Document:

BIOPHAN TECHNOLOGIES, INC.
                             2001 STOCK OPTION PLAN

         1. TITLE AND PURPOSE. The plan described herein shall be known as the
"Biophan Technologies, Inc. 2001 Stock Option Plan" (the "Plan"). The purpose of
the Plan is to advance the interests of Biophan Technologies, Inc. (the
"Company") and its shareholders by strengthening the Company's ability to
attract and retain individuals of training, experience, and ability as officers,
key employees, directors and consultants and to furnish additional incentive to
such key individuals to promote the Company's financial success by providing
them with an equity ownership in the Company commensurate with Company
performance, as reflected in increased shareholder value. It is the intent of
the Company that such individuals be encouraged to obtain and retain an equity
interest in the Company and each Participant will be specifically apprised of
said intent.

         2. DEFINITIONS. As used herein, the following words or terms have the
meaning set forth below.

                  2.1 "Award" means an award granted to any key employee,
officer, consultant, or Non-Employee Director in accordance with the provisions
of the Plan in the form of Options or Restricted Stock.

                  2.2 "Award Agreement" means the written agreement evidencing
each Award of Restricted Stock granted under the Plan.

                  2.3 "Board" means the Board of Directors of the Company,
except that, whenever action is to be taken under the Plan with respect to a
Reporting Person, "Board" shall mean only such directors who are disinterested
persons within the meaning of Rule 16b-3 under the Exchange Act or any successor
rule.

                  2.4 "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.

                  2.5 "Committee" means the Compensation Committee of the Board
or such other committee as may be designated by the Board to administer the
Plan. To the extent that the Committee delegates its power to grant Options as
permitted by Section 4.2, all references in the Plan to the Committee's
authority to grant Options and determinations with respect thereto shall be
deemed to include the Committee's delegate or delegates.

                  2.6 "Common Stock" or "Stock" means the Company's $.005 par
value Common Shares.

                  2.7 "Company" means Biophan Technologies, Inc., a corporation
established under the laws of the State of Nevada, and its subsidiaries.

                  2.8 "Designated Beneficiary" means the beneficiary designated
by a Participant, in a manner determined by the Committee, to receive amounts
due or to exercise rights of the Participant in the event of the Participant's
death. In the absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant's estate.

                  2.9 "Disability" means a physical or mental condition of such
a nature that it would qualify a Participant for benefits under the Company's
long-term disability insurance plan or, if no such plan exists, a determination
by the United States Social Security Administration of total disability.

                  2.10 "Disinterested Person" shall have the same meaning as
defined in Rule 16b-3(c)(2) promulgated by the Securities and Exchange
Commission pursuant to its authority under the Exchange Act.

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                  2.11 "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute.

                  2.12 "Fair Market Value" means the fair market value of the
Company's shares of Common Stock on a given date, which shall be (i) if the
shares of Common Stock are listed on a national exchange, then the mean between
the highest and the lowest quoted selling price of said shares of Common Stock
on such stock exchange on such date, provided at least one sale of said shares
of Common Stock took place on such exchange on such date, and, if not, then on
the basis of the closing price on the last preceding date on which at least one
sale on such exchange did occur, or (ii) if the shares of Common Stock are not
listed on a national exchange, then the mean between dealer "bid" and "ask"
prices of the shares of Common Stock in the over-the-counter market on such
date, as reported by the National Association of Securities Dealers, Inc., or
(iii) if the shares of Common Stock are not publicly traded, then the value as
determined by the Board in good faith.

                  2.13 "Incentive Stock Option" ("ISO") means an Option which is
intended to satisfy the requirements of Section 422 of the Code or any successor
provision.

                  2.14 "Non-Employee Director" means a member of the Board who
is not an employee of the Company or a management consultant to the Company.

                  2.15 "Non-Employee Director Stock Option" ("NEDSO") means a
Nonstatutory Stock Option granted to a Non-Employee Director of the Company or a
member of the Scientific Advisory Board.

                  2.16 "Nonstatutory Stock Option" ("NSO") means an Option which
is not intended to qualify as an Incentive Stock Option.

                  2.17 "Option" means any Option granted under the Plan and
includes an Incentive Stock Option, a Nonstatutory Stock Option and a
Non-Employee Director Stock Option.

                  2.18 "Option Agreement" means the written agreement evidencing
each Option granted under the Plan.

                  2.19 "Option Price" means the purchase price per share of
Common Stock upon the exercise of an Option.

                  .20 "Outside Director" shall have the same meaning as defined
or interpreted for purposes of Section 162(m) of the Code.

                  2.21 "Participant" means an individual who has been granted an
Award under the Plan.

                  2.22 "Reporting Person" means a person required to file
reports under Section 16(a) of the Exchange Act or any successor statute.

                  2.23 "Restricted Stock" means Stock awarded under Section 9 of
the Plan which is subject to certain forfeiture provisions or restrictions on
transfer.

                  2.24 "Retirement" means termination of employment with the
Company if such termination of employment constitutes normal retirement, early
retirement, disability retirement or other retirement as provided for at the
time of such termination of employment under the applicable retirement program
then maintained by the Company, provided that the Participant does not continue
in the employment of the Company.

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                  2.25 "Scientific Advisory Board" means the advisory board
consisting of noted scientists who advise the Company on the development of its
technology.

         3. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided in
Section 11 below, an aggregate of 7,000,000 shares of Common Stock shall be
available for Awards under the Plan. Such shares may be authorized but
previously unissued shares or shares reacquired by the Company, including shares
purchased in the open market. In the event that any outstanding Option granted
under the Plan for any reason expires or is terminated without having been
exercised in full, or any shares of Restricted Stock are forfeited, the shares
allocable to the unexercised portion of such Option or the forfeited portion of
such Restricted Stock shall (unless the Plan shall have been terminated) become
available for subsequent Awards under the Plan; provided that in no event may
the number of shares issued hereunder exceed the total number of shares reserved
for issuance.

              4.           ADMINISTRATION OF THE PLAN.

                  4.1 The Plan shall be administered by the Committee. No
individual may be appointed to the Committee who is not both a Disinterested
Person and an Outside Director. Grants of NEDSOs and the amounts and nature of
such Options shall be automatic as described in Section 8. Subject to the
preceding sentence and the provisions set forth herein, the Committee shall have
full authority to determine the time or times at which, and the officers and key
employees of the Company to whom, Awards shall be granted under the Plan, to
determine the provisions of Awards, to interpret the terms of the Plan and of
Awards made under the Plan, to adopt, amend and rescind rules and guidelines for
the administration of the Plan and for its own acts and proceedings and to
decide all questions and settle all controversies and disputes which may arise
in connection with the Plan. The Committee shall report any action taken by it
to the meeting of the Board next following such action.

                  4.2 o the extent permitted by applicable law, the Committee
may delegate to one or more executive officers who are also directors of the
Company the power to grant Options to Participants who are not Reporting Persons
at the time of such Options and all determinations under the Plan with respect
thereto, provided that the Committee shall fix the maximum amount of Options for
such Participants as a group. Such delegate or delegates shall report any action
taken by it or them to the meeting of the Committee next following such action.

                  4.3 The decision of the Committee on any matter as to which
the Committee is given authority shall be final and binding on all persons
concerned. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option granted
under it.

         5. INDEMNIFICATION OF THE COMMITTEE. In addition to such other rights
of indemnification as they may have as directors of the Company or as members of
the Committee or otherwise, the members of the Committee shall be indemnified by
the Company as and to the fullest extent permitted by law, including without
limitation, indemnification against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Awards
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for negligence, bad faith or misconduct in the performance of his duties;
provided that within 60 days after institution of such action, suit or
proceeding a Committee member shall, in writing, offer the Company the
opportunity, at its own expense, to handle and defend the same.

         6. TYPES OF AWARDS UNDER THE PLAN. Awards under the Plan may be in the
form of any one or more of the following:

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                           Incentive Stock Options (ISOs)
                           Nonstatutory Stock Options (NSOs)
                           Non-Employee Director Stock Options (NEDSOs)
                           Restricted Stock

All Awards shall be subject to the terms and conditions set forth herein and to
such other terms and conditions as may be established by the Committee.
Determinations by the Committee under the Plan including without limitation,
determinations of the Participants, the form, amount and timing of Awards, the
terms and provisions of Awards, and the agreements evidencing Awards, need not
be uniform and may be made selectively among Participants who receive, or are
eligible to receive, Awards hereunder, whether or not such Participants are
similarly situated. Except as otherwise provided by the Plan or a particular
Award, any determination with respect to an Award may be made by the Committee
at the time of grant of the Award or any time thereafter.

         7.       INCENTIVE STOCK OPTIONS AND NONSTATUTORY STOCK OPTIONS.

                  7.1 Eligibility. Any officer or key employee of the Company
shall be eligible to receive an ISO or NSO under the Plan. In addition, any
consultant to the Company, who, in the opinion of the Committee, is in a
position to have a significant effect upon the Company's business, shall be
eligible to receive a NSO under the Plan. No ISO or NSO may be granted to an
individual under this Plan at a time when such individual is serving as a member
of the Committee. An employee owning stock possessing more than 10% of the total
combined voting power or value of all classes of stock of the Company or any
parent or subsidiary corporation ("Ten Percent Stockholder") is not eligible to
receive an ISO unless the option price is at least 110% of the Fair Market Value
of the Common Stock at the time the ISO is granted and the ISO option by its
terms is not exercisable more than five years from the date it is granted.
Restricted Stock and Common Stock which a grantee may purchase under outstanding
Options shall be treated as stock owned by such grantee for purposes of this
calculation. The Committee also may authorize the granting of ISOs and NSOs to
prospective employees. In the case of a prospective employee, the grant of an
ISO or NSO shall be on the condition of employment by the Company in a key
position, and the date of the grant of the ISO or NSO shall be the date such
employment begins or such later date as the Committee may have specified when
authorizing the grant.

                  7.2 Grant of ISOs and NSOs

                           7.2.1 From time to time while the Plan is in effect,
the Committee may, in its absolute discretion, select from among persons
eligible to receive ISOs and NSOs (including persons to whom ISOs and NSOs were
previously granted) those persons to whom ISOs and NSOs are to be granted.

                           7.2.2 The Committee shall, in its absolute
discretion, determine the number of shares of Common Stock to be subject to each
ISO and NSO made by it under the Plan.

                           7.2.3 The Committee shall determine at the time of
each grant hereunder whether the option is an ISO or NSO. The terms and
conditions of ISOs shall be subject to and comply with Section 422 of the Code
or any successor provision, and any regulations thereunder.

                  7.3 Option Price. The option price per share of Common Stock
with respect to each ISO shall not be less than 100% of the Fair Market Value
per share at the time the ISO is granted. The option price per share of Common
Stock with respect to each NSO granted shall be determined by the Committee.

                  7.4 Period of Options. An ISO and NSO shall be exercisable
during such period of time as the Committee may specify, subject, in the case of
ISOs, to any limitation required by the Code. No ISO or NSO shall be exercisable
after the expiration of 10 years from the date the ISO or NSO is granted.

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                  7.5 Vesting of Options. Each ISO and NSO shall be made
exercisable at such time or times as the Committee shall determine. In the case
of an ISO or NSO made exercisable in installments, the Committee may later
determine to accelerate the time at which one or more of such installments may
be exercised. The Committee may impose such conditions with respect to the
exercise of ISOs and NSOs, including conditions relating to the attainment of
specific pre-determined stock price goals or other performance criteria or
conditions relating to applicable federal or state tax or securities laws, as it
considers necessary or advisable and such conditions may differ with respect to
each Participant.

                  7.6 Limitation on Grant of ISOs. The aggregate Fair Market
Value (determined as of the time the ISO is granted) of the shares with respect
to which ISOs are exercisable for the first time by a grantee during any
calendar year (under all such plans of the Company) shall not exceed $100,000.

                  7.7 Options Non-Transferable. No ISO or NSO granted under the
Plan shall be transferable other than by will or by the laws of descent and
distribution. No interest of a Participant under an ISO or NSO or the Plan shall
be subject to the attachment, execution, garnishment, sequestration, the laws of
bankruptcy or any other legal equitable process. During the lifetime of the
Participant, ISOs and NSOs shall be exercisable only by the Participant who
received them.

                  7.8 Termination of Employment.

                           7.8.1 Death During or After Employment. If a
Participant dies during employment or within three (3) months after terminating
employment, and at a time when the Participant is entitled to exercise an ISO or
NSO, then at any time or times within one year after death (or such greater or
lesser period after death as may be specified in the documentation evidencing
the ISO or NSO) such ISO or NSO may be exercised, but only as to any or all of
those shares which the Participant was entitled to purchase immediately prior to
the Participant's death (unless the Committee within thirty (30) days after the
Participant's death shall have accelerated the vesting of the ISO or NSO). ISOs
or NSOs exercisable after death may be exercised by the Participant's Designated
Beneficiary, and except as so exercised, shall expire at the end of the
specified post-death exercise period. In no event, however, may any ISO or NSO
granted under the Plan be exercised after the expiration of the ISO or NSO
exercise period established at the time of grant.

                           7.8.2 Retirement or Disability. In the event of a
Participant's Retirement or Disability at a time when the Participant is
entitled to exercise an ISO or NSO, then within three months after Retirement or
one year after Disability (or such greater or lesser period after Retirement or
Disability as may be specified in the documentation evidencing the ISO or NSO)
the Participant may exercise such ISO or NSO only as to those shares which the
Participant was entitled to purchase immediately prior to such Retirement or
Disability (unless the Committee within thirty (30) days after the Participant's
Retirement or Disability shall have accelerated the vesting of the ISO or NSO).
If the Participant dies within the specified post-Retirement or post-Disability
exercise period, the Participant's ISO or NSO may be exercised by the
Participant's Designated Beneficiary, to the same extent as if the deceased
Participant had survived, during the greater of one year from the date of his
death or, if a post-Retirement or post-Disability exercise period greater than
three months or one year was specified in the ISO or NSO documentation, the
remainder of such longer period.

         Except as exercised within the applicable period described above, each
ISO or NSO shall expire at the end of such period. In no event, however, may any
ISO or NSO granted under the Plan be exercised after the expiration of the ISO
or NSO exercise period established at the time of grant.

                           7.8.3 Other Terminations of Employment. If the
employment of a Participant is terminated for cause, the Participant's option
rights, both accrued and future, under any then outstanding ISO or NSO shall be
forfeited and terminated immediately and may not thereafter be exercised to any
extent.

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         If the employment of a Participant is terminated for any reason other
than cause, death, Retirement or Disability at a time when the Participant is
entitled to exercise an ISO or NSO, then within three months after such
termination of employment (or such greater or lesser period after termination of
employment as may be specified in the documentation evidencing the ISO or NSO),
the Participant may exercise such ISO or NSO only as to those shares which the
Participant was entitled to purchase immediately prior to such termination of
employment (unless the Committee within thirty (30) days after the Participant's
termination of employment shall have accelerated the vesting of the ISO or NSO).
If the Participant dies within the specified post-termination of employment
exercise period, the Participant's ISO or NSO may be exercised by the
Participant's Designated Beneficiary, to the same extent as if the deceased
Participant had survived, during a period equal to the greater of one year from
the date of the Participant's death or the remainder of such specified
post-termination of employment exercise period.

         If the Committee so decides, an ISO or NSO may provide that a leave of
absence granted by the Company is not a termination of employment for the
purpose of this subsection 7.8.3 and, in the absence of such a provision, the
Committee may, in any particular case, determine that such a leave of absence is
not a termination of employment for such purpose.

                           7.8.4 Notwithstanding the terms and provisions of
Sections 7.8.1, 7.8.2, and 7.8.3, the Committee, at any time, may establish such
other terms and provisions with respect to the exercise of an ISO or NSO by a
Participant upon the death, Disability, or other termination of employment of
such person as it, in its sole discretion, deems advisable.

         8.       NON-EMPLOYEE DIRECTOR STOCK OPTIONS.

                  8.1 Eligibility. Each Non-Employee Director of the Board and
each member of the Scientific Advisory Board shall receive a NEDSO as determined
hereunder without further action by the Board or Committee.

                  8.2 Option Grant Dates. Subject to the approval of the Plan by
the shareholders at the 2001 Annual Meeting and in accordance with Section 8.3
below, a NEDSO shall be granted to each Non-Employee Director and each member of
the Scientific Advisory Board automatically every year on the date of the Annual
Meeting of Shareholders, commencing on the date of the 2001 Annual Meeting of
Shareholders. Non-Employee Directors or members of the Scientific Advisory Board
elected by the Board, or appointed, as the case may be, to fill vacancies and
newly created directorships in the interim between grant dates will receive a
pro rated NEDSO based upon the number of full months such Non-Employee Director
or member of the Scientific Advisory Board will serve between his election or
appointment and the next grant date.

                  8.3 Each Non-Employee Director shall receive an initial NEDSO
to purchase 20,000 shares of Common Stock vesting on the first anniversary
following the date of grant without further action by the Board or Committee and
additional grants to purchase 20,000 shares of Stock each succeeding anniversary
date thereafter in which the Participant is a Non-Employee Director. The initial
NESDO granted to qualified board members elected at the 2003 Annual Meeting
shall have an exercise price of $.30 and shall vest fully on the date of grant.
Each member of the Scientific Advisory Board shall receive a NEDSO to purchase
8,333 shares of Stock on each grant date without further action by the Board or
Committee."

                  8.4 Period of Options. Except as otherwise provided herein,
each NEDSO will be exercisable in full one year from the date of grant. All
NEDSOs shall terminate upon the expiration of five years from the date upon
which such NEDSOs were granted (subject to prior termination as hereinafter
provided).

                  8.5 Option Price. The price per share of Stock at which a
NEDSO may be exercised shall be equal to 100% of the Fair Market Value of the
price per share of Stock on the date the NEDSO is granted. Notwithstanding any

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provision herein to the contrary, any NEDSOs granted on the date of the 2001
Annual Meeting of Shareholder to a Non-Employee Director or member of the
Scientific Advisory Board shall have an exercise price of $.50.

                  8.6 Options Non-Transferable. No NEDSO granted under the Plan
shall be transferable other than by will or by the laws of descent and
distribution. No interest of a Non-Employee Director or member of the Scientific
Advisory Board under a NEDSO or the Plan shall be subject to attachment,
execution, garnishment, sequestration, the laws of bankruptcy or any other legal
or equitable process. During the lifetime of the Non-Employee Director or member
of the Scientific Advisory Board NEDSOs shall be exercisable only by the
Non-Employee Director or member of the Scientific Advisory Board who received
them.

                  8.7 Death or Disability of Non-Employee Director. If a
Non-Employee Director shall terminate performance of services for the Company
because of death or Disability, or shall die after termination of performance of
services for the Company but while the Non-Employee Director could have
exercised a NEDSO, that NEDSO may be exercised, to the extent that the
Non-Employee Director was entitled to do so at the date of termination of
performance of services, at any time, or from time to time, within one year
after the date of death or termination of performance of services because of
Disability, but in no event later than the expiration date specified pursuant to
Section 8.4. In the case of death, exercise may be made by the Non-Employee
Director's Designated Beneficiary. Notwithstanding the foregoing, the Committee
may establish such other provisions with respect to the exercise of a NEDSO upon
the death or Disability of a Non-Employee Director as it, in its sole
discretion, deems advisable.

                  8.8 Termination of Services as Non-Employee Director. If a
Non-Employee Director's performance of services for the Company shall terminate
for any reason other than death or Disability, the Non-Employee Director must
exercise such NEDSO, to the extent the Non-Employee Director was entitled to do
so at the date of termination of performance of services, at any time, or from
time to time, within three months after the date of termination of performance
of services, but in no event later than the expiration date specified pursuant
to Section 8.4; provided, however, in the case of termination of performance of
services for cause, the NEDSO shall cease to be exercisable on the date of such
termination. Notwithstanding the foregoing sentence, the Committee may establish
such other provisions with respect to the exercise of a NEDSO by a Non-Employee
Director upon the termination of such person's services by reason of
resignation, retirement, completion of term or otherwise, as it, in its sole
discretion, deems advisable. The Committee shall have the sole power to
determine the date of any circumstances which shall constitute termination of
services as a Non-Employee Director and to determine whether such termination is
the result of death, Disability, cause or any other reason.

         9.       GENERAL PROVISIONS APPLICABLE TO ALL OPTIONS.

                  9.1 Exercise of Options; Payment of Option Price. Options may
be exercised (in full or in part) only by written notice of exercise delivered
to the Company at its principal executive office, accompanied by payment equal
to the full Option Price for the shares of Stock which are exercised. The Option
Price of each share of Common Stock purchased upon exercise of an Option shall
be paid in full in cash at the time of exercise; by delivery to the Company
shares of Common Stock owned by the Participant, by delivering to the Company
(i) irrevocable instructions to deliver the stock certificates representing the
shares of Stock for which the Option is being exercised, directly to a broker,
and (ii) instructions to the broker to sell such shares of Stock and promptly
deliver to the Company the portion of the proceeds equal to the total Option
Price; or in any combination thereof. For purposes of making payment in shares
of Common Stock, such shares shall be valued at their Fair Market Value on the
date of exercise of the Option and shall have been held by the Participant for a
period of at least six (6) months.

                  9.2 Documentation of Options. Neither anything contained in
the Plan nor in any resolutions adopted or to be adopted by the Board or the
Shareholders nor any action taken by the Committee shall constitute the granting
of any Option. The granting of an Option shall take place only when a written
Option Agreement shall have been duly executed and delivered by the Company and
the Participant. Each Option Agreement shall specify the terms and conditions of
the Option and contain such other terms and conditions not inconsistent with the

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provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or comply with applicable tax and regulatory
laws and accounting principles. The Option Agreement with respect to ISOs shall
provide, among other things, that the Participant shall advise the Company
immediately upon any sale or transfer of shares of Common Stock received upon
exercise of the Option to the extent such sale or transfer takes place prior to
the later of two (2) years from the date of grant or one (1) year from the date
of exercise.

                  9.3 Tax Withholding. The Committee shall require, on such
terms as it deems necessary, that the Participant pay to the Company or make
other satisfactory provision for payment of, any federal, state or local taxes
required by law to be withheld in respect to Options under the Plan. In the
Committee's discretion, such tax obligations may be paid in whole or in part in
shares of Common Stock, including shares retained from the Option creating the
tax obligation, valued at their Fair Market Value on the date of delivery. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to the Participant.

                  9.4 Amendment of Options. The Committee may modify or amend
any outstanding Option if it determines, in its sole discretion, that amendment
is necessary or advisable in the light of any addition to or change in the Code
or in the regulations issued thereunder, or any federal or state securities laws
or other law or regulation, which change occurs after the date of grant of the
Option and by its terms applies to the Option. In addition, subject to the terms
and conditions and within the limitations of the Plan, the Committee may modify,
amend, extend or renew outstanding Options granted under the Plan, or accept the
surrender of outstanding Options under the Plan or under any other stock option
plan of the Company (to the extent not theretofore exercised) and authorize the
granting of new Options under the Plan in substitution therefor (to the extent
not theretofore exercised). No amendment of an outstanding Option, however, may,
without the consent of the Participant, make any changes which would adversely
affect the rights of such Participant.

         10.      RESTRICTED STOCK.

                  10.1 The Committee may, in its discretion, make Awards of
Restricted Stock to such officers and key employees as may be selected in the
manner provided in Section 6 of this Plan. Such Awards shall be evidenced by an
Award Agreement in such form, and containing such terms and conditions as are
not inconsistent with this Plan, as the Committee shall, from time to time,
determine. Restricted Stock awarded hereunder shall be subject to such
restrictions as may be determined by the Committee and set out in the Award
Agreement.

                  10.2 Restricted Stock shall be subject to a restriction period
(after which restrictions will lapse) which shall mean a period commencing on
the date the Award is granted and ending on such date as the Committee shall
determine (the "Restriction Period"). The Committee may provide for the lapse of
restrictions in installments where deemed appropriate.

                  10.3 Except when the Committee determines otherwise pursuant
to Section 10.5, if a Participant terminates employment with the Company for any
reason before the expiration of the Restriction Period, all shares of Restricted
Stock still subject to the restriction shall be forfeited by the Participant and
shall be reacquired by the Company.

                  10.4 Except as otherwise provided in this Section 10, no
shares of Restricted Stock received by a Participant shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period.

                  10.5 In cases of death, Disability or Retirement or in cases
of special circumstances, the Committee may, in its sole discretion when it
finds that a waiver would be in the best interests of the Company, elect to
waive any or all remaining restrictions with respect to such Participant's
Restricted Stock.

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                  10.6 The Committee may require, under such terms and
conditions as it deems appropriate or desirable, that the certificates of Stock
delivered under the Plan may be held in custody by a bank or other institution,
or that the Company may itself hold such shares in custody until the Restriction
Period expires or until restrictions thereon otherwise lapse, and may require,
as a condition of any Award of Restricted Stock that the Participant shall have
delivered a stock power endorsed in blank relating to the Restricted Stock.

                  10.7 Subject to Section 10.6, each Participant entitled to
receive Restricted Stock under the Plan shall be issued a certificate for the
shares of Stock. Such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend reciting the terms, conditions
and restrictions, if any, applicable to such Award and shall be subject to
appropriate stop-transfer orders.

                  10.8 The restrictions imposed under this Section 10 shall
apply as well to all shares or other securities issued in respect of the
Restricted Stock in connection with any stock split, stock dividend,
recapitalization, reclassification, merger, consolidation or reorganization, but
such restrictions shall expire or terminate at such time or times as may be
specified therefor in the Award Agreement.

         11.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION; CHANGES IN CONTROL.

                  11.1 If the outstanding shares of Stock of the Company as a
whole are increased, decreased, changed into, or exchanged for, a different
number or kind of shares or securities of the Company, whether through merger,
consolidation, reorganization, recapitalization, reclassification, stock
dividend, stock split, combination of shares, exchange of shares, change in
corporate structure, or amendment to the certificate of incorporation of the
Company or otherwise, an appropriate and proportionate adjustment, as determined
by the Committee shall be made to the number and kind of shares subject to this
Plan, and to the number, kind, and per share Option Price of shares subject to
unexercised Options granted prior to any such change.

                  11.2 Notwithstanding any provisions contained in this Plan or
in an Option Agreement deferring the rights of a Participant to exercise the
Option, the Option shall become fully vested and the Participant shall be
entitled to exercise such Option, in whole or in part, (i) immediately following
the first purchase of Common Stock pursuant to a tender offer or exchange offer
(other than an offer by the Company) for all, or any part of, the Common Stock;
or (ii) commencing on the date of approval by the shareholders of the Company of
an agreement for (a) a merger or consolidation or similar transaction in which
the Company is not the surviving corporation or (b) a sale or exchange or other
disposition of all or substantially all of the Company's assets; or (iii)
immediately following a "change of control" of the Company (as such term is
defined in Section 11.3 hereinafter); provided, however, that the Option may be
cancelled by the Company as of the effective day of any such reorganization,
merger, consolidation, plan of exchange or of any dissolution or liquidation of
the Company by giving notice to the Participant of its intention to do so and by
permitting the purchase of all of the Shares then subject to the Option, for a
period of approximately thirty (30) days thereafter.

                  11.3 For the purposes of this Plan, a "change in control" of
the Company shall be deemed to have occurred if (i) any "person" (as that term
is used in Sections 12(d) and 14(d)(2) of the Exchange Act) is or becomes the
"beneficial owner" (as that term is defined by the Securities and Exchange
Commission for purposes of Section 13(d) of the Exchange Act), directly or
indirectly, of more than 50% of the outstanding voting securities of the Company
or its successors; or (ii) during any period of two consecutive years a majority
of the Board of Directors no longer consists of individuals who were members of
the Board of Directors at the beginning of such period, unless the election of
each director who was not a director at the beginning of the period was approved
by a vote of at least two-thirds of the directors still in office who were
directors at the beginning of the period.

                  11.4 The restrictions applicable to Awards of Restricted Stock
issued pursuant to Section 10 shall lapse upon the occurrence of an event
specified in Section 11.2 and the Company shall issue stock certificates without
a restrictive legend.

                                       9
<Page>

         12.      MISCELLANEOUS.

                  12.1 No Right to Employment. No person shall have any claim or
right to be granted an Award, and the grant of an Award shall not be construed
as giving a Participant the right to continued employment. The Company expressly
reserves the right at any time to terminate the employment of a Participant free
from any liability or claim under the Plan except as may be expressly provided
in the applicable Award.

                  12.2 No Right to Continue as a Director. The granting of a
NEDSO shall not constitute or be evidence of any agreement or understanding,
express or implied, that the Company will retain a Non-Employee Director for any
period of time.

                  12.3 No Rights as Shareholder. Subject to the provisions of
the applicable Option, no Participant or Designated Beneficiary shall have any
rights as a shareholder with respect to any shares of Common Stock to be
distributed under the Plan until such person becomes the holder thereof.

                  12.4 No Fractional Shares. No fractional shares of Common
Stock shall be issued under the Plan, and cash shall be paid in lieu of any
fractional shares in settlement of Options granted under the Plan.

                  12.5 Unfunded Plan. The Plan shall be unfunded, shall not
create (or be construed to create) a trust or a separate fund or funds, and
shall not establish any fiduciary relationship between the Company and any
Participant or other person.

                  12.6 Successors and Assigns. The Plan shall be binding on all
successors and assigns of the Participant, including without limitation the
Participant's Designated Beneficiary or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.

                  12.7 Compliance With Other Laws and Regulations. The Plan, the
grant and exercise of Awards under the Plan, and the obligation of the Company
to transfer shares under such Awards shall be subject to all applicable federal
and state laws, rules and regulations, including those related to disclosure of
financial and other information to Participants, and to any approvals by any
government or regulatory agency as may be required. The Company shall not be
required to issue or deliver any certificates for shares of Stock prior to (a)
the listing of such shares on any stock exchange on which the Stock may then be
listed, where such listing is required under the rules or regulations of such
exchange, and (b) the compliance with applicable federal and state securities
laws and regulations relating to the issuance and delivery of such certificates;
provided, however, that the Company shall make all reasonable efforts to so list
such shares and to comply with such laws and regulations.

                  12.8 Compliance with Rule 16b-3. With respect to persons
subject to Section 16 of the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee.

                  12.9 Amendment of Plan. The Board may amend, suspend or
terminate the Plan or any portion thereof at any time, except that it may not
amend the Plan without shareholder approval where the absence of such approval
would cause the Plan to fail to comply with Rule 16b-3 under the Exchange Act,
the performance-based compensation requirements under Section 162(m) of the
Code, Section 422 of the Code, the requirements of any securities exchange on
which the shares of Common Stock are then listed, or any other requirement of
applicable law or regulation. The Board may not amend Section 8 more than once
every six (6) months, other than to conform with changes in the Code or the
rules and regulations thereunder. The Committee may make non-material amendments

                                       10
<Page>

to the Plan. No amendment shall apply to adversely affect any Participant with
respect to whom an Award shall heretofore have been granted.

                  12.10 Governing Law. To the extent not superseded by federal
law, the provisions of the Plan shall be governed by and interpreted in
accordance with the laws of the State of New York.

         13. EFFECTIVE DATE OF PLAN; TERM OF PLAN. The Plan shall become
effective as of the date on which the Board adopts the Plan, subject, however,
to the approval by the shareholders at the 2001 Annual Meeting of Shareholders.
The Plan shall terminate on June 1, 2011, and no Awards shall be granted under
the Plan after that date, provided, however, that the Plan and all Awards
granted under the Plan prior to such date shall remain in effect until such
Awards have been satisfied or terminated in accordance with the Plan and the
terms of such Awards.

Date Plan adopted by Board of Directors:             June 22, 2001
Date Plan approved by Shareholders:                  July 19, 2001
Date Plan amended by Board of Directors:             July 14, 2003
Date Plan approved by Shareholders:                  August 20, 2003DENALI CONCRETE MANAGEMENT, INC. - COMMON STOCK
                             SUBSCRIPTION AGREEMENT

Investment

I  desire  to  purchase                                              shares  of
Denali  Concrete  Management,  Inc.  at  $___  per  share  for  a  total  of  $

MAKE  CHECKS  PAYABLE  TO:     ESCROW  SPECIALISTS,  DENALI CONCRETE MANAGEMENT,
INC.,  ESCROW  ACCOUNT

Subscriber  Information:  Please clearly print name(s) in which Shares are to be
acquired.  All  correspondence  will  go  to  the  Investor  Residence  Address

Investor  1  (First,  Middle  I.,  Last):

Investor  2  (First,  Middle  I.  Last):

Registration  for  the  Investment  (how  the  investment  should  be  titled):

Check  one  of the following:

U.S.  Citizen

Resident  Alien

Foreign Resident; Country  ________

U.S. Citizen residing outside the  U.S.

Investor  Residence  Address  1:

Investor  Residence  Address  2:

City,                   State         ZIP  Code

Enter  the taxpayer identification number.  For most individual taxpayers, it is
their  Social  Security Number.  Note: If the purchase is in more than one name,
                                 -----
the  number  should  be  that of the first person listed.  For IRAs, Keoghs, and
qualified  plans,  enter  both  the  Social  Security  Number  and  the Taxpayer
Identification  Number  for  the  plan.

Social  Security  Number

Taxpayer  Identification Number (if  applicable)

Form  of  Ownership  (Individual,  IRA,  Trust,  UGMA,  Pension  Plan,  etc.)

Subscriber  Signature:  The  undersigned  has  the  authority to enter into this
subscription  agreement  on  behalf of the person(s) or entity registered above.

Authorized  Signature of Investor 1     ________________________________________

Date:_____________________________________

Authorized  Signature of Investor 2     ________________________________________

Date:_____________________________________

--------------------------------------------------------------------------------

Company's  Acceptance  (To  be completed only by an authorized representative of
the  Company.)

The  foregoing  subscription  is  accepted  this  ____________  day  of
________________,  _____

                                             ___________________________________
                                             Authorized  Representative  of  the
                                             Company

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