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                             ARCADIA FINANCIAL LTD.
                             1990 STOCK OPTION PLAN
                          (AS AMENDED MARCH 16, 2000)

1. PURPOSE

    The purpose of this 1990 Stock Option Plan (the "Plan") is to promote the
interests of Arcadia Financial Ltd., a Minnesota corporation (the "Company"), by
providing employees of the Company and certain independent contractors with an
opportunity to acquire a proprietary interest in the Company, and thereby
develop a stronger incentive to contribute to the Company's continued success
and growth. In addition, the opportunity to acquire a proprietary interest in
the Company by the offering and availability of stock options will assist the
Company in attracting and retaining key personnel and consultants of outstanding
ability.

2. DEFINITIONS

    Wherever used in the Plan, the following terms have the meanings set forth
below:

    2.1    "Board" means the Board of Directors of the Company.

    2.2    "Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

    2.3    "Committee" means the Committee which may be designated from time to
time by the Board to administer the Plan pursuant to Section 3.5.

    2.4    "Incentive Stock Option" or "ISO" means a stock option which is
intended to qualify as an incentive stock option as defined in Section 422A of
the Code.

    2.5    "Non-Statutory Stock Option" or "NSO" means a stock option that is
not intended to, or does not, qualify as an incentive stock option as defined in
Section 422A of the Code.

    2.6    "Option" means, where required by the context of the Plan, an ISO
and/or NSO granted pursuant to the Plan.

    2.7    "Optionee" means a Participant in the Plan who has been granted one
or more Options under the Plan.

    2.8    "Participant" means an individual described in Section 5 of this Plan
who may be granted Options under the Plan.

    2.9    "Stock" means the Common Stock, $.01 par value, of the Company.

    2.10   "Subsidiary" means any corporation, other than the Company, in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns 50% or
more of the voting stock in one of the other corporations in such chain.

3. ADMINISTRATION

    3.1    The Plan shall be administered by the Board, which shall have full
power, subject to the provisions of the Plan, to grant Options, construe and
interpret the Plan, establish rules and regulations with respect to the Plan and
Options granted hereunder, and perform all other acts, including the delegation
of administrative responsibilities, that it believes reasonable and necessary.

    3.2    The Board shall have the sole discretion, subject to the provisions
of the Plan, to determine the Participants eligible to receive Options pursuant
to the Plan and the amount, type, and terms of any Options and the terms and
conditions of option agreements relating to any Option.

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    3.3    The Board may correct any defect, supply any omission, or reconcile
any inconsistency in the Plan or in any Option granted hereunder in the manner
and to the extent it shall deem necessary to carry out the terms of the Plan.

    3.4    Any decision made, or action taken, by the Board arising out of or in
connection with the interpretation and administration of the Plan shall be
final, conclusive and binding upon all Optionees.

    3.5    The Board may designate a Committee from time to time to administer
the Plan. If designated, the Committee shall be composed of not less than two
persons (who need not be members of the Board) who are appointed from time to
time by the Board. If the Board has appointed a Committee pursuant to this
Section 3.5 of the Plan, then the Committee may administer the Plan and exercise
all of the rights and powers granted to the Board in this Plan, including,
without limitation, the right to grant Options pursuant to the Plan and to
establish the Option price as provided in the Plan.

4. SHARES SUBJECT TO THE PLAN

    4.1    The total number of shares of Stock reserved for issuance upon
exercise of Options under the Plan is 5,000,000. Such shares shall consist of
authorized but unissued Stock. If any Option granted under the Plan lapses or
terminates for any reason before being completely exercised, the shares covered
by the unexercised portion of such Option may again be made subject to Options
under the Plan.

    4.2    CHANGES IN CAPITALIZATION.  In the event of any change in the
outstanding shares of Stock of the Company by reason of any stock dividend,
split, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, or rights offering to purchase stock at a price
substantially below fair market value, or other similar corporate change, the
aggregate number of shares which may be subject to Options under the Plan and
the terms of any outstanding Option, including the number and kind of shares
subject to such Options and the purchase price per share thereof, shall be
appropriately adjusted by the Board, consistent with such change and in such
manner as the Board, in its sole discretion, may deem equitable to prevent
substantial dilution or enlargement of the rights granted to or available for
Optionees. Notwithstanding the preceding sentence, in no event shall any
fraction of a share of Stock be issued upon the exercise of an Option.

    4.3    AWARD LIMITATIONS UNDER THE PLAN.  No eligible participant, who is an
employee of the Company at the time of grant, may be granted any Option or
Options, the value of which Options are based solely on an increase in the value
of the Shares after the date of grant of such Options for more than 1,500,000
shares (subject to adjustment as provided for in Section 4.2 relating to stock
splits, etc.), in the aggregate, in any one calendar year period beginning with
the period commencing January 1, 1997 and ending December 31, 1997. The
foregoing annual limitation specifically includes the grant of any Options
representing "qualified performance based compensation" within the meaning of
Section 162(m) of the Code.

5. ELIGIBLE PARTICIPANTS

    The following persons are Participants eligible to participate in the Plan:

    5.1    INCENTIVE STOCK OPTIONS.  Incentive Stock Options may be granted only
to employees of the Company or any Subsidiary, including officers and directors
who are also employees of the Company or any Subsidiary.

    5.2    NON-STATUTORY STOCK OPTIONS.  Non-statutory stock options may be
granted to (i) any employee of the Company or any Subsidiary, including any
officer or director who is also an employee of the Company or any Subsidiary;
and (ii) any consultant to, or other independent contractor of, the Company.

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6. GRANT OF OPTIONS

    Subject to the terms, conditions, and limitations set forth in this Plan,
the Company, by action of its Board, may from time to time grant Options to
purchase shares of the Company's Stock to those eligible Participants as may be
selected by the Board, in such amounts and on such other terms as the Board in
its sole discretion shall determine. Such Options may be (i) "Incentive Stock
Options" so designated by the Board and which, when granted, are intended to
qualify as incentive stock options as defined in Section 422A of the Code; (ii)
"Non-Statutory Stock Options" so designated by the Board and which, when
granted, are not intended to, or do not, qualify as incentive stock options
under Section 422A of the Code; or (iii) a combination of both. The date on
which the Board approves the granting of an Option shall be the date of grant of
such Option, unless a different date is specified by the Board on such date of
approval. Notwithstanding the foregoing, with respect to the grant of any
Incentive Stock Option under the Plan, the aggregate fair market value of Stock
(determined as of the date the Option is granted) with respect to which
incentive stock options are exercisable for the first time by an Optionee in any
calendar year (under all such stock option plans of the Company or Subsidiaries)
shall not exceed $100,000. Each grant of an Option under the Plan shall be
evidenced by a written stock option agreement between the Company and the
Optionee setting forth the terms and conditions, not inconsistent with the Plan,
under which the Option so granted may be exercised pursuant to the Plan and
containing such other terms with respect to the Option as the Board in its sole
discretion may determine.

7. OPTION PRICE AND FORM OF PAYMENT

    7.1    INCENTIVE STOCK OPTIONS.  The purchase price for a share of Stock
subject to an Incentive Stock Option granted hereunder shall not be less than
100% of the fair market value of the Stock. Notwithstanding the foregoing, in
the case of an Incentive Stock Option granted to any Optionee then owning more
than 10% of the voting power of all classes of the Company's stock, the purchase
price per share of the Stock subject to such Option shall not be less than 110%
of the fair market value of the Stock on the date of grant of the Incentive
Stock Option, determined as provided in Section 7.3.

    7.2    NON-STATUTORY STOCK OPTIONS.  The purchase price for a share of Stock
subject to a non-statutory stock Option shall be not less than the lesser of
(a) 100% of the fair market value of the Stock on the date of grant or (b) the
greater of (i) 85% of the fair market value of the Stock on the date of grant
and (ii) $6.00 per share.

    7.3    DETERMINATION OF FAIR MARKET VALUE.  For purposes of this Section 7,
the "fair market value" of the Stock shall be determined as follows:

        (a) if the Stock of the Company is listed or admitted to unlisted
    trading privileges on a national securities exchange, the fair market value
    on any given day shall be the closing sale price for the Stock, or if no
    sale is made on such day, the closing bid price for such day on such
    exchange;

        (b) if the Stock is not listed or admitted to unlisted trading
    privileges on a national securities exchange, the fair market value on any
    given day shall be the closing sale price for the Stock as reported on the
    NASDAQ National Market System on such day, or if no sale is made on such
    day, the closing bid price for such day as entered by a market maker for the
    Stock;

        (c) if the Stock is not listed on a national securities exchange, it is
    not admitted to unlisted trading privileges on any such exchange, and is not
    eligible for inclusion in the NASDAQ National Market System, the fair market
    value on any given day shall be the average of the closing representative
    bid and asked prices as reported by the National Quotation Bureau, Inc. or,
    if the Stock is not quoted on the National Association of Securities Dealers
    Automated Quotations System, then as reported in any publicly available
    compilation of the bid and asked prices of the Stock in any over-the-
    counter market on which the Stock is traded; or

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        (d) if there exists no public trading market for the Stock, the fair
    market value on any given day shall be an amount determined in good faith by
    the Board in such manner as it may reasonably determine in its discretion,
    provided that such amount shall not be less than the book value per share as
    reasonably determined by the Board as of the date of determination or less
    than the par value of the Stock.

    7.4.   PAYMENT OF PURCHASE PRICE.  Except as provided herein, the purchase
price of each share of Stock purchased upon the exercise of any Option shall be
paid:

        (a) in United States dollars in cash or by check, bank draft or money
    order payable to the order of the Company; or

        (b) at the discretion of the Board, through the delivery of shares of
    Stock, having initially or as a result of successive exchanges of shares, an
    aggregate fair market value (as determined in the manner provided under this
    Plan) equal to the aggregate purchase price for the Stock as to which the
    Option is being exercised; or

        (c) at the discretion of the Board, by a combination of both (a) and
    (b) above; or

        (d) by such other method as may be permitted in the written stock option
    agreement between the Company and the Optionee.

    If such form of payment is permitted, the Board shall determine procedures
for tendering Stock as payment upon exercise of an Option and may impose such
additional limitations and prohibitions on the use of Stock as payment upon the
exercise of an Option as it deems appropriate.

    If the Board in its sole discretion so agrees, the Company may finance the
amount payable by an Optionee upon exercise of any Option upon such terms and
conditions as the Board may determine at the time such Option is granted under
this Plan.

8. EXERCISE OF OPTIONS

    8.1    MANNER OF EXERCISE.  An Option, or any portion thereof, shall be
exercised by delivering a written notice of exercise to the Board and paying to
the Company the full purchase price of the Stock to be acquired upon the
exercise of the Option. Until certificates for Stock acquired upon the exercise
of an Option are issued to an Optionee, such Optionee shall not have any rights
as a shareholder of the Company.

    8.2    LIMITATIONS AND CONDITIONS ON EXERCISE OF OPTIONS.  In addition to
any other limitations or conditions contained in this Plan or that may be
imposed by the Board from time to time or in the stock option agreement to be
entered into with respect to Options granted hereunder, the following
limitations and conditions shall apply to the exercise of Options granted under
this Plan:

    8.2.1  No Incentive Stock Option may be exercisable by its terms after the
expiration of 10 years from the date of the grant thereof.

    8.2.2  No Incentive Stock Option granted pursuant to the Plan to an eligible
Participant then owning more than 10% of the voting power of all classes of the
Company's stock may be exercisable by its terms after the expiration of five
years from the date of the grant thereof.

9. INVESTMENT PURPOSES

    Unless a registration statement under the Securities Act of 1933 is in
effect with respect to Stock to be purchased upon exercise of Options to be
granted under the Plan, the Company shall require that an Optionee agree with
and represent to the Company in writing that he or she is acquiring such shares
of Stock for the purpose of investment and with no present intention to
transfer, sell or otherwise dispose of such shares of stock other than by
transfers which may occur by will or by the laws of descent and

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distribution, and no shares of Stock may be transferred unless, in the opinion
of counsel to the Company, such transfer would be in compliance with applicable
securities laws. In addition, unless a registration statement under the
Securities Act of 1933 is in effect with respect to the Stock to be purchased
under the Plan, each certificate representing any shares of Stock issued to an
Optionee hereunder shall have endorsed thereon a legend in substantially the
following form:

    THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT REGISTRATION
    UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND WITHOUT
    REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, IN RELIANCE UPON
    EXEMPTION(S) CONTAINED THEREIN. NO TRANSFER OF THESE SHARES OR ANY INTEREST
    THEREIN MAY BE MADE EXCEPT PURSUANT TO EFFECTIVE REGISTRATION STATEMENTS
    UNDER SAID LAWS UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
    SATISFACTORY TO IT THAT SUCH TRANSFER OR DISPOSITION DOES NOT REQUIRE
    REGISTRATION UNDER SAID LAWS AND, FOR ANY SALES UNDER RULE 144 OF THE ACT,
    SUCH EVIDENCE AS IT SHALL REQUEST FOR COMPLIANCE WITH THAT RULE, OR
    APPLICABLE STATE SECURITIES LAWS.

10. TRANSFERABILITY OF OPTIONS

    No Option granted under the Plan shall be transferable by an Optionee
(whether by sale, assignment, hypothecation or otherwise) other than by will or
the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee.

11. TERMINATION OF EMPLOYMENT

    11.1   GENERALLY.  Except as otherwise provided in this Section 11, if any
Optionee's employment with the Company or Subsidiary is terminated (hereinafter
"Termination") other than by death or disability (as hereinafter defined), the
Optionee may exercise any Option granted under the Plan, to the extent the
Optionee was entitled to exercise the Option at the date of Termination, for a
period of three (3) months after the date of Termination or until the term of
the Option has expired, whichever date is earlier.

    11.1.1  The Optionee may exercise any Incentive Stock Option granted under
the Plan, to the extent the Optionee was entitled to exercise the Incentive
Stock Option at the date of Termination, for a period three (3) months after the
date of Termination or until the term of the Incentive Stock Option has expired,
whichever date is earlier.

    11.1.2  The Optionee may exercise any Non-Statutory Stock Option granted
under the Plan, to the extent the Optionee was entitled to exercise the
Non-Statutory Stock Option at the date of Termination, for a period of up to
eighteen (18) months after the date of Termination, as determined by the
Committee, or until the term of the Non-Statutory Option has expired, whichever
date is earlier.

    11.2   DEATH OR DISABILITY OF OPTIONEE.  In the event of the death or
disability of an Optionee prior to expiration of an Option held by him or her,
the following provisions shall apply:

    11.2.1  If the Optionee is at the time of his or her Disability employed by
the Company or a Subsidiary and has been in continuous employment (as determined
by the Board in its sole discretion) since the date of grant of the Option, then
the Option may be exercised by the Optionee until the earlier of one year
following the date of such Disability or the expiration date of the Option, but
only to the extent the Optionee was entitled to exercise such Option at the time
of his or her Disability. For the purpose of this Section 11, the term
"Disability" shall mean a permanent and total disability as defined in Section
22(e)(3) of the Code. The determination of whether an Optionee has a Disability
within the meaning of Section 22(e)(3) shall be made by the Board in its sole
discretion.

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    11.2.2  If the Optionee is at the time of his or her death employed by the
Company or a Subsidiary and has been in continuous employment (as determined by
the Board in its sole discretion) since the date of grant of the Option, then
the Option (including all then vested and unvested options) may be exercised by
the Optionee's estate or by a person who acquired the right to exercise the
Option by will or the laws of descent and distribution, until the earlier of one
year from the date of the Optionee's death or the expiration date of the Option.

    11.2.3  If the Optionee dies within three (3) months after Termination, the
Option may be exercised until the earlier of nine months following the date of
death or the expiration date of the Option, by the Optionee's estate or by a
person who acquired the right to exercise the Option by will or the laws of
descent or distribution, but only to the extent the Optionee was entitled to
exercise the Option at the time of Termination.

    11.3   TERMINATION FOR CAUSE.  If the employment of an Optionee is
terminated by the Company or a Subsidiary for cause, then the Board shall have
the right to cancel any Options granted to the Optionee under the Plan.

12. AMENDMENT AND TERMINATION OF PLAN

    12.1   The Board, may at any time and from time to time suspend or terminate
the Plan in whole or in part or amend it from time to time in such respects as
may be in the best interests of the Company; provided, however, that no such
amendment shall be made without the approval of the shareholders if it would:
(a) materially modify the eligibility requirements for Participants as set forth
in Section 5 hereof; (b) increase the maximum aggregate number of shares of
Stock which may be issued pursuant to Options, except in accordance with Section
4.2 of the Plan; (c) reduce the minimum Option price per share as set forth in
Section 7 of the Plan, except in accordance with Section 4.2 of the Plan;
(d) extend the period of granting Options; or (e) materially increase in any
other way the benefits accruing to Optionees.

    12.2   No amendment, suspension or termination of this Plan shall, without
the Optionee's consent, alter or impair any of the rights or obligations under
any Option theretofore granted to him or her under the Plan.

    12.3   The Board may amend the Plan, subject to the limitations cited above,
in such manner as it deems necessary to permit the granting of Incentive Stock
Options meeting the requirements of future amendments to the Code.

    12.4   In the event of the proposed dissolution or liquidation of the
Company, each Option will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board. The Board may, in
the exercise of its sole discretion in such instances, declare that any Option
shall terminate as of a date fixed by the Board and give each Optionee the right
to exercise his or her Option as to all or any part of the Optioned Stock,
including Shares as to which the Option would not otherwise be exercisable.

    In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, the
Optionee shall have the right to exercise the Option as to all of the Optioned
Stock, including Shares as to which the Option would not otherwise be
exercisable. Not less than fifteen (15) days prior to the effective date of the
sale or merger, the Board shall notify the Optionee that the Option shall be
fully exercisable for the period from the date of the notice through and
including the date prior to the effective date of the merger, and the Option
will terminate upon expiration of such period as to any then unexercised
Options.

13. MISCELLANEOUS PROVISIONS

    13.1   RIGHT TO CONTINUED EMPLOYMENT.  No person shall have any claim or
right to be granted an Option under the Plan, and the grant of an Option under
the Plan shall not be construed as giving an

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Optionee the right to continued employment with the Company. The Company further
expressly reserves the right at any time to dismiss an Optionee or reduce an
Optionee's compensation with or without cause, free from any liability, or any
claim under the Plan, except as provided herein or in a stock option agreement.

    13.2   WITHHOLDING TAXES.  The Company shall have the right to require that
payment or provision for payment of any and all withholding taxes due upon the
grant or exercise of an Option hereunder or the disposition of any Stock or
other property acquired upon exercise of an Option be made by an Optionee. In
connection therewith, the Board shall have the right to establish such
rules and regulations or impose such terms and conditions in any agreement
relating to an Option granted hereunder with respect to such withholding as the
Board may deem necessary and appropriate.

    13.3   GOVERNING LAW.  The Plan shall be administered in the State of
Minnesota, and the validity, construction, interpretation, and administration of
the Plan and all rights relating to the Plan shall be determined solely in
accordance with the laws of such state, unless controlled by applicable federal
law, if any.

14. EFFECTIVE DATE

    The effective date of the Plan is January 18, 1991. No Option may be granted
after January 17, 2001, provided, however, that the Plan and all outstanding
Options shall remain in effect until such outstanding Options have expired or
been canceled.

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