**EXHIBIT 10.2****WESTCORP 2001****STOCK INCENTIVE PLAN****1. Purpose.**          The Westcorp 2001 Stock Incentive Plan (the “Plan”) is an amendment and restatement ofthe Westcorp 2001 Stock Option Plan that adds a restricted stock feature to the Plan. The purposeof the Plan is to provide incentives to, and to encourage the ownership of Westcorp, a Californiacorporation, common stock (hereinafter “Common Stock”), by certain employees and directors of theCompany and its subsidiaries (collectively, unless the context indicates otherwise, the“Company”). The Plan provides for stock options which qualify as Incentive Stock Options (“ISOs”)under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), Non-StatutoryStock Options (“NSOs”) which are not intended to be ISOs, and Restricted Stock Awards (“StockAwards”). ISOs and NSOs are collectively referred to in the Plan as “Options” and ISOs, NSOs andStock Awards are collectively referred to in the Plan as “Awards”. The Plan is not a qualifiedplan under Section 401(a) of the Code and is not subject to the provisions of the EmployeeRetirement Income Security Act of 1974 (“ERISA”).**2. Administration.**     2.1 The Plan shall be administered by the Board of Directors of the Company (the “Board”) or,if so designated by the Board, by the Compensation Committee of the Board, consisting of not lessthan two members of the Board. The administrator of the Plan is hereinafter referred to as the“Committee”. In addition, the composition of the Committee shall be made in an attempt to satisfy:     (a) Such requirements as the Securities and Exchange Commission may establish foradministrators acting under plans intended to qualify for exemption under Rule 16b-3 (or itssuccessor) under the Securities Exchange Act, and     (b) Such requirements as the Internal Revenue Service may establish for outside directorsacting under plans intended to qualify for exemption under Internal Revenue Code §162(m)(4)(C).     2.2 Subject to the limitations of the Plan, the Committee shall have the sole and completeauthority (a) to select those directors or employees (who may also be officers or directors of theCompany or any subsidiary of the Company) who shall be eligible to receive Awards under the Plan(“Participants”), (b) to determine the type and amount of Awards to be granted to each Participantin conformity with the Plan, (c) to impose such limitations, restrictions, and conditions uponAwards as it shall deem appropriate, (d) to interpret the Plan, adopt agreements, and to adopt,amend, and rescind administrative guidelines and other rules and regulations relating to the Plan,and (e) to make all other determinations and to take all other actions necessary or advisable forthe proper administration of the Plan. Determinations of fair market value under the Plan shall bemade in accordance with the methods and procedures established by the Committee. The Committee’sdeterminations on
 

 
matters within its authority shall be conclusive and binding on the Company and all otherparties. No member of the Board or the Committee shall be liable for any action or determinationmade in good faith with respect to the Plan or any Award made under it. The Committee may selectone of its members as its Chairman, and shall hold meetings at such times and places as it maydetermine. Acts by a majority of the Committee, or acts reduced to or approved in writing by amajority of the members of the Committee without a meeting, shall be the valid acts of theCommittee.     2.3 The “fair market value” on a specified date shall mean the closing price for a share ofCommon Stock on the stock exchange, if any, on which Common Stock is primarily traded, but if noCommon Stock were traded on such date, then on the last previous date on which a share of CommonStock was so traded, or, if Common Stock is not primarily traded on a stock exchange, the averageof the bid and asked closing prices at which one share of Common Stock is traded on theover-the-counter market, as reported on the National Association of Securities Dealers AutomatedQuotation System, or, if none of the above is applicable, the value of a share of Common Stock asestablished by the Board of Directors for such date using any reasonable method of valuation.**3. Type of Award.**     Awards under the Plan shall be based on Common Stock and shall be issued as Options,qualifying as either NSOs or ISOs, or as Stock Awards. No Awards shall be granted under the Planafter ten years from the date the Plan is approved by the shareholders of the Company (or, ifearlier, the date the Plan is adopted by the Board), which expiration date shall be February 13,2011.**4. Shares Subject to Plan and Eligible Employees.**     4.1 At the time of original adoption of the Plan, 3,000,000 shares of Common Stock of theCompany were available for Option grants under the Plan. At the time of amendment and restatementof the Plan, an additional 1,840,622 shares of Common Stock of the Company are being made availablefor Awards under the Plan, so that the total number of shares of Common Stock available for Awardsunder the Plan will equal 4,840,622. All such amounts are subject to adjustment as provided inSection 8 below. In the future, if another company is acquired by the Company or any of itssubsidiaries, any Common Stock covered by or issued as a result of the assumption or substitutionof outstanding grants or awards of the acquired company shall not be deemed issued under the Planand shall not be subtracted from the Common Stock available for grant under the Plan. The CommonStock deliverable under the Plan shall consist in whole or in part of authorized and unissuedshares of the Company. Notwithstanding the foregoing, if any Award is forfeited, or an Award isterminated or expires without issuance of Common Stock or other consideration, the Common Stocksubject to such Award shall again be available for grant pursuant to the Plan. The maximum numberof shares of Common Stock with respect to which an Award or Awards may be granted to anyParticipant in any one taxable year of the Company (the “Maximum Annual Participant Award”) shallnot exceed 500,000 shares for Options or 500,000 shares for Stock Awards.
 

 
     4.2 The class eligible to receive Awards under the Plan shall all be employees and directorsof the Company and its subsidiaries who are selected by the Committee. In general, Participantsshall be selected by the Committee from the directors, executive officers and other key employeesof the Company and its subsidiaries who occupy responsible managerial or professional positionsand/or who have the capacity to or who have already shown their ability to make a substantialcontribution to the success of the Company.     4.3 The form of an Award shall be determined from time to time by the Committee. The termsand provisions of an Option shall be set forth in writing in a Stock Option Certificate Agreement(the “Stock Option Agreement”), signed by the Option holder and on behalf of the Company by theChairman of the Board or an authorized officer. The Agreement shall state whether or not theOption is an Incentive Stock Option. The terms and provisions of a Stock Award shall be set forthin writing in a Restricted Stock Agreement (the “Stock Award Agreement”), signed by the recipientand on behalf of the Company by the Chairman of the Board or an authorized officer. The Committeemay establish such other condition(s) as it may determine provided that, with respect to a grant ofIncentive Stock Options, such condition(s) are not inconsistent with Section 422 of the InternalRevenue Code.**5. Stock Options.**All Options granted under the Plan shall be subject to the following terms and conditions:     5.1 The Committee may, from time to time, subject to the provisions of the Plan and such otherterms and conditions as the Committee may prescribe, grant to any Participant Options to purchaseCommon Stock, which Options may, but need not, be ISOs. As more fully set forth in Section 14, thegrant of an Option shall be evidenced by a signed written Stock Option Agreement containing suchterms and conditions, not inconsistent with this Plan, as the Committee may from time to timeprescribe. Options granted under the Plan as ISOs shall be designated as ISOs in the Stock OptionAgreement covering such Options.     5.2 Each Stock Option Agreement shall specify the exercise price of each Option. The priceper share of the shares subject to each Option shall be set by the Committee; provided, however,that with respect to ISOs, such price shall not be less than one hundred percent (100%) of the fairmarket value of a share of Common Stock as of the date the Option is granted; and provided further,that such price shall be no less than one hundred ten percent (110%) of the fair market value of ashare of Common Stock as of the date the Option is granted if such Option is granted to a personwho owns ten percent (10%) or more of the issued and outstanding Common Stock of the Company as ofsuch date. The exercise price under an NSO shall in no event be less than 85% of the fair marketvalue of a share of Common Stock as of the date the Option is granted. In the case of an NSO, aStock Option Agreement may specify an exercise price that varies in accordance with a predeterminedformula while the NSO is outstanding.
 

 
     5.3 The term of an Option shall be set by the Committee in its discretion; provided, however,that the term shall not be more than seven years from the date an ISO is granted, or, in the caseof an Option granted to a person who owns ten percent (10%) or more of the issued and outstandingCommon Stock of the Company as of the date the Option is granted, the term shall not be more thanfive years from the date an ISO is granted.     5.4 At any time after grant of an Option, the Committee may, in its sole discretion, subjectto whatever terms and conditions it selects, and to the extent applicable, accelerate the periodduring which an Option vests.     5.5 No portion of an Option which is unexercisable at the time a Participant terminatesemployment with the Company or a subsidiary of the Company shall thereafter become exercisable.However, for purposes of understanding the previous sentence, an Option shall not be consideredunexercisable if at that time a Participant terminates the only impediment to his or her exerciseof the Option is the fact that the Participant is subject to a closed window period which restrictsthe exercise of the Option as a matter of law. Further, the existence of a closed window periodwill not extend the time within which Options hereunder may be exercised.     5.6 For those Participants who are employees of the Company or any of its subsidiaries, anOption shall be exercisable by a Participant only while he or she is an employee and up to threemonths following the cessation or termination of employment with the Company and any and allsubsidiaries or no later than three months after the Participant ceases to be a Director. Thepreceding notwithstanding, the Committee may determine that an Option may be exercised subsequentto a Participant’s termination of employment or directorship, subject to the following limitations:     (a) An Option, to the extent not previously exercised, shall terminate no later than seven(7) years from the grant date (the “Option Term”). If Participant ceases to be employed by theCompany because of Participant’s retirement, disability or death, the option may, to the extentit was outstanding and exercisable on the date of such retirement, disability or death, beexercised only during the following periods: (i) if the termination was due to Participant’sdisability (within the meaning of Section 22(e)(3) of the Code), the one-year period followingthe date of such termination; (ii) if the termination was due to Participant’s death, thesix-month period following the date of issuance of letters testamentary or letters ofadministration to the executor or administrator of Participant’s estate, but not later than oneyear after Participant’s death; and (iii) if the termination was due to Participant’s retirementafter attaining age 65, or to Participant’s disability other than as described in (i) above, thethree-month period following the date of such termination. In no event, however, shall any suchperiod set forth in the previous sentence extend beyond the Option Term.     (b) In the event of Participant’s death, an Option may be exercised by Participant’s legalrepresentative(s), but only to the extent that the Option would otherwise have been exercisableby Participant.
 

 
     (c) A transfer of Participant’s employment between the Company and any subsidiary of theCompany, or between any subsidiaries of the Company, shall not be deemed to be a termination ofParticipant’s employment.     (d) Notwithstanding any other provisions set forth herein or in any Stock Option Agreement,if a Participant shall (i) commit any act of malfeasance or wrongdoing affecting the Company orany subsidiary or affiliate of the Company, (ii) breach any covenant not to compete, oremployment contract, with the Company or any subsidiary or affiliate of the Company, or (iii)engage in conduct that would warrant Participant’s discharge for cause (excluding generaldissatisfaction with the performance of Participant’s duties, but including any act ofdisloyalty or any conduct clearly tending to bring discredit upon the Company or any subsidiaryor affiliate of the Company), any unexercised portion of the Option shall immediately terminateand be void.     5.7 An exercisable Option may be exercised in whole or in part. However, an Option shall notbe exercisable with respect to fractional shares and the Committee may require that, by the termsof the Option, a partial exercise only be with respect to a minimum number of shares.     5.8 All or a portion of an exercisable Option shall be deemed exercised upon:     (a) Delivery of all of the following to the Secretary of the Company or his or her office:     (i) A written notice complying with the applicable rules established by theCommittee or the Company stating that the Option, or a portion thereof, is exercised.The notice shall be signed by the Participant or other person then entitled to exercisethe Option or such portion;     (ii) Such representations and documents as the Committee, in its absolutediscretion, deems necessary or advisable to effect compliance with all applicablefederal or state securities laws or regulations. The Committee may, in its absolutediscretion, also take whatever additional actions it deems appropriate to effect suchcompliance, including, without limitation, placing legends on share certificates andissuing stop-transfer notices to agents and registrars; and     (iii) In the event that the Option shall be exercised pursuant to Section 5.6(b) byany person or persons other than the Participant, appropriate proof of the right of suchperson or persons to exercise the Option; and     (b) Full cash payment to the Secretary of the Company for the shares with respect to whichthe Option, or portion thereof, is exercised. However, at the discretion of the Committee, theterms of the Option may allow, or provide the Committee with the continuous discretion to allow:(i) a delay in payment up to thirty days from the date the Option, or portion thereof, isexercised, (ii) payment, in whole or in part, through the delivery of Common Stock owned by theParticipant for at least six months, (iii) delivery
 

 
(in a form prescribed or approved by the Committee or the Company) of an irrevocabledirection to a securities broker to sell all or part of the Common Stock being purchased underthe Plan and to deliver all or part of the sales proceeds to the Company to cover the exerciseprice and any applicable withholding taxes; or (iv) payment, in whole or in part, through thedelivery of property of any kind which constitutes good and valuable consideration.     (c) If Participant fails to pay for any or all of the Option shares specified in the noticeof exercise or fails to accept delivery thereof, Participant’s right to purchase such Optionshares may be terminated by the Company, without notice. The date specified in Participant’snotice of exercise as the date of exercise shall be deemed the date of exercise of the Option,provided that payment in full for the Option shares to be purchased upon such exercise shallhave been received by such date.     5.9 As soon as practicable after receipt by the Company, pursuant to Section 5.8(b), of fullcash payment for the shares with respect to which an Option, or portion thereof, is exercised by aParticipant, with respect to each such exercise, the Company shall transfer to the Participant thenumber of shares equal to the quotient of:     (a) The amount of the payment made by the Participant to the Company pursuant to Section5.8(b), and     (b) The price per share of the shares subject to the Option as determined pursuant toSection 5.2.     5.10 The Company shall not be required to issue or to deliver any certificate or certificatesfor shares of stock purchased upon the exercise of any Option or portion thereof prior tofulfillment of all of the following conditions:     (a) The completion of any registration or other qualification of such shares under anystate or federal law, or under the rulings or regulations of the Securities and ExchangeCommission or any other governmental regulatory body which the Committee shall, in its absolutediscretion, deem necessary or advisable;     (b) Obtaining any approval or other clearance from any state or federal governmental agencythat the Committee shall, in its absolute discretion, determine to be necessary or advisable;     (c) The lapse of such reasonable period of time following the exercise of the Option as theCommittee may establish from time to time for reasons of administrative convenience; and     (d) The receipt by the Company of full payment for such shares, including payment of anyapplicable withholding tax.
 

 
     (e) The execution and delivery by Participant of a counterpart Stock Option Agreementbetween the Company and Participant.     5.11 To the extent that the aggregate fair market value of Common Stock with respect to whichany ISOs are exercisable for the first time by a Participant during any calendar year (under thePlan and all other incentive stock option plans of the Company or any Company subsidiary) exceeds$100,000, such Options shall be treated as NSOs to the extent required by Section 422 of the Code.For purposes of this Section 5.11, the fair market value of stock shall be determined as of thetime the Option, with respect to such stock, is granted.     5.12 Within the limitations of the Plan, the Committee may modify, extend or assumeoutstanding Options or may accept the cancellation of outstanding Options (whether granted by theCompany or by another issuer) in return for the grant of new Options for the same or a differentnumber of shares and at the same or a different exercise price. The foregoing notwithstanding, nomodification of an Option shall, without the consent of the Participant, alter or impair his or herrights or obligations under such Option.**6. Restricted Stock Awards.**     6.1 Stock Awards may be granted either alone, in addition to, or in tandem with other Awardsgranted under the Plan. After the Committee determines that it will offer a Stock Award, it willadvise the Participant in writing, by means of a Stock Award Agreement, of the terms, conditionsand restrictions, including vesting, if any, related to the offer, including the number of sharesof Common Stock that the Participant shall be entitled to receive or purchase, the price to bepaid, if any, and, if applicable, the time within which the Participant must accept the offer. Theoffer shall be accepted by execution of a Stock Award Agreement in the manner determined by theCommittee.     6.2 Unless the Committee determines otherwise, the Stock Award Agreement shall provide for theforfeiture of the nonvested shares of Common Stock underlying such Stock Award when the Participantceases to be an employee or director of the Company. To the extent that the Participant purchasedthe shares of Common Stock granted under such Stock Award and any such shares remain nonvested atthe time the Participant ceases to be an employee or director, the termination of employment orstatus as a director shall cause an immediate sale of such nonvested shares to the Company at theoriginal price per share paid by the Participant. The Stock Award Agreement shall contain suchother terms, provisions and conditions not inconsistent with the Plan as may be determined by theCommittee in its sole discretion.     6.3 The vesting period of a Stock Award shall be set by the Committee in its discretion;provided, however, that the vesting period shall not be more than seven years from the date a StockAward is granted. At any time after grant of a Stock Award, the Committee may, in its solediscretion, subject to whatever terms and conditions it selects, and to the extent applicable,accelerate the period during which a Stock Award vests.
 

 
     6.4 No portion of a Stock Award which is unvested at the time a Participant terminatesemployment with the Company or ceases to be a director of the Company shall thereafter becomevested.     6.5 Notwithstanding any other provisions set forth herein or in any Stock Award Agreement, ifa Participant shall (i) commit any act of malfeasance or wrongdoing affecting the Company or anysubsidiary or affiliate of the Company, (ii) breach any covenant not to compete, or employmentcontract, with the Company or any subsidiary or affiliate of the Company, or (iii) engage inconduct that would warrant Participant’s discharge for cause (excluding general dissatisfactionwith the performance of Participant’s duties, but including any act of disloyalty or any conductclearly tending to bring discredit upon the Company or any subsidiary or affiliate of the Company),any nonvested portion of the Stock Award shall immediately be forfeited. To the extent that theParticipant purchased the shares granted under such Stock Award and any such shares remainnonvested at the time of any action described in the prior sentence, such action shall cause animmediate sale of such nonvested shares to the Company at the original price per share paid by theParticipant.     6.6 The Participant shall make such representations and provide such documents as theCommittee, in its absolute discretion, deems necessary or advisable to effect compliance with allapplicable federal or state securities laws or regulations. The Committee may, in its absolutediscretion, also take whatever additional actions it deems appropriate to effect such compliance,including, without limitation, placing legends on share certificates and issuing stop-transfernotices to agents and registrars.     6.7 The Participant shall make full cash payment to the Secretary of the Company of thepurchase price, if any, for the shares subject to the Stock Award. However, at the discretion ofthe Committee, the terms of the Stock Award may allow, or provide the Committee with the continuousdiscretion to allow: (i) a delay in payment up to thirty days from the date the Stock Award isgranted, or (ii) payment, in whole or in part, through the delivery of property of any kind whichconstitutes good and valuable consideration. If Participant fails to pay the amount, if any,specified for the shares specified in the Stock Award Agreement or fails to accept deliverythereof, Participant’s right to acquire such shares may be terminated by the Company, withoutnotice. The date specified in Participant’s Stock Award Agreement as the date of acquisition shallbe deemed the date of acquisition of the shares, provided that any payment required by the StockAward Agreement shall have been received by such date.     6.8 As soon as practicable after Participant executes the Stock Award Agreement and providesthe Company, pursuant to Section 6.7, with full payment of any purchase price required under theterms of a Stock Award Agreement, the Company shall transfer to the Participant the number ofshares purchased. If no purchase price is required under the Stock Award Agreement, the Companyshall transfer to the Participant the number of shares issued under the Stock Award Agreement afterthe Participant executes the Stock Award Agreement.
 

 
     6.9 Notwithstanding the foregoing, the Company shall not be required to issue or to deliverany certificate or certificates for shares of stock purchased under a Stock Award Agreement priorto fulfillment of all of the following conditions:     (a) The completion of any registration or other qualification of such shares under anystate or federal law, or under the rulings or regulations of the Securities and ExchangeCommission or any other governmental regulatory body which the Committee shall, in its absolutediscretion, deem necessary or advisable; and     (b) Obtaining any approval or other clearance from any state or federal governmental agencythat the Committee shall, in its absolute discretion, determine to be necessary or advisable.**7. Nonassignability of Awards.**     No Award granted under the Plan shall be assigned, transferred, pledged, or otherwiseencumbered by a Participant, otherwise than by will or by the laws of descent and distributionand, in the case of NSOs only, by instrument to an inter vivos or testamentary trust in which theOption is to be passed to beneficiaries upon the death of the Participant, or by gift to a memberof Participant’s immediate family (as such term is defined in Rule 16a-1(e) of the Exchange Act)or pursuant to a qualified domestic relations order. Each Award shall be exercisable during theParticipant’s lifetime only by the Participant. Any attempt to assign, transfer, pledge orotherwise encumber any such Award or of any right or privilege conferred thereby, contrary to thisSection 7, or the sale or levy or similar process upon the rights and privileges conferredthereby, shall be null and void.**8. Protection Against Dilution.**     8.1 Reorganizations. In the event of any change affecting the Common Stock by reason of anysale, merger, consolidation, spin-off, or other reorganization of the Company or any subsidiary oraffiliated company, the Committee may, but shall not be obligated to, make such substitution oradjustment in the aggregate number or class of shares which may be distributed under the Plan andin the number, class, and price of shares subject to the outstanding Awards granted under the Planor in any vesting schedule as the Committee in its sole discretion deems to be appropriate in orderto maintain the purpose of the original grant. Any determination of the Committee as to anyquestion that may arise with respect to any adjustment or lack of adjustment of shares or vestingshall be final. The Committee shall be authorized to make adjustments in the terms and conditionsof other Awards in recognition of unusual or non-recurring events affecting the Company or itsfinancial statements or changes in applicable laws, regulations, or accounting principles. TheCommittee may correct any defect, supply any omission or reconcile any inconsistency in the Plan orany Award in the manner and to the extent it shall deem desirable to carry it into effect.     8.2 Adjustments. If any change is made to the Common Stock as a result of a subdivision ofthe outstanding Common Stock, a declaration of a dividend payable in
 

 
Common Stock, a combination or consolidation of the outstanding Common Stock (byreclassification or otherwise) into a lesser number of shares of Common Stock, a recapitalization,or a similar occurrence or change in the capitalization of the Company which occurrence or changeis neither a rights offering nor related to a merger, sale or other reorganization set forth inSection 8.1, appropriate adjustments shall be made to (i) the maximum number and/or class ofsecurities issuable under the Plan, (ii) the number and/or class of securities and/or the price pershare covered by outstanding Awards under the Plan, and (iii) the Maximum Annual Participant Award.Any fractional shares shall be payable in cash.     8.3 Certain Corporate Events.     (a) Corporate Reorganizations. Upon the dissolution or liquidation of the Company, or upona reorganization, merger or consolidation of the Company as a result of which the outstandingsecurities of the class then subject to Awards hereunder are changed into or exchanged for cashor property or securities not of the Company’s issue, or any combination thereof, or upon a saleof substantially all the property of the Company to, or the acquisition of stock representingboth (i) more than fifty percent (50%) of the voting power of the stock of the Company thenoutstanding by, another corporation or person and (ii) a change in the “Effective Control” (asdefined below) of the Company (any of which being a “Corporate Event”), the Plan shallterminate, and all Awards theretofore granted hereunder shall terminate, unless provision ismade in writing in connection with such transaction for the continuance of the Plan and/or forthe assumption of Awards covering the stock of a successor corporation, or a parent or asubsidiary thereof (such successor corporation or parent or subsidiary, as the case may be,being the “successor corporation”), with appropriate adjustments as to the number and kind of            shares and prices, in which event the Plan and Awards theretofore granted shall continue in themanner and under the terms so provided. If the Plan and Awards shall terminate pursuant to theforegoing sentence, all outstanding Stock Awards shall become fully vested immediately prior tothe consummation of such transaction and all persons entitled to exercise any unexercisedportions of Options then outstanding shall have the right, at such time prior to theconsummation of the transaction causing such termination as the Company shall designate, toexercise the unexercised portions of their Options, including the portions thereof which would,but for this Section entitled “Corporate Reorganizations,” not yet be exercisable. For purposesof this paragraph, the term “Effective Control” shall mean a change in share ownership such thatthe person or persons in Control (as defined in Rule 405 under the Securities Act of 1933, asamended (the “Securities Act”)) of the Company before the Corporate Event are not in Control ofthe Company after the Corporate Event.     (b) Termination of Employment Following Corporate Event. If a Participant’s employment isterminated (other than for reasons set forth in Section 5.6(d) herein) by the Company or asuccessor employer corporation (or a parent or a subsidiary of either of them) within two (2)years following the effective date of a Corporate Event (as defined in subparagraph (a) above)in which Awards are assumed, such Participant’s Options (or replacement options) willimmediately become exercisable, including the
 

 
portions thereof which would, but for this Section entitled “Termination of EmploymentFollowing Corporate Event,” not yet be exercisable, and such Participant’s Stock Awards willimmediately become fully vested. Any such Option will remain exercisable until the expirationof the Option or earlier termination of the Option in accordance with its terms.     (c) Termination of Plan or Options Following Corporate Event. If either the Plan iscontinued by a successor corporation (as defined in subparagraph (a) above) to the Company orAwards are assumed by such successor corporation, or both, as provided in subparagraph (a)above, and thereafter within two (2) years following the effective date of a Corporate Event (asdescribed under subparagraph (a) above), the Plan and unexercised Options (or replacementoptions) or unvested Stock Awards are proposed to be terminated for any reason (including butnot limited to a successor corporation’s Corporate Event), then all such Stock Awards shallbecome fully vested immediately prior to termination of the Plan or Stock Awards and all personsentitled to exercise any unexercised portions of Options then outstanding shall have the right,until seven (7) days prior to the termination of the Plan and unexercised Options (orreplacement options), or such later time as the successor corporation shall designate, toexercise the unexercised portions of their Options (or replacement options), including theportions thereof which would, but for this Section entitled “Termination of Plan or OptionsFollowing Corporate Event,” not yet be exercisable.          Notwithstanding the foregoing, a transaction shall not constitute a Corporate Event if itssole purpose is to change the state of the Company’s incorporation or to create a holding companythat will be owned in substantially the same proportions by the persons who held the Company’ssecurities immediately before such transaction.**9. Withholding.**     At the Committee’s discretion, the recipient of any Award under the Plan may pay to theCompany, in cash, Common Stock (provided it has been held by the Participant for at least sixmonths) or other property, or a combination thereof, the amount of any taxes required to bewithheld with respect to such Award or, in the case of an Award in the form of Common Stock, theCompany shall have the right to retain from such Award a sufficient number of shares of CommonStock to satisfy the applicable withholding tax obligation.**10. Subsidiaries.**     For purposes of the Plan, a “subsidiary” of the Company means any corporation (other than theCompany) in an unbroken chain of corporations beginning with the Company if each of thecorporations other than the last corporation in the chain owns stock possessing 50% or more of thetotal combined voting power of all classes of stock in one of the other corporations in the chain.
 

 
**11. Financial Assistance.**     The Company is vested with authority under this Plan to assist any employee to whom an Awardis granted hereunder (including any director or officer of the Company or any of its subsidiaries)in the payment of the purchase price payable with respect to that Award, by lending the amount ofsuch purchase price to such employee on such terms and at such rates of interest and upon suchsecurity (or unsecured) as shall have been authorized by or under authority of the Board.**12. Limitations of Rights of Participants.**     12.1 A person to whom an Award is granted under this Plan shall not have any interest in theshares available with respect to that Award or in any dividends paid thereon, and shall not haveany of the rights or privileges of a stockholder with respect to such shares until the certificatestherefor have been issued and delivered to him or her.     12.2 No shares of stock issuable under the Plan shall be issued and no certificate therefordelivered unless and until, in the opinion of legal counsel for the Company, such securities may beissued and delivered without causing the Company to be in violation of or to incur any liabilityunder any federal, state or other securities law, or any other requirement of law or of anyregulatory body having jurisdiction over the Company.     12.3 The receipt of an Award does not give the Participant any right to continued employmentby the Company or a subsidiary for any period, nor shall the granting of the Award or the issuanceof shares in accordance with the Award give the Company or any subsidiary any right to thecontinued services of the Participant for any period.     12.4 Nothing contained in this Plan shall constitute the granting of an Award hereunder, whichshall occur only pursuant to express authorization by the Committee and under the terms of a StockOption Agreement or Stock Award Agreement.**13. Amendment and Termination.**     The Board may alter, amend, suspend or terminate this Plan, provided that no such actionshall, without the consent of a Participant, alter or impair any rights or obligations under anyAward granted to such Participant. An amendment of the Plan shall be subject to the approval ofthe Company’s shareholders only to the extent required by applicable laws, regulations or rules.**14. Award Agreements.**     Each Award granted to a Participant shall be evidenced by a written Stock Option Agreement orStock Award Agreement in a form approved by the Committee, which shall be executed by theParticipant and an authorized officer of the Company and which shall contain such terms andconditions as the Committee shall determine, consistent with this Plan. Stock Option Agreementsevidencing ISOs shall contain such terms and conditionsas may be necessary to meet the applicable provisions of Section 422 of the Code.
 

 
**15. Governing Law.**     The place of administration of the Plan and all Stock Option Agreements and Stock AwardAgreements shall be in the State of California. The corporate law of the Company’s state ofincorporation shall govern issues related to the validity and issuance of shares. Otherwise, thisPlan and each Stock Option Agreement and Stock Award Agreement shall be construed and administeredin accordance with the laws of the State of California, without giving effect to principlesrelating to conflict of laws.**16. Use of Proceeds.**     Any cash proceeds received by the Company from the sale of shares pursuant to grants madeunder this Plan shall be used for general corporate purposes.**17. Regulatory Approvals.**     The implementation of the Plan, the granting of any Award hereunder, and the issuance ofstock in accordance with any Award shall be subject to the Company’s procurement of all approvalsand permits required by regulatory authorities having jurisdiction over the Plan, the Awardsgranted under it, and the stock issued pursuant to it.**18. Restrictions on Resale.**     Certain officers and directors of the Company may be deemed to be “affiliates” of theCompany, as that term is defined under the Securities Act. Common Stock acquired under the Planby an affiliate may only be re-offered or resold pursuant to an effective registration statementor pursuant to Rule 144 under the Securities Act or another exemption from the registrationrequirements of the Securities Act.**19. Effective Date.**     This Plan, as amended and restated, shall become effective upon adoption by the Company’sBoard of Directors, subject to the subsequent approval of the amended and restated Plan by thestockholders of the Company within 12 months from the date of said adoption. Awards may begranted prior to such stockholder approval, provided that any Stock Awards shall not vest prior tothe time that this amended and restated Plan is approved by the stockholders, and provided furtherthat if such approval has not been obtained at the end of said 12 month period, all Stock Awardspreviously granted under this amended and restated Plan shall thereupon be cancelled and becomenull and void.**20. Financial Statements.**     Participant shall receive financial statements of the Company at least annually.