, by delivering to the Company
shares of common stock of the Company (in proper form for transfer and
accompanied by all requisite stock transfer tax stamps or cash in lieu thereof)

owned by such holder having a fair market value equal to the
exercise price applicable to that portion of the Option being exercised by the
delivery of such Shares or (b) in part, by delivering to the Company an executed
promissory note on such terms and conditions as the Committee shall determine,
at the time of grant, in its sole discretion; provided, however, that the
principal amount of such note shall not exceed eighty percent (80%) (or such
lesser percentage as would be permitted by applicable margin regulations) of the
aggregate purchase price of the Shares then being purchased pursuant to the
exercise of such Option. The fair market value of the stock so delivered shall
be determined as of the date immediately preceding the date on which the Option
is exercised, or as may be required in order to comply with or to conform to the
requirements of any applicable laws or regulations.



VI. USE OF PROCEEDS



The cash proceeds of the sale of Shares pursuant to the Plan
are to be added to the general funds of the Company and used for its general
corporate purposes as the Board shall determine.



VII. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE



Any Option shall be exercisable at such times, in such
amounts and during such period or periods as the Board or Committee shall
determine at the date of the grant of such Option.



Subject to the provisions of Article XVIII, the Board or
Committee shall have the right to accelerate, in whole or in part, from time to
time, conditionally or unconditionally, rights to exercise any Option granted
hereunder.



To the extent that an Option is not exercised within the
period of exercisability specified therein, it shall expire as to the then
unexercised part.



In no event shall an Option granted hereunder be exercised
for a fraction of a Share.



VIII. EXERCISE OF OPTIONS



Options granted under the Plan shall be exercised by the
optionee as to all or part of the Shares covered thereby by the giving of
written notice of the exercise thereof to the Corporate Secretary of the Company
at the principal business office of the Company, specifying the number of Shares
to be purchased and specifying a business day not more than fifteen (15) days
from the date such notice is given for the payment of the purchase price against
delivery of the Shares being purchased. Subject to the terms of Articles XIII,
XV, and XVI, the Company shall cause certificates for the Shares so purchased to
be delivered to the optionee at the principal business office of the Company,
against payment of the full purchase price, on the date specified in the notice
of exercise.



IX. NON-TRANSFERABILITY OF OPTIONS



An Option granted hereunder shall not be transferable,
whether by operation of law or otherwise, other than by will or the law of
descent and distribution, and any Option granted hereunder shall be exercisable
during the lifetime of the holder only by such holder. Except to the extent
provided above, Options may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.



X. TERMINATION OF EMPLOYMENT



Upon the cessation of such person's status as a director or
key employee of the Company and all subsidiary corporations and parent
corporations of the Company, an

Option previously granted to the director, unless otherwise
specified by the Board or Committee in the Option, to the extent not theretofore
exercised, terminate and become null and void, provided that:



(a) if the director or key employee shall die while serving
as a director or key employee of such corporation or during either the three (3)
month or one (1) year period, whichever is applicable, specified in clause (b)
below and at a time when such director or key employee was entitled to exercise
an Option as herein provided, the legal representative of such director, or such
person who acquired such Option by bequest or inheritance or by reason of the
death of the director, may, not later than one (1) year from the date of death,
exercise such Option, to the extent not theretofore exercised, in respect of any
or all of such number of Shares as specified by the Board or Committee in such
Option; and



(b) if the service of any director to whom such Option shall
have been granted shall terminate by reason of the or key employee's retirement
(at such age or upon such conditions as shall be specified by the Board),
disability (as described in Section 22(e)(3) of the Code) or removal other than
for cause (as defined below), and while such director or key employee is
entitled to exercise such Option as herein provided, such director or key
employee shall have the right to exercise such Option so granted, to the extent
not theretofore exercised, in respect of any or all of such number of Shares as
specified by the Board or Committee in such Option, at any time up to and
including (i) three (3) months after the date of such termination of service in
the case of termination by reason of retirement or removal other than for cause
and (ii) one (1) year after the date of termination of service in the case of
termination by reason of disability.



If a director or key employee voluntarily terminates his or
her service, or is discharged for cause, any Option granted hereunder shall,
unless otherwise specified by the Board or Committee in the Option, forthwith
terminate with respect to any unexercised portion thereof.



If an Option granted hereunder shall be exercised by the
legal representative of a deceased or disabled director or key employee or
former director, or by a person who acquired an Option granted hereunder by
bequest or inheritance or by reason of death of any director or key employee or
former director, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
legal representative or other person to exercise such Option.



For the purposes of the Plan, the term "for cause" shall mean
(i) with respect to a director or key employee who is party to a written
agreement with, or, alternatively, participates in a compensation or benefit
plan of the Company or a subsidiary corporation or parent corporation of the
Company, which agreement or plan contains a definition of "for cause" or "cause"
(or words of like import) for purposes of termination of service thereunder,
"for cause" or "cause" as defined in the most recent of such agreements or
plans, or (ii) in all other cases, as determined by the Board in its sole
discretion, (a) the willful commission by a director or key employee of a
criminal or other act that causes or probably will cause substantial economic
damage to the Company or a subsidiary corporation or parent corporation of the
Company or substantial injury to the business reputation of the Company or a
subsidiary corporation or parent corporation of the Company; (b) the commission
by a director or key employee of an act of fraud in the performance of such
director's duties on behalf of the Company or a subsidiary corporation or parent
corporation of the Company; or (c) the continuing willful failure of a director
or key employee to perform the duties of such director or key employee to the
Company or a subsidiary corporation or parent corporation of the Company (other
than such failure resulting from the director's incapacity due to physical or
mental illness) after written notice thereof (specifying the particulars thereof
in reasonable detail) and a reasonable opportunity to be heard and cure such
failure are given to the director or key employee by the Board or the Committee.
For purposes of the Plan, no act, or failure to act, on the director's part
shall be considered "willful" unless done or omitted to be done by the director
or key employee not in good faith and without reasonable belief that the
director's action or omission was in the best interest of the Company or a
subsidiary corporation or parent corporation of the Company. 



In the event of the complete liquidation or dissolution of a
subsidiary corporation, or in the event that the Company ceases to own, directly
or indirectly, stock possessing 50% or more of the total combined voting power
of all classes of stock of such corporation, any unexercised Options theretofore
granted to any person who served as a director or key employee of such
subsidiary corporation will be deemed canceled unless such person serves on the
Board or board of directors of any parent corporation or another subsidiary
corporation after the occurrence of such event. In the event an Option is to be
canceled pursuant to the provisions of the previous sentence, notice of such
cancellation will be given to each director or key employee holding unexercised
Options and such holder will have the right to exercise such Options in full
(without regard to any limitation set forth or imposed pursuant to Article VII)
during the 30 day period following notice of such cancellation.



Notwithstanding anything to the contrary contained in this
Article XI, in no event, however, shall any person be entitled to exercise any
Option after the expiration of the period of exercisability of such Option as
specified therein.



XI. ADJUSTMENT OF SHARES; EFFECT OF CERTAIN TRANSACTIONS



In the event of any change in the outstanding Shares through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or other like change in capital structure of the Company, the Board or Committee
shall make such adjustment to each outstanding Option that it, in its sole
discretion, deems appropriate. The term "Shares" after any such change shall
refer to the securities, cash and/or property then receivable upon exercise of
an Option. In addition, in the event of any such change, the Board or Committee
shall make any further adjustment as may be appropriate to the maximum number of
Shares which may be acquired under the Plan pursuant to the exercise of Options,
the maximum number of Shares which may be so acquired by one director or key
employee and the number of Shares and prices per Share subject to outstanding
Options as shall be equitable to prevent dilution or enlargement of rights under
such Options, and the determination of the Board or Committee as to these
matters shall be conclusive.



In the event of a "change in control" of the Company, all
then outstanding Options shall immediately become exercisable. For purposes of
the Plan, a "change in control" of the Company occurs if: (a) any "Person" (as
such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing (i) 50% or more of the combined voting
power of the Company's then-outstanding securities; or (ii) 25% or more but less
than 50% of the combined voting power of the Company's then

outstanding securities if such transaction(s) giving rise to
such beneficial ownership are not approved by the Board; or (b) at any time a
majority of the members of the Bard has been elected or designated by any
Person; or (c) the Board shall approve a sale of all or substantially all of the
assets, the result of which would be the occurrence of any event described in
clause (a) or (b) above.



The Board or Committee, in its discretion, may determine
that, upon the occurrence of a transaction described in the preceding paragraph,
each Option outstanding hereunder shall terminate within a specified number of
days after notice to the holder, and such holder shall receive, with respect to
each Share subject to such Option, cash in an amount equal to the excess of the
fair market value of such Shares immediately prior to the occurrence of such
transaction over the exercise price per share of such Option. 



XII. RIGHT TO TERMINATE EMPLOYMENT



The Plan shall not impose any obligation on the Company or on
any subsidiary corporation or parent corporation thereof to continue the service
of any holder of Options and it shall not impose any obligation on the part of
any holder of Options to remain in the service of the Company or of any
subsidiary corporation or parent corporation thereof.



XIII. PURCHASE FOR INVESTMENT



Except for hereinafter provided, the Board or Committee may
require a director or key employee, as a condition upon exercise of any Option
granted hereunder,

to execute and deliver to the Company (a) stock powers with
respect to Shares underlying a particular Option and required to be held by a
custodian, and (b) a written statement, in form satisfactory to the Board or
Committee in which the director or key employee represents and warrants that
Shares are being acquired for such person's own account for investment only and
not with a view to the resale or distribution thereof. The director or key
employee shall, at the request of the Board or Committee, be required to
represent and warrant in writing that any subsequent resale or distribution of
Shares by the director or key employee shall be made only pursuant to either (i)
a Registration Statement on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), which Registration Statement has become
effective and is current with regard to the Shares being sold, or (ii) a
specific exemption from the registration requirements of the Securities Act, but
in claiming such exemption the director or key employee shall, prior to any
offer of sale or sale of such Shares, obtain a prior favorable written opinion
of counsel, in form and substance satisfactory to counsel for the Company, as to
the application of such exemption thereto. The foregoing restriction shall not
apply to (i) issuances by the Company so long as the Shares being issued are
registered under the Securities Act and a prospectus in respect thereof is
current or (ii) re-offerings of Shares by affiliates of the Company (as defined
in Rule 405 or any successor rule or regulation promulgated under the Securities
Act) if the Shares being re-offered are registered under the Securities Act and
a prospectus in respect thereof is current.



XIV. ISSUE OF CERTIFICATES, LEGENDS, PAYMENT OF EXPENSES



Upon any exercise of an Option which may be granted hereunder
and, in the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in the name of the
person exercising the Option and shall be delivered to or upon the order of such
person.



The Company may endorse such legend or legends upon the
certificates for Shares issued pursuant to the Plan and may issue such "stop
transfer" instructions to its transfer agent in respect of such Shares as, in
its discretion, it determines to be necessary or appropriate to (i) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (ii) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares.



The Company shall pay all issue or transfer taxes with
respect to the issuance of transfer of Shares, as well as all fees and expenses
necessarily incurred by the Company in connection with such issuance or
transfer, except fees and expenses which may be necessitated by the filing or
amending of a Registration Statement under the Securities Act, which fees and
expenses shall be borne by the recipient of the Shares unless such Registration
Statement has been filed by the Company for its own corporate purposes (and the
Company so states) in which event the recipient of the Shares shall bear only
fees and expenses as are attributable solely to the inclusion of the Shares he
or she receives in the Registration Statement.



All Shares issued as provided herein shall be fully paid and
non-assessable to the extent permitted by law.



XV. LISTING OF SHARES AND RELATED MATTERS



The Board or Committee may delay any award, issuance or
delivery of Shares if it determines that listing, registration or qualification
of Shares or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Committee.



XVI. AMENDMENT OF THE PLAN



The Board or the Committee, as the case may be, may, from
time to time, amend the Plan, provided that no amendment shall be made, without
the approval of the stockholders of the Company, that will (i) increase the
total number of Shares reserved for Options under the Plan (other than an
increase resulting from an adjustment provided for in Article XII), (ii) reduce
the exercise price of any Option granted hereunder below the price required by
Article V, (iii) modify the provisions of the Plan relating to eligibility, or
(iv) materially increase the benefits accruing to participants under the Plan.
The rights and obligations under any Option granted before amendment of the Plan
or any unexercised portion of such Option shall not be adversely affected by
amendment of the Plan, Option without the consent of the holder of such Option.



XVII. TERMINATION OR SUSPENSION OF THE PLAN



The Board may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated by action of the Board, shall terminate at the
close of business five (5) years from the date the Plan is first adopted by the
Board of Directors. Options may not be granted while the Plan is suspended or
after it is terminated. Rights and obligations under any Option granted while
the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except upon the consent of the person to whom the
Option was granted. The power of the Board or Committee to construe and
administer any Options granted prior to the termination or suspension of the
Plan under Article III nevertheless shall continue after such termination or
during such suspension.



XVIII. GOVERNING LAW



The Plan, such Options as may be granted thereunder and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of Nevada from time to time obtaining.



XIX. PARTIAL INVALIDITY



The invalidity or illegibility of any provision hereof shall
not be deemed to affect the validity of any other provision.



XX. EFFECTIVE DATE



The Plan shall become effective at 5:30 P.M., Pacific
Daylight Time, on the Effective Date.