TEMECULA VALLEY BANCORP INC.
                            2004 STOCK INCENTIVE PLAN



      1. Purpose of the Plan. The purpose of this Temecula Valley Bancorp Inc.
Stock Incentive Plan is to offer certain Employees, Directors and Consultants
the opportunity to acquire a proprietary interest in the Company. Through the
Plan, the Company and its subsidiaries seek to attract, motivate and retain
highly competent persons. The success of the Company and its affiliates is
dependent upon the efforts of these persons. The Plan provides for the grant of
Options to purchase common stock. An Option granted under the Plan may be a
Non-Statutory Stock Option or an Incentive Stock Option, as determined by the
Administrator.

      2. Definitions. As used herein, the following definitions shall apply.

         "2004 Plan" or "Plan" shall mean the Temecula Valley Bancorp Inc. 2004
         Stock Incentive Plan, adopted as of March 24, 2004 by the Board of
         Directors, and as may be amended and restated from time to time.

         "Act" shall mean the Securities Act of 1933, as amended.

         "Administrator" shall mean the Board or any one of the Committees.

         "Affiliate" shall mean any parent or subsidiary (as defined in Sections
         424(e) and (f) of the Code) of the Company.

         "APB 25" shall mean Opinion 25 of the Accounting Principles Board, as
         amended, and any successor thereof.

         "Board" shall mean the Board of Directors of the Company.

         "Cause" shall have the meaning given to it under the Participant's
         employment agreement with the Company or Affiliate, or a policy of the
         Company or an Affiliate. If the Participant does not have an employment
         agreement or the employment agreement does not define this term, or if
         the Company or an Affiliate does not have a policy that defines this
         term, then Cause shall include malfeasance or gross misfeasance in the
         performance of duties or conviction of illegal activity in connection
         therewith or any conduct detrimental to the interests of the Company or
         an Affiliate which results in termination of the Participant's service
         with the Company or an Affiliate, as determined by the Administrator.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Committee" shall mean a committee appointed by the Board in accordance
         with Section 3 below.

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         "Common Stock" shall mean the common stock of the Company, no par
         value.

         "Company" shall mean Temecula Valley Bancorp Inc., a California
         corporation.

         "Consultant" shall mean any natural person who performs bona fide
         Services for the Company or an Affiliate as a consultant or advisor,
         excluding Employees and Non-Employee Directors and provided that the
         Services are not in connection with the offer or sale of securities in
         a capital raising transaction and do not directly or indirectly promote
         or maintain a market for the Company securities.

         "Date of Grant" shall mean the effective date as of which the
         Administrator grants an Option to an Optionee.

         "Director" shall mean a member of the Board.

         "Disability" shall mean total and permanent disability as defined in
         Section 22(e)(3) of the Code.

         "Employee" shall mean any individual who is a common-law employee of
         the Company or an Affiliate.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
         amended.

         "Exercise Price" shall mean the exercise price of a share of Optioned
         Stock.

         "Fair Market Value" shall mean, as of any date, the value of Common
         Stock determined as follows:

          (i)  If the Common Stock is listed on any established stock exchange
               or a national market system or an electronic bulletin board,
               including without limitation, The Nasdaq National Market, The
               Nasdaq SmallCap Market of The Nasdaq Stock Market or the
               Over-the-Counter Bulletin Board, its Fair Market Value shall be
               the closing sales price for such stock (or the closing
               representative bid, if no sales were reported) as quoted on such
               exchange or system for the last market trading day prior to the
               time of determination, as reported in The Wall Street Journal or
               such other source as the Administrator deems reliable;

          (ii) If the Common Stock is regularly quoted by a recognized
               securities dealer but selling prices are not reported, its Fair
               Market Value shall be the mean between the high bid and low asked
               prices for the Common Stock quoted by such recognized securities
               dealer on the last market trading day prior to the day of
               determination; or

          (iii) In the absence of an established market for the Common Stock,
               its Fair Market Value shall be determined, in good faith, by the
               Administrator.

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         "FASB" shall mean the Financial Accounting Standards Board.

         "Grantee" shall mean any person who is granted an Option.

         "Immediate Family" means any child, stepchild, grandchild, parent,
         stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
         son-in-law, daughter-in-law, brother-in-law or sister-in-law, and also
         includes adoptive relationships.

         "Incentive Stock Option" shall mean an Option intended to qualify as an
         incentive stock option within the meaning of Section 422 of the Code.

         "Mature Shares" shall mean Shares that had been held by the Participant
         for a meaningful period of time such as six months or such other period
         of time that is consistent with FASB's interpretation of APB 25.

         "Non-Employee Director" shall mean a non-employee member of the Board.

         "Non-Statutory Stock Option" shall mean an Option not intended to
         qualify as an Incentive Stock Option.

         "Notice of Stock Option Grant" shall mean the notice delivered by the
         Company to the Optionee evidencing the grant of an Option.

         "Option" shall mean a stock option granted pursuant to the Plan.

         "Option Agreement" shall mean a written agreement that evidences an
         Option in such form as the Administrator shall approve from time to
         time.

         "Optioned Stock" shall mean the Common Stock subject to an Option.

         "Optionee" shall mean any person who receives an Option.

         "Participant" shall mean an Optionee or a Grantee.

         "Rule 16b-3" shall mean Rule 16b-3 promulgated under the Exchange Act
         or any successor to Rule 16b-3.

         "Service" shall mean the performance of services for the Company (or
         any Affiliate) by an Employee, Director or Consultant, as determined by
         the Administrator in its sole discretion. Service shall not be
         considered interrupted in the case of: (i) a change of status (i.e.,
         from Employee to Consultant, Non-Employee Director to Consultant, or
         any other combination); (ii) transfers between locations of the Company
         or between the Company and any Affiliate; or (iii) a leave of absence
         approved by the Company or an Affiliate. A leave of absence approved by

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         the Company or an Affiliate shall include sick leave, military leave,
         or any other personal leave approved by an authorized representative of
         the Company or an Affiliate.

         "Service Provider" shall mean an Employee, Director or Consultant.

         "Share" shall mean a share of Common Stock.

         "Tax" or "Taxes" shall mean the federal, state, and local income,
         employment and excise tax liabilities incurred by the Participant in
         connection with his/her Options.

         "10% Shareholder" shall mean the owner of stock (as determined under
         Section 424(d) of the Code) possessing more than 10% of the total
         combined voting power of all classes of stock of the Company (or any
         Affiliate) on the Date of Grant, as applicable.

         "Termination Date" shall mean the date on which a Participant's Service
         terminates, as determined by the Administrator in its sole discretion.

      3. Administration of the Plan.

          (a)  Except as otherwise provided for below, the Plan shall be
               administered by (i) the Board or (ii) a Committee, which
               Committee shall be constituted to satisfy applicable laws. To the
               extent desirable to qualify transactions hereunder as exempt
               under Rule 16b-3, the transactions contemplated hereunder shall
               be structured to satisfy the requirements for exemption under
               Rule 16b-3.

          (b)  Powers of the Administrator. Subject to the provisions of the
               Plan and in the case of specific duties delegated by the
               Administrator, and subject to the approval of relevant
               authorities, including the approval, if required, of any stock
               exchange or national market system upon which the Common Stock is
               then listed, the Administrator shall have the authority, in its
               sole discretion:

               (i)  to determine the Fair Market Value of the Common Stock;

               (ii) to select the Service Providers to whom Options may, from
                    time to time, be granted under the Plan;

               (iii) to determine whether and to what extent Options are granted
                    under the Plan;

               (iv) to determine the number of Shares that pertain to each
                    Option;

               (v)  to approve the terms of the Option Agreements;

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               (vi) to determine the terms and conditions, not inconsistent with
                    the terms of the Plan, of any Option. Such terms and
                    conditions may include, but are not limited to, the Exercise
                    Price, the status of an Option (Non-Statutory Stock Option
                    or Incentive Stock Option), the time or times when Options
                    may be exercised, any vesting acceleration or waiver of
                    forfeiture restrictions, and any restriction or limitation
                    regarding any Option or the Shares relating thereto, based
                    in each case on such factors as the Administrator, in its
                    sole discretion, shall determine;

               (vii) to determine the method of payment of the Exercise Price;

               (viii) with the prior approval of a majority of the Non-Employee
                    Directors of the Administrator, reduce the Exercise Price of
                    any Option to the then current Fair Market Value if the Fair
                    Market Value of the Optioned Stock has declined since the
                    Date of Grant of such Option;

               (ix) to delegate to others responsibilities to assist in
                    administering the Plan;

               (x)  to construe and interpret the terms of the Plan, Option
                    Agreements and any other documents related to the Options;
                    and

               (xi) to interpret and administer the terms of the Plan to comply
                    with all Tax rules and regulations.

          (c)  Effect of Administrator's Decision. All decisions,
               determinations, and interpretations of the Administrator shall be
               final and binding on all Participants and any other holders of
               any Options. The Administrator's decisions and determinations
               under the Plan need not be uniform and may be made selectively
               among Participants whether or not such Participants are similarly
               situated.

          (d)  Liability. No member of the Administrator shall be personally
               liable by reason of any mistake of judgment made in good faith
               while acting in such capacity if he or she was acting within
               her/his authority as a member of the Administrator at the time of
               the mistake, and the Company shall indemnify and hold harmless
               each member of the Administrator and each other employee, officer
               or director of the Company to whom any duty or power relating to
               the administration or interpretation of the Plan may be allocated
               or delegated, against any cost or expense (including counsel
               fees) or liability (including any sum paid in settlement of a
               claim) arising out of any act or omission to act in connection
               with the Plan unless arising out of such person's own fraud or
               bad faith. The foregoing right of indemnification shall not be
               exclusive of any other rights of indemnification to which such
               persons may be entitled under the Company's Articles of
               Incorporation or Bylaws, as a matter of law, or otherwise, or any
               power the Company may have to indemnify them or hold them
               harmless. The Board shall make the determination if any such
               person shall be entitled to indemnification and such decision by
               the Board shall be made in good faith, final and binding.

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      4. Stock Subject To The Plan.

          (a)  Basic Limitation. The total number of Options under the Plan may
               not exceed 2,250,000, subject to the adjustments provided for in
               Section 8 of the Plan.

          (b)  Additional Shares. In the event that any outstanding Option
               expires or is canceled or otherwise terminated, the Shares that
               pertain to the unexercised Option shall again be available for
               the purposes of the Plan.

      5. Eligibility. The persons eligible to participate in the Plan shall be
limited to Employees, Directors and Consultants who have the potential to impact
the long-term success of the Company and/or its Affiliates and who have been
selected by the Administrator to participate in the Plan.

      6. Option Terms. Each Option shall be evidenced by an Option Agreement, in
the form approved by the Administrator and may contain such provisions as the
Administrator deems appropriate; provided, however, that each Option Agreement
shall comply with the terms specified below and shall be subject to all of the
other provisions of the Plan. Each Option Agreement evidencing an Incentive
Stock Option shall be subject to the following applicable provisions (except
ISOs if in conflict with Section 7) as well as Section 7 below.

          (a)  Exercise Price.

               (i)  The Exercise Price of an Incentive Stock Option shall be
                    determined by the Administrator but shall not be less than
                    100% of the Fair Market Value of a Share on the Date of
                    Grant of such Option, and the exercise price of a
                    Non-Statutory Stock Option shall not be less than 85% of the
                    Fair Market Value of a Share on the Date of Grant of such
                    Option.

               (ii) The consideration to be paid for the Shares to be issued
                    upon exercise of an Option, including the method of payment,
                    shall be determined by the Administrator and may consist
                    entirely of (A) cash, (B) check, (C) Mature Shares, or (D)
                    any combination of the foregoing methods of payment. The
                    Administrator may also permit Optionees, either on a
                    selective or aggregate basis, to simultaneously exercise
                    Options and sell the shares of Common Stock thereby
                    acquired, pursuant to a brokerage or similar arrangement,
                    approved in advance by the Administrator, and use the
                    proceeds from such sale as payment of part or all of the
                    exercise price of such shares. Notwithstanding the
                    foregoing, a method of payment may not be used if it causes
                    the Company to: (x) recognize compensation expense for

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                    financial reporting purposes; (y) violate Section 402 of the
                    Sarbanes-Oxley Act of 2002 or any regulations adopted
                    pursuant thereto; or (z) violate Regulation O, promulgated
                    by the Board of Governors of the Federal Reserve System, as
                    determined by the Administrator in its sole discretion.

          (b)  Vesting. Any Option granted hereunder shall be exercisable and
               shall vest at such times and under such conditions as determined
               by the Administrator and set forth in the Option Agreement, but
               in any event all Options granted to an Optionee who is not an
               officer, Director or Consultant of the Company shall vest at a
               rate of at least 20% per year over five years from the Date of
               Grant of the Option subject to reasonable conditions such as
               continued employment. An Option may not be exercised for a
               fraction of a Share and the Optionee shall receive cash in lieu
               thereof equal to the Fair Market Value of such fraction on the
               date of exercise.

          (c)  Term of Options. No Option shall have a term in excess of 10
               years measured from the Date of Grant of such Option.

          (d)  Procedure for Exercise. An Option shall be deemed to be exercised
               when written notice of such exercise has been given to the
               Administrator in accordance with the terms of the Option
               Agreement by the person entitled to exercise the Option and full
               payment of the applicable Exercise Price for the Share being
               exercised has been received by the Administrator. Full payment
               may, as authorized by the Administrator, consist of any
               consideration and method of payment allowable under Section
               (a)(iii) above in this Section. In the event of a cashless
               exercise, the broker shall not be deemed to be an agent of the
               Administrator.

          (e)  Effect of Termination of Service.

               (i)  Termination of Service. Upon termination of an Optionee's
                    Service, other than due to death, Disability, or Cause, the
                    Optionee may exercise his/her Option, but only on or prior
                    to the date that is three months following the Optionee's
                    Termination Date, and only to the extent that the Optionee
                    was entitled to exercise such Option on the Termination Date
                    (but in no event later than the expiration of the term of
                    such Option, as set forth in the Notice of Stock Option
                    Grant to the Option Agreement). If, on the Termination Date,
                    the Optionee is not entitled to exercise the Optionee's
                    entire Option, the Shares covered by the unexercisable
                    portion of the Option shall immediately revert to the Plan.
                    If, after termination of Service, the Optionee does not
                    exercise his/her Option within the time specified herein,
                    the Option shall terminate, and the Optioned Stock shall
                    immediately revert to the Plan.

               (ii) Disability of Optionee. In the event of termination of an
                    Optionee's Service due to his/her Disability, the Optionee
                    may exercise his/her Option, but only on or prior to the
                    date that is twelve months following the Termination Date,
                    and only to the extent that the Optionee was entitled to
                    exercise such Option on the Termination Date (but in no

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                    event later than the expiration date of the term of his/her
                    Option, as set forth in the Notice of Stock Option Grant to
                    the Option Agreement). To the extent the Optionee is not
                    entitled to exercise the Option on the Termination Date, the
                    Shares covered by the unexercisable portion of the Option
                    shall immediately revert to the Plan. If, after Termination
                    of Service due to Disability, the Optionee does not exercise
                    the Option to the extent so entitled within the time
                    specified herein, the Option shall terminate, and the
                    Optioned Stock shall immediately revert to the Plan.

               (iii) Death of Optionee. In the event that an Optionee should die
                    while in Service, the Optionee's Option may be exercised by
                    the Optionee's estate or by a person who has acquired the
                    right to exercise the Option by bequest or inheritance, but
                    only on or prior to the date that is twelve months following
                    the date of death, and only to the extent that the Optionee
                    was entitled to exercise the Option at the date of death
                    (but in no event later than the expiration date of the term
                    of his/her Option, as set forth in the Notice of Stock
                    Option Grant to the Option Agreement). If, at the time of
                    death, the Optionee was not entitled to exercise his/her
                    entire Option, the Shares covered by the unexercisable
                    portion of the Option shall immediately revert to the Plan.
                    If after death, the Optionee's estate or a person who
                    acquires 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
                    Optioned Stock shall immediately revert to the Plan.

               (iv) Cause. In the event of termination of an Optionee's Service
                    due to Cause, the Optionee's Options shall terminate on the
                    Termination Date.

               (v)  To the extent that the Company does not violate Section 402
                    of the Sarbanes-Oxley Act of 2002 or any regulations adopted
                    pursuant thereto or Regulation O, promulgated by the Board
                    of Governors of the Federal Reserve System (as determined by
                    the Administrator in its sole discretion), the Administrator
                    shall have complete discretion, exercisable either at the
                    time an Option is granted or at any time while the Option
                    remains outstanding, to:

                    (A)  extend the period of time for which the Option is to
                         remain exercisable following the Optionee's cessation
                         of Service from the limited exercise period otherwise
                         in effect for that Option to such greater period of
                         time as the Administrator shall deem appropriate, but
                         in no event beyond the expiration of the Option term;
                         and/or

                    (B)  permit the Option to be exercised, during the
                         applicable post-Service exercise period, not only with
                         respect to the number of vested Shares for which such

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                         Option is exercisable at the time of the Optionee's
                         cessation of Service but also with respect to one or
                         more additional installments in which the Optionee
                         would have vested had the Optionee continued in
                         Service.

          (f)  Shareholder Rights. Until the issuance (as evidenced by the
               appropriate entry on the books of the Company or of a duly
               authorized transfer agent of the Company) of the stock
               certificate evidencing such Shares, no right to vote or receive
               dividends or any other rights as a shareholder shall exist with
               respect to the Optioned Stock, notwithstanding the exercise of
               the Option. The Company shall issue (or cause to be issued) such
               certificate promptly upon exercise of the Option. No adjustment
               will be made for a dividend or other right for which the record
               date is prior to the date the stock certificate is issued, except
               as provided in Section 8 below.

          (g)  Non-transferability of Options. Options may not be sold, pledged,
               assigned, hypothecated, transferred, or disposed of in any manner
               other than by will, by the laws of descent and distribution, by
               instrument to an inter vivos or testamentary trust in which
               Options are to be passed to beneficiaries upon the death of the
               trustor (settler) or by gift to Immediate Family. Notwithstanding
               the immediately preceding sentence, Incentive Stock Option
               transfers may be limited by the Administrator in order to comply
               with the Code and shall be further limited, if necessary, so that
               neither the transfer of an Option other than an Incentive Stock
               Option to such Immediate Family, nor the ability of a Optionee to
               make such a transfer shall have adverse consequences to the
               Company or the Optionee by reason of Section 162(m) of the Code.

          (h)  10% Shareholder. If any Grantee to whom an Option is granted is a
               10% Shareholder on the Date of Grant, then the Exercise Price
               shall not be less than 110% of the Fair Market Value of a Share
               on the Date of Grant of such Option.

      7. Incentive Stock Options. The terms specified below shall be applicable
to all Incentive Stock Options, and these terms shall, as to such Incentive
Stock Options, supercede any conflicting terms in Section 6 above. Options which
are specifically designated as Non-Statutory Stock Options when issued under the
Plan shall not be subject to the terms of this Section.

          (a)  Eligibility. Incentive Stock Options may only be granted to
               Employees.

          (b)  Exercise Price. The Exercise Price of an Incentive Stock Option
               shall not be less than 100% of the Fair Market Value of a Share
               on the Date of Grant of such Option, except as otherwise provided
               for in Subsection (d) below.

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          (c)  Dollar Limitation. In the case of an Incentive Stock Option, the
               aggregate Fair Market Value of the Optioned Stock (determined as
               of the Date of Grant of each Option) with respect to Options
               granted to any Employee under the Plan (or any other option plan
               of the Company or any Affiliate) that may for the first time
               become exercisable as Incentive Stock Options during any one
               calendar year shall not exceed the sum of $100,000. To the extent
               the Employee holds two or more such Options which become
               exercisable for the first time in the same calendar year, the
               foregoing limitation on the exercisability of such Options as
               Incentive Stock Options shall be applied on the basis of the
               order in which such Options are granted. Any Options in excess of
               such limitation shall automatically be treated as Non-Statutory
               Stock Options.

          (d)  Option Term for 10% Shareholder. The Option term of an Incentive
               Stock Option granted to a 10% Shareholder shall not exceed five
               years measured from the Date of Grant of such Option.

          (e)  Change in Status. In the event of an Optionee's change of status
               from Employee to Consultant or to Non-Employee Director, an
               Incentive Stock Option held by the Optionee shall cease to be
               treated as an Incentive Stock Option and shall be treated for tax
               purposes as a Non-Statutory Stock Option three months and one day
               following such change of status.

          (f)  Approved Leave of Absence. If an Optionee is on an approved leave
               of absence, and the Optionee's reemployment upon expiration of
               such leave is not guaranteed by statute or contract, including
               Company policies, then on the 91st day of such leave any
               Incentive Stock Option held by the Optionee shall cease to be
               treated as an Incentive Stock Option and shall be treated for tax
               purposes as a Non-Statutory Stock Option.

      8. Adjustments

          (a)  Recapitalization, Etc. If the outstanding Common Stock is
               hereafter increased or decreased, or changed into or exchanged
               for a different number or kind of shares or other securities of
               the Company or of another corporation, by reason of a
               recapitalization, reclassification, reorganization, merger,
               consolidation, share exchange or other business combination in
               which the Company is the surviving parent corporation, stock
               split-up, combination of shares or dividend or other distribution
               payable in capital stock or rights to acquire capital stock,
               appropriate adjustment shall be made by the Administrator in the
               number and kind of shares for which Options may be granted under
               the Plan. In addition, the Administrator shall make appropriate
               adjustment in the number and kind of shares as to which
               outstanding and unexercised Options shall be exercisable, to the
               end that the proportionate interest of the holder of the Option
               shall, to the extent practicable, be maintained as before the
               occurrence of the event. The adjustment in outstanding Options
               shall be made without change in the total price applicable to the
               unexercised portion of the Option but with a corresponding
               adjustment in the exercise price per share.

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          (b)  Reorganization. Upon a Reorganization (as hereinafter defined):

               (i)  If there is no plan or agreement with respect to the
                    Reorganization ("Reorganization Agreement"), or if the
                    Reorganization Agreement does not specifically provide for
                    the adjustment, change, conversion, or exchange of the
                    outstanding and unexercised Options for cash or other
                    property or securities of another corporation, then any
                    outstanding and unexercised Options shall terminate as of a
                    future date to be fixed by the Administrator; or

               (ii) If there is a Reorganization Agreement, and the
                    Reorganization Agreement specifically provides for the
                    adjustment, change, conversion or exchange of the
                    outstanding and unexercised Options for cash or other
                    property or securities of another corporation, then the
                    Administrator shall adjust the shares under the outstanding
                    and unexercised Options, and shall adjust the shares
                    remaining under the Plan which are then available for the
                    issuance of Options under the Plan if the Reorganization
                    Agreement makes specific provisions therefor, in a manner
                    not inconsistent with the provisions of the Reorganization
                    Agreement for the adjustment, change, conversion, or
                    exchange of the Options and shares.

          (c)  Reorganization Defined. The term "Reorganization" as used in this
               Section 8 means any reorganization, merger, consolidation, share
               exchange or other business combination pursuant to which the
               Company is not the surviving parent corporation after the
               effective date of the Reorganization, or any sale or lease of all
               or substantially all of the assets of the Company. Nothing herein
               shall require the Company to adopt a Reorganization Agreement, or
               to make provision for the adjustment, change, conversion, or
               exchange of any Options or the shares subject thereto, in any
               Reorganization Agreement that it does adopt.

          (d)  Notice to Optionees. The Administrator shall provide to each
               Optionee then holding an outstanding and unexercised Option not
               less than 30 calendar days' advanced written notice of any date
               fixed by the Administrator pursuant to this Section 8 and of the
               terms of any Reorganization Agreement providing for the
               adjustment, change, conversion, or exchange of outstanding and
               unexercised Options. Except as the Administrator may otherwise
               provide, each Optionee shall have the right during that period to
               exercise his or her Option only to the extent that the Option was
               exercisable on the date the notice was provided to the Optionee.

          (e)  Adjustment Must Conform. Any adjustment to any outstanding ISO
               pursuant to this Section 8, if made by reason of a transaction
               described in Section 424(a) of the Code, shall be made so as to
               conform to the requirements of that Section and the regulations
               thereunder. If any other transaction described in Section 424(a)

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               of the Code affects the Common Stock subject to any unexercised
               ISO theretofore granted under the Plan ("old option"), the Board
               or the board of directors of any surviving or acquiring
               corporation may take such action as it deems appropriate, in
               conformity with the requirements of that Code Section and the
               regulations thereunder, to substitute a new option for the old
               option, in order to make the new option, as nearly as may be
               practicable, equivalent to the old option, or to assume the old
               option.

          (f)  No Modification. No modification, extension, renewal, or other
               change in any Option granted under the Plan may be made, after
               the grant of the Option, without the Optionee's consent, unless
               it is permitted by the provisions of the Plan and the option
               agreement. In the case of an ISO, Optionees are hereby advised
               that certain changes may disqualify the ISO from being considered
               as such under Section 422 of the Code, or constitute a
               modification, extension, or renewal of the ISO under Section
               424(h) of the Code.

          (g)  Good Faith of the Administrator. All adjustments and
               determinations under this Section 8 shall be made by the
               Administrator in good faith in its sole discretion.

          (h)  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. In such event, the
               Administrator, in its discretion, may provide for a Participant
               to fully vest in his/her Option. To the extent it has not been
               previously exercised, an Option will terminate upon dissolution
               or liquidation of the Company.

      9. Cancellation and Regrant of Options. The Administrator shall have the
authority to effect, at any time and from time to time, with the consent of the
affected Optionee, the cancellation of any or all outstanding Options and to
grant in substitution new Options covering the same or a different number of
Shares but with an Exercise Price per Share based on the Fair Market Value per
Share on the new Date of Grant of the Option. For purposes of Section 4 hereof,
Shares underlying any Option cancelled by the Company in such exchange shall be
available for issuance under the Plan; furthermore, except with respect to a
Participant subject to Section 162(m) of the Code, a grant of any Option to a
Participant pursuant to such exchange shall be disregarded for purposes of
determining whether such Participant has exceeded any limitations hereunder
limiting the amount of any type of Option or aggregate amount of Options that
may be granted to a Participant (except to the extent the number of Shares
underlying such Options exceeds the number of Shares underlying the
Participant's cancelled Options).

      10. Information to Holders of Options. The Company shall provide to each
Optionee, on an annual basis, the information required by Section 260.140.46,
Title 10 of the California Code of Regulations and any successor law or
regulation.

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      11. Tax Withholding.

          (a)  For corporate purposes, the Company's obligation to deliver
               Shares upon the exercise of Options under the Plan shall be
               subject to the satisfaction of all applicable federal, state and
               local income and employment tax withholding requirements.

          (b)  To the extent permitted under Section 402 of the Sarbanes-Oxley
               Act of 2002 and the regulations adopted pursuant thereto, the
               Administrator may, in its discretion, provide any or all holders
               of Non-Statutory Stock Options with the right to use previously
               vested Shares in satisfaction of all or part of the Taxes
               incurred by such holders in connection with the exercise of their
               Non-Statutory Stock Options, provided, however, that this form of
               payment shall be limited to the withholding amount calculated
               using the minimum statutory rates. Such right may be provided to
               any such holder as follows: The election to have the Company
               withhold, from the Shares otherwise issuable upon the exercise of
               such Non-Statutory Stock Option, a portion of those Shares with
               an aggregate Fair Market Value equal to the Taxes calculated
               using the minimum statutory withholding rates interpreted in
               accordance with APB 25 and FASB Interpretation No. 44.

      12. Effective Date and Term of the Plan. The Plan was adopted by the Board
on March 24, 2004, and shall become effective on the date of its approval by the
Company's shareholders. Unless sooner terminated by the Administrator, the Plan
shall continue until March 24, 2014. When the Plan terminates, no Options shall
be granted under the Plan thereafter. The termination of the Plan shall not
affect any Option previously granted under the Plan.

      13. Time of Granting Options. The Date of Grant of an Option shall, for
all purposes, be the date on which the Administrator makes the determination to
grant such Option, or such other date as determined by the Administrator;
provided, however, that any Option granted prior to the date on which the Plan
is approved by the Company's shareholders shall be subject to the shareholders'
approval of the Plan. Notice of the determination shall be given to each Service
Provider to whom an Option is so granted within a reasonable period of time
after the date of such grant.

      14. Amendment and Termination of the Plan.

          (a)  Amendment and Termination. The Board may at any time amend,
               alter, suspend, or discontinue the Plan, but no amendment,
               alteration, suspension, or discontinuation shall be made which
               would impair the rights of any Participant under any grant
               theretofore made without his/her consent. In addition, to the
               extent necessary and desirable to comply with Section 422 of the
               Code (or any other applicable law or regulation, including the
               requirements of any stock exchange or national market system upon
               which the Common Stock is then listed), the Company shall obtain
               shareholder approval of any Plan amendment in such a manner and
               to such a degree as required.

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          (b)  Effect of Amendment and Termination. Any such amendment or
               termination of the Plan shall not affect Options already granted,
               and such Options shall remain in full force and effect as if this
               Plan had not been amended or terminated, unless mutually agreed
               otherwise between the Participant and the Board, which agreement
               must be in writing and signed by the Participant and the Company.

      15. Regulatory Approvals.

          (a)  The implementation of the Plan, the granting of any Options and
               the issuance of any Shares upon the exercise of any granted
               Options shall be subject to the Company's procurement of all
               approvals and permits required by regulatory authorities having
               jurisdiction over the Plan, the Options granted under it, and the
               Shares issued pursuant to it.

          (b)  No Shares or other assets shall be issued or delivered under the
               Plan unless and until there shall have been compliance with all
               applicable requirements of federal and state securities laws,
               including the filing and effectiveness of the Form S-8
               registration statement (if required) and under state law (if
               required) for the Shares issuable under the Plan.

          (c)  The receipt of Shares upon the exercise of an Option shall be
               conditioned upon the Optionee (or any other person who exercises
               the Option on his or her behalf as permitted by this Plan)
               providing to the Administrator a written representation that, at
               the time of such exercise, it is the intent of that person(s) to
               acquire the shares for investment only and not with a view toward
               distribution. The certificate for unregistered shares issued for
               investment shall be restricted by the Company as to transfer
               unless the Company receives an opinion of counsel satisfactory to
               the Company to the effect that the restriction is not necessary
               under then pertaining law. The providing of the representation
               and the restrictions on transfer shall not, however, be required
               upon any person's receipt of Shares under the Plan if, at the
               time of grant of the Option relating to receipt or upon receipt,
               whichever is the appropriate measure under applicable federal or
               state securities laws, the Optioned Stock is: (i) covered by an
               effective and current registration statement under the Securities
               Act of 1933, as amended; and (ii) either qualified or exempt from
               qualification under applicable state securities laws.

      16. No Employment/Service Rights. Nothing in the Plan shall confer upon
the Participant any right to continue in Service for any period of specific
duration or interfere with or otherwise restrict in any way the rights of the
Company (or any Affiliate employing or retaining such person) or of the
Participant, which rights are hereby expressly reserved by each, to terminate
such person's Service at any time for any reason, with or without cause.

      17. Governing Law. This Plan shall be governed by California law, applied
without regard to conflict of law principles.

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      18. Non-Exclusivity of the Plan. Nothing contained in the Plan is intended
to amend, modify or rescind any previously approved compensation plans, programs
or options entered into by the Company. This Plan shall be construed to be in
addition to and independent of any and all other arrangements. Neither the
adoption of the Plan by the Board nor the submission of the Plan to the
shareholders of the Company for approval shall be construed as creating any
limitations on the power or authority of the Board to adopt, with or without
shareholder approval, such additional or other compensation arrangements as the
Board may from time to time deem desirable.

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