Exhibit 10.1

CALIFORNIA COASTAL COMMUNITIES, INC.
AMENDED AND RESTATED
1993 STOCK OPTION/STOCK ISSUANCE PLAN

(As approved by the Board of Directors (i) on February 28, 2006 with required
Stockholder approval obtained on June 27, 2006; and on June 14, 2006
without the requirement of Stockholder approval)

ARTICLE ONE
GENERAL

I.   PURPOSE OF THE AMENDED AND RESTATED PLAN

A.    This Amended and Restated 1993 Stock Option/Stock Issuance Plan (“Plan”)
is intended to promote the interests of California Coastal Communities, Inc., a
Delaware corporation (the “Corporation”), by providing (i) key employees
(including officers) of the Corporation (or its parent or subsidiary
corporations) who are responsible for the management, growth and financial
success of the Corporation (or its parent or subsidiary corporations), and
(ii) consultants and other independent contractors who provide valuable services
to the Corporation (or its parent or subsidiary corporations) with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation (or its parent or subsidiary corporations).

B.     The Plan amends and restates the Corporation’s Amended and Restated 1993
Stock Option/Stock Issuance Plan (the “1993 Plan”) which was adopted by the
Board on March 4, 2004 and was approved by the Corporation’s stockholders on
May 27, 2004.

II.   DEFINITIONS

A.    For purposes of the Plan, the following definitions shall be in effect:

Board:           the Corporation’s Board of Directors.

Change in Control:    a change in ownership or control of the Corporation
effected through either of the following transactions:

a.      any person or related group of persons (other than the Corporation or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Corporation) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders which the Board does not
recommend such stockholders to accept; or

b.      a change in the composition of the Board over a period of thirty-six
(36) consecutive months or less such that a majority of the Board members
(rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who either
(A) have been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during such
period by at least a majority of the Board members

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described in clause (A) who were still in office at the time such election or
nomination was approved by the Board.

Common Stock:    shares of the Corporation’s Common Stock, par value $.05 per
share, on a post 1997 capital stock combination and one for one hundred (1:100)
reverse stock split basis.

Code:    the Internal Revenue Code of 1986, as amended.

Committee:    the committee of two (2) or more non-employee Board members
appointed by the Board to administer the Plan.

Corporate Transaction:    any of the following stockholder-approved transactions
to which the Corporation is a party:

a.      a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Corporation is incorporated,

b.      the sale, transfer or other disposition of all or substantially all of
the assets of the Corporation in complete liquidation or dissolution of the
Corporation, or

c.      any reverse merger in which the Corporation is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation’s outstanding securities are
transferred to a person or persons different from the persons holding those
securities immediately prior to such merger.

Employee:     an individual who performs services while in the employ of the
Corporation or one or more parent or subsidiary corporations, subject to the
control and direction of the employer entity not only as to the work to be
performed but also as to the manner and method of performance.

Exercise Date:    the date on which the Corporation shall have received written
notice of the option exercise.

Fair Market Value:    the Fair Market Value per share of Common Stock determined
in accordance with the following provisions:

a.      If the Common Stock is not at the time listed or admitted to trading on
any national securities exchange but is traded on the Nasdaq National Market,
the Fair Market Value shall be the closing selling price per share of that
security on the date in question, as such price is reported by the National
Association of Securities Dealers through the Nasdaq National Market or any
successor system. If there is no reported closing selling price for the Common
Stock on the date in question, then the closing selling price per share of that
security on the last preceding date for which such quotation exists shall be
determinative of Fair Market Value.

b.      If the Common Stock is at the time listed or admitted to trading on any
national stock exchange, then the Fair Market Value shall be the closing selling
price per share of that security on the date in question on the exchange serving
as the primary market for the Common Stock, as such price is officially quoted
in the composite tape of transactions on such exchange. If there is no reported
sale of Common Stock on such exchange on the date

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in question, then the Fair Market Value shall be the closing selling price per
share of that security on the exchange on the last preceding date for which such
quotation exists.

Hostile Take-Over:    a change in ownership of the Corporation effected through
the following transaction:

a.                 any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) directly or indirectly
acquires beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act)
of securities possessing more than fifty percent (50%) of the Corporation’s
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation’s stockholders which the Board does not recommend such
stockholders to accept, and

b.                more than fifty percent (50%) of the securities so acquired in
such tender or exchange offer are accepted from holders other than the officers
and directors of the Corporation subject to the short-swing profit restrictions
of Section 16 of the 1934 Act.

Incentive Option:    a stock option which satisfies the requirements of Code
Section 422.

1934 Act:    the Securities and Exchange Act of 1934, as amended.

Non-Statutory Option:    a stock option not intended to meet the requirements of
Code Section 422.

Optionee:     any person to whom an option is granted under the Discretionary
Option Grant Program in effect under the Plan.

Permanent Disability or Permanently Disabled:    the inability of the Optionee
or the Participant to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment expected to result in
death or to be of continuous duration of twelve (12) months or more.

Plan Administrator:    the Committee in its capacity as the administrator of the
Plan.

Service:        the performance of services on a periodic basis to the
Corporation (or any parent or subsidiary corporation) in the capacity of an
Employee, a non-employee member of the board of directors or an independent
consultant or advisor, except to the extent otherwise specifically provided in
the applicable stock option or stock issuance agreement.

Take-Over Price:    the greater of (a) the Fair Market Value per share of the
Common Stock subject to the particular option surrendered to the Corporation in
connection with a Hostile Take-Over on the date such option surrender is
effected or (b) the highest reported price per share of that security paid by
the tender offeror in effecting such Hostile Take-Over. However, if the
surrendered option is an Incentive Option, the Take-Over Price shall not exceed
the clause (a) price per share.

B.     The following provisions shall be applicable in determining the parent
and subsidiary corporations of the Corporation:

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—     Any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation shall be considered to be a parent of
the Corporation, provided each such corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

—     Each corporation (other than the Corporation) in an unbroken chain of
corporations which begins with the Corporation shall be considered to be a
subsidiary of the Corporation, provided each such corporation in the unbroken
chain (other than the last corporation) owns, at the time of the determination,
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

III.  STRUCTURE OF THE PLAN

A.    Stock Programs.    The Plan shall be divided into two (2) separate
components: the Discretionary Option Grant Program specified in Article Two and
the Director Fee Program specified in Article Three. Under the Discretionary
Option Grant Program, eligible individuals may, at the discretion of the Plan
Administrator, be granted options to purchase shares of Common Stock in
accordance with the provisions of Article Two. Under the Director Fee Program,
each non-employee Board member may, in accordance with the provisions of Article
Three, elect to apply all or any portion of his or her annual retainer fee to
the acquisition of unvested shares of Common Stock.

B.     General Provisions.    Unless the context clearly indicates otherwise,
the provisions of Articles One and Four shall apply to the Discretionary Option
Grant Program and the Director Fee Program and shall accordingly govern the
interests of all individuals under the Plan.

IV.    ADMINISTRATION OF THE PLAN

A.    The Discretionary Option Grant Program shall be administered by the
Committee in its capacity as Plan Administrator. No non-employee Board member
shall be eligible to serve on the Committee if such individual has, within the
twelve (12)-month period immediately preceding the date of his or her
appointment to the Committee, received an option grant or direct stock issuance
under this Plan or any other stock plan of the Corporation (or any parent or
subsidiary corporation), other than pursuant to the Director Fee Program.

B.     Members of the Committee shall serve for such period of time as the Board
may determine and shall be subject to removal by the Board at any time.

C.     The Committee as Plan Administrator shall have full power and authority
(subject to the express provisions of the Plan) to establish rules and
regulations for the proper administration of the Discretionary Option Grant
Program and to make such determinations under, and issue such interpretations
of, the provisions of such program and any outstanding option grants thereunder
as it may deem necessary or advisable. Decisions of the Plan Administrator shall
be final and binding on all parties who have an interest in the Discretionary
Option Grant Program or any outstanding option or unvested share issuance
thereunder.

D.     Administration of the Director Fee Program shall be self-executing in
accordance with the express terms and conditions of Article Three and the
Committee as Plan Administrator shall

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exercise no discretionary functions with respect to option grants or share
issuances made pursuant to those programs.

V.     OPTION GRANTS AND STOCK ISSUANCES

A.    The persons eligible to participate in the Discretionary Option Grant
Program under Article Two shall be limited to the following:

—     officers and other key employees of the Corporation (or its parent or
subsidiary corporations) who render services which contribute to the management,
growth and financial success of the Corporation (or its parent or subsidiary
corporations);

—     members of the Board or the members of the board of directors of any
parent or subsidiary corporation; and

—     those consultants or other independent contractors who provide valuable
services to the Corporation (or its parent or subsidiary corporations).

B.     Non-employee Board members who serve as Plan Administrator shall not,
during their period of service as such, be eligible to participate in the
Discretionary Option Grant Program or in any other stock option, stock purchase,
stock bonus or other stock plan of the Corporation (or its parent or subsidiary
corporations), other than the Director Fee Program, to the extent they are
eligible for participation in those latter programs in accordance with the
provisions of Articles Three.

C.     The Plan Administrator shall have full authority to determine which
eligible individuals are to receive option grants under the Discretionary Option
Grant Program, the number of shares to be covered by each such grant, the status
of the granted option as either an Incentive Option or a Non-Statutory Option,
the time or times at which each granted option is to become exercisable and the
maximum term for which the option is to remain outstanding.

VI.   STOCK SUBJECT TO THE PLAN

A.    Shares of Common Stock shall be available for issuance under the Plan and
shall be drawn from either the Corporation’s authorized but unissued shares of
Common Stock or from reacquired shares of Common Stock, including shares
repurchased by the Corporation on the open market. One Million One Hundred Fifty
Nine Thousand Nine Hundred and Eighty-Four (1,159,984) shares of Common Stock
may be issued over the term of the Plan, subject to adjustment from time to time
in accordance with the provisions of this Section VI. Such authorized share
reserve is comprised of the number of shares of Common Stock which remained
available for issuance under the 1993 Plan prior to this amendment, as reduced
by this amendment.

B.     In no event shall there be issued over the remaining term of the Plan,
from the effective date of this amendment to the 1993 Plan until the termination
of the Plan pursuant to Article Four, Section IV, more than One Million One
Hundred Fifty Nine Thousand Nine Hundred and Eighty-Four (1,159,984) shares in
the aggregate of Common Stock. The foregoing share limitations shall be subject
to periodic adjustment in accordance with the provisions of Section F of this
Article VI.

C.     Should one or more outstanding options under this Plan expire or
terminate for any reason prior to exercise in full then the shares subject to
the portion of each option not so exercised shall be available for subsequent
issuance under the Plan. Shares subject to any option or portion

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thereof surrendered in accordance with Section IV of Article Two and all share
issuances under the Plan, whether or not the shares are subsequently repurchased
by the Corporation pursuant to its repurchase rights under the Plan, shall
reduce on a share-for-share basis the number of shares of Common Stock available
for subsequent issuance under the Plan. In addition, should the exercise price
of an outstanding option under the Plan be paid with shares of Common Stock or
should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection
with the exercise of an outstanding option under the Plan or the vesting of a
direct share issuance made under the Plan, then the number of shares of Common
Stock (as the case may be) available for issuance under the Plan shall be
reduced by the gross number of shares for which the option is exercised or which
vest under the share issuance, and not by the net number of shares of Common
Stock actually issued to the holder of such option or share issuance.

D.     Should any change be made to the Common Stock issuable under the Plan by
reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Corporation’s receipt of consideration, then
appropriate adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of
securities in the aggregate for which any one individual participating in the
Plan may be granted stock options, separately exercisable stock appreciation
rights and direct share issuances over the term of the Plan, (iii) the number
and/or class of securities for which share issuances are subsequently to be made
to non-employee Board members under the Director Fee Program, and (iv) the
number and/or class of securities and price per share in effect under each
option outstanding under the Discretionary Option Grant. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM

I.     TERMS AND CONDITIONS OF OPTIONS

Options granted pursuant to the Discretionary Option Grant Program shall be
authorized by action of the Plan Administrator and may, at the Plan
Administrator’s discretion, be either Incentive Options or Non-Statutory
Options. Individuals who are not Employees of the Corporation or its parent or
subsidiary corporations may only be granted Non-Statutory Options. Each granted
option shall be evidenced by one or more instruments in the form approved by the
Plan Administrator; provided, however, that each such instrument shall comply
with the terms and conditions specified below. Each instrument evidencing an
Incentive Option shall, in addition, be subject to the applicable provisions of
Section II of this Article Two.

A.    Exercise Price.

1.      The exercise price per share of Common Stock subject to any option
granted under this Article Two shall be fixed by the Plan Administrator at the
time of the grant, but in no event shall such exercise price be less than one
hundred percent (100%) of the Fair Market Value per share of that security on
the grant date.

2.      The exercise price shall become immediately due upon exercise of the
option and, subject to the provisions of Section I of Article Four and the
instrument evidencing the grant, shall be payable in one of the following
alternative forms specified below:

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a.      full payment in cash or check made payable to the Corporation’s order;

b.      full payment in shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation’s earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date;

c.      full payment in a combination of shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation’s earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise
Date and cash or check drawn to the Corporation’s order; or

d.      to the extent the option is exercised for vested shares, full payment
through a broker-dealer sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable written instructions to (i) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be withheld by the
Corporation in connection with such purchase and (ii) the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.

Except to the extent the sale and remittance procedure is utilized in connection
with the exercise of the option for vested shares, payment of the exercise price
for the purchased shares must accompany the exercise notice.

B.     Term and Exercise of Options.    Each option granted under this
Discretionary Option Grant Program shall be exercisable at such time or times
and during such period as is determined by the Plan Administrator and set forth
in the instrument evidencing the grant. No such option, however, shall have a
maximum term in excess of ten (10) years from the grant date. During the
lifetime of the Optionee, the option, together with any stock appreciation
rights pertaining to such option, shall be exercisable only by the Optionee and
shall not be assignable or transferable by the Optionee except for a transfer of
the option effected by will or by the laws of descent and distribution following
the Optionee’s death.

C.     Termination of Service.

1.      The following provisions shall govern the exercise period applicable to
any outstanding options under this Article Two held by the Optionee at the time
of cessation of Service or death:

—     Should an Optionee cease Service for any reason (including death or
Permanent Disability) while holding one or more outstanding options under this
Article Two, then none of those options shall (except to the extent otherwise
provided pursuant to subparagraph 3 below) remain exercisable for more than a
thirty-six (36)-month period (or such shorter period determined by the Plan
Administrator and set forth in the instrument evidencing the grant) measured
from the date of such cessation of Service.

—     Any option held by the Optionee under this Article Two and exercisable in
whole or in part on the date of his or her death may be subsequently exercised
by the

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personal representative of the Optionee’s estate or by the person or persons to
whom the option is transferred pursuant to the Optionee’s will or in accordance
with the laws of descent and distribution. The right to exercise such option,
however, shall lapse upon the earlier of (i) the third anniversary of the date
of the Optionee’s death (or such shorter period determined by the Plan
Administrator and set forth in the instrument evidencing the grant) or (ii) the
specified expiration date of the option term. Accordingly, upon the occurrence
of the earlier event, the option shall terminate and cease to be outstanding.

—     During the applicable post-Service exercise period, the option may not be
exercised in the aggregate for more than the number of shares (if any) in which
the Optionee is vested at the time of his or her cessation of Service. Upon the
expiration of the limited post-Service exercise period or (if earlier) upon the
specified expiration date of the option term, each such option shall terminate
and cease to he outstanding with respect to any vested shares for which the
option has not otherwise been exercised. However, each outstanding option shall
immediately terminate and cease to be outstanding, at the time of the Optionee’s
cessation of Service, with respect to any shares for which the option is not
otherwise at that time exercisable or in which the Optionee is not otherwise
vested.

—     Under no circumstances shall any such option be exercisable after the
specified expiration date of the option term.

—     Should (i) the Optionee’s Service be terminated for misconduct (including,
but not limited to, any act of dishonesty, willful misconduct, fraud or
embezzlement) or (ii) the Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Corporation or its parent or
subsidiary corporations, then in any such event all outstanding options held by
the Optionee under this Article Two shall terminate immediately and cease to be
outstanding.

2.      The Plan Administrator shall have complete discretion, exercisable
either at the time the option is granted or at any time while the option remains
outstanding, to permit one or more options held by the Optionee under this
Article Two to be exercised, during the limited post-Service exercise period
applicable under subparagraph 1 above, not only with respect to the number of
vested shares of Common Stock for which each such option is exercisable at the
time of the Optionee’s cessation of Service but also with respect to one or more
subsequent installments of vested shares for which the option would otherwise
have become exercisable had such cessation of Service not occurred.

3.      The Plan Administrator shall also have full power and authority,
exercisable either at the time the option is granted or at any time while the
option remains outstanding, to extend the period of time for which the option is
to remain exercisable following the Optionee’s cessation of Service or death
from the limited period in effect under subparagraph 1 above to such greater
period of time as the Plan Administrator shall deem appropriate. In no event,
however, shall such option be exercisable after the specified expiration date of
the option term.

D.     Stockholder Rights.    An Optionee shall have no stockholder rights with
respect to any shares covered by the option until such individual shall have
exercised the option and paid the exercise price for the purchased shares.

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E.     Repurchase Rights.    The shares of Common Stock acquired upon the
exercise of any Article Two option grant may be subject to repurchase by the
Corporation in accordance with the following provisions:

—     The Plan Administrator shall have the discretion to authorize the issuance
of unvested shares of Common Stock under this Article Two. Should the Optionee
cease Service while holding such unvested shares, the Corporation shall have the
right to repurchase any or all of those unvested shares at the exercise price
paid per share. The terms and conditions upon which such repurchase right shall
be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Plan Administrator and set forth in the instrument evidencing such
repurchase right.

—     All of the Corporation’s outstanding repurchase rights under this Article
Two shall automatically terminate, and all shares subject to such terminated
rights shall immediately vest in full, upon the occurrence of a Corporate
Transaction, except to the extent: (i) any such repurchase right is expressly
assigned to the successor corporation (or parent thereof) in connection with the
Corporate Transaction or (ii) such termination is precluded by other limitations
imposed by the Plan Administrator at the time the repurchase right is issued.

—     The Plan Administrator shall have the discretionary authority, exercisable
either before or after the Optionee’s cessation of Service, to cancel the
Corporation’s outstanding repurchase rights with respect to one or more shares
purchased or purchasable by the Optionee under this Discretionary Option Grant
Program and thereby accelerate the vesting of such shares in whole or in part at
any time.

II.    INCENTIVE OPTIONS

The terms and conditions specified below shall be applicable to all Incentive
Options granted under this Article Two. Incentive Options may only be granted to
individuals who are Employees of the Corporation. Options which are specifically
designated as Non-Statutory Options when issued under the Plan shall not be
subject to such terms and conditions.

A.    Dollar Limitation.    The aggregate Fair Market Value (determined as of
the respective date or dates of grant) of the Common Stock for which one or more
options granted to any Employee under this Plan (or any other option plan of the
Corporation or its parent or subsidiary corporations) may for the first time
become exercisable as incentive stock options under the Federal tax laws during
any one calendar year shall not exceed the sum of One Hundred Thousand Dollars
($100,000). To the extent the Employee holds two (2) or more such options which
become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as incentive stock options
under the Federal tax laws shall be applied on the basis of the order in which
such options are granted. Should the number of shares of Common Stock for which
any Incentive Option first becomes exercisable in any calendar year exceed the
applicable One Hundred Thousand Dollar ($100,000) limitation, then that option
may nevertheless be exercised in that calendar year for the excess number of
shares as a non-statutory option under the Federal tax laws.

B.     10% Stockholder.    If any individual to whom an incentive Option is
granted is the owner of stock (as determined under Section. 424(d) of the Code)
possessing ten percent (10%) or more of the total combined voting power of all
classes of stock of the Corporation or any one of its

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parent or subsidiary corporations, then the exercise price per share of the
Common Stock subject to that option shall not be less than one hundred and ten
percent (110%) of the Fair Market Value per share of that security on the grant
date, and the option term shall not exceed five (5) years, measured from the
grant date.

Except as modified by the preceding provisions of this Section II, the
provisions of Articles One, Two and Four of the Plan shall apply to all
Incentive Options granted hereunder.

III.  CORPORATE TRANSACTIONS/CHANGES IN CONTROL

A.    In the event of any Corporate Transaction, each option which is at the
time outstanding under this Article Two shall automatically accelerate so that
each such option shall, immediately prior to the specified effective date for
the Corporate Transaction, become fully exercisable for all of the shares of
Common Stock at the time subject to such option and may be exercised for all or
any portion of such shares. However, an outstanding option under this Article
Two shall not so accelerate if and to the extent: (i) such option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or parent
thereof, (ii) such option is to be replaced with a cash incentive program of the
successor corporation which preserves the option spread existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to such option or (iii) the acceleration of
such option is subject to other limitations imposed by the Plan Administrator at
the time of the option grant. The determination of option comparability under
clause (i) above shall be made by the Plan Administrator, and its determination
shall be final, binding and conclusive.

B.     Immediately following the consummation of the Corporate Transaction, all
outstanding options under this Article Two shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation or its
parent company.

C.     Each outstanding option under this Article Two which is assumed in
connection with the Corporate Transaction or is otherwise to continue in effect
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply and pertain to the number and class of securities which would have been
issued to the option holder, in consummation of such Corporate Transaction, had
such person exercised the option immediately prior to such Corporate
Transaction. Appropriate adjustments shall also be made to the exercise price
payable per share, provided the aggregate exercise price payable for such
securities shall remain the same. In addition, the class and number of
securities available for issuance under the Plan on both an aggregate and per
participant basis following the consummation of the Corporate Transaction shall
be appropriately adjusted.

D.     The Plan Administrator shall have the discretion, exercisable either at
the time the option is granted or at any time while the option remains
outstanding, to provide (upon such terms as it may deem appropriate) for both
(i) the automatic acceleration of one or more outstanding options granted under
this Article Two Plan which are assumed or replaced in a Corporate Transaction
and do not otherwise accelerate at that time and (ii) the immediate termination
of one or more of the Corporation’s outstanding repurchase rights which are
assigned in connection with such Corporate Transaction and do not otherwise
terminate at that time, in the event the Optionee’s Service should subsequently
terminate within a designated period following the effective date of such
Corporate Transaction.

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E.     The Plan Administrator shall have the discretionary authority,
exercisable either in advance of any actually-anticipated Change in Control or
at the time of an actual Change in Control, to provide for the automatic
acceleration of one or more outstanding options under this Article Two (and the
immediate termination of one or more of the Corporation’s outstanding repurchase
rights under this Article Two) upon the occurrence of the Change in Control. The
Plan Administrator shall also have full power and authority to condition any
such option acceleration (and the termination of any outstanding repurchase
rights) upon the subsequent termination of the Optionee’s Service within a
specified period following the Change in Control.

F.     Any options accelerated in connection with the Change in Control shall
remain fully exercisable until the expiration or sooner termination of the
option term.

G.     The grant of options under this Article Two shall in no way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.

H.     The exercisability as incentive stock options under the Federal tax laws
of any options accelerated under this Section III in connection with a Corporate
Transaction or Change in Control shall remain subject to the dollar limitation
of Section II of this Article Two. To the extent such dollar limitation is
exceeded, the accelerated option shall be exercisable as a non-statutory option
under the Federal tax laws.

IV.    STOCK APPRECIATION RIGHTS.

A.    Provided and only if the Plan Administrator determines in its discretion
to implement the stock appreciation right provisions of this Section IV, one or
more Optionees may be granted the right, exercisable upon such terms and
conditions as the Plan Administrator may establish, to surrender all or part of
an unexercised option under this Article Two in exchange for a distribution from
the Corporation in an amount equal to the excess of (i) the Fair Market Value
(on the option surrender date) of the number of shares of Common Stock in which
the Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (ii) the aggregate exercise price payable for such vested
shares.

B.     No surrender of an option shall be effective hereunder unless it is
approved by the Plan Administrator. If the surrender is so approved, then the
distribution to which the Optionee shall accordingly become entitled under this
Section IV may be made in shares of Common Stock valued at Fair Market Value on
the option surrender date, in cash, or partly in shares and partly in cash, as
the Plan Administrator shall in its sole discretion deem appropriate.

C.     If the surrender of an option is rejected by the Plan Administrator, then
the Optionee shall retain whatever rights the Optionee had under the surrendered
option (or surrendered portion thereof) on the option surrender date and may
exercise such rights at any time prior to the later of (i) five (5) business
days after the receipt of the rejection notice or (ii) the last day on which the
option is otherwise exercisable in accordance with the terms of the instrument
evidencing such option, but in no event may such rights be exercised more than
ten (10) years after the date of the option grant.

D.     One or more officers of the Corporation subject to the short-swing profit
restrictions of the Federal securities laws may, in the Plan Administrator’s
sole discretion, be granted limited stock appreciation rights with respect to
their outstanding options under the Plan. Upon the occurrence of a Hostile
Take-Over, the officer shall have a thirty (30)-day period in which he or she
may

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surrender any outstanding options with such a limited stock appreciation right
in effect for at least six (6) months to the Corporation, to the extent such
option is at the time exercisable for fully-vested shares of Common Stock. The
officer shall in return be entitled to a cash distribution from the Corporation
in an amount equal to the excess of (i) the Take-Over Price of the vested shares
of Common Stock at the time subject to each surrendered option (or surrendered
portion of such option) over (ii) the aggregate exercise price payable for such
shares. The cash distribution payable upon such option surrender shall be made
within five (5) days following the date the option is surrendered to the
Corporation. Neither the approval of the Plan Administrator nor the consent of
the Board shall be required in connection with such option surrender and cash
distribution. Any unsurrendered portion of the option shall continue to remain
outstanding and become exercisable in accordance with the terms of the
instrument evidencing such grant.

E.     The shares of Common Stock subject to any option surrendered for an
appreciation distribution pursuant to this Section IV shall not be available for
subsequent issuance under the Plan.

ARTICLE THREE
DIRECTOR FEE PROGRAM

I.     ELIGIBILITY

Subject to the availability of shares of Common Stock under the Plan pursuant to
Article One, Section VI of the Plan, each individual serving as a non-employee
Board member shall be eligible to apply all or any portion of the annual
retainer fee otherwise payable to him or her in cash to the acquisition of
unvested shares of Common Stock under this Article Three Program.

II.    ELECTION PROCEDURE

A.    Filing.    The non-employee Board member must make the
stock-in-lieu-of-fee election prior to the start of the calendar year for which
the election is to be effective. The first calendar year for which any such
election may be filed shall be the 1994 calendar year. The election must be
filed with the Plan Administrator on the appropriate form provided for this
purpose, and the election, once filed, shall be irrevocable. The election for
any upcoming calendar year may be filed at any time prior to the start of that
year, but in no event later than December 31 of the immediately preceding
calendar year. The non-employee Board member may file a standing election to be
in effect for two or more consecutive calendar years or to remain in effect
indefinitely until revoked by written instrument filed with the Plan
Administrator at least six (6) months prior to the start of the first calendar
year for which such standing election is no longer to remain in effect.

B.     Election Form.    On the election form, the non-employee Board member
must indicate the percentage or dollar amount of his or her annual retainer fee
to be applied to the acquisition of unvested shares under this Article Three
Program to be issued in lieu of such fee. The non-employee Board member may
elect to apply a portion of the fee to the acquisition of Common Stock.

III.  SHARE ISSUANCE

A.    Issue Date.    On the first trading day in January of the calendar year
for which the election is effective, the portion of the retainer fee subject to
such election shall automatically be applied to the acquisition of the selected
shares of Common Stock by dividing the elected dollar amount by the Fair Market
Value per share of the Common Stock on that trading day. The number

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of issuable shares shall be rounded down to the next whole share, and the issued
shares shall be held in escrow by the Secretary of the Corporation until the
non-employee Board member vests in those shares. The non-employee Board member
shall have full stockholder rights, including voting, dividend and liquidation
rights, with respect to all issued shares held in escrow on his or her behalf,
but such shares shall not be assignable or transferable while they remain
unvested.

B.     Vesting.    Upon completion of each calendar quarter of Board service
during the year for which the election is in effect, the non-employee Board
member shall vest in one-fourth of the issued shares, and the stock certificate
for those shares shall be released from escrow. Immediate vesting in all the
issued shares shall occur in the event (i) the non-employee Board member should
die or become Permanently Disabled during his or her period of Board service or
(ii) there should occur a Corporate Transaction or Change in Control while such
individual remains in Board service. Should such individual cease Board service
prior to vesting in one or more quarterly installments of the issued shares,
then those unvested shares shall immediately be surrendered to the Corporation
for cancellation, and the non-employee Board member shall not be entitled to any
cash payment or other consideration from the Corporation with respect to the
cancelled shares and shall have no further stockholder rights with respect to
such shares.

IV.    AMENDMENT OF THE DIRECTOR FEE PROGRAM

A.    Limited Amendments.    The provisions of this Director Fee Program,
together with the unvested share issuances outstanding under this Article Three,
may not be amended at intervals more frequently than once every six (6) months,
other than to the extent necessary to comply with applicable Federal income tax
laws and regulations.

ARTICLE FOUR
MISCELLANEOUS

I.    NO LOANS OR INSTALLMENT PAYMENTS

A.    The Plan Administrator shall not, assist any Optionee (including an
officer of the Corporation) in the exercise of one or more options granted to
such Optionee under the Discretionary Option Grant Program, including the
satisfaction of any Federal, state and local income and employment tax
obligations arising therefrom, by (i) authorizing the extension of a loan from
the Corporation to such Optionee or (ii) permitting the Optionee to pay the
exercise price for the purchased shares in installments over a period of years.
in connection with the acquisition of such shares.

II.    AMENDMENT OF THE PLAN AND AWARDS

A.    The Board has complete and exclusive power and authority to amend or
modify the Plan (or any component thereof) in any or all respects whatsoever.
However, (i) no such amendment or modification shall adversely affect rights and
obligations with respect to options at the time outstanding under the Plan,
unless the Optionee consents to such amendment, and (ii) any amendment made to
the Director Fee Program (or any stock options or share issuances outstanding
thereunder) shall be in compliance with the limitation of Section IV of Article
Four. In addition, the Board may not, without the approval of the Corporation’s
stockholders, amend the Plan to (i) materially increase the maximum number of
shares issuable under the Plan, or increase the maximum number of shares of
Common Stock for which any one participant may receive stock options, separately
exercisable stock appreciation rights and direct share issuances over the term
of the Plan, except for permissible adjustments under Section VI.F of Article
One, (ii) materially

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modify the eligibility requirements for plan participation or (iii) materially
increase the benefits accruing to plan participants.

B.     Options to purchase shares of Common Stock may be granted under the
Discretionary Option Grant Program, which are in excess of the number of shares
then available for issuance under the Plan, provided any excess shares actually
issued under the Discretionary Option Grant Program are held in escrow until
stockholder approval is obtained for a sufficient increase in the number of
shares available for issuance under the Plan. If such stockholder approval is
not obtained within twelve (12) months after the date the first such excess
option grants are made, then (i) any unexercised excess options shall terminate
and cease to be exercisable and (ii) the Corporation shall promptly refund the
purchase price paid for any excess shares actually issued under the Plan and
held in escrow, together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow.

C.     The Board will not have the authority, at any time, without the approval
of  the holders of a majority of the issued and outstanding Common Stock to (i)
reduce the exercise price of any Incentive Options or Non-Statutory Options
(“Options”) under the Plan that are currently outstanding; or (ii) cancel any
outstanding Options under the Plan and grant in substitution therefore new
Options under the Plan at a lower exercise price, regardless of whether or not
the cancelled Options revert to and again become available for issuance under
the Plan.  This Section II C of Article Four may not be amended without the
affirmative vote of the holders of a majority of the shares of Common Stock
present or represented and entitled to vote at a duly convened meeting of the
stockholders. Notwithstanding the foregoing, this paragraph will not be
construed to apply to (i) “issuing or assuming a stock option in a transaction
to which section 424(a) applies,” within the meaning of Section 424 of the Code;
(ii) the provisions of Options which relate to adjustments for any Corporate
Transaction or any stock split, stock or cash dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class.

III.  TAX WITHHOLDING

A.    The Corporation’s obligation to deliver shares of Common Stock upon the
exercise of stock options for such shares or the vesting of such shares under
the Plan shall be subject to the satisfaction of all applicable Federal, state
and local income and employment tax withholding requirements.

B.     The Plan Administrator may, in its discretion and in accordance with the
provisions of this Section III of Article Four and such supplemental rules as
the Plan Administrator may from time to time adopt (including the applicable
safe-harbor provisions of Securities and Exchange Commission Rule 16b-3),
provide any or all holders of Non-Statutory Options or unvested shares (other
than the unvested shares issued under the Director Fee Program) with the right
to use shares of the Corporation’s Common Stock in satisfaction of all or part
of the Federal, state and local income and employment tax liabilities incurred
by such holders in connection with the exercise of their options or the vesting
of their shares (the “Taxes”). Such right may be provided to any such holder in
either or both of the following formats:

Stock Withholding:    The holder of the Non-Statutory Option or unvested shares
may be provided with the election to have the Corporation withhold, from the
shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of the shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the applicable
Taxes (not to exceed one hundred percent (100%)) designated by the holder.

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Stock Delivery:    The Plan Administrator may, in its discretion, provide the
holder of the Non-Statutory Option or the unvested shares with the election to
deliver to the Corporation, at the time the Non-Statutory Option is exercised or
the shares vest, one or more shares of Common Stock previously acquired by such
individual (other than in connection with the option exercise triggering the
Taxes) with an aggregate Fair Market Value equal to the percentage of the Taxes
incurred in connection with such option exercise or share vesting (not to exceed
one hundred percent (100%)) designated by the holder.

IV.    EFFECTIVE DATE AND TERM OF PLAN

A.    The 1993 Plan originally became effective immediately upon adoption by the
Board on November 29, 1993. The Plan, as amended hereby, will become effective
immediately upon approval by the Company’s stockholders at the Annual Meeting on
June  27, 2006. Stock options may be made under the Plan, as amended hereby,
immediately thereafter upon the effective date of this amendment.

B.     The Plan shall terminate upon the earlier of (i) December 31, 2020 or
(ii) the date on which all shares available for issuance under the Plan shall
have been issued or cancelled pursuant to the exercise, surrender or cash-out of
the options granted under the Plan or the issuance of shares (whether vested or
unvested) under the Director Fee Program. If the date of termination is
determined under clause (i) above, then all option grants and unvested share
issuances outstanding on such date shall thereafter continue to have force and
effect in accordance with the provisions of the instruments evidencing such
grants or issuances.

V.     USE OF PROCEEDS

Any cash proceeds received by the Corporation from the sale of shares pursuant
to option grants or share issuances under the Plan shall be used for general
corporate purposes

VI.   REGULATORY APPROVALS

A.    The implementation of the Plan, the granting of any option under the Plan,
the issuance of any shares under the Director Fee Program and the issuance of
Common Stock upon the exercise or surrender of the option grants made hereunder
shall be subject to the Corporation’s procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
options granted under it and the Common Stock issued pursuant to it.

B.     No shares of Common Stock or other assets shall be issued or delivered
under this Plan unless and until there shall have been compliance with all
applicable requirements of Federal, and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any securities exchange on which the Common Stock is then listed for trading.

VII.   NO EMPLOYMENT/SERVICE RIGHTS

Neither the action of the Corporation in establishing the Plan, nor any action
taken by the Plan Administrator hereunder, nor any provision of the Plan shall
be construed so as to grant any individual the right to remain in the Service of
the Corporation (or any parent or subsidiary corporation) for any period of
specific duration, and the Corporation (or any parent or subsidiary corporation
retaining the services of such individual) may terminate such individual’s
Service at any time and for any reason, with or without cause.

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VIII.   MISCELLANEOUS PROVISIONS

A.    Except to the extent otherwise expressly provided under the Plan, the
right to acquire Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee or Participant.

B.     The provisions of the Plan relating to the exercise of options and the
vesting of shares shall be governed by the laws of the State of California, as
such laws are applied to contracts entered into and performed in such State.

C.     The provisions of the Plan shall inure to the benefit of, and be binding
upon, the Corporation and its successors or assigns, whether by Corporate
Transaction or otherwise, and the Optionees and any holders of unvested shares
under the Plan, the legal representatives of their respective estates, their
respective heirs or legatees and their permitted assignees.

IN WITNESS WHEREOF, the undersigned being the duly authorized and elected
President and Chief Executive Officer of the Corporation has executed this
Amended and Restated 1993 Stock Option/Stock Issuance Plan as of June 27, 2006.

/s/Raymond J. Pacini

 

Raymond J. Pacini

 

President and Chief Executive Officer

 

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