ex4_3.htm


    
      
        

      

    

    
      EXHIBIT
        4.3

       

      EQUITY
        INCENTIVE PLAN

    

     

    1ST
      CENTURY BANCSHARES,
      INC.

     

    AMENDED
      AND RESTATED 2005 EQUITY
      INCENTIVE PLAN

     

    (Effective
      July 1,
      2005)

     

    1ST
      CENTURY BANCSHARES, INC.. (the “Company”), hereby adopts in its entirety the 1st
      Century Bancshares, Inc. 2005 Equity Incentive (“Plan”), effective as of July 1,
      2005 (“Plan Adoption Date”).  The Plan was approved by the
      shareholders of 1st Century Bancshares, Inc. on May 23, 2005, and was amended
      by
      the Board, on October 20, 2005, to delete Section 6 regarding stock appreciation
      rights and all other references to stock appreciation rights contained in the
      Plan. Unless otherwise defined, terms with initial capital letters are defined
      in Section 2 below.

     

     

    SECTION
      1

    BACKGROUND
      AND PURPOSE

     

    1.1           Background  The
      Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options,
      Performance Shares and Restricted Stock.

     

    1.2           Purpose
      of the
      Plan  The Plan is intended to attract, motivate and retain the
      following individuals:  (a) employees of the Company and its
      Affiliates; (b) consultants who provide significant services to the Company
      and
      its Affiliates and (c) directors of the Company who are employees of neither
      the
      Company nor any Affiliate.  The Plan is also designed to encourage
      stock ownership by such individuals, thereby aligning their interests with
      those
      of the Company’s shareholder.

     

     

    SECTION
      2

    DEFINITIONS

     

    The
      following words and phrases shall have the following meanings unless a different
      meaning is plainly required by the context:

     

    2.1           “1934
      Act” means the
      Securities Exchange Act of 1934, as amended.  Reference to a specific
      section of the 1934 Act shall include such section, any valid rules or
      regulations promulgated under such section, and any comparable provisions of
      any
      future legislation, rules or regulations amending, supplementing or superseding
      any such section, rule or regulation.

     

    2.2           “Administrator”
means,
      collectively the Board, and/or one or more Committees, and/or one or more
      executive officers of the Company designated by the Board to administer the
      Plan
      or specific portions thereof; provided, however, that Awards may not be made
      by
      executive officers.

     

    
      
        
          
          

        

        
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    2.3           “Affiliate”
means
      any
      corporation or any other entity (including, but not limited to, Subsidiaries,
      partnerships and joint ventures) controlling, controlled by, or under common
      control with the Company.

     

    2.4           “Applicable
      Law” means
      the legal requirements relating to the administration of Options, Performance
      Shares and Restricted Stock and similar incentive plans under any applicable
      laws, including but not limited to federal, state and foreign employment, labor,
      privacy and securities laws, the Code, and applicable rules and regulations
      promulgated by the NASDAQ, New York Stock Exchange, American Stock Exchange
      or
      the requirements of any other stock exchange or quotation system upon which
      the
      Shares may then be listed or quoted.

     

    2.5           “Award”
means,
      individually or collectively, a grant under the Plan of Nonqualified Stock
      Options, Incentive Stock Options, Restricted Stock and/or Performance
      Shares.

     

    2.6           “Award
      Agreement”
means the written agreement setting forth the terms and provisions applicable
      to
      each Award granted under the Plan, including the Grant Date.

     

    2.7           “Board”
or
“Board
      of Directors”
means the Board of Directors of the Company.

     

    2.8           “Change
      in Control”
means the occurrence of any of the following events:

     

    (a)           Any
      “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
      becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
      directly or indirectly, of securities of the Company representing fifty percent
      (50%) or more of the total voting power represented by the Company’s then
      outstanding voting securities;

     

    (b)           The
      consummation of the sale or disposition by the Company of all or substantially
      all of the Company’s assets;

    


    (c)           The
      consummation of a liquidation or dissolution of the Company;

    


    (d)           A
      change in the composition of the Board occurring within a two-year period,
      as a
      result of which fewer than a majority of the directors are Incumbent
      Directors.  “Incumbent Directors” means directors who either
      (A) are Directors as of the Plan Effective Date, or (B) are elected,
      or nominated for election, to the Board with the affirmative votes of at least
      a
      majority of the Directors at the time of such election or nomination (but will
      not include an individual whose election or nomination is in connection with
      an
      actual or threatened proxy contest relating to the election of Directors);
      or

    


    (e)           The
      consummation of a merger or consolidation of the Company with any other
      corporation, other than a merger or consolidation which would result in the
      voting securities of the Company outstanding immediately prior thereto
      continuing to represent (either by remaining outstanding or by being converted
      into voting securities of the surviving entity or its parent) at least fifty
      percent (50%) of the total voting power represented by the voting securities
      of
      the Company or such surviving entity or its parent outstanding immediately
      after
      such merger or consolidation.

    


    
      
        
          
          

        

        
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    2.9           “Code”
means
      the
      Internal Revenue Code of 1986, as amended.  Reference to a specific
      section of the Code or regulation thereunder shall include such section or
      regulation, any valid regulation promulgated under such section, and any
      comparable provision of any future legislation or regulation amending,
      supplementing or superseding such section or regulation.

     

    2.10         “Committee”
means
      any
      committee appointed by the Board of Directors to administer the Plan or any
      portion thereof that is composed entirely of Independent Directors.

     

    2.11         “Company”
means
      1st
      Century Bancshares, Inc. or any successor thereto.  With respect to
      the definitions of the Performance Goals, the Administrator may determine that
      “Company” means 1st Century Bancshares, Inc. and its consolidated
      Subsidiaries.

     

    2.12         “Consultant”
means
      any
      consultant, independent contractor or other person who provides significant
      services to the Company or its Affiliates, but who is neither an Employee nor
      a
      Director.

     

    2.13        
      "Continuous
      Status” as an Employee, Consultant or Director means that a Participant’s
      employment or service relationship with the Company or any Affiliate is not
      interrupted or terminated.  “Continuous Status
      as an
      Employee or Consultant” shall not be considered interrupted in the
      following cases: (i) any leave of absence approved by the Company or (ii)
      transfers between locations of the Company or between the Company and any
      Subsidiary or successor.  A leave of absence approved by the Company
      shall include sick leave, military leave or any other personal leave approved
      by
      an authorized representative of the Company.  For purposes of
      Incentive Stock Options, no leave of absence may exceed ninety (90) days, unless
      reemployment upon expiration of such leave is guaranteed by statute or
      contract.  If such reemployment is not so guaranteed, then on the one
      hundred eighty-first (181st) day of such leave any Incentive Stock Option held
      by the Participant shall cease to be treated as an Incentive Stock Option and
      shall be treated for tax purposes as a Nonqualified Stock
      Option.  “Continuous Status
      as a
      Director” means the absence of any interruption or termination of service
      as a Director.

     

    2.14         “Director”
means
      any
      individual who is a member of the Board of Directors of the
      Company.

     

    2.15         “Disability”
means
      a
      permanent and total disability within the meaning of Section 22(e)(3) of
      the Code, provided that in the case of Awards other than Incentive Stock
      Options, the Administrator in its discretion may determine whether a permanent
      and total disability exists in accordance with uniform and non-discriminatory
      standards adopted by the Administrator from time to time.

     

    2.16         “Employee”
means
      any
      individual who is a common-law employee of the Company or of an
      Affiliate.

     

    2.17         “Exercise
      Price” means
      the price at which a Share may be purchased by a Participant pursuant to the
      exercise of an Option.

     

    
      
        
          
          

        

        
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    2.18         “Fair
      Market Value”
means the market price of a Share on the relevant date, determined by
      the
      Committee as follows:

     

    


    
      	
               

            	
              (i)

            	
              If
                Share was traded on a stock exchange on the date in question, then
                the
                Fair Market Value shall be equal to the closing price reported by
                the
                applicable composite transactions report for such date;
                and

            


    

    


    
      	
               

            	
              (ii)

            	
              If
                Share was traded over-the-counter on the date in question and was
                traded
                on NASDAQ, then the Fair Market Value shall be equal to the
                last-transaction price quoted for such date by
                NASDAQ;

            


    

    


    
      	
               

            	
              (iii)

            	
              If
                none of the foregoing provisions is applicable, then the Fair Market
                Value
                shall be determined by the Committee in good faith on such basis
                as it
                deems reasonable.

            


    

    


    In
      all
      cases, the determination of Fair Market Value by the Committee shall be
      conclusive and binding on all persons.

     

    2.19         “Fiscal
      Year” means a
      fiscal year of the Company.

     

    2.20         “Grant
      Date” means
      with respect to an Award, the effective date an Award is granted.

     

    2.21         “Incentive
      Stock
      Option” means an Option to purchase Shares, which is designated as an
      Incentive Stock Option and is intended to meet the requirements of Section
      422
      of the Code.

     

    2.22         “Independent
      Director”
      means a Nonemployee Director who is (i) a “nonemployee director” within the
      meaning of Section 16b-3 of the 1934 Act, (ii) “independent” as determined under
      the applicable rules of the NASDAQ, and (iii) an “outside director” under
      Treasury Regulation Section 1.162-27(e)(3), as any of these definitions may
      be
      modified or supplemented from time to time.

     

    2.23         “Individual
      Objectives” means as to a Participant, the objective and measurable goals
      set by a “management by objectives” process and approved by the Administrator in
      its discretion.

     

    2.24         “Misconduct”
shall
      include commission of any act in competition with any activity of the Company
      (or any Affiliate) or any act contrary or harmful to the interests of the
      Company (or any Affiliate) and shall include, without
      limitation:  (a) conviction of a felony or crime involving moral
      turpitude or dishonesty, (b) violation of Company (or any Affiliate) policies,
      with or acting against the interests of the Company (or any Affiliate),
      including employing or recruiting any present, former or future employee of
      the
      Company (or any Affiliate), (c) misuse of any confidential, secret, privileged
      or non-public information relating to the Company's (or any Affiliate’s)
      business, or (e) participating in a hostile takeover attempt of the Company
      or
      an Affiliate.  The foregoing definition shall not be deemed to be
      inclusive of all acts or omissions that the Company (or any Affiliate) may
      consider as Misconduct for purposes of the Plan.

     

    2.25         “NASDAQ”
means
      The
      NASDAQ Stock Market, Inc.

     

    
      
        
          
          

        

        
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    2.26         “Nonemployee
      Director”
means a Director who is not employed by the Company or an
      Affiliate.

     

    2.27         “Nonqualified
      Stock
      Option” means an option to purchase Shares that is not intended to be an
      Incentive Stock Option.

     

    2.28         “Option”
means
      an
      Incentive Stock Option or a Nonqualified Stock Option.

     

    2.29         “Participant”
means
      an
      Employee, Consultant or Nonemployee Director who has an outstanding
      Award.

     

    2.30         “Performance
      Goals”
means the goal(s) (or combined goal(s)) determined by the Administrator
      (in its
      discretion) to be applicable to a Participant with respect to an
      Award.  As determined by the Administrator, the Performance Goals
      applicable to an Award may provide for a targeted level or levels of
      achievement, including without limitation goals tied to Individual Objectives
      and/or the Company’s (or a business unit’s) return on assets, return on
      shareholders’ equity, efficiency ratio, earnings per share, net income, or other
      financial measures determined in accordance with U.S. generally accepted
      accounting principles (“GAAP”), with or without adjustments determined by the
      Administrator.  The Performance Goals may differ from Participant to
      Participant and from Award to Award.

     

    2.31         “Performance
      Shares”
mean an Award granted to a Participant pursuant to Section 9 of the
      Plan that
      entitles the Participant to receive a prescribed number of Shares upon
      achievement of performance objectives associated with such Award.

     

    2.32        
      “Period of
      Restriction” means the period during which the transfer of Shares of
      Restricted Stock are subject to restrictions that subject the Shares to a
      substantial risk of forfeiture.  As provided in Section 7, such
      restrictions may be based on the passage of time, the achievement of Performance
      Goals, or the occurrence of other events as determined by the Administrator,
      in
      its discretion.

     

    2.33         “Plan”
means
      this 1st
      Century Bancshares, Inc. 2005 Equity Incentive Plan, as set forth in this
      instrument and as hereafter amended from time to time.

     

    2.34         “Restricted
      Stock”
means an Award granted to a Participant pursuant to Section 7.  An
      Award of Restricted Stock constitutes a transfer of ownership of Shares to
      a
      Participant from the Company subject to restrictions against transferability,
      assignment, and hypothecation.  Under the terms of the Award, the
      restrictions against transferability are removed when the Participant has met
      the specified vesting requirement.  Vesting can be based on continued
      employment over a stated service period, or on the attainment of specified
      performance goals.  If employment is terminated prior to vesting, the
      unvested restricted stock reverts back to the Company.

     

    2.35         “Retirement”
means
      the
      termination of employment pursuant to the Company's retirement policies for
      an
      Employee whose Continuous Status as an Employee was not interrupted during
      the
      previous five (5) years.

     

    
      
        
          
          

        

        
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    2.36         “Rule
      16b-3” means
      Rule 16b-3 promulgated under the 1934 Act, and any future regulation amending,
      supplementing or superseding such regulation.

     

    2.37         “SEC”
means
      the U.S.
      Securities and Exchange Commission.

     

    2.38         “Section
      16 Person”
means a person who, with respect to the Shares, is subject to Section
      16 of the
      1934 Act.

     

    2.39         “Shares”
means
      the
      shares of common stock of the Company.

     

    2.40         “Subsidiary”
means
      any
      corporation in an unbroken chain of corporations beginning with the Company
      if
      each of the corporations other than the last corporation in the unbroken chain
      then owns stock possessing fifty percent (50%) or more of the total combined
      voting power of all classes of stock in one of the other corporations in such
      chain.

     

     

    SECTION
      3

    ADMINISTRATION

     

    3.1           The
      Administrator.
      The Administrator shall be appointed by the Board of Directors from time to
      time.

     

    3.2           Authority
      of the
      Administrator.  It shall be the duty of the Administrator to
      administer the Plan in accordance with the Plan’s provisions and in accordance
      with Applicable Law.  The Administrator shall have all powers and
      discretion necessary or appropriate to administer the Plan and to control its
      operation, including, but not limited to, the power to make recommendations
      to
      the Board regarding the following: (a) which Employees, Consultants and
      Directors shall be granted Awards; (b) the terms and conditions of the
      Awards, (c) interpretation of the Plan, (d) adoption of such procedures and
      sub-plans as are necessary or appropriate to permit participation in the Plan
      by
      Employees and Directors who are foreign nationals or employed outside of the
      United States, (e) adoption of rules for the administration, interpretation
      and application of the Plan as are consistent therewith and
      (f) interpretation, amendment or revocation of any such rules.

     

    3.3           Delegation
      by the
      Administrator.  The Administrator, in its discretion and on
      such terms and conditions as it may provide, may delegate all or any part of
      its
      authority and powers under the Plan to one or more Directors; provided, however,
      that the Administrator may not delegate its authority and powers (a) with
      respect to Section 16 Persons or (b) in any way which would jeopardize the
      Plan’s qualification under Section 162(m) of the Code or Rule
      16b-3.

     

    3.4           Decisions
      Binding.  All determinations and decisions made by the
      Administrator, the Board and any delegate of the Administrator pursuant to
      the
      provisions of the Plan shall be final, conclusive and binding on all persons,
      and shall be given the maximum deference permitted by Applicable
      Law.

     

    
      
        
          
          

        

        
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    SECTION
      4

    SHARES
      SUBJECT TO THE PLAN

     

    4.1           Number
      of Shares.
      Subject to adjustment, as provided in Section 4.3, the total combined number
      of
      Shares and Performance Shares initially available for grant under the Plan
      shall
      be One Million Two Hundred Thousand (1,200,000). When any Award made under
      the
      Plan expires, or is forfeited or cancelled without the delivery of Shares,
      such
      Shares will become available for future Awards under the Plan.  Shares
      granted under the Plan may be authorized but unissued Shares or reacquired
      Shares bought on the market or otherwise.

     

    4.2           Lapsed
      Awards.  If an Award is cancelled, terminates, expires, or
      lapses for any reason, any Shares subject to such Award again shall be available
      to be the subject of an Award.

     

    4.3           Adjustments
      in Awards and
      Authorized Shares.  Except as provided under Section 4.3.1, and
      subject to the limitations of Section 10.6, in the event that any dividend
      or
      other distribution (whether in the form of cash, Shares, other securities,
      or
      other property), recapitalization, stock split, reverse stock split,
      reorganization, merger, consolidation, split-up, spin-off, combination,
      repurchase, or exchange of Shares or other securities of the Company, or other
      change in the corporate structure of the Company affecting the Shares occurs
      such that an adjustment is determined by the Administrator (in its discretion)
      to be appropriate in order to prevent dilution or enlargement of the benefits
      or
      potential benefits intended to be made available under the Plan, then the
      Administrator shall, in such manner as it may deem equitable, adjust the number
      and class of Shares which may be delivered under the Plan, the number, class,
      and price of Shares subject to outstanding Awards, and the numerical limits
      of
      Sections 8.1 and 10.6.  Notwithstanding the preceding, the number of
      Shares subject to any Award always shall be a whole number.

     

    4.3.1         Incentive
      Stock
      Options.  Except as provided in Sections 4.3.2, any adjustment
      to the maximum aggregate number of Shares to be issued through the exercise
      of
      Incentive Stock Options must be approved by shareholders within 12 months before
      or after the date a resolution is adopted by the Board of Directors to adjust
      the maximum aggregate number of Shares to be issued through the exercise of
      Incentive Stock Options.

    


    4.3.2        
      Increase to Reflect
      Outstanding Shares.  Any adjustment described in Section 4.3.1
      which merely reflects a change in the outstanding Shares, such as a stock
      dividend or stock split, will be effective without shareholder
      approval.

     

    4.4           Legal
      Compliance.  Awards and Shares shall not be issued pursuant to
      the making or exercise of an Award unless the exercise of Options and rights
      and
      the issuance and delivery of Shares shall comply with the California Financial
      Code, as amended, the 1934 Act and other Applicable Law, and shall be further
      subject to the approval of counsel for the Company with respect to such
      compliance.  Any Award made in violation hereof shall be null and
      void.

     

    4.5           Investment
      Representations. As a condition to the exercise of an Option or
      other right, the Company may require the person exercising such Option or right
      to represent and warrant at the time of exercise that the Shares are being
      acquired only for investment and without any present intention to sell or
      distribute such Shares if, in the opinion of counsel for the Company, such
      a
      representation is required.

    


    
      
        
          
          

        

        
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    SECTION
      5

    EMPLOYEE
      AND CONSULTANT STOCK OPTIONS

    


    The
      provisions of this Section 5 are
      applicable only to Options granted to Employees (including Directors who are
      also Employees) and Consultants. Such Participants shall also be eligible to
      receive other types of Awards as set forth in the Plan.

     

    5.1           Grant
      of
      Options.  Subject to the terms and provisions of the Plan,
      Options may be granted to Employees and Consultants at any time and from time
      to
      time as determined by the Administrator in its discretion.  The
      Administrator may grant Incentive Stock Options, Nonqualified Stock Options,
      or
      a combination thereof, and the Administrator, in its discretion and subject
      to
      Sections 4.1 and 10.6, shall determine the number of Shares subject to each
      Option.

     

    5.2           Award
      Agreement.  Each Option shall be evidenced by an Award
      Agreement that shall specify the Exercise Price, the expiration date of the
      Option, the number of Shares to which the Option pertains, any conditions to
      exercise the Option, and such other terms and conditions as the Administrator,
      in its discretion, shall determine.  The Award Agreement shall also
      specify whether the Option is intended to be an Incentive Stock Option or a
      Nonqualified Stock Option.

     

    5.3           Exercise
      Price.  The Administrator shall determine the Exercise Price
      for each Option subject to the provisions of this Section 5.3.

     

    5.3.1         Nonqualified
      Stock
      Options.  In the case of a Nonqualified Stock Option, the
      Exercise Price shall be determined by the Administrator, but in no case shall
      the per Share exercise price be less than one hundred percent (100%) of the
      Fair
      Market Value of a Share on the Grant Date.

     

    5.3.2         Incentive
      Stock
      Options.  The grant of Incentive Stock Options shall be subject
      to the following limitations:

     

    (a)           The
      Exercise Price of an Incentive Stock Option shall be not less than one hundred
      percent (100%) of the Fair Market Value of a Share on the Grant Date; provided,
      however, that if on the Grant Date, the Employee (together with persons whose
      stock ownership is attributed to the Employee pursuant to Section 424(d) of
      the
      Code) owns stock possessing more than 10% of the total combined voting power
      of
      all classes of stock of the Company or any of its Subsidiaries, the Exercise
      Price shall be not less than one hundred and ten percent (110%) of the Fair
      Market Value of a Share on the Grant Date;

    


    (b)           Incentive
      Stock Options may be granted only to persons who are, as of the Grant Date,
      Employees of the Company or a Subsidiary, and may not be granted to Nonemployee
      Directors or Consultants;

    


    (c)           To
      the extent that the aggregate Fair Market Value of the Shares with respect
      to
      which Incentive Stock Options are exercisable for the first time by the
      Participant during any calendar year (under all plans of the Company and any
      parent or Subsidiary) exceeds $100,000, such Options shall be treated as
      Nonstatutory Stock Options. For purposes of this Section 5.3.2(c), Incentive
      Stock Options shall be taken into account in the order in which they were
      granted. The Fair Market Value of the Shares shall be determined as of the
      time
      the Option with respect to such Shares is granted; and

    


    
      
        
          
          

        

        
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    (d)           In
      the event of an Participant's change of status from Employee to Consultant
      or
      Director, an Incentive Stock Option held by the Participant shall cease to
      be
      treated as an Incentive Stock Option and shall be treated for tax purposes
      as a
      Nonstatutory Stock Option three (3) months and one (1) day following such change
      of status.

     

    5.3.3        
      Substitute
      Options.  Notwithstanding the provisions of Sections 5.3.1 and
      5.3.2, in the event that the Company or an Affiliate consummates a transaction
      described in Section 424(a) of the Code (e.g., the acquisition of property
      or
      stock from an unrelated corporation), persons who become Employees, Directors
      or
      Consultants on account of such transaction may be granted Options in
      substitution for options granted by their former employer.  If such
      substitute Options are granted, the Administrator, in its discretion and
      consistent with Section 424(a) of the Code, may determine that such substitute
      Options shall have an exercise price of no less than eighty-five percent (85%)
      of the Fair Market Value of the Shares on the Grant Date.

     

    5.4           Expiration
      of
      Options

     

    5.4.1         Expiration
      Dates.  Each Option shall terminate no later than the first to
      occur of the following events:

     

    (a)           Date
      in Award
      Agreement. The date for termination of the Option set forth in the
      written Award Agreement; or

     

    (b)           Termination
      of Continuous
      Status as Employee or Consultant.  The last day of the three
      (3)-month period following the date the Participant ceases his/her Continuous
      Status as an Employee or Consultant (other than termination for a reason
      described in subsections (c), (d), (e), (f) or (g) below); or

     

    (c)           Misconduct.  In
      the event a Participant's Continuous Status as an Employee or Consultant
      terminates because the Participant has performed an act of Misconduct as
      determined by the Administrator, all unexercised Options held by such
      Participant shall expire five (5) business days following written notice from
      the Company to the Participant;

     

    (d)           Disability.  In
      the event that a Participant's Continuous Status as an Employee or Consultant
      terminates as a result of the Participant's Disability, the Participant may
      exercise his or her Option at any time within twelve (12) months from the date
      of such termination, but only to the extent that the Participant was entitled
      to
      exercise it at the date of such termination (but in no event later than the
      expiration of the term of such Option as set forth in the Award
      Agreement).  If, at the date of termination, the Participant is not
      entitled to exercise his or her entire Option, the Shares covered by the
      unexercisable portion of the Option shall revert to the Plan.  If,
      after termination, the Participant does not exercise his or her Option within
      the time specified herein, the Option shall terminate, and the Shares covered
      by
      such Option shall revert to the Plan; or

     

    
      
        
          
          

        

        
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    (e)           Death.
      In the event
      of the death of a Participant, the Option may be exercised at any time within
      twenty-four (24) months following the date of death (but in no event later
      than
      the expiration of the term of such Option as set forth in the Award Agreement),
      by the Participant's estate or by a person who acquired the right to exercise
      the Option by bequest or inheritance, but only to the extent that the
      Participant was entitled to exercise the Option at the date of death. If, at
      the
      time of death, the Participant was not entitled to exercise his or her entire
      Option, the Shares covered by the unexercisable portion of the Option shall
      immediately revert to the Plan. If, after death, the Participant's estate or
      a
      person who acquired 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 Shares covered by such Option shall revert to the Plan;
      or

     

    (f)           Retirement.  In
      the event that a Participant's Continuous Status as an Employee terminates
      as a
      result of the Participant's Retirement, the Participant may exercise his or
      her
      Option at any time subject to the limitations in the Plan and the Award
      Agreement, but only to the extent that the Participant was entitled to exercise
      the Option at the time of such termination, unless otherwise expressly provided
      in a written agreement between the Participant and the
      Company.  However, any Incentive Stock Options not exercised within
      three (3) months of the termination of the Participant's Continuous Status
      as an
      Employee shall be treated for tax purposes as Nonstatutory Stock Options three
      (3) months and one (1) day following such Retirement; or

     

    (g)           10
      Years from
      Grant.  Unless otherwise specified above, an Option shall
      expire no more than ten (10) years from the Grant Date; provided, however,
      that
      if an Incentive Stock Option is granted to an Employee who, together with
      persons whose stock ownership is attributed to the Employee pursuant to Section
      424(d) of the Code, owns stock possessing more than 10% of the total combined
      voting power of all classes of the stock of the Company or any of its
      Subsidiaries, such Incentive Stock Option may not be exercised after the
      expiration of five (5) years from the Grant Date.

     

    (h)           Change
      in
      Status.  In the event a Participant’s status has changed from
      Consultant to Employee, or vice versa, a Participant's Continuous Status as
      an
      Employee or Consultant shall not automatically terminate solely as a result
      of
      such change in status.

     

    (i)           Inadequate
      Capitalization.  Upon the direction of state or federal
      regulators, the Administrator may require the Participant’s to exercise all or a
      portion of their Options.  In such case, the Administrator shall
      provide written notice to each Participant directing immediate exercise of
      the
      Option identified in the written notice.  The notice shall provide
      each Participant with a copy of the declaration from the state or federal
      regulators directing the Company to effectuate the immediate exercise of
      Participant Options.  Upon receipt of this written notice from the
      Company, each Participant shall have thirty (30) days to exercise the identified
      Options that are subject to immediate exercise.  At the expiration of
      this thirty-day period, any Options that were identified in the written notice
      that remain unexercised shall be immediately canceled.

     

    
      
        
          
          

        

        
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    5.4.2        Administrator
      Discretion.  Subject to the limits of Section 5.4.1, the
      Administrator, in its discretion, (a) shall provide in each Award Agreement
      when
      each Option expires and becomes unexercisable, and (b) may, after an Option
      is
      granted, extend the maximum term of the Option (subject to limitations
      applicable to Incentive Stock Options).

     

    5.5           Exercisability
      of
      Options.  Options granted under the Plan shall be exercisable
      at such times and be subject to such restrictions and conditions as the
      Administrator shall determine in its discretion.  After an Option is
      granted, the Administrator, in its discretion, may accelerate the exercisability
      of the Option.

     

    5.6           Exercise
      and
      Payment.  Options shall be exercised by the Participant’s
      delivery of a written notice of exercise to the Secretary of the Company (or
      its
      designee), setting forth the number of Shares with respect to which the Option
      is to be exercised, accompanied by full payment for the Shares.

     

    5.6.1        Form
      of
      Consideration. Upon the exercise of any Option, the Exercise Price shall
      be payable to the Company in full in cash or its equivalent.  The
      Administrator, in its discretion, also may permit the same-day exercise and
      sale
      of Options and related Shares, or exercise by tendering previously acquired
      Shares having an aggregate Fair Market Value at the time of exercise equal
      to
      the total Exercise Price (such previously acquired Shares must have been held
      for the requisite period necessary to avoid a charge to the Company’s earnings
      for financial reporting purposes, unless otherwise determined by the
      Administrator), or by any other means which the Administrator, in its
      discretion, determines to provide legal consideration for the Shares, and to
      be
      consistent with the purposes of the Plan.

     

    5.6.2         Delivery
      of Shares.
      As soon as practicable after receipt of a written notification of exercise
      and
      full payment for the Shares purchased, the Company shall deliver to the
      Participant (or the Participant’s designated broker), Share certificates (which
      may be in book entry form) representing such Shares.

     

    SECTION
      6

    RESERVED

    


    
      
        
          
          

        

        
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    SECTION
      7

    RESTRICTED
      STOCK

     

    7.1           Grant
      of Restricted
      Stock.  Subject to the terms and provisions of the Plan, the
      Administrator, at any time and from time to time, may grant Shares of Restricted
      Stock to Employees, Directors and Consultants in such amounts as the
      Administrator, in its discretion, shall determine.  The Administrator,
      in its discretion and subject to Section 10.6, shall determine the number of
      Shares to be granted to each Participant.

     

    7.2           Restricted
      Stock
      Agreement.  Each Award of Restricted Stock shall be evidenced
      by an Award Agreement that shall specify the Period of Restriction, the number
      of Shares granted, and such other terms and conditions as the Administrator,
      in
      its discretion, shall determine.  Unless the Administrator determines
      otherwise, Shares of Restricted Stock shall be held by the Company as escrow
      agent until the restrictions on such Shares have lapsed.

     

    7.3           Transferability.  Except
      as provided in this Section 7, Shares of Restricted Stock may not be sold,
      transferred, pledged, assigned, or otherwise alienated or hypothecated until
      expiration of the applicable Period of Restriction.

     

    7.4           Other
      Restrictions.  The Administrator, in its discretion, may impose
      such other restrictions on Shares of Restricted Stock as it may deem advisable
      or appropriate, in accordance with this Section 7.4, including, without
      limitation, provisions relating to expiration of restrictions equivalent to
      the
      provisions relating to expiration of options as set forth in Section
      5.4.

     

    7.4.1         General
      Restrictions.  The Administrator may set restrictions based
      upon the achievement of specific performance objectives (Company-wide, business
      unit, or individual), or any other basis determined by the Administrator in
      its
      discretion.

     

    7.4.2         Section
      162(m) Performance
      Restrictions.  For purposes of qualifying grants of Restricted
      Stock as “performance-based compensation” under Section 162(m) of the Code, the
      Administrator, in its discretion, may set restrictions based upon the
      achievement of Performance Goals.  The Performance Goals shall be set
      by the Administrator on or before the latest date permissible to enable the
      Restricted Stock to qualify as “performance-based compensation” under Section
      162(m) of the Code.  In granting Restricted Stock which is intended to
      qualify under Section 162(m) of the Code, the Administrator shall follow any
      procedures determined by it from time to time to be necessary or appropriate
      to
      ensure qualification of the Restricted Stock under Section 162(m) of the Code
      (e.g., in determining the Performance Goals).

     

    7.4.3         Legend
      on
      Certificates.  The Administrator, in its discretion, may legend
      the certificates representing Restricted Stock to give appropriate notice of
      such restrictions.

     

    
      
        
          
          

        

        
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    7.5           Removal
      of
      Restrictions.  Except as otherwise provided in this Section 7,
      Shares of Restricted Stock covered by each Restricted Stock grant made under
      the
      Plan shall be released from escrow as soon as practicable after expiration
      of
      the Period of Restriction.  The Administrator, in its discretion, may
      accelerate the time at which any restrictions shall lapse or be
      removed.  After the restrictions have lapsed, the Participant shall be
      entitled to have any legend or legends under Section 7.4.3 removed from his
      or
      her Share certificate, and the Shares shall be freely transferable by the
      Participant, subject to Applicable Law.

     

    7.6           Voting
      Rights.  During the Period of Restriction, Participants holding
      Shares of Restricted Stock granted hereunder may exercise full voting rights
      with respect to those Shares, unless the Administrator determines
      otherwise.

     

    7.7           Dividends
      and Other
      Distributions.  During the Period of Restriction, Participants
      holding Shares of Restricted Stock shall be entitled to receive all dividends
      and other distributions paid with respect to such Shares unless otherwise
      provided in the Award Agreement.  If any such dividends or
      distributions are paid in Shares, the Shares shall be subject to the same
      restrictions on transferability and forfeitability as the Shares of Restricted
      Stock with respect to which they were paid.

     

    7.8           Return
      of Restricted Stock
      to Company.  On the date set forth in the Award Agreement, the
      Restricted Stock for which restrictions have not lapsed shall revert to the
      Company and again shall become available for grant under the Plan.

     

     

    SECTION
      8

    NONEMPLOYEE
      DIRECTOR AWARDS

    


    The
      provisions of this Section 8 are applicable only to Nonemployee
      Directors.

     

    8.1           Granting
      of
      Options

     

    8.1.1         Initial
      Grants.  Each Nonemployee Director who first becomes a
      Nonemployee Director on or after the Plan Effective Date  (excluding
      each Nonemployee Director whom, at the time he or she first becomes a Director,
      holds unvested options to purchase Shares or securities convertible or
      exchangeable for Shares as a result of such Outside Director’s service as a
      director of an Affiliate), shall be entitled to receive, as of the date that
      the
      individual first is appointed or elected as a Nonemployee Director, an Award
      of
      up to 1,000 Shares, or such lesser number of Shares as is allowed pursuant
      to
      Section 10.6.  Such Award may consist of a single type or any
      combination of the types of Awards permissible under this Plan, as determined
      from time to time by the Board as a whole.

     

    8.1.2         Ongoing
      Grants.  On the first trading day of February in each calendar
      year, each Nonemployee Director who has served as a Nonemployee Director for
      at
      least five months on that date shall be granted an Award of up to 750 Shares,
      or
      such lesser amount of Shares as is allowed pursuant to Section 10.6,
      provided that such Nonemployee Director is a member of the
      Board.   Such Award may consist of a single type or any
      combination of the types of Awards permissible under this Plan, as determined
      from time to time by the Board as a whole.

     

    
      
        
          
          

        

        
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    8.1.3         “Imputed
      Value.”  For purposes of Section 8.3 (as such section relates
      to Options), the “Imputed Value” of any Award shall mean the value as determined
      in accordance with Financial Accounting Standards Board Statement No. 123
      (revised 2004), “Accounting for Share-Based Compensation,” as the same may be
      amended from time to time.

     

    8.2           Terms
      of
      Options.

     

    8.2.1         Option
      Agreement.  A written Award Agreement between the Participant
      and the Company shall evidence each Option granted pursuant to this Section
      8.

     

    8.2.2         Exercise
      Price.  The Exercise Price for the Shares subject to each
      Option granted pursuant to this Section 8 shall be 100% of the Fair Market
      Value
      of such Shares on the Grant Date.

     

    8.2.3         Expiration
      of
      Options.  Each Option granted pursuant to this Section 8 shall
      terminate upon the first to occur of the following events:

     

    (a)           The
      date for termination of the Option set forth in the written Award Agreement;
      or

     

    (b)           The
      expiration of ten (10) years from the Grant Date; or

     

    (c)           The
      expiration of twelve (12) months from the date the Participant ceases Continuous
      Status as a Director for any reason other than the Participant’s death or
      Disability; or

     

    (d)           In
      the event that a Participant's Continuous Status as a Director terminates as
      a
      result of the Participant's Death or Disability, the Participant’s Option shall
      terminate in accordance with the provisions set forth in Section 5.4.1 (d)
      and
      (e), respectively; or

     

    (e)           In
      the event a Director receives written notice from the Company directing the
      immediate exercise of certain identified options in accordance with the
      provisions set forth in Section 5.4.1 (i), and such options remain unexercised
      at the expiration of the thirty-day period following the date the written notice
      is received.

     

    8.2.4         Nonqualified
      Stock Options
      Only.  No Incentive Options may be granted pursuant to this
      Section 8.

     

    8.2.5        Vesting
      and Other
      Terms.  Except as provided in Section 8.2.3, Options granted
      pursuant to this Section 8 shall become exercisable on terms and conditions
      determined by the Administrator in its sole discretion.  All other
      provisions of the Plan not inconsistent with this Section 8 shall also apply
      to
      Options granted to Nonemployee Directors.  In the event of any
      inconsistency between provisions set forth in Section 8 and those set forth
      elsewhere in the Plan as they relate to Options, the provisions of Section
      8
      shall govern with respect to Options granted to Nonemployee
      Directors.

     

    
      
        
          
          

        

        
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    8.2.6         Substitute
      Options.
      In the event that the Company or an Affiliate consummates a transaction
      described in section 424(a) of the Code (e.g., the acquisition of property
      or
      stock from an unrelated corporation), an individual who becomes a Nonemployee
      Director as a result of such transaction may be granted Options in substitution
      for options granted by the unrelated corporation.  If such substitute
      Options are granted, the Administrator, in its discretion and consistent with
      section 424(a) of the Code, shall determine the exercise price of such
      substitute Options.

     

    8.3           Elections
      by Nonemployee
      Directors.  Pursuant to such procedures as the Administrator
      (in its discretion) may adopt from time to time, each Nonemployee Director
      may
      elect to forego receipt of all or a portion of the annual retainer, committee
      fees and meeting fees otherwise due to the Nonemployee Director in exchange
      for
      an Award under this Plan.  The number of Shares subject to an Award
      received by any Nonemployee Director shall equal the amount of foregone
      compensation divided by the Fair Market Value of a Share on the date the
      compensation otherwise would have been paid to the Nonemployee Director, rounded
      up to the nearest whole number of Shares.  The number of Options
      granted shall be determined by dividing the cash amount foregone by the Imputed
      Value of the Options (as defined in Section 8.1.3), rounded up to the nearest
      whole number of Shares.  The procedures adopted by the Administrator
      for elections under this Section 8.3 shall be designed to ensure that any such
      election by a Nonemployee Director will not disqualify him or her as a
“nonemployee director” under Rule 16b-3.

     

     

    SECTION
      9

    PERFORMANCE
      SHARES

     

    9.1           Grant
      of Performance
      Shares.  Subject to the terms and conditions of the Plan,
      Performance Shares may be granted to Employees, Directors and Consultants at
      any
      time and from time to time, as shall be determined by the Administrator in
      its
      discretion.

     

    9.1.1         Number
      of Performance
      Shares.  The Administrator will have complete discretion in
      determining the number of Performance Shares granted to any Participant, subject
      to the limitations in Section 10.6.

     

    9.1.2         Value
      of Performance
      Shares.  Notwithstanding Section 8.1.3, each Performance Share
      will have an value equal to the Fair Market Value of a Share.

     

    9.2           Performance
      Objectives and
      Other Terms.  The Administrator will set performance objectives
      or other vesting provisions, including, without limitation, time-based vesting
      provisions, in its discretion which, depending on the extent to which they
      are
      met, will determine the number or value of Performance Shares that will be
      paid
      out to Participants.  The time period during which the performance
      objectives or other vesting provisions must be met will be called the
“Performance Period.”  Each Award of Performance Shares will be
      evidenced by an Award Agreement that will specify the Performance Period, and
      such other terms and conditions as the Administrator, in its discretion, will
      determine.  The Administrator may set performance objectives based
      upon the achievement of Company-wide or individual goals or any other basis
      determined by the Administrator in its discretion.

     

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    


    9.3           Earning
      of Performance
      Shares.  After the applicable Performance Period has ended, the
      holder of Performance Shares will be entitled to receive a payout of the number
      of Performance Shares earned by the Participant over the Performance Period,
      to
      be determined as a function of the extent to which the corresponding performance
      objectives or other vesting provisions have been achieved.  After the
      grant of a Performance Share, the Administrator, in its discretion, may reduce
      or waive any performance objectives or other vesting provisions for such
      Performance Share.

     

    9.4           Form
      and Timing of Payment
      of Performance Shares.  Payment of earned Performance Share
      will be made in Shares in equal value as soon as practicable after the
      expiration of the applicable Performance Period.

     

    9.5           Cancellation
      of Performance
      Shares.  On the date set forth in the Award Agreement, all
      unearned or unvested Performance Shares will be forfeited to the Company, and
      again will be available for grant under the Plan.

     

     

    SECTION
      10

    MISCELLANEOUS

     

    10.1          Change
      In
      Control

     

    10.1.1      Generally.  In
      the event of a Change in Control, unless an Award is assumed or substituted
      by
      the successor corporation, then (i) such Awards shall become fully exercisable
      as of the date of the Change in Control, whether or not then exercisable and
      (ii) all restrictions and conditions on any Award then outstanding shall lapse
      as of the date of the Change in Control.

     

    10.1.2       Options.  If
      the Administrator determines that Options will be assumed or an equivalent
      option or right substituted by the successor corporation or a parent or
      Subsidiary of the successor corporation, then

     

    (a)           In
      the event that the successor corporation refuses to assume or substitute for
      the
      Option, the Options held by such Participant shall immediately become one
      hundred percent (100%) exercisable.  In such event, the Company shall
      notify the Participant in writing or electronically that the Options are fully
      exercisable (subject to the consummation of the Change in Control) for a period
      of ninety (90) days from the date of such notice, and the Option shall terminate
      upon the expiration of such period.

     

    (b)           For
      the purposes of this Section 10.1.2, the Option shall be considered assumed
      if,
      following the Change in Control, the option confers the right to purchase or
      receive, for each Share subject to the Option immediately prior to the Change
      in
      Control, the consideration (whether stock, cash, or other securities or
      property) received in the Change in Control event by holders of Shares for
      each
      Share held on the closing date of the transaction (and if holders were offered
      a
      choice of consideration, the type of consideration chosen by the holders of
      a
      majority of the outstanding Shares); provided, however, that if such
      consideration received in the Change in Control is not solely common stock
      of
      the successor corporation or its parent, the Administrator or the Board may,
      with the consent of the successor corporation, provide for the consideration
      to
      be received upon the exercise of the Option, for each Share subject to the
      Option, to be solely common stock of the successor corporation or its parent
      equal in fair market value to the per share consideration received by holders
      of
      Shares in the Change in Control, as determined on the date of the Change in
      Control.

     

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

    


    10.1.3       Restricted
      Stock.  If the Administrator determines that any Company
      repurchase or reacquisition right with respect to outstanding Shares of
      Restricted Stock held by the Participant will be assigned to the successor
      corporation, then in the event that the successor corporation refuses to accept
      the assignment of any such Company repurchase or reacquisition right, such
      Company repurchase or reacquisition right will immediately lapse and the
      Participant will become one hundred percent (100%) vested in such Shares of
      Restricted Stock prior to the closing of the Change in Control
      event.

     

    10.1.4       Performance
      Shares.  If the Administrator determines that Performance
      Shares will be assumed or an equivalent option or right substituted by the
      successor corporation or a parent or Subsidiary of the successor corporation,
      then

     

    (a)           In
      the event that the successor corporation refuses to assume or substitute for
      the
      Performance Shares, 100% of all performance objectives will be deemed achieved
      and all other terms and conditions met.  In such event, payment of
      earned Performance Shares will be made as soon as practical in accordance with
      Section 9.4.

     

    (b)           For
      the purposes of this Section 10.1.4, the Performance Share shall be considered
      assumed if, following the Change in Control, the Performance Share confers
      the
      right to purchase or receive, for each Share subject to the Performance Share
      immediately prior to the Change in Control, the consideration (whether stock,
      cash, or other securities or property) received in the Change in Control by
      holders of Shares for each Share held on the effective date of the transaction
      (and if holders were offered a choice of consideration, the type of
      consideration chosen by the holders of a majority of the outstanding Shares);
      provided, however, that if such consideration received in the Change in Control
      is not solely common stock of the successor corporation or its parent, the
      Administrator or the Board may, with the consent of the successor corporation,
      provide for the consideration to be received upon the payout of a Performance
      Share, for each Share subject to such Award, to be solely common stock of the
      successor corporation or its parent equal in fair market value to the per share
      consideration received by holders of Shares in the Change in Control, as
      determined on the date of the Change in Control.  Notwithstanding
      anything in this Section 10.1.4 to the contrary, an Award that vests, is earned
      or paid-out upon the satisfaction of one or more performance goals will not
      be
      considered assumed if the Company or its successor modifies any of such
      performance goals without the Participant’s consent; provided, however, that a
      modification to such performance goals only to reflect the successor
      corporation’s post Change in Control corporate structure will not be deemed to
      invalidate an otherwise valid Award assumption.

     

    10.2          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.  The Administrator in its discretion may provide for a
      Participant to have the right to exercise his or her Award until ten (10) days
      prior to such transaction as to all of the Shares covered thereby, including
      Shares as to which the Award would not otherwise be exercisable. In addition,
      the Administrator may provide that any Company repurchase rights applicable
      to
      any Shares purchased upon exercise of an Award shall lapse as to all such
      Shares, provided the proposed dissolution or liquidation takes place at the
      time
      and in the manner contemplated.  To the extent it has not been
      previously exercised, an Award will terminate immediately prior to the
      consummation of such proposed action.

     

    
      
        
          
          

        

        
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    10.3          Deferrals.  The
      Administrator, in its discretion, may permit a Participant to defer the payment
      of Shares that would otherwise be due to such Participant under an
      Award.  Any such deferral elections shall be subject to such rules and
      procedures as shall be determined by the Administrator in its
      discretion.

     

    10.4          No
      Effect on Employment or
      Service.  Nothing in the Plan shall interfere with or limit in
      any way the right of the Company or an Affiliate to terminate any Participant’s
      employment or service at any time, with or without cause.  Unless
      otherwise provided by written contract, employment with the Company and its
      Affiliates is on an at-will basis only.  Additionally, the Plan shall
      not confer upon any Nonemployee Director any right with respect to continuation
      of service as a Director or nomination to serve as a Director, nor shall it
      interfere in any way with any rights which such Nonemployee Director or the
      Company may have to terminate his or her directorship at any time.

     

    10.5           Participation.  No
      Employee or Consultant shall have the right to be selected to receive an Award
      under this Plan, or, having been so selected, to be selected to receive a future
      Award.

     

    10.6          Limitations
      on
      Awards.  No Participant shall be granted an Award in any Fiscal
      Year representing more than the lesser of (i) ten percent (10%) of the Company’s
      total number of outstanding Shares immediately prior to the issuance of such
      Award or (ii) 928,000 Shares; provided, however, that such limitation shall
      be
      adjusted proportionately in connection with any change in the Company's
      capitalization as described in Section 4.3.

     

    10.7          Successors.  All
      obligations of the Company under the Plan, with respect to Awards granted
      hereunder, shall be binding on any successor to the Company, whether the
      existence of such successor is the result of a direct or indirect purchase,
      merger, consolidation or, otherwise, sale or disposition of all or substantially
      all of the business or assets of the Company.

     

    10.8          Beneficiary
      Designations.  If permitted by the Administrator, a Participant
      under the Plan may name a beneficiary or beneficiaries to whom any vested but
      unpaid Award shall be paid in the event of the Participant’s
      death.  Each such designation shall revoke all prior designations by
      the Participant and shall be effective only if given in a form and manner
      acceptable to the Administrator.  In the absence of any such
      designation, any vested benefits remaining unpaid at the Participant’s death
      shall be paid to the Participant’s estate and, subject to the terms of the Plan
      and of the applicable Award Agreement, any unexercised vested Award may be
      exercised by the administrator or executor of the Participant’s
      estate.

     

    10.9          Limited
      Transferability of
      Awards.  No Award granted under the Plan may be sold,
      transferred, pledged, assigned, or otherwise alienated or hypothecated, other
      than by will or by the laws of descent and distribution.  All rights
      with respect to an Award granted to a Participant shall be available during
      his
      or her lifetime only to the Participant.  Notwithstanding the
      foregoing, the Participant may, in a manner specified by the Administrator,
      (a) transfer a Nonqualified Stock Option to a 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 a Nonqualified 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 an/or member(s) of the
      Participant’s immediate family control the management of the foundation’s
      assets.

     

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

    


    10.10        Restrictions
      on Share
      Transferability.  The Administrator may impose such
      restrictions on any Shares acquired pursuant to the exercise of an Award as
      it
      may deem advisable, including, but not limited to, restrictions related to
      applicable federal securities laws, the requirements of any national securities
      exchange or system upon which Shares are then listed or traded or any blue
      sky
      or state securities laws.

     

    10.11        Buyout
      Provisions.
      The Administrator may at any time offer to buy out for a payment in cash or
      Shares, an Award previously granted based on such terms and conditions as the
      Administrator shall establish and communicate to the Participant at the time
      that such offer is made.

     

    10.12       No
      Rights as
      Shareholder.  Except to the limited extent provided in Sections
      7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the rights
      or privileges of a shareholder of the Company with respect to any Shares
      issuable pursuant to an Award (or exercise thereof), unless and until
      certificates representing such Shares shall have been issued, recorded on the
      records of the Company or its transfer agents or registrars, and delivered
      to
      the Participant (or beneficiary).

     

     

    SECTION
      11

    AMENDMENT,
      TERMINATION, AND DURATION; RE-PRICING PROHIBITED

     

    11.1          Amendment,
      Suspension, or
      Termination.  Except as provided in Section 11.2, the Board, in
      its sole discretion, may amend, suspend or terminate the Plan, or any part
      thereof, at any time and for any reason.  The amendment, suspension or
      termination of the Plan shall not, without the consent of the Participant,
      alter
      or impair any rights or obligations under any Award theretofore granted to
      such
      Participant.  No Award may be granted during any period of suspension
      or after termination of the Plan.

     

    11.2          No
      Amendment or Re-Pricing
      without Shareholder Approval. The Company shall obtain shareholder
      approval of any material Plan amendment (including but not limited to any
      provision to reduce the exercise or purchase price of any outstanding Options
      or
      other Awards after the Grant Date (other than for adjustments made pursuant
      Section 4.3), or to cancel and re-grant Options or other rights at a lower
      exercise price), to the extent necessary or desirable to comply with the rules
      of the NASDAQ, the Exchange Act, Section 422 of the Code, or other Applicable
      Law.

     

    
      
        
          
          

        

        
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    11.3          Plan
      Effective Date and
      Duration of Awards .  The Plan shall be effective as of the
      Plan Adoption Date subject to the shareholders of the Company approving the
      Plan
      by the required vote), subject to Sections 11.1 and 11.2 (regarding the Board’s
      right to amend or terminate the Plan), and shall remain in effect
      thereafter.  However, without further shareholder approval, no Award
      may be granted under the Plan more than ten (10) years after the Plan Adoption
      Date.

     

     

    SECTION
      12

    TAX
      WITHHOLDING

     

    12.1          Withholding
      Requirements.  Prior to the delivery of any Shares or cash
      pursuant to an Award (or exercise thereof), the Company shall have the power
      and
      the right to deduct or withhold, or require a Participant to remit to the
      Company, an amount sufficient to satisfy federal, state, and local taxes
      (including the Participant’s FICA obligation) required to be withheld with
      respect to such Award (or exercise thereof).

     

    12.2          Withholding
      Arrangements.  The Administrator, in its discretion and
      pursuant to such procedures as it may specify from time to time, may permit
      a
      Participant to satisfy such tax withholding obligation, in whole or in part
      by
      (a) electing to have the Company withhold otherwise deliverable Shares or (b)
      delivering to the Company already-owned Shares having a Fair Market Value equal
      to the minimum amount required to be withheld.  The amount of the
      withholding requirement shall be deemed to include any amount which the
      Administrator agrees may be withheld at the time the election is made, not
      to
      exceed the amount determined by using the maximum federal, state or local
      marginal income tax rates applicable to the Participant with respect to the
      Award on the date that the amount of tax to be withheld is to be
      determined.  The Fair Market Value of the Shares to be withheld or
      delivered shall be determined as of the date taxes are required to be
      withheld.

     

     

    SECTION
      13

    LEGAL
      CONSTRUCTION

     

    13.1          Liability
      of Company.
      The inability of the Company to obtain authority from any regulatory body having
      jurisdiction, which authority is deemed by the Company's counsel to be necessary
      to the lawful grant or any Award or the issuance and sale of any Shares
      hereunder, shall relieve the Company, its officers, Directors and Employees
      of
      any liability in respect of the failure to grant such Award or to issue or
      sell
      such Shares as to which such requisite authority shall not have been
      obtained.

     

    13.2          Grants
      Exceeding Allotted
      Shares. If the Shares covered by an Award exceed, as of the date of
      grant, the number of Shares, which may be issued under the Plan without
      additional shareholder approval, such Award shall be void with respect to such
      excess Shares, unless shareholder approval of an amendment sufficiently
      increasing the number of Shares subject to the Plan is timely
      obtained.

     

    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    


    13.3          Gender
      and
      Number.  Except where otherwise indicated by the context, any
      masculine term used herein also shall include the feminine; the plural shall
      include the singular and the singular shall include the plural.

     

    13.4          Severability.  In
      the event any provision of the Plan shall be held illegal or invalid for any
      reason, the illegality or invalidity shall not affect the remaining parts of
      the
      Plan, and the Plan shall be construed and enforced as if the illegal or invalid
      provision had not been included.

     

    13.5          Requirements
      of
      Law.  The granting of Awards and the issuance of Shares under
      the Plan shall be subject to all applicable laws, rules, and regulations, and
      to
      such approvals by any governmental agencies or national securities exchanges
      as
      may be required.

     

    13.6          Securities
      Law
      Compliance.  With respect to Section 16 individuals,
      transactions under this Plan are intended to comply with all applicable
      conditions of Rule 16b-3.  To the extent any provision of the Plan,
      Award Agreement or action by the Administrator fails to so comply, it shall
      be
      deemed null and void, to the extent permitted by law and deemed advisable by
      the
      Administrator.

     

    13.7          Governing
      Law.  The Plan and all Award Agreements shall be construed in
      accordance with and governed by the laws of the State of California

     

    13.8          Captions.  Captions
      are provided herein for convenience only, and shall not serve as a basis for
      interpretation or construction of the Plan.

    


    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    


    IN
      WITNESS WHEREOF, the Company, by its duly authorized officer, has executed
      this
      Plan on the date indicated below.

    


    
 

    


    
      	 	
              1ST
                CENTURY BANCSHARES, INC.

            	 
	 	 	 	 
	 	
              By:

            	 	 
	 	 	 	 
	 	
              Name:

            	
               Roman
                Khariton

            	 
	 	 	 	 
	 	
              Title:

            	
               AVP,
                Human Resources Manager

            	 
	 	 	 	 
	 	
              Date:

            	 	 


    

     

     

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