EXHIBIT 99.1

EXHIBIT 99.1


COMMONWEALTH BIOTECHNOLOGIES, INC.
1997 STOCK INCENTIVE PLAN

1. Purpose. The purpose of this Commonwealth Biotechnologies, Inc.
1997 Stock Incentive Plan (the "Plan") is to further the long term stability and
financial success of Commonwealth Biotechnologies, Inc. (the "Company") by
attracting and retaining personnel, including employees, directors, officers,
consultants, agents, advisors and independent contractors, through the use of
stock incentives. It is believed that ownership of Company stock will stimulate
the efforts of those persons upon whose judgment and interest the Company is and
will be largely dependent for the successful conduct of its business. It is also
believed that Incentive Awards granted to such persons under this Plan will
strengthen their desire to remain with the Company or to continue to contribute
to the growth of the business of the Company and will further the identification
of their interests with those of the Company's shareholders. The Plan is
intended to conform to the provisions of Securities and Exchange Commission Rule
16b-3 promulgated under the 1934 Act, if the Company shall register its Common
Stock under Section 12 of the 1934 Act.

2. Definitions. As used in the Plan, the following terms have the
meanings indicated:

(a) "Agreement" means a written agreement (including any
amendment or supplement thereto) between the Company and a Participant
specifying the terms and conditions of an Incentive Award granted to such
Participant.

(b) "Applicable Withholding Taxes" means the aggregate amount
of federal, state, and local income and payroll taxes that the Company is
required to withhold in connection with any exercise of a Nonstatutory Stock
Option, or Tax Offset Right, any lapse of restrictions on Restricted Stock, or
any grant of Performance Stock.

(c) "Affiliate" means any "parent" or "subsidiary"
corporation (within the meaning of Code Section 424) of the Company.

(d) "Board" means the Board of Directors of the Company.

(e) "Cause" means dishonesty, fraud, misconduct, gross
negligence, breach of a material fiduciary duty, material breach of an agreement
with the Company or any of its Subsidiaries, unauthorized use or disclosure of
confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Committee, which determination shall be binding.

(f) "Change of Control" means:

(i) The acquisition, after the effective date of the
Company's registration statement for its initial public offering
of shares of Common Stock



under the Securities Act of 1933, as amended (the "IPO Date"),
other than from the Company, by any individual, entity, or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934
Act), who was not a beneficial owner (within the meaning of Rule
13d-3 promulgated under the 1934 Act) of 50% or more of such
securities prior to the IPO Date, of beneficial ownership of 50%
or more of either the then outstanding shares of Common Stock or
the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (collectively, "Voting Securities"), but
excluding for this purpose, any such acquisition by the Company
or any of its subsidiaries, or any employee benefit plan (or
related trust) of the Company or its subsidiaries, or any
corporation with respect to which, following such acquisition,
more than 50% of the then outstanding shares of Voting Securities
of such is then beneficially owned, directly or indirectly, by
the individuals and entities who were the beneficial owners of
Voting Securities of the Company immediately prior to such
acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the then
outstanding shares of Voting Securities of the Company; or

(ii) Approval by the shareholders of the Company of
(A) a reorganization, merger or consolidation with respect to
which the individuals and entities who were the respective
beneficial owners of the Voting Securities of the Company
immediately prior to such reorganization, merger or consolidation
do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of the
then outstanding shares of Voting Securities of the corporation
resulting from such reorganization, merger or consolidation, or
(B) a complete liquidation or dissolution of the Company, or (C)
any sale, lease, exchange, or other disposition in one
transaction or a series of related transactions of all or
substantially all of the Company's assets other than a
disposition of the Company's assets to a majority-owned
Subsidiary.

(g) "Code" means the Internal Revenue Code of 1986, as
amended.

(h) "Committee" means the Compensation Committee appointed by the
Board from time to time as described under Section 15 hereof, or in the absence
of such Committee, the Board.

(i) "Common Stock" means Common Stock, no par value, of the
Company. If the par value of the Common Stock is changed, or in the event of a
change in the capital structure of the Company (as provided in Section 14), the
shares resulting from such a change shall be deemed to be Common Stock within
the meaning of the Plan.

(j) "Company" means Commonwealth Biotechnologies, Inc., a
Virginia corporation.



(k) "Date of Grant" means the date on which an Incentive
Award is granted by the Committee. If, however, the Committee designates in a
resolution a later date as the date an Incentive Award is to be granted, then
such later date shall be the Date of Grant.

(l) "Disability" or "Disabled" means, as to an ISO, a
Disability within the meaning of Code Section 22(e)(3). As to all other
Incentive Awards, the Committee shall determine whether a Disability exists,
which determination shall be conclusive.

(m) "Fair Market Value" means, on any given date, the value
of a share of Common Stock. If the Common Stock is not publicly traded on the
date of valuation, the value shall be determined by the Committee in good faith
using any reasonable method. If the Common Stock is publicly traded, then Fair
Market Value shall equal (i) if the Common Stock is listed on The Nasdaq
National Market or The Nasdaq SmallCap Market, the average of the high and low
per share sales prices for the Common Stock as reported by The Nasdaq National
Market or The Nasdaq SmallCap Market for a single trading day or (ii) if the
Common Stock is listed on the New York Stock Exchange or the American Stock
Exchange, the average of the high and low per share sales prices for the Common
Stock as such price is officially quoted in the composite tape of transactions
on such exchange for a single trading day. If there is no such reported price
for the Common Stock for the date in question, then such price on the last
preceding date for which such price exists shall be determinative of the Fair
Market Value.

(n) "Incentive Award" means any form of an Option,
Performance Stock, Restricted Stock, or Tax Offset Right granted under the
Plan.

(o) "Incentive Stock Option" or "ISO" means an Option
intended to meet the requirements of, and qualify for favorable federal income
tax treatment, under Code Section 422.

(p) "Insider" means a person subject to Section 16(b) of the
1934 Act.

(q) "1934 Act" means the Securities Exchange Act of 1934, as
amended.

(r) "1933 Act" means the Securities Act of 1933, as amended.

(s) "Nonstatutory Stock Option" means an Option that does not
meet the requirements of Code Section 422, or, even if meeting the requirements
of Code Section 422, is not intended to be an ISO and is so designated.

(t) "Option" means a right to purchase Common Stock granted
under the Plan, at a price determined in accordance with the Plan and set forth
in an Agreement.

(u) "Participant" means an individual to whom an Incentive
Award is granted under the Plan.

(v) "Performance Stock" means Common Stock awarded when
performance goals are achieved pursuant to an incentive program as provided in
Section 7.


(w) "Plan" means the Commonwealth Biotechnologies, Inc.
Option Plan.

(x) "Reload Feature" means a feature of an Option described
in an Agreement that authorizes the automatic grant of a Reload Option in
accordance with the provisions of Section 10(d).

(y) "Reload Option" means an Option automatically granted to
a Participant equal to the number of shares of already owned Common Stock
delivered by the Participant to exercise an Option having a Reload Feature.

(z) "Restricted Stock" means Common Stock awarded upon the
terms and subject to the restrictions set forth in Section 6.

(aa) "Rule 16b-3" means Rule 16b-3 of the Securities and
Exchange Commission promulgated under the 1934 Act. A reference in the Plan to
Rule 16b-3 shall include a reference to any corresponding rule (or number
redesignation) of any amendments to Rule 16b-3 enacted after the effective date
of the Plan's adoption.

(bb) "Ten Percent Shareholder" means any individual who owns,
directly or indirectly, more than 10% of the total combined voting power of
all classes of stock of the Company or of an Affiliate. Indirect ownership of
stock shall be determined in accordance with Code Section 424(d).

(cc) "Tax Offset Right" means a right to receive cash amounts
related to Applicable Withholding Taxes from the Company as described in Section
12 of the Plan.

3. General. All types of Incentive Awards may be granted under
the Plan. Options granted under the Plan may be ISOs or Nonstatutory Stock
Options.

4. Stock. Subject to Section 16 of the Plan, there shall be
reserved for issuance under the Plan an aggregate of 376,667 shares of Common
Stock, which shall be authorized, but unissued shares. Of these shares, 236,667
will be reserved for Incentive Awards to be granted to Drs. Richard J. Freer,
Robert B. Harris and Gregory A. Buck and Mr. Thomas R. Reynolds. 140,000 shares
will be reserved for Incentive Awards to be granted to other persons, and the
foregoing named individuals shall not be eligible for Incentive Awards with
respect to these 140,000 shares. Incentive Awards may be made and exercised as
to whole shares or fractional shares, at the discretion of the Committee. If an
Incentive Award is terminated or expires, in whole or in part, for any reason
other than its exercise, the number of shares of Common Stock allocated to the
Incentive Award or portion thereof may be reallocated to other Incentive Awards
to be granted under this Plan. Shares of Common Stock subject to repurchase
which are subsequently repurchased by the Company shall also be available for
issuance in connection with future grants of Incentive Awards. For purposes of
determining the number of shares that are available for Incentive Awards under
the Plan, such number shall, to the extent permissible under Rule 16b-3, include
the number of shares surrendered by a Participant or retained by the Company


in payment of Applicable Withholding Taxes; provided, however, that for purposes
of Code Section 162(m), any such shares shall be counted in accordance with the
requirements of such Code Section.

5. Eligibility.

(a) Subject to the sole discretion of the Committee, any
employee, director, officer, consultant, agent, advisor, or independent
contractor of the Company (or any Affiliate including a corporation that becomes
an Affiliate after the adoption of this Plan) is eligible to receive Incentive
Awards; provided that only employees of the Company or its Affiliates may be
granted ISO's. The Committee has the sole discretion to determine for each
Participant the terms and conditions, the nature of the award, and the number of
shares to be allocated to each Participant as part of each Incentive Award. Any
Incentive Award granted under this Plan shall be evidenced by an Agreement which
shall be subject to the applicable provisions of this Plan and to other such
provisions as the Committee may impose.

(b) The grant of an Incentive Award shall not obligate the
Company or any Affiliate to pay a Participant any particular amount of
remuneration, to continue the employment of a Participant after the grant, or to
make further grants to the Participant at any time thereafter.

6. Restricted Stock Awards.

(a) Whenever the Committee deems it appropriate to grant
Restricted Stock, notice shall be given to the Participant stating the number of
shares of Restricted Stock granted and the terms and conditions to which the
Restricted Stock is subject. This notice, when accepted in writing by the
Participant, shall become an Agreement and certificates representing the shares
shall be issued and delivered to the Participant. Restricted Stock may be
awarded by the Committee in its discretion without cash consideration.

(b) Restricted Stock issued pursuant to the Plan shall
be subject to the following restrictions:

(i) No shares of Restricted Stock may be sold,
assigned, transferred, or disposed of by an Insider within a
six-month period beginning on the Date of Grant, and Restricted
Stock may not be pledged, hypothecated, or otherwise encumbered
within a six-month period beginning on the Date of Grant if such
action would be treated as a sale or disposition under Rule
16b-3.

(ii) No shares of Restricted Stock may be sold,
assigned, transferred, pledged, hypothecated, or otherwise
encumbered or disposed of until the restrictions on such shares
as set forth in the Participant's Agreement have lapsed or been
removed pursuant to paragraph (d) or (e) below.

(iii) If a Participant ceases to be employed by the
Company or an Affiliate, the Participant shall forfeit to the
Company any shares of Restricted Stock on



which the restrictions have not lapsed or been removed pursuant
to paragraph (d) or (e) below on the date such Participant shall
cease to be so employed and the Company shall have no obligation
to pay any amounts with respect to such forfeiture, unless the
Committee determines to the contrary.

(c) Upon the acceptance by a Participant of an award of
Restricted Stock, such Participant shall, subject to the restrictions set forth
in paragraph (b) above, have all the rights of a shareholder with respect to
such shares of Restricted Stock, including, but not limited to, the right to
vote such shares of Restricted Stock and the right to receive all dividends and
other distributions paid thereon. Certificates representing Restricted Stock
shall bear a legend referring to the restrictions set forth in the Plan and the
Participant's Agreement.

(d) The Committee shall establish as to each award of
Restricted Stock the terms and conditions upon which the restrictions set forth
in paragraph (b) above shall lapse. Such terms and conditions may include,
without limitation, the lapsing of such restrictions as a result of the
Disability, death or Retirement of the Participant or the occurrence of a Change
of Control.

(e) Notwithstanding the provisions of paragraphs (b)(ii) and
(iii) above, the Committee may at any time, in its sole discretion, accelerate
the time at which any or all restrictions will lapse or remove any and all such
restrictions.

(f) Until the requirements of Section 11 have been met, no
stock certificate free of a legend reflecting the restrictions set forth in
paragraph (b) above shall be issued to such Participant.

7. Performance Stock Awards.

(a) Performance Stock may be issued pursuant to the Plan in
connection with incentive programs established from time to time by the
Committee when performance criteria established by the Committee as part of the
incentive program have been achieved.

(b) Whenever the Committee deems it appropriate, the
Committee may establish an incentive program and notify Participants of their
participation in and the terms of the incentive program. More than one incentive
program may be established by the Committee and they may operate concurrently or
for varied periods of time and a Participant may be permitted to participate in
more than one incentive program at the same time. Performance Stock will be
issued only subject to the incentive program and the Plan and consistent with
meeting the performance goals set by the Committee. A Participant in an
incentive program shall have no rights as a shareholder until Performance Stock
is issued. Performance Stock may be issued without cash consideration.

(c) A Participant's interest in an incentive program
may not be sold, assigned, transferred, pledged, hypothecated, or otherwise
encumbered.


8. Stock Options.

(a) Whenever the Committee deems it appropriate to grant
Options, a written agreement shall be given to the Participant stating the
number of shares for which Options are granted, the Option price per share,
whether the Options are ISOs or Nonstatutory Stock Options, and the conditions
to which the grant and exercise of the Options are subject. This written
agreement, when duly accepted in writing by the Participant, shall become an
Agreement.

(b) The exercise price of shares of Common Stock covered by
an ISO shall be not less than 100% of the Fair Market Value of such shares on
the Date of Grant; provided that if an ISO is granted to a Participant who, at
the time of the grant, is a Ten Percent Shareholder, then the exercise price of
the shares covered by the ISO shall be not less than 110% of the Fair Market
Value of such shares on the Date of Grant.

(c) Options may be exercised in whole or in part at such
times as may be specified by the Committee in the Participant's Agreement,
subject to Section 12; provided that no ISO may be exercised after ten years
(or, in the case of an ISO granted to a Ten Percent Shareholder, five years)
from the Date of Grant. Except as otherwise provided in this paragraph, no ISO
may be exercised unless the Participant is employed by the Company or an
Affiliate at the time of the exercise and has been employed by the Company or an
Affiliate of the Company at all times since the Date of Grant. An ISO by its
terms, shall be exercisable in any calendar year only to the extent that the
aggregate Fair Market Value (determined at the Date of Grant) of the Common
Stock with respect to which ISOs are exercisable for the first time during the
calendar year does not exceed $100,000 (the "Limitation Amount"). ISOs granted
under the Plan and all other plans of the Company and any Affiliate shall be
aggregated for purposes of determining whether the Limitation Amount has been
exceeded. The Board may impose such conditions as it deems appropriate on an ISO
to ensure that the foregoing requirement is met. If ISOs that first become
exercisable in a calendar year exceed the Limitation Amount, the excess will be
treated as Nonstatutory Stock Options to the extent permitted by law.

(d) To obtain certain tax benefits afforded to ISOs under
Section 422 of the Code, the Participant must hold the shares issued upon the
exercise of an ISO for two years after the Date of Grant of the ISO and one year
from the date of exercise. A Participant may be subject to the alternative
minimum tax at the time of exercise of an ISO. The Committee may require a
Participant to give the Company prompt notice of any disposition of shares
acquired by the exercise of an ISO before the expiration of such holding
periods.

(e) Notwithstanding the foregoing, no Option shall be
exercisable within the first six months after it is granted; provided that, this
restriction shall not apply if the Participant becomes Disabled or dies during
the six-month period.

(f) The Committee may, in its sole discretion, grant Options
that by their terms become fully exercisable upon a Change of Control,
notwithstanding other conditions on exercisability in the Agreement.


9. Method of Exercise of Options.

(a) Options may be exercised by the Participant giving
written notice of the exercise to the Company, stating the number of shares the
Participant has elected to purchase under the Option. Such notice shall be
effective only if accompanied by the exercise price in full in cash; provided
that, if the terms of an Option so permit, the Participant may (i) deliver, or
cause to be withheld from the Option shares, shares of Common Stock (valued at
their Fair Market Value on the date of exercise) that have been held for at
least six months if acquired from the Company and are not subject to any
restrictions in satisfaction of all or any part of the exercise price, (ii)
deliver a properly executed exercise notice together with irrevocable
instructions to a broker to deliver promptly to the Company, from the sale or
loan proceeds with respect to the sale of Common Stock or a loan secured by
Common Stock, the amount necessary to pay the exercise price and, if required by
the Committee, Applicable Withholding Taxes, or (iii) deliver an interest
bearing recourse promissory note, payable to the Company, in payment of all or
part of the exercise price together with such collateral as may be required by
the Committee at the time of exercise. The interest rate under any such
promissory note shall be established by the Committee and shall be at least
equal to the minimum interest rate required at the time to avoid imputed
interest under the Code.

(b) The Company may place on any certificate representing
Common Stock issued upon the exercise of an Option any legend deemed desirable
by the Company's counsel to comply with federal or state securities laws, and
the Company may require a customary written indication of the Participant's
investment intent. Until the Participant has made any required payment,
including any Applicable Withholding Taxes, and has had issued a certificate for
the shares of Common Stock acquired, he shall possess no shareholder rights with
respect to the shares.

(c) If a Participant exercises an Option that has a Reload
Feature by delivering already owned shares of Common Stock in payment of the
exercise price, the Committee shall grant to the Participant a Reload Option.
The Committee shall grant the Reload Option in the same manner as set forth in
Section 8(a). The Reload Option shall be subject to the following restrictions:

(i) The exercise price of shares of Common Stock
covered by a Reload Option shall be not less than 100% of the
Fair Market Value of such shares on the Date of Grant of the
Reload Option;

(ii) If and to the extent required by Rule 16b-3, a
Reload Option shall not be exercisable within the first six
months after it is granted; provided that this restriction shall
not apply if the Participant becomes Disabled or dies during the
six-month period;

(iii) The Reload Option shall be subject to the same
restrictions on exercisability imposed on the underlying option
(possessing the Reload Feature) exercised unless the Committee
specifies different limitations;


(iv) The Reload Option shall not be exercisable until
the expiration of any retention holding period imposed on the
disposition of any shares of Common Stock covered by the
underlying Option (possessing the Reload Feature) delivered; and

(v) The Reload Option shall not have a Reload
Feature.

The Committee may, in its sole discretion, cause the Company to place on any
certificate representing Common Stock issued to a Participant upon the exercise
of an underlying Option (possessing a Reload Feature as evidenced by the
Agreement for such Option) delivered pursuant to this subsection (d), a legend
restricting the sale or other disposition of such Common Stock.

(d) Notwithstanding anything herein to the contrary, at all
times at which the Company has any class of securities registered under Section
12 of the 1934 Act, Options shall be granted and exercised in such a manner as
to conform to the provisions of Rule 16b-3.

(e) Each Participant shall, before the exercise of any
Option, deliver to the Company any reasonable information the Company deems
necessary to be able to satisfy itself that the shares of Common Stock issuable
upon exercise of an Option will be acquired in accordance with the terms of an
applicable exemption from the securities registration requirements of applicable
federal and state securities law. With respect to Options that are not ISOs and
without limiting the scope of the Company's or the Committee's discretion to
withhold approval or otherwise administer this Plan, approval may be withheld to
the extent that the exercise, either individually or in the aggregate together
with the exercise of other previously exercised Options and/or offers and sales
pursuant to any prior or contemplated offering of securities, would, in the sole
and absolute judgment of the Company, require the filing of a registration
statement with the United States Securities and Exchange Commission or with the
securities commission of any state. The Company shall avail itself of any
exemptions from registration contained in applicable federal and state
securities laws which are reasonably available to the Company on terms which, in
its sole and absolute discretion, it deems reasonable and not unduly burdensome
or costly. If an Option which is not an ISO cannot be exercised at the time it
would otherwise expire due to the restrictions contained in this Section, the
exercise period for that Option shall be extended for successive one-year
periods until that Option can be exercised in accordance with this Section

10. Nontransferability of Options. Options by their terms, shall not
be transferable except by will or by the laws of descent and distribution or, if
permitted by Rule 16b-3, pursuant to a qualified domestic relations order (as
defined in Code Section 414(p)) ("QDRO") and shall be exercisable, during the
Participant's lifetime, only by the Participant or, if permitted by Rule 16b-3,
an alternative payee under a QDRO, or by his guardian, duly authorized
attorney-in-fact or other legal representative.

11. Payment of Applicable Withholding Taxes. The Company may require
the Participant to pay to the Company the amount of Applicable Withholding Taxes
with respect to




the grant or exercise of any Incentive Award. Subject to the Plan and applicable
law, the Committee may, in its sole discretion, permit the Participant to
satisfy withholding obligations, in whole or in part, by paying cash, by
electing to have the Company withhold shares of Common Stock issuable upon the
exercise of an Incentive Award, or by transferring to the Company shares of
Common Stock that have been held for at least six months if acquired from the
Company and are not subject to any restrictions, in such amounts equal to the
Applicable Withholding Taxes. The Company shall have the right to withhold from
any shares of Common Stock issuable pursuant to an Incentive Award or from any
cash amounts otherwise due or to become due from the Company to the Participant
an amount equal to such taxes. The Company shall have no obligation to deliver
shares of Common Stock until the Applicable Withholding Taxes have been
satisfied.

12. Effect of Death, Disability, or Termination of Employment.

(a) In the event of termination of a Participant's employment
or services for the Company or its Affiliates for any reason other than for
Cause, death, or Disability, such Participant shall have the right to exercise
the Incentive Award at any time within three months after such termination of
employment to the extent of the full number of shares that such Participant was
entitled to purchase under the Incentive Award on the date of termination,
subject to the condition that no Incentive Award shall be exercisable after the
expiration of the term of the Incentive Award.

(b) If a Participant's employment or services is terminated
by the Company or its Affiliates for Cause, his Incentive Awards shall be
terminated as of the date of the misconduct.

(c) If a Participant's employment or services for the Company
or its Affiliates terminate for death or Disability, all Incentive Awards then
held by such Participant under the Plan expire on the earlier of (i) 12 months
from the date of such termination, (ii) the expiration date of such option, or
(iii) if for Retirement, the date on which Participant breaches a noncompetition
or other obligation owed to the Company. The Incentive Award may be exercised by
the personal representatives, administrators, or guardian of the Participant or
by any person or persons to whom the Incentive Award is transferred by will or
the applicable laws of descent and distribution, but only to the extent of the
full number of shares such Participant was entitled to purchase under the
Incentive Award on the date of such death or termination of employment.

(d) Notwithstanding the foregoing, the Committee shall
establish and set forth in each Incentive Award agreement whether the Incentive
Award will continue to be exercisable, and the terms and conditions of such
exercise, if a Participant ceases to be employed by, or to provide services to,
the Company or its Affiliates, which provisions may be waived or modified by the
Committee at any time. If not so established in the agreement evidencing the
Incentive Award, the Option will be exercisable according to the provisions of
paragraphs (a), (b), and (c), above, which may be waived or modified by the
Committee at any time. If the Committee extends the exercisability of an ISO
beyond the time provided for in Code Section 422, the ISO will become a
Nonstatutory Stock Option.

13. Tax Offset Rights.

(a) Whenever the Committee deems it appropriate, Tax
Offset Rights may be granted in connection with Nonstatutory Stock Options,
Performance Stock, or Restricted Stock. Tax Offset Rights shall be evidenced in
writing as part of the Agreement to which they pertain.

(b) Tax Offset Rights, (i) upon exercise of all or any part
of Nonstatutory Stock Option (ii) upon grant of Performance Stock, or (iii) upon
the lapse of restrictions on Restricted Stock, entitle the Participant to
receive in cash from the Company an amount equal to or approximating the
Applicable Withholding Taxes.

(c) A Participant may exercise a Tax Offset Right by giving
the Committee written notice of exercise simultaneously with the exercise of a
Nonstatutory Stock Option the receipt of an award of Performance Stock, or the
lapse of restrictions on Restricted Stock. To the extent exercised, the Tax
Offset Right shall lapse.

(d) The Committee may limit the amount the Participant will
be entitled to receive in connection with a Tax Offset Right and may include any
provisions in a Tax Offset Right that the Committee deems appropriate to ensure
that the Tax Offset Right will not be characterized as an "equity security" or
"derivative security" for purposes of Section 16 of the 1934 Act and the rules
and regulations thereunder.

14. Repurchase Rights, Escrow.

(a) The Committee shall have the discretion to authorize the
issuance of unvested shares of Common Stock pursuant to the exercise of an
Incentive Award. In the event of termination of the Participant's employment or
services or breach of a material obligation owed by Participant to the Company
or its Subsidiaries, all shares of Common Stock issued upon exercise of an
Incentive Award which are unvested at the time of cessation of employment or
services shall be subject to repurchase at the exercise price paid for such
shares. The terms and conditions upon which such repurchase right shall be
exercisable (including the period and procedure for exercise) shall be
established by the Committee and set forth in the agreement evidencing such
right. All of the Company's outstanding repurchase rights under this Section
14(a) are assignable by the Company at any time and shall remain in full force
and effect in the event of a Change of Control; provided that if the vesting of
Incentive Awards is accelerated pursuant to Section 17, the repurchase rights
under this Section 14(a) shall terminate and all shares subject to such
terminated rights shall immediately vest in full. The Committee shall have the
discretionary authority, exercisable either before or after the Participant's
cessation of employment or services or breach of a material obligation owed by
Participant to the Company or its Subsidiaries, to cancel the Company's
outstanding repurchase rights with respect to one or more shares purchased or
purchasable by the Participant under an Incentive Award and thereby accelerate
the vesting of such shares in whole or in part at any time.




(b) To ensure that shares of Common Stock acquired upon
exercise of an Incentive Award that are subject to any repurchase right,
stockholders agreement, security for any promissory note, or other restrictions,
including without limitation those set forth in Section 6(b), will be available
for repurchase, the Committee may require the Participant to deposit the
certificate or certificates evidencing such shares with an agent designated by
the Committee under the terms and conditions of escrow and security agreements
approved by the Committee. If the Committee does not require such deposit as a
condition of exercise of an Incentive Award, the Committee reserves the right at
any time to require the Participant to so deposit the certificate or
certificates in escrow. The Company shall bear the expense of the escrow. As
soon as practicable after the expiration of any repurchase rights, stockholders
agreement, or other restrictions, and after full repayment of any promissory
note secured by the shares in escrow, the agent shall deliver to the Participant
the shares no longer subject to such restrictions and no longer security for any
promissory note. In the event shares held in escrow are subject to the Company's
exercise of a repurchase option or stockholders agreement, the notices required
to be given to the Participant shall be given to the agent and any payment
required to be given to the Participant shall be given to the agent. Within 30
days after payment by the Company, the agent shall deliver the shares which the
Company has purchased to the Company and shall deliver the payment received from
the Company to the Participant. In the event of a stock dividend, stock split,
or consolidation of shares or any like capital adjustment of any of the
outstanding securities of the Company, any and all new, substituted or
additional securities or other property to which the Participant is entitled by
reason of ownership of shares acquired upon exercise of an Incentive Award shall
be subject to any repurchase rights, stockholders agreement, and/or security for
any promissory note with the same force and effect as the shares subject to such
repurchase rights, stockholders agreement and/or security interest immediately
before such event

15. Termination, Modification, Change. If not sooner terminated by
the Board, this Plan shall terminate at the close of business ten years after
the effective date as set forth in Section 24 hereof. No Incentive Awards shall
be made under the Plan after its termination. The Board may terminate the Plan
or may amend the Plan in such respects as it shall deem advisable; provided
that, if and to the extent required by the Code or Rule 16b-3, no change shall
be made that increases the total number of shares of Common Stock reserved for
issuance pursuant to Incentive Awards granted under the Plan (except pursuant to
Section 16), materially modifies the requirements as to eligibility for
participation in the Plan, or materially increases the benefits accruing to
Participants under the Plan, or unless such change is authorized by the
shareholders of the Company. Notwithstanding the foregoing, the Board may
unilaterally amend the Plan and Incentive Awards as it deems appropriate to
ensure compliance with Rule 16b-3 and to cause ISOs to meet the requirements of
the Code and regulations thereunder. Except as provided in the preceding
sentence, a termination or amendment of the Plan shall not, without the consent
of the Participant, adversely affect a Participant's rights under an Incentive
Award previously granted to him.

16. Change in Capital Structure.

(a) In the event of a stock dividend, stock split,
combination of shares, recapitalization or merger in which the Company is the
surviving corporation, or other change in


the Company's capital stock (including, but not limited to, the creation or
issuance to shareholders generally of rights, options, or warrants for the
purchase of common stock or preferred stock of the Company), the number and kind
of shares of stock or securities of the Company to be subject to the Plan and to
Incentive Awards then outstanding or to be granted thereunder, the maximum
number of shares or securities which may be delivered under the Plan, the
exercise price and other relevant provisions shall be appropriately adjusted by
the Committee, whose determination shall be binding on all persons. If the
adjustment would produce fractional shares with respect to any unexercised
Option, the Committee may, but need not, adjust appropriately the number of
shares covered by the Option so as to eliminate the fractional shares.

(b) Notwithstanding anything in the Plan to the contrary, the
Committee may take the foregoing actions without the consent of any Participant,
and the Committee's determination shall be conclusive and binding on all persons
for all purposes.

17. Change of Control. Except as otherwise provided in the agreement
that evidences the Incentive Award, in the event of a Change of Control, the
Committee shall determine whether provision will be made in connection with the
Change of Control for an appropriate assumption of the Incentive Awards
theretofore granted under the Plan (which assumption may be effected by means of
a payment to each Participant (by the Company or any other person or entity
involved in the Change of Control), in exchange for the cancellation of the
Incentive Awards held by such Participant, of the difference between the then
Fair Market Value of the aggregate number of shares of Common Stock then subject
to such Incentive Awards and the aggregate exercise price that would have to be
paid to acquire such shares) or for substitution of appropriate new Incentive
Awards covering stock of a successor corporation to the Company or stock of an
Affiliate of such successor corporation. If the Committee determines that such
an assumption or substitution will be made, the Committee shall give notice of
such determination to the Participants, and the provisions of such assumption or
substitution, and any adjustments made (i) to the number and kind of shares
subject to the outstanding Incentive Awards (or to the options in substitution
therefor), (ii) to the exercise prices, and/or (iii) to the terms and conditions
of the stock options, shall be binding on the Participants. Any such
determination shall be made in the sole discretion of the Committee and shall be
final, conclusive, and binding on all Participants. If the Committee, in its
sole discretion, determines that no such assumption or substitution will be
made, the Committee shall give notice of such determination to the Participants,
and each Incentive Award that is at the time outstanding shall automatically
accelerate so that each such Incentive Award shall, immediately before the
specified effective date for the Change of Control, become 100% vested and
exercisable, except that such acceleration will not occur if, in the opinion of
the Company's outside accountants, it would render unavailable "pooling of
interest" accounting for a Change of Control that would otherwise qualify for
such accounting treatment. All such Incentive Awards shall terminate and cease
to remain outstanding immediately following the consummation of the Change of
Control, except to the extent assumed by the successor corporation or an
Affiliate thereof.

18. Administration of the Plan. The Plan shall be administered by the
Committee, which shall consist of not less than two non-employee members of the
Board, who shall be appointed by the Board. In making grants of Incentive
Awards; the Committee shall consult with,




and seek the recommendations of, the executive officers of the Company, although
it shall have no obligation to act in accordance with such recommendations and
such consultations and recommendations shall not diminish the discretion any
authority otherwise granted to the Committee. The Committee shall have general
authority to impose any limitation or condition upon an Incentive Award the
Committee deems appropriate to achieve the objectives of the Incentive Award and
the Plan and, without limitation and in addition to powers set forth elsewhere
in the Plan, shall have the following specific authority:

(a) The Committee shall have the power and sole and complete
discretion to determine (i) which eligible persons shall receive Incentive
Awards and the nature of each Incentive Award, (ii) the number of shares of
Common Stock to be covered by each Incentive Award, (iii) whether Options shall
be ISOs or Nonstatutory Stock Options, (iv) when, whether and to what extent Tax
Offset Rights shall be granted and the terms thereof, (v) the time or times when
an Incentive Award shall be granted, (vi) whether an Incentive Award shall
become vested over a period of time and when it shall be fully vested, (vii)
when Options may be exercised, (viii) whether a Disability exists, (ix) the
manner in which payment will be made upon the exercise of Options (x) conditions
relating to the length of time before disposition of Common Stock received upon
the exercise of Options is permitted, (xi) whether to approve a Participant's
election (A) to deliver shares of already owned Common Stock to satisfy
Applicable Withholding Taxes or (B) to have the Company withhold from the shares
to be issued upon the exercise of a Nonstatutory Stock Option the number of
shares necessary to satisfy Applicable Withholding Taxes, (xii) the terms and
conditions applicable to Restricted Stock Awards, (xiii) the terms and
conditions on which restrictions upon Restricted Stock shall lapse, (xiv)
whether to accelerate the time at which any or all restrictions with respect to
Restricted Stock will lapse or be removed, (xv) notice provisions relating to
the sale of Common Stock acquired under the Plan, (xvi) the terms of incentive
programs, performance criteria, and other factors relevant to the issuance of
Performance Stock, and (xvii) any additional requirements relating to Incentive
Awards that the Committee deems appropriate. Notwithstanding the foregoing, no
"tandem stock options" (where two stock options are issued together and the
exercise of one option affects the right to exercise the other option) may be
issued in connection with ISOs. The Committee shall have the power to amend the
terms of previously granted Incentive Awards so long as the terms as amended are
consistent with the terms of the Plan and provided that the consent of the
Participant is obtained with respect to any amendment that would be detrimental
to him, except that such consent will not be required if such amendment is for
the purpose of complying with Rule 16b-3 or any requirement of the Code
applicable to the Incentive Award.

(b) The Committee may adopt rules and regulations for carrying
out the Plan. The interpretation and construction of any provision of the Plan
by the Committee shall be final and conclusive. The Committee may consult with
counsel, who may be counsel to the Company, and shall not incur any liability
for any action taken in good faith in reliance upon the advice of counsel.

(c) A majority of the members of the Committee shall
constitute a quorum, and all actions of the Committee shall be taken by a
majority of the members present. Any action


may be taken by a written instrument signed by all of the members, and any
action so taken shall be fully effective as if it had been taken at a meeting.

(d) If and so long as the Common Stock is registered under
Section 12 of the 1934 Act, the Board shall consider in selecting the membership
of the Committee, with respect to any person subject or likely to become subject
to Section 16 of the 1934 Act, the provisions regarding (a) "outside directors"
as contemplated by Code Section 162(m) and (b) "nonemployee directors" as
contemplated by Rule 16b-3 under the 1934 Act. The Committee may consist of one
or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time.

19. Market Standoff.

(a) In connection with any underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the 1933 Act, including the Company's initial public
offering, a person shall not sell, or make any short sale of, loan, hypothecate,
pledge, grant any option for the purchase of, otherwise dispose or transfer for
value, or otherwise agree to engage in any of the foregoing transactions with
respect to, any shares issued pursuant to an Incentive Award granted under the
Plan without the prior written consent of the Company or its underwriters. Such
limitations shall be in effect only if and to the extent and for such period of
time as may be requested by the Company or such underwriters and agreed to by
the Company's officers and directors; provided, however, that in no event shall
the weighted average number of days in such period exceed 180 days. The
limitations of this paragraph shall in all events terminate two years after the
effective date of the Company's initial public offering.

(b) In the event of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares, or other change
affecting the Company's outstanding Common Stock affected as a class without the
Company's receipt of consideration, then any new, substituted or additional
securities distributed with respect to the purchased shares shall be immediately
subject to the provisions of this Section 20, to the same extent the purchased
shares are at such time covered by such provisions.

(c) To enforce the limitations of this Section 19, the
Company may impose stop-transfer instructions with respect to the purchase
shares and any new, substituted or additional securities distributed with
respect to the purchased shares until the end of the applicable standoff period.

20. Registration.

(a) The Company shall be under no obligation to any
Participant to register for offering or resale or to qualify for exemption under
the 1933 Act, or to register or qualify under state securities laws, any shares
of Common Stock, security or interest in a security paid or issued under, or
created by, the Plan, or to continue in effect any such registrations or
qualifications if made. The Company may issue certificates for shares with such
legends and subject to


such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.

(b) Inability of the Company to obtain, from any regulatory
body having jurisdiction, the authority deemed by the Company's counsel to be
necessary for the lawful issuance and sale of any shares hereunder or the
unavailability of an exemption from registration for the issuance and sale of
any shares hereunder shall relieve the Company of any liability in respect of
the nonissuance or sale of such shares as to which such requisite authority
shall not have been obtained.

(c) As a condition to the exercise of an Incentive Award, the
Company may require the Participant to represent and warrant at the time of any
such exercise or receipt that such shares are being purchased or received only
for the Participant's own account and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any such shares may
be placed on the official stock books and records of the Company, and a legend
indicating that such shares may not be pledged, sold or otherwise transferred,
unless an opinion of counsel is provided (concurred in by counsel for the
Company) stating that such transfer is not in violation of any applicable law or
regulation, may be stamped on stock certificates to ensure exemption from
registration. The Committee may also require such other action or agreement by
the Participant as may from time to time be necessary to comply with the federal
and state securities laws.

21. Compliance With Laws and Approval of Regulatory Bodies. No Option
shall be exercisable, no Common Stock shall be issued, no certificates for
shares of Common Stock shall be delivered, and no payment shall be made under
this Plan except in compliance with all applicable federal and state laws and
regulations (including, without limitation, withholding tax requirements) and
the rules of all domestic stock exchanges on which the Company's shares may be
listed. The Company shall have the right to rely on an opinion of its counsel as
to such compliance. Any share certificate issued to evidence Common Stock for
which an Option is exercised may bear such legends and statements as the
Committee may deem advisable to assure compliance with federal and state laws
and regulations. No Option shall be exercisable, no Common Stock shall be
issued, no certificate for shares shall be delivered, and no payment shall be
made under this Plan until the Company has obtained such consent or approval as
the Committee may deem advisable from regulatory bodies having jurisdiction over
such matters. The exercise of any Option granted under this Plan shall
constitute a Participant's full and complete consent to whatever action the
Committee deems necessary to satisfy any federal and state tax withholding
requirements which the Committee, acting in its discretion, deems applicable to
such exercise.

22. Notice. All notices and other communications required or
permitted to be given under this Plan shall be in writing and shall be deemed to
have been duly given if delivered personally or mailed first class, postage
prepaid, as follows: (a) if to the Company - at its principal business address
to the attention of the Treasurer and (b) if to any Participant - at the last
address of the Participant known to the sender at the time the notice or other
communication is sent.


23. Interpretation. The terms of this Plan are subject to all present
and future regulations and rulings of the Secretary of the Treasury or his
delegate relating to the qualification of ISOs under the Code. If any provision
of the Plan conflicts with any such regulation or ruling, then that provision of
the Plan shall be void and of no effect. The terms of this Plan shall be
governed by the laws of the Commonwealth of Virginia.

24. Effective Date of the Plan. This Plan shall be effective on June
24, 1997, and shall be submitted to the shareholders of the Company for
approval. Until (i) the Plan has been approved by the Company's shareholders,
and (ii) the requirements of any applicable State securities laws have been met,
no Restricted Stock shall be awarded, no Performance Stock shall be issued and
no Option shall be exercisable.


IN WITNESS WHEREOF, the Company has caused this Plan to be adopted
as set forth herein this __ day of June, 1997.



COMMONWEALTH
BIOTECHNOLOGIES, INC.


By: ________________________________
Its: President