UNITED
      PANAM FINANCIAL CORP. 

     

    AMENDED
      AND RESTATED 1997 EMPLOYEE STOCK INCENTIVE PLAN 

     

    Section 1.    PURPOSE
      OF PLAN 

     

    (a) The
      purpose of this Amended and Restated 1997 Employee Stock Incentive Plan
      (“Plan”)
      of
      United PanAm Financial Corp., a California corporation (the “Company”),
      is to
      enable the Company to attract, retain and motivate its employees and consultants
      by providing for or increasing the proprietary interests of such employees
      and
      consultants in the Company, and to enable the Company and its subsidiaries
      to
      attract, retain and motivate nonemployee directors and further align their
      interests with those of the stockholders of the Company by providing for or
      increasing the proprietary interest of such directors in the Company.


     

    (b) The
      1997 Employee Stock Incentive Plan constituted an amendment and restatement
      of
      the 1994 Stock Option Plan (the “1994
      Plan”)
      of Pan
      American Bank, FSB, and on the effective date of The 1997 Employee Stock
      Incentive Plan each option granted under the 1994 Plan was reconstituted as
      an
      option under The 1997 Employee Stock Incentive Plan on the same terms and
      conditions as set forth in the 1994 Plan or any form of stock option agreement
      evidencing such option under the 1994 Plan. This Plan, which amends and restates
      the previously amended and restated 1997 Employee Stock Incentive Plan, was
      adopted by the Board of Directors of the Company on May 17, 2007, and, subject
      to the provisions of Section 9 below, became effective as of such date.


     

    Section 2.    PERSONS
      ELIGIBLE UNDER PLAN 

     

    Each
      of
      the following persons (each, a “Participant”)
      shall
      be eligible to be considered for the grant of Awards (as hereinafter defined)
      hereunder: (1) any employee of the Company or any of its subsidiaries,
      including any director who is also such an employee, (2) any director of
      the Company or any of its subsidiaries who is not also an employee of the
      Company or any of its subsidiaries (a “Nonemployee
      Director”)
      and
      (3) any consultant of the Company or any of its subsidiaries. 

     

    Section 3.    AWARDS
      

     

    (a)
      The
      Committee (as hereinafter defined), on behalf of the Company, is authorized
      under this Plan to enter into any type of arrangement with a Participant that
      is
      not inconsistent with the provisions of this Plan and that, by its terms,
      involves or might involve the issuance of (i) shares of common stock of the
      Company (“Common
      Shares”)
      or
      (ii) a Derivative Security (as such term is defined in Rule l6a-1
      promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange
      Act”),
      as
      such rule may be amended from time to time) with an exercise or conversion
      privilege at a price related to the Common Shares or with a value derived from
      the value of the Common Shares. The entering into of any such arrangement is
      referred to herein as the “grant”
of
      an
“Award.”
      

    



    
      
         

      

      
        1

        
          

        

      

      
         

      

    


    (b)
      Awards are not restricted to any specific form or structure and may include,
      without limitation, sales or bonuses of stock, restricted stock, stock options,
      reload stock options, stock purchase warrants, other rights to acquire stock,
      securities convertible into or redeemable for stock, stock appreciation rights,
      phantom stock, dividend equivalents, performance units or performance shares,
      and an Award may consist of one such security or benefit, or two or more of
      them
      in tandem or in the alternative. 

     

    (c)
      Awards may be issued, and Common Shares may be issued pursuant to an Award,
      for
      any lawful consideration as determined by the Committee, including, without
      limitation, services rendered by the recipient of such Award. 

     

    (d)
      Subject to the provisions of this Plan, the Committee, in its sole and absolute
      discretion, shall determine all of the terms and conditions of each Award
      granted under this Plan, which terms and conditions may include, among other
      things 

     

    (i)
      a
      provision permitting the recipient of such Award, including any recipient who
      is
      a director or officer of the Company, to pay the purchase price of the Common
      Shares or other property issuable pursuant to such Award, in whole or in part,
      by any one or more of the following: 

     

    (A)
      the
      delivery of cash; 

     

    (B)
      the
      delivery of other property deemed acceptable by Committee; 

     

    (C)
      the
      delivery of previously owned shares of capital stock of the Company (including
      “pyramiding”) or other property, or 

     

    (D)
      a
      reduction in the amount of Common Shares or other property otherwise issuable
      pursuant to such Award. 

     

    (ii)
      a
      provision conditioning or accelerating the receipt of benefits pursuant to
      such
      Award, either automatically or in the discretion of the Committee, upon the
      occurrence of specified events, including, without limitation, a change of
      control of the Company (as defined by the Committee), as acquisition of a
      specified percentage of the voting power of the Company, the dissolution or
      liquidation of the Company, a sale of substantially all of the property and
      assets of the Company or an event of the type described in Section 7
      hereof, or 

     

    (iii)
      a
      provision required in order for such Award to qualify as an incentive stock
      option under Section 422 of the Internal Revenue Code (an “Incentive
      Stock Option”);
      provided,
      however
      that no
      Award issued to any consultant or any Nonemployee Director may qualify as an
      Incentive Stock Option. 

     

    (e)
      Neither an Award nor any interest therein may be sold, assigned, transferred,
      conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner
      other than by will or the laws of descent and distribution. Notwithstanding
      the
      foregoing, a Participant may, in a manner specified by the Committee, (a)
      transfer any Award other than an Incentive Stock Option to the Participant’s
      spouse, former spouse or dependent pursuant to a court-approved domestic
      relations order which relates to the provision of child support, alimony
      payments or marital property rights and (b) transfer any Award other than an
      Incentive Stock Option by bona fide gift and not for any consideration to (i)
      a
      member or members of the Participant’s immediate family, (ii) a trust
      established for the exclusive benefit of the Participant and/or member(s) of
      the
      Participant’s immediate family, (iii) a partnership, limited liability company
      of other entity whose only partners or members are the Participant and/or
      member(s) of the Participant’s immediate family or (iv) a foundation in which
      the Participant and/or member(s) of the Participant’s immediate family control
      the management of the foundation’s assets.


    
      
         

      

      
        2

        
          

        

      

      
         

      

    


     

    (f)
      All
      certificates evidencing Awards or Common Shares issued pursuant thereto shall
      bear any legend determined by the Board or the Committee to be necessary or
      appropriate. 

     

    Section 4.    STOCK
      SUBJECT TO PLAN 

     

    (a)
      At
      any time, the aggregate number of Common Shares issued and issuable pursuant
      to
      all Awards (including all Incentive Stock Options) granted under this Plan
      (including all Common Shares issued and issuable pursuant to all Awards granted
      under the 1994 Plan and this Plan prior to May 17, 2007) shall not exceed
      8,500,000 subject to adjustment as provided in Section 7 hereof. In the
      case of stock options and stock appreciation rights, the maximum number of
      Common Shares with respect to which options or rights may be granted to any
      person during a calendar year shall be 1,000,000 shares. 

     

    (b)
      For
      purposes of Section 4(a) hereof, the aggregate number of Common Shares
      issued and issuable pursuant to Awards granted under this Plan shall at any
      time
      be deemed to be equal to the sum of the following: 

     

    (i)
      the
      number of Common Shares that were issued prior to such time pursuant to Awards
      granted under this Plan, other than Common Shares that were subsequently
      reacquired by the Company pursuant to the terns and conditions of such Awards
      and with respect to which the holder thereof received no benefits of ownership
      such as dividends; plus 

     

    (ii)
      the
      number of Common Shares that were otherwise issuable prior to such time pursuant
      to Awards granted under this Plan, but that were withheld by the Company as
      payment of the purchase price of the Common Shares issued pursuant to such
      Awards; plus 

     

    (iii)
      the
      maximum number of Common Shares that are or may be issuable at or after such
      time pursuant to Awards granted under this Plan prior to such time.


     

    Section 5.    DURATION
      OF PLAN 

     

    No
      Awards
      shall be made under this Plan after May 16, 2017. Although Common Shares may
      be
      issued after May 16, 2017 pursuant to Awards made prior to such date, no Common
      Shares shall be issued under this Plan after May 16, 2027. 

     


    
      
         

      

      
        3

        
          

        

      

      
         

      

    


    Section 6.    ADMINISTRATION
      OF PLAN 

     

    (a)
      This
      Plan shall be administered by a committee (the “Committee”)
      of the
      Board of Directors of the Company (the “Board”)
      consisting of two or more directors, each of whom is an “outside director”
within the meaning of Section 162(m) of the Internal Revenue Code of 1986,
      as amended; and who otherwise comply with the requirements of Rule 16b-3;
      provided, however, that before the registration of the Common Shares under
      Section 12 of the Exchange Act, grants of Awards may, in the absence of action
      of the Committee, be made by the entire Board. 

     

    (b)
      Subject to the provisions of this Plan, the Committee shall be authorized and
      empowered to do all things necessary or desirable in connection with the
      administration of this Plan, including, without limitation, the following:
      

     

    (i)
      adopt, amend and rescind rules and regulations relating to this Plan;


     

    (ii)
      determine which persons are Participants and to which of such Participants,
      if
      any, Awards shall be granted hereunder; 

     

    (iii)
      grant Awards to Participants and determine the terms and conditions thereof
      including the number of Common Shares issuable pursuant thereto; 

     

    (iv)
      determine whether, and the extent to which adjustments are required pursuant
      to
      Section 7 hereof; 

     

    (v)
      interpret and construe this Plan and the tenors and conditions of any Award
      granted hereunder; and 

     

    (vi)
      certify in writing prior to payment of compensation that the performance goals
      and any other material terms of any Award were in fact satisfied. For this
      purpose, approved minutes of the Committee meeting in which the certification
      is
      made are treated as a written certification. 

     

    Section 7.    ADJUSTMENTS
      

     

    If
      the
      outstanding securities of the class then subject to this Plan are increased,
      decreased or exchanged for or converted into cash, property or a different
      number or kind of securities, or if cash, property or securities are distributed
      in respect of such outstanding securities, in either case as a result of a
      reorganization, merger, consolidation, recapitalization, restructuring,
      reclassification, dividend (other than a regular cash dividend) or other
      distribution, stock split, reverse stock split or the like, or if substantially
      all of the property and assets of the Company are sold, then, unless the terms
      of such transaction shall provide otherwise, the Committee shall make
      appropriate and proportionate adjustments in (i) the number and type of
      shares or other securities or cash or other property that may be acquired
      pursuant to Awards theretofore granted under this Plan and (ii) the maximum
      number and type of shares or other securities that may be issued pursuant to
      Awards thereafter granted under this Plan. 

     


    
      
         

      

      
        4

        
          

        

      

      
         

      

    


    Section 8.    AMENDMENT
      AND TERMINATION OF PLAN 

     

    The
      Board
      may amend or terminate this Plan at any time and in any manner, provided that
      no
      such amendment or termination shall deprive the recipient of any Award
      theretofore granted under this Plan, without the consent of such recipient,
      of
      any of his or her rights thereunder with respect thereto. 

     

    Section 9.    EFFECTIVE
      DATE OF PLAN 

     

    This
      Plan
      shall be effective as of May 17, 2007, the date upon which it was approved
      by
      the Board; provided, however that no Common Shares maybe issued under this
      Plan
      until it has been approved, directly or indirectly, by the affirmative votes
      of
      the holders of a majority of the securities of the Company present, or
      represented, and entitled to vote at a meeting duly held in accordance with
      the
      laws of the State of California. 

     

    Section 10.    GOVERNING
      LAW 

     

    This
      Plan
      and any Award granted hereunder shall be governed by and construed and enforced
      in accordance with the laws of the State of California without reference to
      choice or conflict of law principals. 

     


    
      
         

      

      
        5