Exhibit 10.1 - Amended and Restated 2004 Stock Incentive Plan

                          TEMECULA VALLEY BANCORP INC.
                      2004 STOCK INCENTIVE PLAN, as amended

     1.     Purpose of the Plan. The purpose of this Temecula Valley Bancorp
Inc.  Stock  Incentive  Plan  is  to  offer  certain  Employees,  Directors  and
Consultants  the  opportunity to acquire a proprietary  interest in the Company.
Through the Plan, the Company and its subsidiaries seek to attract, motivate and
retain highly competent  persons.  The success of the Company and its affiliates
is dependent upon the efforts of these persons.  The Plan provides for the grant
of Options to purchase  common stock.  An Option granted under the Plan may be a
Non-Statutory  Stock Option or an Incentive  Stock Option,  as determined by the
Administrator.

     2.     Definitions. As used herein, the following definitions shall apply.

     "2004 Plan" or "Plan" shall mean the  Temecula  Valley  Bancorp  Inc.  2004
     Stock  Incentive  Plan,  adopted  as of  March  24,  2004 by the  Board  of
     Directors, and as may be amended and restated from time to time.

     "Act" shall mean the Securities Act of 1933, as amended.

     "Administrator" shall mean the Board or any one of the Committees.

     "Affiliate"  shall mean any parent or  subsidiary  (as  defined in Sections
     424(e) and (f) of the Code) of the Company.

     "APB 25" shall  mean  Opinion 25 of the  Accounting  Principles  Board,  as
     amended, and any successor thereof.

     "Board" shall mean the Board of Directors of the Company.

     "Cause"  shall  have  the  meaning  given  to it  under  the  Participant's
     employment  agreement  with the  Company or  Affiliate,  or a policy of the
     Company or an  Affiliate.  If the  Participant  does not have an employment
     agreement or the employment  agreement does not define this term, or if the
     Company or an Affiliate does not have a policy that defines this term, then
     Cause shall include  malfeasance or gross misfeasance in the performance of
     duties or  conviction of illegal  activity in  connection  therewith or any
     conduct  detrimental to the interests of the Company or an Affiliate  which
     results in termination of the Participant's  service with the Company or an
     Affiliate, as determined by the Administrator.

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

     "Committee"  shall mean a committee  appointed  by the Board in  accordance
     with Section 3 below.

     "Common Stock" shall mean the common stock of the Company, no par value.

     "Company"   shall  mean   Temecula   Valley   Bancorp  Inc.,  a  California
     corporation.

     "Consultant"  shall mean any natural person who performs bona fide Services
     for the Company or an  Affiliate  as a  consultant  or  advisor,  excluding
     Employees and Non-Employee Directors and provided that the Services are not
     in connection  with the offer or sale of  securities  in a capital  raising
     transaction and do not directly or indirectly  promote or maintain a market
     for the Company securities.

     "Date of Grant" shall mean the effective date as of which the Administrator
     grants an Option to an Optionee.

     "Director" shall mean a member of the Board.

     "Disability"  shall  mean  total and  permanent  disability  as  defined in
     Section 22(e)(3) of the Code.

     "Employee"  shall mean any individual  who is a common-law  employee of the
     Company or an Affiliate.
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     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Exercise  Price"  shall  mean the  exercise  price of a share of  Optioned
     Stock.

     "Fair Market Value" shall mean,  as of any date,  the value of Common Stock
     determined as follows:

            (i)      If the Common Stock is listed on any established stock
     exchange  or a national  market  system or an  electronic  bulletin  board,
     including without  limitation,  The Nasdaq Global Select Market, The Nasdaq
     Global Market, The Nasdaq Capital Market or the  Over-the-Counter  Bulletin
     Board,  its fair market  value  shall be the  closing  sales price for such
     stock (or the closing  representative  bid, if no sales were  reported)  as
     quoted on such exchange or system for the last market  trading day prior to
     the time of  determination,  as reported in The Wall Street Journal or such
     other source as the Administrator deems reliable;

            (ii)     If the Common Stock is regularly quoted by a recognized
     securities  dealer but  selling  prices are not  reported,  its fair market
     value shall be the mean  between the high bid and low asked  prices for the
     Common Stock quoted by such recognized securities dealer on the last market
     trading day prior to the day of determination; or

            (iii)    In the absence of an established market for the Common
     Stock,  its fair market value shall be  determined,  in good faith,  by the
     Administrator,  taking into account all material information available with
     respect  to the  value  of a share  of  Common  Stock,  including,  without
     limitation, the value of the tangible and intangible assets of the Company,
     the present value of its anticipated future cash flows, the market value of
     the stock or equity  interests in other entities  engaged in  substantially
     the same business,  recent arm's length transactions  involving the sale of
     Common  Stock,  and other  relevant  factors  such as control  premiums  or
     discounts for lack of marketability.

     "FASB" shall mean the Financial Accounting Standards Board.

     "Grantee" shall mean any person who is granted an Option.

     "Immediate  Family"  means  any  child,  stepchild,   grandchild,   parent,
     stepparent,  grandparent,  spouse, sibling,  mother-in-law,  father-in-law,
     son-in-law,  daughter-in-law,  brother-in-law  or  sister-in-law,  and also
     includes adoptive relationships.

     "Incentive  Stock  Option"  shall mean an Option  intended to qualify as an
     incentive stock option within the meaning of Section 422 of the Code.

     "Mature Shares" shall mean Shares that had been held by the Participant for
     a meaningful period of time such as six months or such other period of time
     that is consistent with FASB's interpretation of APB 25.

     "Non-Employee Director" shall mean a non-employee member of the Board.

     "Non-Statutory  Stock  Option" shall mean an Option not intended to qualify
     as an Incentive Stock Option.

     "Notice of Stock  Option  Grant"  shall mean the  notice  delivered  by the
     Company to the Optionee evidencing the grant of an Option.

     "Option" shall mean a stock option granted pursuant to the Plan.

     "Option  Agreement" shall mean a written agreement that evidences an Option
     in such form as the Administrator shall approve from time to time.

     "Optioned Stock" shall mean the Common Stock subject to an Option.

     "Optionee" shall mean any person who receives an Option.

     "Participant" shall mean an Optionee or a Grantee.
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     "Rule  16b-3" shall mean Rule 16b-3  promulgated  under the Exchange Act or
     any successor to Rule 16b-3.

     "Service"  shall mean the  performance  of services for the Company (or any
     Affiliate)  by an Employee,  Director or  Consultant,  as determined by the
     Administrator  in its sole  discretion.  Service  shall  not be  considered
     interrupted in the case of: (i) a change of status (i.e.,  from Employee to
     Consultant, Non-Employee Director to Consultant, or any other combination);
     (ii) transfers  between locations of the Company or between the Company and
     any  Affiliate;  or (iii) a leave of absence  approved by the Company or an
     Affiliate. A leave of absence approved by the Company or an Affiliate shall
     include sick leave, military leave, or any other personal leave approved by
     an authorized representative of the Company or an Affiliate.

     "Service Provider" shall mean an Employee, Director or Consultant.

     "Share" shall mean a share of Common Stock.

     "Tax"  or  "Taxes"  shall  mean  the  federal,  state,  and  local  income,
     employment  and excise  tax  liabilities  incurred  by the  Participant  in
     connection with his/her Options.

     "10%  Shareholder"  shall  mean the  owner of stock  (as  determined  under
     Section 424(d) of the Code)  possessing more than 10% of the total combined
     voting power of all classes of stock of the Company (or any  Affiliate)  on
     the Date of Grant, as applicable.

     "Termination  Date"  shall mean the date on which a  Participant's  Service
     terminates, as determined by the Administrator in its sole discretion.

     3.     Administration of the Plan.

            (a)      Except as otherwise provided for below, the Plan shall be
administered  by (i) the Board or (ii) a  Committee,  which  Committee  shall be
constituted  to satisfy  applicable  laws.  To the extent  desirable  to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder  shall be structured to satisfy the  requirements  for exemption under
Rule 16b-3.

            (b)      Powers of the Administrator. Subject to the provisions of
the Plan and in the case of specific duties delegated by the Administrator, and
subject to the approval of relevant authorities, including the approval, if
required, of any stock exchange or national market system upon which the Common
Stock is then listed, the Administrator shall have the authority, in its sole
discretion:

                     (i)     to determine the fair market value of the Common
            Stock;

                     (ii)    to select the Service Providers to whom Options
            may, from time to time, be granted under the Plan;

                     (iii)   to determine whether and to what extent Options
            are granted under the Plan;

                     (iv)    to determine the number of Shares that pertain
            to each Option;

                     (v)     to approve the terms of the Option Agreements;

                     (vi)    to determine the terms and conditions, not
            inconsistent with the terms of the Plan, of any Option. Such terms
            and conditions may include,  but are not limited to, the Exercise
            Price,  the status of an Option  (Non-Statutory  Stock  Option or
            Incentive  Stock  Option),  the time or times when Options may be
            exercised,  any  vesting  acceleration  or waiver  of  forfeiture
            restrictions,  and any  restriction  or limitation  regarding any
            Option or the Shares relating thereto, based in each case on such
            factors  as the  Administrator,  in its  sole  discretion,  shall
            determine;

                     (vii)   to determine the method of payment of the Exercise
            Price;
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                     (viii)  with the prior approval of a majority of the
            Non-Employee Directors of the Administrator,  reduce the Exercise
            Price of any Option to the then  current fair market value if the
            fair market  value of the Optioned  Stock has declined  since the
            Date of Grant of such Option;

                     (ix)    to delegate to others responsibilities to assist
            in administering the Plan;

                     (x)     to construe and interpret the terms of the Plan,
            Option Agreements and any other documents related to the Options;
            and

                     (xi)    to interpret and administer the terms of the
            Plan to comply with all Tax rules and regulations.

            (c)      Effect of Administrator's Decision. All decisions,
determinations, and interpretations of the Administrator shall be final and
binding on all Participants and any other holders of any Options. The
Administrator's decisions and determinations under the Plan need not be uniform
and may be made selectively among Participants whether or not such Participants
are similarly situated.

            (d)      Liability. No member of the Administrator shall be
personally liable by reason of any mistake of judgment made in good faith while
acting in such capacity if he or she was acting within her/his authority as a
member of the Administrator at the time of the mistake, and the Company shall
indemnify and hold harmless each member of the Administrator and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or bad faith. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power the Company may have to indemnify them or hold
them harmless. The Board shall make the determination if any such person shall
be entitled to indemnification and such decision by the Board shall be made in
good faith, final and binding.

     4.     Stock Subject To The Plan.

            (a)      Basic Limitation. The total number of Options under the
Plan may not exceed 1,200,000, subject to the adjustments provided for in
Section 8 of the Plan. The total number of Options granted under the Plan to any
one Participant during each calendar year shall not exceed 60,000.

            (b)      Additional Shares. In the event that any outstanding
Option expires or is canceled or otherwise terminated, the Shares that pertain
to the unexercised Option shall again be available for the purposes of the Plan.

     5.     Eligibility. The persons eligible to participate in the Plan shall
be limited to Employees, Directors and Consultants who have the potential to
impact the long-term success of the Company and/or its Affiliates and who have
been selected by the Administrator to participate in the Plan.

     6.     Option Terms. Each Option shall be evidenced by an Option Agreement,
in the form approved by the Administrator and may contain such provisions as the
Administrator deems appropriate; provided, however, that each Option Agreement
shall comply with the terms specified below and shall be subject to all of the
other provisions of the Plan. Each Option Agreement evidencing an Incentive
Stock Option shall be subject to the following applicable provisions (except
ISOs if in conflict with Section 7) as well as Section 7 below.

            (a)      Exercise Price.

                     (i)     The Exercise Price of an Incentive Stock Option
            shall be determined by the Administrator but shall not be less
            than 100% of the fair market value of a Share on the Date of
            Grant of such Option, and the exercise price of a
            Non-Statutory Stock Option shall not be less than 100% of the
            fair market value of a Share on the Date of Grant of such Option.
<PAGE>
                     (ii)    The consideration to be paid for the Shares to
            be issued  upon  exercise of an Option,  including  the method of
            payment, shall be determined by the Administrator and may consist
            entirely of (A) cash, (B) check,  (C) Mature  Shares,  or (D) any
            combination   of  the   foregoing   methods   of   payment.   The
            Administrator may also permit Optionees, either on a selective or
            aggregate basis, to simultaneously  exercise Options and sell the
            shares of Common Stock thereby acquired,  pursuant to a brokerage
            or similar arrangement, approved in advance by the Administrator,
            and use the proceeds  from such sale as payment of part or all of
            the exercise price of such shares. Notwithstanding the foregoing,
            a method of payment  may not be used if it causes the Company to:
            (x)  recognize   compensation  expense  for  financial  reporting
            purposes;  (y) violate Section 402 of the  Sarbanes-Oxley  Act of
            2002 or any regulations  adopted pursuant thereto; or (z) violate
            Regulation  O,  promulgated  by the  Board  of  Governors  of the
            Federal Reserve System, as determined by the Administrator in its
            sole discretion.

            (b)      Vesting. Any Option granted hereunder shall be exercisable
and shall vest at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement, but in any event all
Options granted to an Optionee who is not an officer, Director or Consultant of
the Company shall vest at a rate of at least 20% per year over five years from
the Date of Grant of the Option subject to reasonable conditions such as
continued employment. An Option may not be exercised for a fraction of a Share
and the Optionee shall receive cash in lieu thereof equal to the fair market
value of such fraction on the date of exercise.

            (c)      Term of Options. No Option shall have a term in excess of
10 years measured from the Date of Grant of such Option.

            (d)      Procedure for Exercise. An Option shall be deemed to be
exercised when written notice of such exercise has been given to the
Administrator in accordance with the terms of the Option Agreement by the person
entitled to exercise the Option and full payment of the applicable Exercise
Price for the Share being exercised has been received by the Administrator. Full
payment may, as authorized by the Administrator, consist of any consideration
and method of payment allowable under Section (a)(iii) above in this Section. In
the event of a cashless exercise, the broker shall not be deemed to be an agent
of the Administrator.

            (e)      Effect of Termination of Service.

                     (i)     Termination of Service. Upon termination of an
            Optionee's  Service,  other  than due to  death,  Disability,  or
            Cause, the Optionee may exercise  his/her Option,  but only on or
            prior to the date that is three months  following the  Optionee's
            Termination  Date,  even if the  date  of  exercise  within  such
            extended  period  is past the  expiration  date set  forth in the
            Option  Agreement,  and only to the extent that the  Optionee was
            entitled to exercise such Option on the Termination  Date (but in
            no event  later  than ten  years  after the date the  Option  was
            granted).  If,  on the  Termination  Date,  the  Optionee  is not
            entitled to exercise the  Optionee's  entire  Option,  the Shares
            covered  by  the  unexercisable   portion  of  the  Option  shall
            immediately revert to the Plan. If, after termination of Service,
            the Optionee  does not exercise  his/her  Option  within the time
            specified  herein,  the Option shall terminate,  and the Optioned
            Stock shall immediately revert to the Plan.

                     (ii)    Disability of Optionee. In the event of
            termination of an Optionee's  Service due to his/her  Disability,
            the Optionee may exercise his/her Option, but only on or prior to
            the date that is twelve months  following the  Termination  Date,
            even if the date of exercise  within such extended period is past
            the expiration date set forth in the Option  Agreement,  and only
            to the extent that the  Optionee  was  entitled to exercise  such
            Option on the  Termination  Date (but in no event  later than ten
            years after the date the Option was  granted).  To the extent the
            Optionee  is  not   entitled  to  exercise   the  Option  on  the
            Termination Date, the Shares covered by the unexercisable portion
            of the Option  shall  immediately  revert to the Plan.  If, after
            Termination of Service due to  Disability,  the Optionee does not
            exercise  the  Option to the extent so  entitled  within the time
            specified  herein,  the Option shall terminate,  and the Optioned
            Stock shall immediately revert to the Plan.

                     (iii)   Death of Optionee. In the event that an Optionee
            should  die  while  in  Service,  the  Optionee's  Option  may be
            exercised  by  the  Optionee's  estate  or by a  person  who  has
            acquired   the  right  to  exercise  the  Option  by  bequest  or
            inheritance,  but only on or prior  to the  date  that is  twelve
<PAGE>
            months following the date of death,  even if the date of exercise
            within such extended period is past the expiration date set forth
            in the Option Agreement, and only to the extent that the Optionee
            was  entitled to exercise the Option at the date of death (but in
            no event  later  than ten  years  after the date the  Option  was
            granted). If, at the time of death, the Optionee was not entitled
            to exercise  his/her  entire  Option,  the Shares  covered by the
            unexercisable  portion of the Option shall immediately  revert to
            the Plan. If after death,  the Optionee's  estate or a person who
            acquires   the  right  to  exercise  the  Option  by  bequest  or
            inheritance   does  not  exercise  the  Option  within  the  time
            specified  herein,  the Option shall terminate,  and the Optioned
            Stock shall immediately revert to the Plan.

                     (iv)    Cause. In the event of termination of an Optionee's
            Service due to Cause,  the Optionee's  Options shall terminate on
            the Termination Date.

                     (v)     To the extent that the Company does not violate
            Section 402 of the  Sarbanes-Oxley Act of 2002 or any regulations
            adopted  pursuant  thereto or  Regulation O,  promulgated  by the
            Board of Governors of the Federal  Reserve  System (as determined
            by the Administrator in its sole  discretion),  the Administrator
            shall have complete discretion, exercisable either at the time an
            Option  is  granted  or at any  time  while  the  Option  remains
            outstanding, to:

                             (A)     extend the period of time for which the
                    Option is to remain  exercisable  following  the  Optionee's
                    cessation  of  Service  from  the  limited  exercise  period
                    otherwise in effect for that Option to such  greater  period
                    of time as the Administrator shall deem appropriate,  but in
                    no event beyond the expiration of the Option term; and/or

                             (B)     permit the Option to be exercised, during
                    the applicable  post-Service  exercise period, not only with
                    respect to the number of vested Shares for which such Option
                    is exercisable  at the time of the  Optionee's  cessation of
                    Service  but also  with  respect  to one or more  additional
                    installments in which the Optionee would have vested had the
                    Optionee continued in Service.

                     (f)     Shareholder Rights. Until the issuance (as
            evidenced by the appropriate entry on the books of the Company or
            of a duly authorized  transfer agent of the Company) of the stock
            certificate  evidencing such Shares,  no right to vote or receive
            dividends or any other rights as a  shareholder  shall exist with
            respect to the Optioned  Stock,  notwithstanding  the exercise of
            the Option.  The Company shall issue (or cause to be issued) such
            certificate  promptly upon exercise of the Option.  No adjustment
            will be made for a dividend  or other  right for which the record
            date is prior to the date the stock certificate is issued, except
            as provided in Section 8 below.

                     (g)     Non-transferability of Options. Options may not
            be  sold,  pledged,  assigned,   hypothecated,   transferred,  or
            disposed  of in any  manner  other  than by will,  by the laws of
            descent  and  distribution,  by  instrument  to an inter vivos or
            testamentary   trust  in  which  Options  are  to  be  passed  to
            beneficiaries  upon the death of the trustor (settler) or by gift
            to Immediate Family.  Notwithstanding  the immediately  preceding
            sentence,  Incentive Stock Option transfers may be limited by the
            Administrator  in order  to  comply  with  the Code and  shall be
            further limited, if necessary, so that neither the transfer of an
            Option  other than an Incentive  Stock  Option to such  Immediate
            Family,  nor the  ability of a  Optionee  to make such a transfer
            shall have adverse consequences to the Company or the Optionee by
            reason of Section 162(m) of the Code.

                     (h)     10% Shareholder. If any Grantee to whom an Option
            is granted is a 10%  Shareholder  on the Date of Grant,  then the
            Exercise  Price  shall not be less  than 110% of the fair  market
            value of a Share on the Date of Grant of such Option.

     7.     Incentive Stock Options. The terms specified below shall be
applicable to all Incentive Stock Options, and these terms shall, as to such
Incentive Stock Options, supersede any conflicting terms in Section 6 above.
Options which are specifically designated as Non-Statutory Stock Options when
issued under the Plan shall not be subject to the terms of this Section.

            (a)      Eligibility. Incentive Stock Options may only be granted
to Employees.
<PAGE>
            (b)      Exercise Price. The Exercise Price of an Incentive Stock
Option shall not be less than 100% of the fair market value of a Share on the
Date of Grant of such Option, except as otherwise provided for in Subsection (d)
below.

            (c)      Dollar Limitation. In the case of an Incentive Stock
Option, the aggregate fair market value of the Optioned Stock (determined as of
the Date of Grant of each Option) with respect to Options granted to any
Employee under the Plan (or any other option plan of the Company or any
Affiliate) that may for the first time become exercisable as Incentive Stock
Options during any one calendar year shall not exceed the sum of $100,000. To
the extent the Employee holds two 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 shall be applied on
the basis of the order in which such Options are granted. Any Options in excess
of such limitation shall automatically be treated as Non-Statutory Stock
Options.

            (d)      Option Term for 10% Shareholder. The Option term of an
Incentive Stock Option granted to a 10% Shareholder shall not exceed five years
measured from the Date of Grant of such Option.

            (e)      Change in Status. In the event of an Optionee's change of
status from Employee to Consultant or to Non-Employee Director, an Incentive
Stock Option held by the Optionee shall cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as a Non-Statutory Stock
Option three months and one day following such change of status.

            (f)      Approved Leave of Absence. If an Optionee is on an
approved leave of absence, and the Optionee's reemployment upon expiration of
such leave is not guaranteed by statute or contract, including Company policies,
then on the 91st day of such leave any Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Non-Statutory Stock Option.

     8.     Adjustments

            (a)      Recapitalization, Etc. If the outstanding Common Stock is
hereafter increased or decreased, or changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation, by reason of a recapitalization, reclassification, reorganization,
merger, consolidation, share exchange or other business combination in which the
Company is the surviving parent corporation, stock split-up, combination of
shares or dividend or other distribution payable in capital stock or rights to
acquire capital stock, appropriate adjustment shall be made by the Administrator
in the number and kind of shares for which Options may be granted under the
Plan. In addition, the Administrator shall make appropriate adjustment in the
number and kind of shares as to which outstanding and unexercised Options shall
be exercisable, to the end that the proportionate interest of the holder of the
Option shall, to the extent practicable, be maintained as before the occurrence
of the event. The adjustment in outstanding Options shall be made without change
in the total price applicable to the unexercised portion of the Option but with
a corresponding adjustment in the exercise price per share.

            (b)      Reorganization. Upon a Reorganization (as hereinafter
defined):

                     (i)     If there is no plan or agreement with respect to
            the  Reorganization   ("Reorganization  Agreement"),  or  if  the
            Reorganization  Agreement does not  specifically  provide for the
            adjustment,  change,  conversion,  or exchange of the outstanding
            and unexercised  Options for cash or other property or securities
            of another  corporation,  then any  outstanding  and  unexercised
            Options  shall  terminate  as of a future date to be fixed by the
            Administrator; or

                     (ii)    If there is a Reorganization Agreement, and the
            Reorganization    Agreement   specifically   provides   for   the
            adjustment, change, conversion or exchange of the outstanding and
            unexercised  Options for cash or other  property or securities of
            another  corporation,  then the  Administrator  shall  adjust the
            shares under the outstanding and unexercised  Options,  and shall
            adjust  the  shares  remaining  under  the  Plan  which  are then
            available  for the  issuance  of  Options  under  the Plan if the
            Reorganization Agreement makes specific provisions therefor, in a
            manner not inconsistent with the provisions of the Reorganization
            Agreement for the adjustment,  change, conversion, or exchange of
            the Options and shares.
<PAGE>
            (c)      Reorganization Defined. The term "Reorganization" as used
in this Section 8 means any reorganization, merger, consolidation, share
exchange or other business combination pursuant to which the Company is not the
surviving parent corporation after the effective date of the Reorganization, or
any sale or lease of all or substantially all of the assets of the Company.
Nothing herein shall require the Company to adopt a Reorganization Agreement, or
to make provision for the adjustment, change, conversion, or exchange of any
Options or the shares subject thereto, in any Reorganization Agreement that it
does adopt.

            (d)      Notice to Optionees. The Administrator shall provide to
each Optionee then holding an outstanding and unexercised Option not less than
30 calendar days' advanced written notice of any date fixed by the Administrator
pursuant to this Section 8 and of the terms of any Reorganization Agreement
providing for the adjustment, change, conversion, or exchange of outstanding and
unexercised Options. Except as the Administrator may otherwise provide, each
Optionee shall have the right during that period to exercise his or her Option
only to the extent that the Option was exercisable on the date the notice was
provided to the Optionee.

            (e)      Adjustment Must Conform. Any adjustment to any outstanding
ISO pursuant to this Section 8, if made by reason of a transaction described in
Section 424(a) of the Code, shall be made so as to conform to the requirements
of that Section and the regulations thereunder. If any other transaction
described in Section 424(a) of the Code affects the Common Stock subject to any
unexercised ISO theretofore granted under the Plan ("old option"), the Board or
the board of directors of any surviving or acquiring corporation may take such
action as it deems appropriate, in conformity with the requirements of that Code
Section and the regulations thereunder, to substitute a new option for the old
option, in order to make the new option, as nearly as may be practicable,
equivalent to the old option, or to assume the old option.

            (f)      No Modification. No modification, extension, renewal, or
other change in any Option granted under the Plan may be made, after the grant
of the Option, without the Optionee's consent, unless it is permitted by the
provisions of the Plan and the option agreement. In the case of an ISO,
Optionees are hereby advised that certain changes may disqualify the ISO from
being considered as such under Section 422 of the Code, or constitute a
modification, extension, or renewal of the ISO under Section 424(h) of the Code.

            (g)      Good Faith of the Administrator. All adjustments and
determinations under this Section 8 shall be made by the Administrator in good
faith in its sole discretion.

            (h)      Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. In such event, the Administrator, in its discretion, may provide
for a Participant to fully vest in his/her Option. To the extent it has not been
previously exercised, an Option will terminate upon dissolution or liquidation
of the Company.

     9.     Cancellation and Regrant of Options. The Administrator shall have
the authority to effect, at any time and from time to time, with the consent of
the affected Optionee, the cancellation of any or all outstanding Options and to
grant in substitution new Options covering the same or a different number of
Shares but with an Exercise Price per Share based on the fair market value per
Share on the new Date of Grant of the Option. For purposes of Section 4 hereof,
Shares underlying any Option cancelled by the Company in such exchange shall be
available for issuance under the Plan; furthermore, except with respect to a
Participant subject to Section 162(m) of the Code, a grant of any Option to a
Participant pursuant to such exchange shall be disregarded for purposes of
determining whether such Participant has exceeded any limitations hereunder
limiting the amount of any type of Option or aggregate amount of Options that
may be granted to a Participant (except to the extent the number of Shares
underlying such Options exceeds the number of Shares underlying the
Participant's cancelled Options).

     10.    Information to Holders of Options. The Company shall provide to
each Optionee, on an annual basis, the information required by Section
260.140.46, Title 10 of the California Code of Regulations and any successor law
or regulation.

     11.    Tax Withholding.

            (a)      For corporate purposes, the Company's obligation to
deliver Shares upon the exercise of Options under the Plan shall be subject to
the satisfaction of all applicable federal, state and local income and
employment tax withholding requirements.
<PAGE>
            (b)      To the extent permitted under Section 402 of the
Sarbanes-Oxley  Act of 2002 and the regulations  adopted pursuant  thereto,  the
Administrator   may,  in  its   discretion,   provide  any  or  all  holders  of
Non-Statutory  Stock Options with the right to use  previously  vested Shares in
satisfaction  of all or part of the Taxes incurred by such holders in connection
with the exercise of their Non-Statutory Stock Options, provided,  however, that
this form of payment shall be limited to the withholding amount calculated using
the minimum  statutory  rates.  Such right may be provided to any such holder as
follows:  The election to have the Company  withhold,  from the Shares otherwise
issuable  upon the exercise of such  Non-Statutory  Stock  Option,  a portion of
those Shares with an aggregate  fair market value equal to the Taxes  calculated
using the minimum statutory withholding rates interpreted in accordance with APB
25 and FASB Interpretation No. 44.

     12.    Effective Date and Term of the Plan. The Plan was adopted by the
Board on March 24, 2004, and shall become effective on the date of its approval
by the Company's shareholders. Unless sooner terminated by the Administrator,
the Plan shall continue until March 24, 2014. When the Plan terminates, no
Options shall be granted under the Plan thereafter. The termination of the Plan
shall not affect any Option previously granted under the Plan.

     13.    Time of Granting Options. The Date of Grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination to
grant such Option, or such other date as determined by the Administrator;
provided, however, that any Option granted prior to the date on which the Plan
is approved by the Company's shareholders shall be subject to the shareholders'
approval of the Plan. Notice of the determination shall be given to each Service
Provider to whom an Option is so granted within a reasonable period of time
after the date of such grant.

     14.    Amendment and Termination of the Plan.

            (a)      Amendment and Termination. The Board may at any time
amend, alter, suspend, or discontinue the Plan, but no amendment, alteration,
suspension, or discontinuation shall be made which would impair the rights of
any Participant under any grant theretofore made without his/her consent. In
addition, to the extent necessary and desirable to comply with Section 422 of
the Code (or any other applicable law or regulation, including the requirements
of any stock exchange or national market system upon which the Common Stock is
then listed), the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required.

            (b)      Effect of Amendment and Termination. Any such amendment or
termination of the Plan shall not affect Options already granted, and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Participant
and the Board, which agreement must be in writing and signed by the Participant
and the Company.

     15.    Regulatory Approvals.

            (a)      The implementation of the Plan, the granting of any
Options and the issuance of any Shares upon the exercise of any granted Options
shall be subject to the Company's procurement of all approvals and permits
required by regulatory authorities having jurisdiction over the Plan, the
Options granted under it, and the Shares issued pursuant to it.

            (b)      No Shares or other assets shall be issued or delivered
under the 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 (if required)
and under state law (if required) for the Shares issuable under the Plan.

            (c)      The receipt of Shares upon the exercise of an Option shall
be conditioned upon the Optionee (or any other person who exercises the Option
on his or her behalf as permitted by this Plan) providing to the Administrator a
written representation that, at the time of such exercise, it is the intent of
that person(s) to acquire the shares for investment only and not with a view
toward distribution. The certificate for unregistered shares issued for
investment shall be restricted by the Company as to transfer unless the Company
receives an opinion of counsel satisfactory to the Company to the effect that
the restriction is not necessary under then pertaining law. The providing of the
representation and the restrictions on transfer shall not, however, be required
upon any person's receipt of Shares under the Plan if, at the time of grant of
the Option relating to receipt or upon receipt, whichever is the appropriate
measure under applicable federal or state securities laws, the Optioned Stock
is: (i) covered by an effective and current registration statement under the
Securities Act of 1933, as amended; and (ii) either qualified or exempt from
qualification under applicable state securities laws.
<PAGE>
     16.    No Employment/Service Rights. Nothing in the Plan shall confer upon
the Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any Affiliate employing or retaining such person) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
such person's Service at any time for any reason, with or without cause.

     17.    Governing Law. This Plan shall be governed by California law,
applied without regard to conflict of law principles.

     18.    Non-Exclusivity of the Plan. Nothing contained in the Plan is
intended to amend, modify or rescind any previously approved compensation plans,
programs or options entered into by the Company. This Plan shall be construed to
be in addition to and independent of any and all other arrangements. Neither the
adoption of the Plan by the Board nor the submission of the Plan to the
shareholders of the Company for approval shall be construed as creating any
limitations on the power or authority of the Board to adopt, with or without
shareholder approval, such additional or other compensation arrangements as the
Board may from time to time deem desirable.