|STOCK OPTION PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
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|1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|The purpose of the Stock Option Plan (the "Amended 1994 Plan") of Birch
    Mountain Resources Ltd., a corporation incorporated under the Business
    Corporations Act(Alberta) (the "Corporation") is to advance the interests
    of the Corporation by encouraging the directors, senior officers, employees
    and consultants of the Corporation, and of its subsidiaries, if any, to
    acquire common shares in the share capital of the Corporation, thereby
    increasing their proprietary interest in the Corporation, encouraging them
    to remain associated with the Corporation and furnishing them with
    additional incentive in their efforts on behalf of the Corporation in the
    conduct of its affairs.
|2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|All options granted pursuant to this Amended 1994 Plan shall be subject to
    rules and policies of any stock exchange or exchanges on which the common
    shares of the Corporation are then listed and any other regulatory body
    having jurisdiction hereinafter (hereinafter collectively referred to as,
    the "Exchange").                                                                                                                                                                                                                                                                                                                                                                                                
|4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Subject to adjustment as provided in Section 15 hereof, the shares to be
    offered under the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         





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|Amended 1994 Plan shall consist of common shares of the
    Corporation's authorized but unissued common shares ("Shares"). The
    aggregate number of Shares issuable upon the exercise of all options granted
    under the Amended 1994 Plan shall not exceed 10% of the issued and
    outstanding Shares of the Corporation from time to time.
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|5.                                                                                                                                                                                                                                                                                                                                                  
|The Corporation shall at all times during the term of the Amended 1994 Plan
    reserve and keep available such numbers of Shares as will be sufficient to
    satisfy the requirements of the Amended 1994 Plan.                                                                                                                                   
|6.                                                                                                                                                                                                                                                                                                                                                  
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|7.                                                                                                                                                                                                                                                                                                                                                  
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|8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Number of Optioned Shares               
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (a)                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (b)                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (c)                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (d)                                     
|9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Duration of Option                      
|Each option and all rights thereunder shall be expressed to expire on the
    date set out in the option agreement and shall be subject to earlier
    termination as provided in Sections 11 and 12, provided that in no
    circumstance shall the duration of an option exceed the maximum term
    permitted by the Exchange. For greater certainty, if the Corporation is
    listed on the TSX Venture Exchange Inc. ("TSX-V"), the maximum term may not
    exceed 10 years if the Corporation is classified as a "Tier 1 Issuer" by the
    TSX-V, and the maximum term may not exceed 5 years if the Corporation is
    classified as a "Tier 2 Issuer" by the TSX-V.
|10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | Option Period, Consideration and Payment
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (a)                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (b)                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (c)                                     



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|                                                                                                                                                                                                       |                                                                      | may be exercised under this Amended 1994 Plan until this
    Amended 1994 Plan has been approved by a resolution duly passed by the
    shareholders of the Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                       | (d)                                                                  | Except as set forth in Sections 11 and 12, no option may
    be exercised unless the Participant is at the time of such exercise a
    director, senior officer, consultant, or employee of the Corporation or any
    of its subsidiaries, or a Management Company Employee of the Corporation or
    any of its subsidiaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                       | (e)                                                                  | The exercise of any option will be contingent upon
    receipt by the Corporation at its head office of a written notice of
    exercise, specifying the number of Shares with respect to which the option
    is being exercised, accompanied by cash payment, certified cheque or bank
    draft for the full purchase price of such Shares with respect to which the
    option is exercised. No Participant or his legal representatives, legatees
    or distributees will be, or will be deemed to be, a holder of any Shares of
    the Corporation unless and until the certificates for such Shares issuable
    pursuant to options under the Amended 1994 Plan are issued to him or them
    under the terms of the Amended 1994 Plan.                                
|11.                                                                                                                                                                                                    | Ceasing To Be a Director, Senior Officer, Consultant or
    Employee
|                                                                                                                                                                                                       | (a)                                                                  | If a Participant shall cease to be a director, senior
    officer, consultant, employee or a Management Company Employee of the
    Corporation, or its subsidiaries, for any reason (other than death), such
    Participant may exercise his option to the extent that the Participant was
    entitled to exercise it at the date of such cessation, provided that such
    exercise must occur within 90 days after the Participant ceases to be a
    director, senior officer, consultant, employee or a Management Company
    Employee, unless such Participant was engaged in investor relations
    activities, in which case such exercise must occur within 30 days after the
    cessation of the Participant's services to the Corporation or its
    subsidiaries.
|                                                                                                                                                                                                       | (b)                                                                  | Nothing contained in the Amended 1994 Plan, nor in any
    option granted pursuant to the Amended 1994 Plan, shall as such confer upon
    any Participant any right with respect to continuance as a director, senior
    officer, consultant, employee or Management Company Employee of the
    Corporation or of any of its subsidiaries or affiliates.                                                                                                                                                                                                                                                                                                                                                                                                                      
|12.                                                                                                                                                                                                    | Death of Participant                                                
|Notwithstanding section 11, in the event of the death of
    a Participant, the option previously granted to him shall be exercisable
    only within the one (1) year after such death and then only:
|                                                                                                                                                                                                       | (a)                                                                  | by the person or persons to whom the Participant's rights
    under the option shall pass by the Participant's will or the laws of descent
    and distribution; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                       | (b)                                                                  | if and to the extent that such Participant was entitled
    to exercise the option at the date of his death.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



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|13.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Rights of Optionee                            
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------
|No person entitled to exercise any option granted under the Amended 1994
    Plan shall have any of the rights or privileges of a shareholder of the
    Corporation in respect of any Shares issuable upon exercise of such option
    until certificates representing such Shares shall have been issued and
    delivered.                                                                                                                                                                                                                                                                                    
|14.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Proceeds from Sale of Shares                  
|The proceeds from the sale of Shares issued upon the
    exercise of options shall be added to the general funds of the Corporation
    and shall thereafter be used from time to time for such corporate purposes
    as the Board may determine.                                                                                                                                                                                                                                                                                                                                                               
|15.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Adjustments                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (a)                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (b)                                           
|16.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Transferability                               
|All benefits, rights and options accruing to any
    Participant in accordance with the terms and conditions of the Amended 1994
    Plan shall not be transferable or assignable unless specifically provided
    herein or the extent, if any, permitted by the Exchange. During the lifetime
    of a Participant any benefits, rights and options may only be exercised by
    the Participant.                                                                                                                                                                                                              
|17.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Amendment and Termination of Amended 1994 Plan
|Subject to applicable approval of the Exchange, the Board
    may, at any time, suspend or terminate the Amended 1994 Plan. Subject to
    applicable approval of the Exchange, the Board may also at any time amend or
    revise the terms of the Amended 1994 Plan; provided that no such amendment
    or revision shall result in a material adverse change to the terms of any
    options theretofore granted under the Amended 1994 Plan, unless shareholder
    approval, or disinterested shareholder approval, as the case may be, is
    obtained for such amendment or revision.                    
|18.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Necessary Approvals                           
|The ability of a Participant to exercise options and the
    obligation of the Corporation to issue and deliver Shares in accordance with
    the Amended 1994 Plan is subject to any approvals which may be required from
    shareholders of the Corporation and any regulatory authority or stock
    exchange having jurisdiction over the securities of the Corporation. If any
    Shares cannot be issued to any Participant for whatever reason, the
    obligation of the Corporation to issue such Shares shall terminate and any
    option exercise price paid to the Corporation will be returned to



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|the Participant.                                                                                                                                                                                                                                                        
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|19.                                                                                                                                                                                                                                                                     
|The Amended 1994 Plan has been adopted by the Board of
    the Corporation subject to the approval of the Exchange and, if so approved,
    subject to the discretion of the Board, the Amended 1994 Plan shall become
    effective upon such approvals being obtained.
|20.                                                                                                                                                                                                                                                                     
|The Amended 1994 Plan will be governed by and construed
    in accordance with the laws of the Province of Alberta.                                                                                                                                                     
|MADE by the Board of Directors of the Corporation as
    evidenced by the signature of the following director duly authorized in that
    behalf effective the 8th day of May, 2003, and approved by the shareholders
    of the Corporation on _______________ , 2003. 
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