**Exhibit
      10.4**





**As
      Amended Effective April 30, 2001**








**99¢
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**1996
      STOCK OPTION PLAN**





**1.**
            **Purpose
                of the Plan.**





The
      primary purpose of this 1996 Stock Option Plan, as amended and restated (the
      “Plan”) is to provide incentives and rewards to selected eligible directors,
      officers, employees independent contractors and consultants of 99¢ Only Stores
      (the “Company”) or its subsidiaries in order to assist the Company and its
      subsidiaries in attracting, retaining and motivating those persons by providing
      for or increasing the proprietary interests of those persons in the Company,
      and
      by associating their interests in the Company with those of the Company’s
      shareholders.





**2.**
            **Administration
                of the Plan.**





The
      Plan
      shall be administered by a committee of the Board of Directors of the Company
      (the “Committee”) consisting of two or more directors, each of whom shall be
      both a “non-employee director,” as that term is defined in Rule 16b-3(b)(3)(i)
      of the Rules and Regulations (the “Rules”) of the Securities and Exchange
      Commission under the Securities Exchange Act of 1934, as amended, and an
“outside director” for purposes of Section 162(m) of the Internal Revenue Code
      of 1986, as amended (the “Code”) and the regulations of the Internal Revenue
      Service adopted thereunder, as such Rules and such Section and regulations
      may
      from time to time be amended or interpreted. Members of the Committee shall
      serve at the pleasure of the Board of Directors of the Company. The Committee
      may in its discretion act directly and/or, when and as authorized and permitted
      by law, through a designated officer/representative of the Management Committee.





The
      Committee shall have all the powers vested in it by the terms of the Plan,
      including exclusive authority (i) to select from among eligible directors,
      officers, employees and consultants, those persons to be granted “Awards” (as
      defined below) under the Plan; (ii) to determine the type, size and terms of
      individual Awards (which need not be identical and will likely vary from person
      to person) to be made to each person selected; (iii) to determine the time
      when
      Awards will be granted, and to establish objectives and conditions (including,
      without limitation, vesting and performance conditions), if any, for earning
      Awards, and whether Awards will be paid after the end of the Award period;
      (iv)
      to amend the terms or conditions of any outstanding Award, subject to applicable
      legal restrictions; (v) to determine the duration and purpose of leaves of
      absences which may be granted to holders of Awards without constituting
      termination of their employment for purposes of their Awards; (vi) to authorize
      any person to execute, on behalf of the Company, any instrument required to
      carry out the purposes of the Plan; and (vii) to make any and all other
      determinations which it determines to be necessary or advisable in the
      administration of the Plan. The Committee shall have full power and authority
      to
      administer and interpret the Plan and to adopt, amend and revoke such rules,
      regulations, agreements, guidelines and instruments for the administration
      of
      the Plan and for the conduct of its business as the Committee deems necessary
      or
      advisable. The Committee’s interpretation of the Plan, and all actions taken and
      determinations made by the Committee pursuant to the powers vested in it
      hereunder, shall be conclusive and binding on all parties concerned, including
      the Company, its shareholders, any participants in the Plan and any other
      employee of the Company or any of its subsidiaries, except that any plan
      participant shall have the right to appeal within 5 business days of notice
      or
      knowledge thereof by written notice to an executive officer of the Company)]
      any
      adverse decision made by the Committee to the full Board of
      Directors.


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**3.**
            **Persons
                Eligible under the Plan.**





Any
      person who is an officer, employee, independent contractor or consultant of
      the
      Company, or any of its subsidiaries (an “Employee”), including any member of the
      Board of Directors of the Company who is an Employee, shall be eligible to
      be
      considered for the grant of Awards under the Plan. Subject to the provisions
      of
      Section 5 hereof, members of the Board of Directors of the Company who are
      not
      employees (each a “non-employee Director”) shall be eligible to be considered
      for the grant of Awards under the Plan.





**4.**
            **Awards.**





*(a)*  *Common
      Stock and Derivative Security Awards.* Awards
      authorized under the Plan shall consist of any type of arrangement with an
      Employee that is not inconsistent with the provisions of the Plan and that,
      by
      its terms, involves or might involve or be made with reference to the issuance
      of (i) shares of the Common Stock, no par value, of the Company (the “Common
      Stock”) or (ii) a “derivative security” (as that term is defined in Rule
      16a-l(c) of the Rules, as the same may be amended from time to time) with an
      exercise or conversion price related to the Common Stock or with a value derived
      from the value of the Common Stock





*(b)*  *Types
      of Awards.* Awards
      are not restricted to any specified form or structure and may include, but
      need
      not be limited to, sales, bonuses and other transfers of stock, restricted
      stock, stock options, reload stock options, stock purchase warrants, other
      rights to acquire stock or securities convertible into or redeemable for stock,
      stock appreciation rights, phantom stock, dividend equivalents, performance
      units or performance shares, or any other type of Award which the Committee
      shall determine is consistent with the objectives and limitations of the Plan.
      An Award may consist of one such security or benefit, or two or more of them
      in
      tandem or in the alternative.





*(c)*  *Consideration.* Common
      Stock may be issued pursuant to an Award for any lawful consideration as
      determined by the Committee, including, without limitation, a cash payment,
      services rendered, or the cancellation of indebtedness.





*(d)*  *Guidelines.* The
      Committee may adopt, amend or revoke from time to time written policies that
      provide guidelines implementing the Plan. Such guidelines may include, but
      need
      not be limited to, the type, size and term of Awards to be made to participants
      and the conditions for payment of such Awards.





*(e)*  *Terms
      and Conditions.*  ** Subject
      to the provisions of the Plan, the Committee, in its sole and absolute
      discretion, shall determine all of the terms and conditions of each Award
      granted pursuant to the Plan, which terms and conditions may include, among
      other things:


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(i) any
      provision necessary for such Award to qualify as an incentive stock Option
      under
      Section 422 of the Code (an “Incentive Stock Option”);





(ii) 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
      Stock or other property issuable pursuant to such Award, or to pay such
      recipient’s tax withholding obligation with respect to such issuance, in whole
      or in part, by delivering previously owned shares of capital stock of the
      Company (including “pyramiding”) or other property, or by reducing the number of
      shares of Common Stock or the amount of other property otherwise issuable
      pursuant to such Award; or





(iii) a
      provision conditioning or accelerating the receipt of benefits pursuant to
      the
      Award, or terminating the 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, an 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 g of the Plan.





*(f)*  *Maximum
      Awards.* An
      employee may be granted multiple Awards under the Plan. However, notwithstanding
      any other provision of the Plan, the maximum number of shares of Common Stock
      with respect to which options or rights or other Awards may be granted under
      the
      Plan to any Employee during any fiscal year shall be 50,000, subject to
      adjustment as provided in Section 8 of the Plan.





*(g)*  *Suspension
      or Termination of Awards.*





If
      the
      Company or the Committee has reason to believe that an Employee who has received
      the grant of Awards under the Plan (each a “participant”) may have engaged in
      Detrimental Activity the Committee, directly or through any authorized officer
      of the Company acting on its behalf shall be entitled (but without prejudice
      to
      its right subsequently to terminate such Award, and/or such Participant’s
      service or employment, on the same or any other ground) to withhold the payment
      of proceeds from stock options exercised and/or to otherwise suspend the
      participant’s rights under any then outstanding Award for so long as reasonably
      necessary to enable an investigation to be undertaken. Any such investigation
      shall take no longer than sixty (60) days to complete. The Committee may cancel,
      rescind, suspend, withhold or otherwise terminate, limit or restrict any and
      all
      unexpired, unpaid, deferred or other Awards, whether vested or unvested, at
      any
      time if it determines that the participant, while employed by the Company,
      engaged or engages in any Detrimental Activity or otherwise is not in compliance
      with all applicable provisions of the Award Agreement and the Plan. (In
      addition, the Committee may also determine that no new or future stock option
      grants will be issued to such persons, and no future stock option exercises
      will
      be permitted by such persons.) In the event a participant engages or has engaged
      in Detrimental Activity prior to payment or delivery pursuant to an Award,
      exercise of any options may be refused if not already granted or, if already
      granted, may be rescinded prior to payment or delivery of the option proceeds
      to
      the plan participant.


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(i) For
      purposes of this Section 4(g), “Detrimental Activity” means


a)
      The
      willful or knowing disclosure to anyone outside the Company or its Affiliates,
      or the use in other than the Company's or a subsidiary’s business, without
      written authorization from the Company, of any confidential information or
      proprietary information, relating to the business of the Company or its
      subsidiaries, acquired by a participant prior to the participant's termination
      of service or employment;


b) Any
      attempt, directly or indirectly, to solicit, induce or hire (or the
      identification for solicitation, inducement or hire) any non-clerical employee
      of the Company or its subsidiaries to be employed by, or to perform services
      for, the participant or any person or entity with which the participant is
      associated (including, but not limited to, due to the participant's employment
      by, consultancy for, equity interest in, or creditor relationship with such
      person or entity) or any person or entity from which the participant receives
      direct or indirect compensation or fees as a result of such solicitation,
      inducement or hire (or the identification for solicitation, inducement or hire)
      without, in all cases, written authorization from the Company;





c) Any
      attempt, directly or indirectly, to induce any current or prospective employee,
      vendor, or customer of the Company or its subsidiaries to not comply with or
      to
      breach a contract with the Company or its subsidiaries;




d) Diversion
      of any opportunity available, offered or belonging to the Company for a plan
      participant’s private gain or benefit; or





e) Any
      other non-trivial conduct or act determined by the Committee in its reasonable
      discretion to be injurious, detrimental or prejudicial to any interest of the
      Company or its subsidiaries.




f)  Insubordination,
      dishonesty, deceit, the theft of any money, products, or other property or
      rights of or belonging to the Company, making or accepting any bribe, kick-back,
      favor or other inducement, the failure or refusal to comply or act consistent
      or
      in accordance with any material term of the Employee Handbook or the willful
      or
      knowing violation or disregard of Company policies or directives;
      or




g) With
      respect to a non-employee Director's termination of Directorship, “Cause” shall
      mean an act or failure to act that constitutes cause for removal of a director
      under applicable California law.


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Notwithstanding
      the above or anything in the Plan to the contrary, the Committee shall have
      the
      sole and absolute authority to construe and interpret the term “Detrimental
      Activity” and apply any provisions of the Plan relating to such
      term;





**5.**
            **Mandatory
                Grants to Non-Employee
                Directors.**




*(a)*  *Grants
      to Non-Employee Directors.* Notwithstanding any other provision of the Plan, the grant of Awards to
      non-employee Directors shall be subject to the following limitations of this
      Section 5:


(i)           
      Prior to
      the date of the first registration of an equity security of the Company under
      Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”),
      Non-Employee Directors shall be entitled to participate in the Plan and receive
      Awards to the same extent as Employees pursuant to Section 4 of the
      Plan.





(ii) following
      the date of the first registration of an equity security of the Company under
      Section 12 of the Exchange Act, each non-employee Director who is serving on
      the
      Board of Directors of the Company as of the date of each Annual Meeting of
      the
      Company’s Shareholders (or any Special Meeting in lieu of the Annual Meeting),
      shall receive a ten year Non-Statutory Option to purchase 3,000 shares of
      Stock;





(iv) (iii) all
      Stock
      Options granted to non-employee Directors under this Section 5 shall be
      exercisable at an exercise price equal to 100% of the fair market value of
      a
      share of Common Stock on the day preceding the Date of Grant. after an person
      has served continuously on the Board of Directors for five (5) years, once
      that
      person thereafter retires or resigns from the Board, or is otherwise no longer
      a
      member of the Board of Directors, upon the departure of the person from the
      Board of Directors, all stock options granted to such person and not previously
      exercised shall immediately vest and shall then be exercisable by such former
      Board member in equal one-third increments over the next three year period
      (one-third at any time during the first 365 days immediately following departure
      from the Board, the second third at any time during the following 365 days,
      and
      the final third at any time during the third 365 day period following departure
      from the Board.





*(b)*  *Prohibition
      of Other Grants to Non-Employee Directo* rs.
      Notwithstanding any other provisions in this Plan, the mandatory grants
      described in this Section 5 shall constitute the only grant of Awards under
      the
      Plan permitted to be made to non-employee Directors.





*(c)*  *Prohibition
      Against Certain Amendments.*  ** Notwithstanding
      any other provisions of this Plan, the provisions of this Section 5 shall not
      be
      amended more than once every six months, other than to comport with changes
      in
      the Internal Revenue Code, the Employee Retirement Income Security Act, or
      the
      rules thereunder.





**6.**
            **Shares
                of Common Stock Subject to the
                Plan**


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The
      aggregate number of shares of Common Stock that may be issued or issuable
      pursuit to all Awards under the Plan (including Awards in the form of Incentive
      Stock Options and Non- Statutory Options) shall not exceed an aggregate of
      2,500,000 shares of Common Stock, subject to adjustment as provided in Section
      8
      of the Plan. Shares of Common Stock subject to the Plan may consist, in whole
      or
      in part, of authorized and unissued shares or treasury shares. Any shares of
      Common Stock subject to an Award that for any reason expires or is terminated
      unexercised as to such shares shall again be available for issuance under the
      Plan. For purposes of this Section 6, the aggregate number of shares of Common
      Stock that may be issued at any time pursuant to Awards granted under the Plan
      shall be reduced by: (i) the number of shares of Common Stock previously issued
      pursuant to Awards granted under the Plan, other than shares of Common Stock
      subsequently reacquired by the Company pursuant to the terms and conditions
      of
      such Awards and with respect to which the holder thereof received no benefits
      of
      ownership, such as dividends; and (ii) the number of shares of Common Stock
      which were otherwise issuable pursuant to Awards granted under this Plan but
      which were withheld by the Company as payment of the purchase price of the
      Common Stock issued pursuant to such Awards or as payment of the recipient’s tax
      withholding obligation with respect to such issuance.





**7.**
            **Payment
                of Awards.**





The
      Committee shall determine the extent to which Awards shall be payable in cash
      (i.e., by check), shares of Common Stock or any combination thereof. The
      Committee may, upon request of a participant, determine that all or a portion
      of
      a payment to that participant under the Plan, whether it is to be made in cash,
      shares of Common Stock or a combination thereof, shall be deferred. Deferrals
      shall be for such periods and upon such terms as the Committee may determine
      in
      its sole discretion; provided however that no deferrals shall be made with
      respect to Awards granted pursuant to Section 5 of the Plan.





**8.**
            **Dilution
                and Other Adjustment.**





In
      the
      event of any change in the outstanding shares of the Common Stock or other
      securities then subject to the Plan by reason of any stock split, reverse stock
      split, stock dividend, recapitalization, merger, consolidation, combination
      or
      exchange of shares or other similar corporate change, or if the outstanding
      securities of the class then subject to the Plan are exchanged for or converted
      into cash, property or a different kind of securities, or if cash, property
      or
      securities are distributed in respect of such outstanding securities (other
      than
      a regular cash dividend), then, unless the terms of such transaction shall
      provide otherwise, such equitable adjustments shall be made in the Plan and
      the
      Awards thereunder (including, without limitation, 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 Incentive Stock Options and
      other Awards theretofore granted under the Plan, including, without limitation
      Awards granted under Section 5 of the Plan, (ii) the maximum number and type
      of
      shares or other securities that may be issued pursuant to Incentive Stock
      Options and other Awards thereafter granted under the Plan; and (iii) the
      maximum number of securities with respect to which Awards may thereafter be
      granted to any Employee in any fiscal year) as the Committee determines are
      necessary or appropriate, including, if necessary, any adjustments in the
      maximum number of shares referred to in Section 6 of the Plan. Such adjustments
      shall be conclusive and binding for all purposes of the Plan.


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**9.**
            **Miscellaneous
                Provisions.**





*(a)*  *Definitions.* As used
      herein, “subsidiary” means any current or future corporation which would be a
“subsidiary corporation,” as that term is defined in Section 425 of the Code, of
      the Company; and the term “or” means “and/or.”





*(b)*  *Conditions
      on Issuance.* Securities shall not be issued pursuant to Awards unless the grant and issuance
      thereof shall comply with all relevant provisions of law and the requirements
      of
      any securities exchange or quotation system upon which any securities of the
      Company are listed, and shall be further subject to approval of counsel for
      the
      Company with respect to such compliance. Inability of the Company to obtain
      authority from any regulatory body having jurisdiction, which authority is
      determined by Company counsel to be necessary to the lawful issuance and sale
      of
      any security or Award, shall relieve the Company of any liability in respect
      of
      the nonissuance or sale of such securities as to which requisite authority
      shall
      not have been obtained.





*(c)*  *Rights
      as Shareholder.* A
      participant under the Plan shall have no rights as a holder of Common Stock
      with
      respect to Awards hereunder, unless and until certificates for shares of such
      stock are issued to the participant .





*(d)*  *Assignment
      or Transfer.* No
      Awards under the Plan or any rights or interests therein shall be assignable
      or
      transferable by a participant except by will or the laws of descent and
      distribution. During the lifetime of a participant, Awards hereunder are
      exercisable only by, and payable only to, the participant .




*(e)*  *Agreements.* All
      Awards granted under the Plan shall be evidenced by written agreements in such
      form and containing such terms and conditions (not inconsistent with the Plan)
      as the Committee shall from time to time adopt.





*(f)*  *Withholding
      Taxes.* The
      Company shall have the right to deduct from all Awards hereunder paid in cash
      any federal, state, local or foreign taxes required by law to be withheld with
      respect to such awards and, with respect to awards paid in stock, to require
      the
      payment (through withholding from the participant’s salary or otherwise) of any
      such taxes. The obligation of the Company to make delivery of Awards in cash
      or
      Common Stock shall be subject to currency or other restrictions imposed by
      any
      government.





*(g)*  *No
      Rights to Award.* No
      Employee or other person shall have any right to be granted an Award under
      the
      Plan. Neither the Plan nor any action taken hereunder shall be construed as
      giving any Employee any right to be retained in the employ of the Company or
      any
      of its subsidiaries or shall interfere with or restrict in any way the rights
      of
      the Company or any of its subsidiaries, which are hereby reserved, to discharge
      the Employee at any time for any reason whatsoever or for no reason, in the
      Company’s sole and absolute discretion, with or without cause.


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*(h)*  *Costs
      and Expenses.* The
      costs and expenses of administering the Plan shall be borne by the Company
      and
      not charged to any Award nor to any Employee receiving an Award.





*(i)*  *Funding
      of Plan.* The Plan
      shall be unfunded. The Company shall not be required to establish any special
      or
      separate fund or to make any other segregation of assets to assure the payment
      of any Award under the Plan.





**10.**
            **Amendments
                and Termination.**





*(a)*  *Amendments.* The
      Committee may at any time terminate or from time to time amend the Plan in
      whole
      or in part, but, except as may be provided herein or in the Company’s other Plan
      documents and as may be permitted by applicable law, no such action shall
      materially adversely affect any participant’s rights or obligations with respect
      to any Awards theretofore made under the Plan. However, with the consent of
      the
      Employee affected, the Committee may amend outstanding agreements evidencing
      Awards under the Plan in a manner not inconsistent with the terms of the
      Plan.





*(b)*  *Shareholder
      Approval.* To the
      extent that Rule 16b-3 of the Rules, Section 422 of the Code, other applicable
      law, or the rules, regulations, procedures or listing agreement of any national
      securities exchange or quotation system, requires that any such amendment be
      approved by the shareholders of the Company, no such amendment shall be
      effective unless and until it is approved by the shareholders in such a manner
      and to such a degree as is required.





*(c)*  *Termination.* Unless
      the Plan shall theretofore have been terminated as above provided, the Plan
      (but
      not the awards theretofore granted under the Plan) shall terminate on and no
      awards shall be granted after March 19, 2006.





**11.**
            **Effective
                Date.**





The
      Plan
      is effective on March 19, 1996, the date on which it was adopted by the Board
      of
      Directors of the Company and the holders of the majority of the Common Stock
      of
      the Company. The Plan was amended effective May 12, 1998, which amendment is
      applicable to all grants made on or after such date (including those grants
      authorized on April 25, 1998). The Plan was further amended and restated
      effective April 30, 2001, which amendment is applicable to all grants that
      are
      outstanding as of the effective date and all subsequent grants that are made
      pursuant to the Plan, unless the Award Agreement specifically states
      otherwise.





**12.**
            **Governing
                Law.**





The
      corporate law of California shall govern issues related to the validity and
      issuance of Common Stock. Otherwise, the Plan and any agreements entered into
      thereunder shall be construed and governed by the laws of the State of
      California applicable to contracts made within, and to be performed wholly
      within, the State of California.




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