Filed by Automated Filing Services Inc. (604) 609-0244 - Sterling Group Ventures, Inc. - Exhibit 10.1





 EXHIBIT 10.1 2004 Incentive Stock Option Plan  

 2004 STOCK OPTION PLAN OF

  STERLING GROUP VENTURES, INC  


SECTION 1. ESTABLISHMENT AND PURPOSE.



The Plan is established on February 3, 2004, effective on approval by shareholders, to offer directors and selected employees, advisors and consultants an opportunity to acquire a proprietary interest in the success of the Company, or to increase
such interest, by purchasing Shares of the Company's Common Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options as well
as ISOs intended to qualify under section 422 of the Code.



The Plan is intended to comply in all respects with Rule 16b-3 (or its successor) under the Exchange Act and shall be construed accordingly.



SECTION 2. DEFINITIONS.


	(a)
   	"Board of Directors" shall
        mean the Board of Directors of the Company, as constituted from time to
        time.

         

	(b)
   	"Code" shall mean the Internal
        Revenue Code of 1986, as amended.

         

	(c)
   	"Committee" shall mean a
        committee of the Board of Directors, as described in Section 3(a).

         

	(d)
   	"Company" shall mean Sterling
        Group Ventures, Inc., a Nevada corporation.

         

	(e)
   	"Employee" shall mean (i)
        any individual who is a common-law employee of the Company or of a Subsidiary,
        (ii) an Outside Director and (iii) an advisor, a consultant or an independent
        contractor who performs services for the Company or a Subsidiary and who
        is not a member of the Board of Directors. Service as an Outside Director
        shall be considered employment for all purposes of the Plan, except as
        provided in Subsections (a) and (b) of Section 4.

         

	(f)
   	"Exchange Act" shall mean
        the Securities Exchange Act of 1934, as amended.

         

	(g)
   	"Exercise Price" shall mean
        the amount for which one Share may be purchased upon exercise of an Option,
        as specified by the Committee in the applicable Stock Option Agreement.

         

	(h)
   	"Fair Market Value" shall
        mean the market price of Stock, determined by the Committee as follows:

         

	 	(i)
   	If Stock was traded on a stock exchange
        on the date in question, then the Fair Market Value shall be equal to
        the closing price reported for such date by the applicable composite-
        transactions report;

         

	 	(ii)
   	If Stock was traded over-the-counter
        on the date in question and was traded on the Nasdaq system or the Nasdaq
        National Market, then the Fair Market Value shall be equal to the last-transaction
        price quoted for such date by the Nasdaq system or the Nasdaq National
        Market;

         

	 	(iii)
   	If Stock was traded over-the-counter
        on the date in question but was not traded on the Nasdaq system or the
        Nasdaq National Market, then the Fair Market Value shall be equal to the
        mean between the last reported representative bid and asked prices quoted
        for such date by the principal automated inter-dealer quotation system
        on which Stock is quoted or, if the Stock is not quoted on any such system,
        by the "Pink Sheets" published by the National Quotation Bureau, Inc.;
        and

         

	 	(iv)	If none of the foregoing provisions
        is applicable, then the Fair Market Value shall be determined by the Committee
        in good faith on such basis as it deems appropriate.



 In all cases, the determination of Fair Market Value by the Committee shall
  be conclusive and binding on all persons.

	(i) 	"ISO" shall mean an employee incentive stock option described in section
      422(b) of the Code. 

        




 

	(j)
  	"Nonstatutory Option" shall mean an employee stock option not described in sections 422(b) or 423(b) of the Code.

       
	(k)
  	"Offeree" shall mean an individual to whom the Committee has offered the right to acquire Shares under the Plan (other than upon exercise of an Option).

       
	(l)
  	"Option" shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

       
	(m)
  	"Optionee" shall mean an individual who holds an Option.

       
	(n)	"Outside Director" shall mean a member of the Board of Directors
      who is not a common-law employee of the Company or of a Subsidiary.



SECTION 3. ADMINISTRATION.


	(a)
   	Committee Membership. The
        Plan shall be administered by the Committee. The "Committee" shall mean
        the full Board of Directors and/or a committee designated by the Board
        of Directors, which is authorized to administer the Plan under this Section.
        The Committee's membership shall enable the Plan to qualify under Rule
        16b-3 with regard to the grant of Shares and Options under the Plan to
        persons who are subject to Section 16 of the Exchange Act. Subject to
        the requirements of applicable law, the Committee may designate persons
        other than members of the Committee to carry out its responsibilities
        and may prescribe such conditions and limitations as it may deem appropriate,
        except that the Committee may not delegate its authority with regard to
        the selection for participation of or the granting of Shares or Options
        under the Plan to persons subject to Section 16 of the Exchange Act.

         

	(b)
   	Committee Procedures. The
        Committee shall designate one of its members as chairman. The Committee
        may hold meetings at such times and places as it shall determine. The
        acts of a majority of the Committee members present at meetings at which
        a quorum exists, or acts reduced to or approved in writing by all Committee
        members, shall be valid acts of the Committee.

         

	(c)
   	Committee Responsibilities.
        Subject to the provisions of the Plan, the Committee shall have full authority
        and discretion to take the following actions:

         

	 	(i)
   	To interpret the Plan and to apply its
        provisions;

         

	 	(ii)
   	To adopt, amend or rescind rules, procedures
        and forms relating to the Plan;

         

	 	(iii)
   	To authorize any person to execute,
        on behalf of the Company, any instrument required to carry out the purposes
        of the Plan;

         

	 	(iv)
   	To determine when Shares are to be awarded
        or offered for sale and when Options are to be granted under the Plan;

         

	 	(v)
   	To select the Offerees and Optionees;

         

	 	(vi)	To determine the number of Shares to
        be offered to each Offeree or to be made subject to each Option; 

          



	 	(vii)	To prescribe the terms and conditions
        of each award or sale of Shares, including (without limitation) the Purchase
        Price, and to specify the provisions of the Stock Purchase Agreement relating
        to such award or sale;

          

	 	(viii) 	To prescribe the terms and conditions
        of each Option, including (without limitation) the Exercise Price, to
        determine whether such Option is to be classified as an ISO or as a Nonstatutory
        Option, and to specify the provisions of the Stock Option Agreement relating
        to such Option; 

          

	 	(ix)
   	To amend any outstanding Stock Purchase
        Agreement or Stock Option Agreement, subject to applicable legal restrictions
        and, to the extent such amendments adverse to the Offeree's or Optionee's
        interest, to the consent of the Offeree or Optionee who entered into such
        agreement;

      

	 	 	 
	 	(x)
   	To prescribe the consideration for the
        grant of each Option or other right under the Plan and to determine the
        sufficiency of such consideration; and

      

	 	(xi)
   	To take any other actions deemed necessary
        or advisable for the administration of the Plan.

      











All decisions, interpretations and other actions of the Committee shall be final and binding on all Offerees, all Optionees, and all persons deriving their rights from an Offeree or Optionee. No member of the Committee shall be liable for any action
that he or she has taken or has failed to take in good faith with respect to the Plan, any Option, or any right to acquire Shares under the Plan.



SECTION 4. ELIGIBILITY.


	(a)
   	General Rules. Only Employees
        (including, without limitation, advisors, consultants and independent
        contractors who are not members of the Board of Directors) shall be eligible
        for designation as Optionees or Offerees by the Committee. In addition,
        only Employees who are common-law employees of the Company or a Subsidiary
        shall be eligible for the grant of ISOs. Employees who are Outside Directors
        shall only be eligible for the grant of the Nonstatutory Options described
        in Subsection (b) below.

         

	(b)
   	Outside Directors. Any other
        provision of the Plan not with-standing, the participation of Outside
        Directors in the Plan shall be subject to the following restrictions:

         

	 	(i)
   	Outside Directors shall receive no grants
        other than the Nonstatutory Options described in this Subsection (b).

         

	 	(ii)
   	All Nonstatutory Options granted to
        an Outside Director under this Subsection (b) shall also become exercisable
        in full in the event of the termination of such Outside Director's service
        because of death, Total and Permanent Disability or voluntary retirement
        at or after age 65.

         

	 	(iii)
   	The Exercise Price under all Nonstatutory
        Options granted to an Outside Director under this Subsection (b) shall
        be equal to 100 percent of the Fair Market Value of a Share on the day
        before grant, payable in one of the forms described in Subsection (a),
        (b), (c) or (d) of Section 8.

         

	 	(iv)	Nonstatutory Options granted to an Outside
        Director under this Subsection (b) shall terminate on the earliest of
        (A) the 10th anniversary of the date of grant, (B) the date 120 days after
        the termination of such Outside Director's service for any reason other
        than death or Total and Perm- anent Disability or (C) the date 6
        months after the termination of such Outside Director's service because
        of death or Total and Permanent Disability.



 The Committee may provide that the Nonstatutory Options that
  otherwise would be granted to an Outside Director under this Subsection (b)
  shall instead be granted to an affiliate of such Outside Director. Such affiliate
  shall then be deemed to be an Outside Director for purposes of the Plan, provided
  that the service-related vesting and termination provisions pertaining to the
  Nonstatutory Options shall be applied with regard to the service of the Outside
  Director. 


SECTION 5. STOCK SUBJECT TO PLAN.


	(a)

        	Basic Limitation. Shares offered under
        the Plan shall be authorized but unissued Shares or treasury Shares. The
        aggregate number of Shares which may be issued under the Plan (upon exercise
        of Options or other rights to acquire Shares) shall not exceed 15% of
        Shares outstanding, subject to adjustment pursuant to Section 9. The number
        of Shares which are subject to Options or other rights outstanding at
        any time under the Plan shall not exceed the number of Shares which then
        remain available for issuance under the Plan. The Company, during the
        term of the Plan, shall at all times reserve and keep available sufficient
        Shares to satisfy the requirements of the Plan.

         

	(b)

        	Additional Shares. In the event that
        any outstanding Option or other right for any reason expires or is canceled
        or otherwise terminated, the Shares allocable to the unexercised portion
        of such Option or other right shall again be available for the purposes
        of the Plan. In the event that Shares issued under the Plan are reacquired
        by the Company pursuant to a forfeiture provision, a right of repurchase
        or a right of first refusal, such Shares shall again be available for
        the purposes of the Plan.

          







SECTION 6. TERMS AND CONDITIONS OF AWARDS OR SALES.



	(a)

        	Stock Purchase Agreement. Each award
        or sale of Shares under the Plan (other than upon exercise of an Option)
        shall be evidenced by a Stock Purchase Agreement between the Offeree and
        the Company. Such award or sale shall be subject to all applicable terms
        and conditions of the Plan and may be subject to any other terms and conditions
        which are not inconsistent with the Plan and which the Committee deems
        appropriate for inclusion in a Stock Purchase Agreement. The provisions
        of the various Stock Purchase Agreements entered into under the Plan need
        not be identical.

         

	(b)

        	Duration of Offers and Nontransferability
        of Rights. Any right to acquire Shares under the Plan (other than an Option)
        shall automatically expire if not exercised by the Offeree within 60 days
        after the grant of such right was communicated to the Offeree by the Committee.
        Such right shall not be transferable and shall be exercisable only by
        the Offeree to whom such right was granted.

         

	(c)

        	Purchase Price. The Purchase Price of
        Shares to be offered under the Plan shall not be less than 100 percent
        of the Fair Market Value of such Shares. Subject to the preceding sentence,
        the Purchase Price shall be determined by the Committee at its sole discretion.
        The Purchase Price shall be payable in a form described in Section 8.

         

	(d)

        	Withholding Taxes. As a condition to
        the award, sale or vesting of Shares, the Offeree shall make such arrangements
        as the Committee may require for the satisfaction of any federal, state,
        local or foreign withholding tax obligations that arise in connection
        with such Shares. The Committee may permit the Offeree to satisfy all
        or part of his or her tax obligations related to such Shares by having
        the Company withhold a portion of any Shares that otherwise would be issued
        to him or her or by surrendering any Shares that previously were acquired
        by him or her. The Shares withheld or surrendered shall be valued at their
        Fair Market Value on the date when taxes otherwise would be withheld in
        cash. The payment of taxes by assigning Shares to the Company, if permitted
        by the Committee, shall be subject to such restrictions as the Committee
        may impose, including any restrictions required by rules of the Securities
        and Exchange Commission.

         

	(e)	Restrictions on Transfer of Shares.
        Any Shares awarded or sold under the Plan shall be subject to such special
        forfeiture conditions, rights of repurchase, rights of first refusal and
        other transfer restrictions as the Committee may determine. Such restrictions
        shall be set forth in the applicable Stock Purchase Agreement and shall
        apply in addition to any general restrictions that may apply to all holders
        of Shares.




SECTION 7. TERMS AND CONDITIONS OF OPTIONS.


	(a)

        	Stock Option Agreement. Each grant of
        an Option under the Plan shall be evidenced by a Stock Option Agreement
        between the Optionee and the Company. Such Option shall be subject to
        all applicable terms and conditions of the Plan and may be subject to
        any other terms and conditions which are not inconsistent with the Plan
        and which the Committee deems appropriate for inclusion in a Stock Option
        Agreement. The provisions of the various Stock Option Agreements entered
        into under the Plan need not be identical.

         

	(b)

        	Number of Shares. Each Stock Option
        Agreement shall specify the number of Shares that are subject to the Option
        and shall provide for the adjustment of such number in accordance with
        Section 9. The Stock Option Agreement shall also specify whether the Option
        is an ISO or a Nonstatutory Option.

         

	(c)

        	Exercise Price. Each Stock Option Agreement
        shall specify the Exercise Price. The Exercise Price of an ISO shall not
        be less than 100 percent of the Fair Market Value of a Share on the day
        before grant. The Exercise Price of a Nonstatutory Option shall not be
        less than 100 percent of the Fair Market Value of a Share on the day before
        grant. Subject to the preceding two sentences, the Exercise Price under
        any Option shall be determined by the Committee at its sole discretion.
        The Exercise Price shall be payable in a form described in Section 8.

         

	(d)

        	Withholding Taxes. As a condition to
        the exercise of an Option, the Optionee shall make such arrangements as
        the Committee may require for the satisfaction of any federal, state,
        local or foreign withholding tax obligations that arise in connection
        with such exercise. The Optionee shall also make such arrangements as
        the Committee may require for the satisfaction of any federal, state,
        local or foreign withholding tax obligations that may arise in connection
        with the disposition of Shares acquired by exercising an Option. The Committee
        may permit the Optionee to satisfy all or part of his or her tax obligations
        related to the Option by having the Company withhold a portion of any
        Shares that otherwise would be issued to him or her or by surrendering
        any Shares that previously were acquired by him or her. Such Shares shall
        be valued at their Fair Market

         







 Value on the date when taxes otherwise
  would be withheld in cash. The payment of taxes by assigning Shares to the Company,
  if permitted by the Committee, shall be subject to such restrictions as the
  Committee may impose, including any restrictions required by rules of the Securities
  and Exchange Commission. 

	(e)

        	Exercisability and Term.
        Each Stock Option Agreement shall specify the date when all or any installment
        of the Option is to become exercisable. The vesting of any Option shall
        be determined by the Committee at its sole discretion. A Stock Option
        Agreement may provide for accelerated exercisability in the event of the
        Optionee's death, Total and Permanent Disability or retirement or other
        events. The Stock Option Agreement shall also specify the term of the
        Option. The term shall not exceed 10 years from the date of grant. Subject
        to the preceding sentence, the Committee at its sole discretion shall
        determine when an Option is to expire.

         

	(f)

        	Nontransferability. During
        an Optionee's lifetime, such Optionee's Option(s) shall be exercisable
        only by him or her and shall not be transferable, unless permitted by
        the Stock Option Agreement. In the event of an Optionee's death, such
        Optionee's Option(s) shall not be transferable other than by will, by
        a beneficiary designation executed by the Optionee and delivered to the
        Company, or by the laws of descent and distribution.

         

	(g)

        	Termination of Service (Except
        by Death). If an Optionee's Service terminates for any reason other than
        the Optionee's death, then such Optionee's Option(s) shall expire on the
        earliest of the following occasions:

         

	 	(i)

        	The expiration date determined pursuant
        to Subsection (e) above;

         

	 	(ii)

        	The date 120 days after the termination
        of the Optionee's Service for any reason other than Total and Permanent
        Disability; or

         

	 	(iii)	The date six months after the termination
        of the Optionee's Service by reason of Total and Permanent Disability.



 The Optionee may exercise all or part
  of his or her Option(s) at any time before the expiration of such Option(s)
  under the preceding sentence, but only to the extent that such Option(s) had
  become exercisable before the Optionee's Service terminated or became exercisable
  as a result of the termination. The balance of such Option(s) shall lapse when
  the Optionee's Service terminates. In the event that the Optionee dies after
  the termination of the Optionee's Service but before the expiration of the Optionee's
  Option(s), all or part of such Option(s) may be exercised (prior to expiration)
  by his or her designated beneficiary (if applicable), by the executors or administrators
  of the Optionee's estate or by any person who has acquired such Option(s) directly
  from the Optionee by bequest or inheritance, but only to the extent that such
  Option(s) had become exercisable before the Optionee's Service terminated or
  became exercisable as a result of the termination. 

	(h)
   	Leaves of Absence. For purposes
        of Subsection (g) above, Service 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 Committee). The foregoing notwithstanding,
        in the case of an ISO granted under the Plan, Service shall not be deemed
        to continue beyond the first 90 days of such leave, unless the Optionee's
        reemployment rights are guaranteed by statute or by contract.

      

	 	 
	(i)
   	Death of Optionee. If an
        Optionee dies while he or she is in Service, then such Optionee's Option(s)
        shall expire on the earlier of the following dates:

	 	(i)	The expiration date determined pursuant
        to Subsection (e) above; or

	 	(ii)	The date six months after the Optionee's
        death.

          



	 	All or part of the Optionee's Option(s) may be exercised
        at any time before the expiration of such Option(s) under the preceding
        sentence by his or her designated beneficiary (if applicable), by the
        executors or administrators of the Optionee's estate or by any person
        who has acquired such Option(s) directly from the Optionee by bequest
        or inheritance, but only to the extent that such Option(s) had become
        exercisable before the Optionee's death or became exercisable as a result
        of the Optionee's death. The balance of such Option(s) shall lapse when
        the Optionee dies. 

          

	(j)	No Rights as a Stockholder. An Optionee, or a transferee
        of an Optionee, shall have no rights as a stockholder with respect to
        any Shares covered by his or her Option until the date of the issuance
        of a stock certificate for such Shares. No adjustments shall be made,
        except as provided in Section 9.

          





 

	(k)

        	Modification, Extension and Renewal
        of Options. Within the limitations of the Plan, the Committee may modify,
        extend or renew outstanding Options or may accept the cancellation of
        outstanding Options (to the extent not previously exercised) in return
        for the grant of new Options at the same or a different price. The foregoing
        notwithstanding, no modification of an Option shall, without the consent
        of the Optionee, impair such Optionee's rights or increase his or her
        obligations under such Option.

         

	(l)	Restrictions on Transfer of Shares.
        Any Shares issued upon exercise of an Option shall be subject to such
        special forfeiture conditions, rights of repurchase, rights of first refusal
        and other transfer restrictions as the Committee may determine. Such restrictions
        shall be set forth in the applicable Stock Option Agreement and shall
        apply in addition to any general restrictions that may apply to all holders
        of Shares.




SECTION 8. PAYMENT FOR SHARES.


	(a)
   	General Rule. The entire
        Purchase Price or Exercise Price of Shares issued under the Plan shall
        be payable in lawful money of the United States of America at the time
        when such Shares are purchased, except as follows:

         

	 	(i)
   	In the case of Shares sold under the
        terms of a Stock Purchase Agreement subject to the Plan, payment shall
        be made only pursuant to the express provisions of such Stock Purchase
        Agreement. However, the Committee (at its sole discretion) may specify
        in the Stock Purchase Agreement that payment may be made in one or all
        of the forms described in Subsections (e), (f) and (g) below.

         

	 	(ii)
   	In the case of an ISO granted under
        the Plan, payment shall be made only pursuant to the express provisions
        of the applicable Stock Option Agreement. However, the Committee (at its
        sole discretion) may specify in the Stock Option Agreement that payment
        may be made pursuant to Subsections (b), (c), (d), (f) or (g) below.

         

	 	(iii)
   	In the case of a Nonstatutory Option
        granted under the Plan, the Committee (at its sole discretion) may accept
        payment pursuant to Subsections (b), (c), (d), (f) or (g) below.

         

	(b)
   	Surrender of Stock. To the
        extent that this Subsection (b) is applicable, payment may be made all
        or in part with Shares which have already been owned by the Optionee or
        his or her representative for more than 12 months and which are surrendered
        to the Company in good form for transfer. Such Shares shall be valued
        at their Fair Market Value on the date when the new Shares are purchased
        under the Plan.

          

	(c) 	Exercise/Sale. To the extent
        that this Subsection (c) is applicable, payment may be made by the delivery
        (on a form prescribed by the Company) of an irrevocable direction to a
        securities broker approved by the Company to sell Shares and to deliver
        all or part of the sales proceeds to the Company in payment of all or
        part of the Exercise Price and any withholding taxes.

         

	(d)
   	Exercise/Pledge. To the
        extent that this Subsection (d) is applicable, payment may be made by
        the delivery (on a form prescribed by the Company) of an irrevocable direction
        to pledge Shares to a securities broker or lender approved by the Company,
        as security for a loan, and to deliver all or part of the loan proceeds
        to the Company in payment of all or part of the Exercise Price and any
        withholding taxes.

         

	(e)
   	Services Rendered. To the
        extent that this Subsection (e) is applicable, Shares may be awarded under
        the Plan in consideration of services rendered to the Company or a Subsidiary
        prior to the award. If Shares are awarded without the payment of a Purchase
        Price in cash, the Committee shall make a determination (at the time of
        the award) of the value of the services rendered by the Offeree and the
        sufficiency of the consideration to meet the requirements of Section 6(c).

         

	(f)
   	Promissory Note. To the
        extent that this Subsection (f) is applicable, a portion of the Purchase
        Price or Exercise Price, as the case may be, of Shares issued under the
        Plan may be payable by a full-recourse promissory note, provided that
        (i) the par value of such Shares must be paid in lawful money of the United
        States of America at the time when such Shares are purchased, (ii) the
        Shares are security for payment of the principal amount of the promissory
        note and interest thereon and (iii) the interest rate payable under the
        terms of the promissory note shall be no less than the minimum rate (if
        any) required to avoid the imputation of additional interest under the
        Code. Subject to the foregoing, the Committee (at its sole discretion)
        shall specify the term, interest rate, amortization requirements (if any)
        and other provisions of such note.

         






 

	(g)	Other Forms of Payment. To the extent that this Subsection (g) is applicable,
      payment may be made in any other form approved by the Committee, consistent
      with applicable laws, regulations and rules.


SECTION 9. ADJUSTMENT OF SHARES. 

	(a)
   	General. In the event of a subdivision
        of the outstanding Stock, a declaration of a dividend payable in Shares,
        a declaration of a dividend payable in a form other than Shares in an
        amount that has a material effect on the value of Shares, a combination
        or consolidation of the outstanding Stock (by reclassification or otherwise)
        into a lesser number of Shares, a recapitalization, a spin off or a similar
        occurrence, the Committee shall make appropriate adjustments in one or
        more of (i) the number of Shares available for future grants under Section
        5, (ii) the number of Nonstatutory Options to be granted to Outside Directors
        under Section 4(b), (iii) the number of Shares covered by each outstanding
        Option or (iv) the Exercise Price under each outstanding Option.

         

	(b)
   	Reorganizations. In the event that the
        Company is a party to a merger or other reorganization, outstanding Options
        shall be subject to the agreement of merger or reorganization. Such agreement
        may provide, without limitation, for the assumption of outstanding Options
        by the surviving corporation or its parent, for their continuation by
        the Company (if the Company is a surviving corporation), for payment of
        a cash settlement equal to the difference between the amount to be paid
        for one Share under such agreement and the Exercise Price, or for the
        acceleration of their exercisability followed by the cancellation of Options
        not exercised, in all cases without the Optionees' consent. Any cancellation
        shall not occur until after such acceleration is effective and Optionees
        have been notified of such acceleration. In the case of Options that have
        been outstanding for less than 12 months, a cancellation need not be preceded
        by an acceleration.

         

	(c)
   	Reservation of Rights. Except
        as provided in this Section 9, an Optionee or Offeree shall have no rights
        by reason of any subdivision or consolidation of shares of stock of any
        class, the payment of any dividend or any other increase or decrease in
        the number of shares of stock of any class. Any issue by the Company of
        shares of stock of any class, or securities convertible into shares of
        stock of any class, shall not affect, and no adjustment by reason thereof
        shall be made with respect to, the number or Exercise Price of Shares
        subject to an Option. The grant of an Option pursuant to the Plan 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 or consolidate or to dissolve, liquidate, sell or
        transfer all or any part of its business or assets.




SECTION 10. SECURITIES LAWS.


 Shares shall not be issued under the Plan unless the issuance
  and delivery of such Shares complies with (or is exempt from) all applicable
  requirements of law, including (without limitation) the Securities Act of 1933,
  as amended, the rules and regulations promulgated thereunder, state securities
  laws and regulations, and the regulations of any stock exchange on which the
  Company's securities may then be listed. 

 SECTION 11. NO RETENTION RIGHTS. 

 Neither the Plan nor any Option shall be deemed to give any
  individual a right to remain an employee, consultant or director of the Company
  or a Subsidiary. The Company and its Subsidiaries reserve the right to terminate
  the service of any employee, consultant or director at any time, with or without
  cause, subject to applicable laws, the Company's certificate of incorporation
  and by-laws and a written employment agreement (if any). 


SECTION 12. DURATION AND AMENDMENTS.


	(a)

        	Term of the Plan. The Plan, as set forth
        herein, shall become effective upon approval by shareholders. The Plan
        shall terminate automatically 15 years after its initial adoption by the
        Board of Directors on February 3, 2004, and may be terminated on any earlier
        date pursuant to Subsection (b) below.

         

	(b)

        	Right to Amend or Terminate the Plan.
        The Board of Directors may, subject to applicable law, amend, suspend
        or terminate the Plan at any time and for any reason. An amendment to
        the Plan shall require stockholder approval only to the extent required
        by applicable law.

         






 

	(c)	Effect of Amendment or Termination. No Shares shall
        be issued or sold under the Plan after the termination thereof, except
        upon exercise of an Option granted prior to such termination. The termination
        of the Plan, or any amendment thereof, shall not affect any Share previously
        issued or any Option previously granted under the Plan.



SECTION 13. EXECUTION. 

 To record the adoption of the Plan by the Board of Directors
  on February 3, 2004 subject to approval by the Company's stockholders at a duly
  noticed shareholders' meeting, the Company has caused its authorized officer
  to execute the same. 


STERLING GROUP VENTURES, INC.


 By /s/ Richard Shao 

  President