Document:

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                                                                    EXHIBIT 10.3

                            VINEYARD NATIONAL BANCORP
                        1997 INCENTIVE STOCK OPTION PLAN

      I.    Purpose

      The purpose of this Plan is to strengthen Vineyard National Bancorp
("Corporation"), by providing incentive stock options as a means of retaining,
attracting and motivating competent full-time officers, key employees and
directors of Vineyard National Bank ("Bank") and/or "Corporation" and by
providing to the participating officers, key employees, and directors an added
incentive for high levels of performance and for unusual efforts to the increase
the earnings of the Bank and the Corporation. The Plan seeks to accomplish these
purposes and results by providing the means by which the officers, key employees
and directors may purchase shares of the capital stock of the Corporation by way
of stock options.

      II.   Administration

      This Plan shall be administered by the Stock Option Committee, referred to
as the "Committee", consisting of members selected and serving at the pleasure
of the Board of Directors of the Corporation. Any action of the Committee with
respect to the administration of the Plan shall be taken pursuant to a majority
vote of its members.

      Subject to the express provisions of the Plan, the Committee shall have
the authority to construe and interpret the Plan; to define the terms used by
it, to prescribe, amend, and rescind rules and regulations relating to the
administration of the Plan; to determine the duration and purposes of leaves of
absence which may be granted to participants without constituting a termination
of their employment for the purposes of the Plan; and to make all other
determinations necessary or advisable for the administration of the Plan. The
determinations of the Committee on the above matters shall be conclusive.
Subject to the express provisions of the Plan, the Committee shall determine
from the eligible class of Corporation and/or Bank employees the individuals who
shall receive options, and the terms and provisions of the options, which need
not be identical; provided, however, that all grants of options shall be by the
Board.

      III.  Participation By Eligible Directors, Officers and Employees of the
Corporation or Bank

      Directors, Officers, and key employees and directors of the Corporation
and/or Bank shall be eligible for selection to participate in the Plan. An
individual who has been granted an option may, if otherwise eligible, be granted
an additional option or options if the Board shall so determine. No options,
however, will be granted to any individual who immediately before or after the
grant of the option will own beneficially more than ten percent (10%) of the
outstanding stock of the Corporation. However, the Board may determine that this
limitation will not apply if the option price is at least 110% of the fair
market value at the time the option is granted. Such option to a 10% or more
owner by its terms is not exercisable after the expiration of five years from
the date such option is granted.

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      IV.   Stock Subject to the Plan

      Subject to adjustments as provided in Section XII of this Plan, the stock
to be offered under the Plan shall be shares of the Corporation's authorized but
unissued common stock, referred to as "stock," and the aggregate amount of stock
to be delivered upon the exercise of all options granted under the Plan shall
not exceed 253,316 shares (consisting of 200,000 additional shares and 53,316
available under the 1987 Plan as of December 31, 1996), subject to adjustment as
described in Section XII of this Plan. If all shares of common stock subject to
option under the plan are optioned and the options are exercised, the shares so
issued would constitute about 13.6% of the Bancorp's outstanding shares of
common stock. Any option to be granted under this Plan shall be granted within
ten (10) years from the effective date of this Plan.

      If any option granted under this Plan expires or terminates for any reason
without having been fully exercised in full, the un-purchased shares subject to
the option shall again be available for the purposes of this Plan.

      Subject to the general limitations contained in this Plan, the Board may
make any adjustment in the exercise price, the number of shares subject to the
option, or the term of an option by cancellation of an outstanding option and a
subsequent grant of an option, amendment or substitution. Any subsequent grant
may have an exercise price which is higher or lower than the prior option,
provide for a greater or lesser number of shares subject to the option, or have
a longer or shorter term than the prior option.

      The Board of Directors recommended additional shares of the Corporation's
common stock in the amount of $200,000 to be added to the amount available for
issuance upon exercise of the options. The shareholders at the Annual meeting on
November 13, 1997 approved the additional shares. This recommendation and the
anticipated shareholder approval are subject to obtaining the consent of
appropriate regulatory agencies if required by law.

      V.    Intent to Meet the Requirements of the Internal Revenue Code

      Options to be granted under this Plan are intended to be incentive stock
options as defined in Section 422 and other applicable sections of the Internal
Revenue Code.

      VI.   Option Price

      The purchase price of stock covered by each option shall be determined by
the Board of Directors of the Corporation but shall not be less at the time of
grant than one hundred percent (100%) of the fair market value of the stock on
the date of the granting of the option or 110% as indicated in Section III above
for an individual owning more than ten percent (10%) of the outstanding stock of
the Corporation. The Committee shall in good faith determine the fair market
value at the time the option is granted. The purchase price of any shares
purchased by the exercise of an option shall be paid in full in cash or by check
at the time of purchase.

      VII.  Option Period

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      Each option and all rights or obligations under it shall expire on the
expiration date the Committee or the Board shall determine, but no later than
the tenth anniversary of the date on which the option is granted, and each
option shall be subject to earlier termination as provided in this Plan. (See
Section III)

      VIII. Exercise of Options: Continuation of Employment

      Each employee or director to whom an option is granted must agree, at the
request of the Corporation, to remain in the continuous employ of the
Corporation and/or Bank following the date of the granting of the option for a
period of not less than two (2) years in order to exercise the option. Nothing
contained in the Plan (or in any option granted under the Plan) shall confer
upon any employee or director any right to continue in the employment of the
Corporation and/or Bank for any period of time or constitute any contract or
agreement of employment for any period of time or interfere in any way with the
right of the Corporation and/or Bank and/or their respective Shareholders to
reduce or increase the person's compensation, or to change the person's job
description or to terminate the person's employment or directorship. However
nothing contained in this Plan or in any option agreement shall affect any
contractual rights of an employee.

      As each option shall become exercisable, the total number of shares
subject to it shall be purchasable in installments which need not be equal, as
the Committee shall determine; provided, however, that if the holder of an
option shall not in any given installment period purchase all of the shares
which the holder is entitled to purchase in the installment period, then the
holder's right to purchase shares not purchased in the installment period shall
continue until the expiration or sooner termination of the holder's option. No
option or installment shall be exercisable except in whole shares, and
fractional share interests shall be disregarded except that they may be
accumulated in accordance with the next sentence. Not less than one (1) share
may be purchased at one time unless the number purchased at the time equals the
total number available for purchase under the option.

      The option by its terms is not exercisable while there is outstanding any
ISO which was granted to the employee at an earlier time. For this purpose, an
option which has not been exercised in full is outstanding until the expiration
of the period which under its initial terms it would have been exercised. Thus,
the cancellation of an earlier option will not enable a subsequent option to be
exercised any sooner.

      In addition, to be eligible to exercise the option and purchase stock, the
option holder (including directors) must have been an employee of the Bank
and/or Bancorp for the entire time from the date of the granting of the option
until three (3) months before the date of exercise (expanded to twelve (12)
months if employment ceased due to permanent and total disability). This
requirement and the holding period requirement are waived in the case of death
of the employee.

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      IX.   Non-transferability of Options

      An option granted under this Plan shall, by its terms, be nontransferable
by the option holder other than by will or the laws of descent and distribution,
and shall be exercisable during the holder's lifetime only by the option holder.

      X.    Disposition of Shares Obtained by Exercise of Options.

      The recipient of an option who then exercises the option and purchases
stock must not dispose of the stock within two (2) years from the date of the
granting of the option or within one year after the transfer of such share to
him, and must hold the stock itself for at least one Year.

      XI.   Termination of Employment

      If the option holder ceases to be employed by the Corporation and/or Bank
because of discharge for cause, the holder's options shall expire concurrently
with the discharge for cause. However, the Board of Directors may, in its sole
discretion, within thirty (30) days of termination, reinstate the option by
giving written notice of the reinstatement to the optionee at his or her last
known address. In the event of a reinstatement, the optionee may exercise his or
her option only to the extent, for the time, and upon other terms and conditions
as if he or she had ceased to be employed by the Bank and/or Bancorp upon the
date of the termination for a reason other than cause. If the option holder
ceases to be employed by the Corporation and/or Bank for any reason other than
death or discharge for cause, the holder's options shall be subject to earlier
termination as provided for under Section VI and expire one (1) month after
termination of employment, or after a shorter period as may be provided in the
option, and during the one month period after the holder ceases to be an
employee, the option shall be exercisable only as to those shares with respect
to which installments, if any, had accrued as of the date of the termination of
employment.

      XII.  $100,000 Per Year Limitation

      To the extent that the aggregate fair market value of stock with respect
to which incentive stock options are exercisable for the first time by any
individual during any calendar year exceeds $100,000, such options shall be
treated as options which are not incentive stock options.

      XIII. Death of Employee

      If any option holder dies while employed by the Corporation and/or Bank,
the holder's options shall, subject to earlier termination under Section VI,
expire one (1) year after the death of the option holder (or after a shorter
period as may be provided in the option), and during the period after the date
of death of the option holder the option may, to the extent that installments,
if any, had accrued as of the date of the death of the option holder, be
exercised by the person or persons to whom the option holder's rights under the
option shall pass by will or by the applicable laws of the descent and
distribution.

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      XIV.  Right of First Refusal to Purchase Stock

      If, at any time, a shareholder owns shares in the Corporation which were
acquired by that shareholder under a corporate stock option plan, desires to
sell or in any way transfer all or any portion of the shares in the Corporation,
the shareholder shall first offer to sell the shares to the Board of Directors
of the Corporation as a group. The Board of Directors shall then have a right of
first refusal to buy the offered shares of the optionee at the shares' then
current fair market value. The purchase price shall be payable in cash within
one hundred twenty (120) days of the receipt of a notice to the Board from the
shareholder stating the number of shares he or she intends to sell or transfer.
If the Board fails to purchase all of the offered shares within the one hundred
twenty (120) day period, the shareholder shall be free to sell the shares to any
person on any terms he or she desires. This restriction shall be printed on each
and every share purchased under this Plan by the shareholder.

      XV.   Adjustments Upon Changes in Capitalization

      If the outstanding shares of the stock of the Corporation are increased,
decreased, or changed into, or exchanged for a different number or kind of
shares or securities of the Corporation through reorganization, merger,
recapitalization, reclassification, stock split-up, stock dividend, stock
consolidation, or otherwise, an appropriate and proportionate adjustment shall
be made in the number and kind of shares subject to the options which may be
granted under this Plan. A corresponding adjustment changing the number or kind
of shares and the exercise price per share allocated to unexercised options or
portions of the stock options which are subject to this Plan which shall have
been granted prior to any change, shall also be made. Any adjustment in an
outstanding option shall be made without change in the total price applicable to
the unexercised portion of the option but with a corresponding adjustment in the
price for each share covered by the option.

      Upon the dissolution or liquidation of the Corporation, or upon a
reorganization, merger, or consolidation of the Corporation with one or more
other corporations where the Corporation is not the surviving corporation, or
upon a sale of substantially all the property of the Corporation to another
corporation or association, this Plan shall terminate, and any options granted
under it shall terminate, unless provisions are made in connection with the
transaction for the assumption of the options then granted, or the substitution
for the then granted options with new options covering the stock of a successor
corporation, or a parent or subsidiary of it, with appropriate adjustments as to
number and kind of shares and prices.

      Adjustments under this section shall be made by the Board, whose
determination as to what adjustments shall be made, and their extent shall be
final, binding, and conclusive. No fractional shares of stock shall be issued
under the Plan on account of any adjustment.

      XVI.  Amendment and Termination

      The Board may at any time suspend, amend, or terminate this Plan and may,
with the consent of an option holder, make modifications of the terms and
conditions of the holder's option as it shall deem advisable. No option may be
granted during any suspension of the Plan

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or after its termination. The amendment, suspension, or termination of the Plan
shall not, without the consent of the option holder, alter or impair any rights
or obligations under any option granted under the Plan.

      With respect to the following amendments, the Board may only amend the
Plan with the consent of a majority of the outstanding shareholders of the
Corporation and with the consent of any appropriate government agency which by
law must give its consent.

            A.    To change the eligibility requirements to participate in the
                  Plan;

            B.    To increase the stock allocated to the Plan;

            C.    To extend the duration of the Plan beyond November 12, 2007;

            D.    To extend or decrease the exercise period of an option granted
                  under the Plan which is ten (10) years;

            E.    To decrease the option price;

            F.    To permit anyone other than a director and/or full time
                  salaried employee of the Bank and/or Bancorp to be granted
                  options.

      XVII. Time of Granting of Options

      The granting of an option under the Plan shall take place at the time of
the Committee's action; provided, however, that if the appropriate resolutions
of the Committee indicate that an option is to be granted at some future date,
the date of grant shall be the future date.

      XVIII. Privileges of Stock Ownership

      The holder of an option shall not be entitled to any of the privileges of
stock ownership as to any shares of stock which are not actually issued and
delivered to him or her. No shares, however, shall be issued upon the exercise
of any option unless and until full compliance with all applicable requirements
of any regulatory agency having jurisdiction of the option and issuance of
stock.

      XIX.   Effective Date of the Plan

      This Plan shall be approved by the vote or written consent of the holders
of a majority of the Corporation's outstanding stock entitled to vote and shall
commence at the effective date of the plan as adopted by a majority of the
holders of record of the corporation's outstanding stock.

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      XX.   Termination

      Unless previously terminated by the Board of Directors, this Plan shall
terminate on a date not more than ten (10) years from the date the plan was
approved by the shareholders on November 13, 1997. No options shall be granted
under it after that time; but the Plan's termination shall not affect any
options previously granted.

                                      /s/ Soule Sensenbach
                                      -----------------------------------------
                                      Soule Sensenbach
                                      Secretary of Vineyard National Bancorp

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                            CERTIFICATE OF SECRETARY

      This is to certify:

      That I am the duly-elected qualified, acting Secretary of Vineyard
National Bancorp, a California corporation, and that on November 13, 1997, at
the hour of 4:00 p.m. the shareholders of the Corporation at their meeting held
on such date and time duly adopted the Vineyard National Bank 1997 Stock Option
Plan as recorded in the minutes of the meeting by this majority vote of the
shareholders entitled to exercise the majority of the voting power of said
Association.

      Attached hereto and incorporated herein by reference is a true and correct
copy of the "Vineyard National Bancorp 1997 Stock Option Plan" which plan was
adopted by the shareholders at the meeting.

      IN WITNESS WHEREOF, I have hereunder set my hand and affix the corporate
seal this 14th day of November, 1997.

                                      /s/ Soule Sensenbach
                                      -----------------------------------------
(Seal)                                Soule Sensenbach
                                      Secretary of Vineyard National Bancorp

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                                     ANNEX 1

THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.

            AMENDED AND RESTATED 1997 INCENTIVE STOCK OPTION PLAN OF
                           VINEYARD NATIONAL BANCORP:
                             STOCK OPTION AGREEMENT

                           SECTION 1: GRANT OF OPTION

      1.1 OPTION. On the terms and conditions set forth in the notice of stock
option grant to which this agreement (the "AGREEMENT") is attached (the "NOTICE
OF STOCK OPTION GRANT") and this agreement, the Company grants to the individual
named in the Notice of Stock Option Grant (the "OPTIONEE") the option to
purchase at the exercise price specified in the Notice of Stock Option Grant
(the "EXERCISE PRICE") the number of Shares set forth in the Notice of Stock
Option Grant. This option is intended to be either an ISO or a Non-Qualified
Stock Option, as provided in the Notice of Stock Option Grant.

      1.2 STOCK PLAN AND DEFINED TERMS. This option is granted pursuant to and
subject to the terms of the Amended and Restated 1997 Incentive Stock Option
Plan of Vineyard National Bancorp, as in effect on the date specified in the
Notice of Stock Option Grant (which date shall be the later of (i) the date on
which the Board resolved to grant this option or (ii) the first day of the
Optionee's Service) and as amended from time to time (the "PLAN"), a copy of
which is attached hereto and which the Optionee acknowledges having received.
Capitalized terms not otherwise defined in this Agreement have the definitions
ascribed to them in the Plan.

                          SECTION 2: RIGHT TO EXERCISE

      2.1 EXERCISABILITY. Subject to Sections 2.2 and 2.3 below and the other
conditions set forth in this Agreement, all or part of this option may be
exercised prior to its expiration at the time or times set forth in the Notice
of Stock Option Grant. Shares purchased by exercising this option may be subject
to the Right of Repurchase under Section 7. In addition, in the event (i) there
is a Change in Control before the Optionee's Service terminates and (ii) the
option is cancelled without substitution of a successor option or payment of any
consideration, Optionee shall have the right, exercisable during the later of
the ten-day period ending on the fifth day prior to the Change in control or ten
days after the Administrator provides the Optionee with a notice of
cancellation, to exercise this option in whole or in part without regard to any
installment exercise provisions in this Agreement.

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      2.2 $100,000 LIMITATION. The aggregate fair market value (determined at
the time the option is granted) of the Shares with respect to which ISOs are
exercisable for the first time during any calendar year (under all ISO plans of
the Company, Parent and Subsidiaries) shall not exceed $100,000. If this option
is designated as an ISO in the Notice of Stock Option Grant, then to the extent
(and only to the extent) the Optionee's right to exercise this option causes
this option (in whole or in part) to not be treated as an ISO by reason of the
$100,000 annual limitation under Section 422(d) of the Code, such options shall
be treated as Non-Qualified Stock Options, but shall be exercisable by their
terms. The determination of options to be treated as Non-Qualified Stock Options
shall be made by taking options into account in the order in which they are
granted. If the terms of this option cause the $100,000 annual limitation under
Section 422(d) of the Code to be exceeded, a pro rata portion of each exercise
shall be treated as the exercise of a Non-Qualified Stock Option.

      2.3 SHAREHOLDER APPROVAL. Any other provision of this Agreement
notwithstanding, no portion of this option shall be exercisable at any time
prior to the approval of the Plan by the Company's shareholders.

                 SECTION 3: NO TRANSFER OR ASSIGNMENT OF OPTION

      Except as provided herein, an Optionee may not assign, sell or transfer
the option, in whole or in part, other than by will or by operation of the laws
of descent and distribution. The Administrator, in its sole discretion may
permit the transfer of a Non-Qualified Option (but not an ISO) as follows: (i)
by gift to a member of the Participant's immediate family or (ii) by transfer by
instrument to a trust providing that the Option is to be passed to beneficiaries
upon death of the trustor (either or both (i) or (ii) referred to as a
"PERMITTED TRANSFEREE"). For purposes of this Section 3, "immediate family"
shall mean the Optionee's spouse (including a former spouse subject to terms of
a domestic relations order); child, stepchild, grandchild, child-in-law; parent,
stepparent, grandparent, parent-in-law; sibling and sibling-in-law, and shall
include adoptive relationships. A transfer permitted under this Section 3 hereof
may be made only upon written notice to and approval thereof by Administrator. A
Permitted Transferee may not further assign, sell or transfer the transferred
option, in whole or in part, other than by will or by operation of the laws of
descent and distribution. A Permitted Transferee shall agree in writing to be
bound by the provisions of this Plan.

                         SECTION 4: EXERCISE PROCEDURES

      4.1 NOTICE OF EXERCISE. The Optionee or the Optionee's representative may
exercise this option by delivering a written notice in the form of Exhibit A
attached hereto ("NOTICE OF EXERCISE") to the Company in the manner specified
pursuant to Section 10.4 hereof. Such Notice of Exercise shall specify the
election to exercise this option, the number of Shares for which it is being
exercised and the form of payment, which must comply with Section 5. The Notice
of Exercise shall be signed by the person who is entitled to exercise this
option. In the event that this option is to be exercised by the Optionee's
representative, the notice shall be accompanied by proof (satisfactory to the
Company) of the representative's right to exercise this option.

      4.2 ISSUANCE OF SHARES. After receiving a proper Notice of Exercise, the
Company shall cause to be issued a certificate or certificates for the Shares as
to which this option has been exercised, registered in the name of the person
exercising this option (or in the names of such

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person and his or her spouse as community property or as joint tenants with
right of survivorship). The Company shall cause such certificate or certificates
to be deposited in escrow or delivered to or upon the order of the person
exercising this option.

      4.3 WITHHOLDING TAXES. In the event that the Company determines that the
Company, Parent or a Subsidiary is required to withhold any tax as a result of
the exercise of this option, the Optionee, as a condition to the exercise of
this option, shall make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. The Optionee shall also make arrangements
satisfactory to the Company to enable it to satisfy any withholding requirements
that may arise in connection with the vesting or disposition of Shares purchased
by exercising this option.

                          SECTION 5: PAYMENT FOR STOCK

      5.1 GENERAL RULE. The entire Exercise Price of Shares issued under the
Plan shall be payable in full by cash or check for an amount equal to the
aggregate Exercise Price for the number of shares being purchased.
Alternatively, in the sole discretion of the Plan Administrator and upon such
terms as the Plan Administrator shall approve, the Exercise Price may be paid
by:

            5.1.1 CASHLESS EXERCISE. A copy of instructions to a broker
directing such broker to sell the Shares for which this option is exercised, and
to remit to the Company the aggregate Exercise Price of such option ("CASHLESS
EXERCISE");

            5.1.2 STOCK-FOR-STOCK EXERCISE. Paying all or a portion of the
Exercise Price for the number of Shares being purchased by tendering Stock owned
by the Optionee for at least six months, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the Exercise
Price (or portion) thereof multiplied by the number of Shares with respect to
which this option is being exercised (the "PURCHASE PRICE") aggregate Purchase
Price of the shares with respect to which this option or portion hereof is
exercised; or

            5.1.3 ATTESTATION EXERCISE. By a stock for stock exercise by means
of attestation whereby the Optionee identifies for delivery specific shares of
Stock already owned by Optionee for at least six months that have a Fair Market
Value on the date of Attestation equal to the Exercise Price or Purchase Price
(or portion thereof) and receives a number of shares of Stock equal to the
difference between the number of shares thereby exercised or purchased and the
number identified attestation shares of Stock.

      5.2 WITHHOLDING PAYMENT. The Exercise Price shall include payment of the
amount of all federal, state, local or other income, excise or employment taxes
subject to withholding (if any) by the Company, Parent or a Subsidiary as a
result of the exercise of a Stock Option. The Optionee may pay all or a portion
of the tax withholding by cash or check payable to the Company, or, at the
discretion of the Administrator, upon such terms as the Administrator shall
approve, by (i) cashless exercise; (ii) tendering Stock owned by the
Participant, duly endorsed for transfer to the Company, with a Fair Market Value
on the date of delivery equal to the withholding due for the number of shares
being exercised; (iii) means of attestation whereby the Participant identifies
for delivery specific shares of Stock already owned by Participant that have a
Fair Market Value on the date of attestation equal to the withholding due for
the number of shares being exercised (iv) in the case of an Option, by paying
all or a portion of the tax withholding for the number of shares being purchased
by withholding shares from any transfer or

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payment to the Optionee ("STOCK WITHHOLDING"); or (v) a combination of one or
more of the foregoing payment methods. Any shares issued pursuant to the
exercise of an Option and transferred by the Optionee to the Company for the
purpose of satisfying any withholding obligation shall not again be available
for purposes of the Plan. The Fair Market Value of the number of shares subject
to Stock withholding shall not exceed an amount equal to the applicable minimum
required tax withholding rates.

      5.3 PROMISSORY NOTE. The Plan Administrator, in its sole discretion, upon
such terms as the Plan Administrator shall approve, may permit all or a portion
of the Exercise Price of Shares issued under the Plan to be paid with a
full-recourse promissory note. However, in the event there is a stated par value
of the shares and applicable law requires, the par value of the shares, if newly
issued, shall be paid in cash or cash equivalents. The Shares shall be pledged
as security for payment of the principal amount of the promissory note and
interest thereon. Subject to the foregoing, the Plan Administrator (at its sole
discretion) shall specify the term, interest rate, amortization requirements (if
any) and other provisions of such note.

      5.4 EXERCISE/PLEDGE. In the discretion of the Plan Administrator, upon
such terms as the Plan Administrator shall approve, payment may be made all or
in part by the delivery (on a form prescribed by the Plan Administrator) of an
irrevocable direction to pledge Shares to a securities broker or lender approved
by the Company, as security for a loan, and to deliver all or part of the loan
proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes.

                         SECTION 6: TERM AND EXPIRATION

      6.1 BASIC TERM. Unless otherwise provided by the Plan Administrator within
thirty (30) days after Optionee's Service terminates, this option shall expire
and shall not be exercisable after the expiration of the earliest of (i) the
Expiration Date specified in the Notice of Stock Option Grant, (ii) thirty (30)
days after the date the Optionee's Service with the Company, Parent and
Subsidiaries terminates if such termination is for any reason other than death,
Disability or Cause, (iii) one year after the date the Optionee's Service with
the Company, Parent and Subsidiaries terminates if such termination is a result
of death or Disability, and (iv) if the Optionee's Service with the Company,
Parent and Subsidiaries terminates for Cause, all outstanding Options granted to
such Optionee shall expire as of the commencement of business on the date of
such termination. Outstanding Options that are not exercisable at the time of
termination of employment for any reason shall expire at the close of business
on the date of such termination. The Plan Administrator shall have the sole
discretion to determine when this option is to expire. For any purpose under
this Agreement, Service shall be deemed to continue while the Optionee is on a
bona fide leave of absence, if such leave to the extent required by applicable
law. To the extent applicable law does not require such a leave to be deemed to
continue while the Optionee is on a bona fide leave of absence, such leave shall
be deemed to continue if, and only if, expressly provided in writing by the
Administrator or a duly authorized officer of the Company, Parent or Subsidiary
for whom Optionee provides his or her services.

      6.2 EXERCISE AFTER DEATH. All or part of this option may be exercised at
any time before its expiration under Section 6.1 above by the executors or
administrators of the Optionee's estate or by any person who has acquired this
option directly from the Optionee by beneficiary designation, bequest or
inheritance, but only to the extent that this option had become exercisable
before the Optionee's death. When the Optionee dies, this option shall expire

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immediately with respect to the number of Shares for which this option is not
yet exercisable and with respect to any Share that is subject to the Right of
Repurchase (as such term is defined below) (the "RESTRICTED STOCK").

      6.3 NOTICE CONCERNING ISO TREATMENT. If this option is designated as an
ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax
treatment as an ISO to the extent it is exercised (i) more than three months
after the date the Optionee ceases to be an Employee for any reason other than
death or permanent and total disability (as defined in Section 22(e)(3) of the
Code), (ii) more than 12 months after the date the Optionee ceases to be an
Employee by reason of such permanent and total disability or (iii) after the
Optionee has been on a leave of absence for more than 90 days, unless the
Optionee's reemployment rights are guaranteed by statute or by contract.

                         SECTION 7: RIGHT OF REPURCHASE

      7.1 STOCK REPURCHASE RIGHT. Unless they have become vested in accordance
with the Notice of Stock Option Grant, the stock acquired under this Agreement
initially shall be Restricted Stock and shall be subject to a right (but not an
obligation) of repurchase by the Company, which shall be exercisable at a price
equal to the Exercise Price paid for the Restricted Stock (the "Right of
Repurchase").

      7.2 CONDITION PRECEDENT TO EXERCISE. The Right of Repurchase shall be
exercisable over Restricted Stock only during the 90-day period next following
the later of:

            7.2.1 The date when the Optionee's Service terminates for any
reason, with or without Cause, including (without limitation) death or
disability; or

            7.2.2 The date when this option was exercised by the Optionee, the
executors or administrators of the Optionee's estate or any person who has
acquired this option directly from the Optionee by bequest, inheritance or
beneficiary designation;

      7.3 LAPSE OF RIGHT OF REPURCHASE. The Right of Repurchase shall lapse with
respect to the Shares subject to this option in accordance with the vesting
schedule set forth in the Notice of Stock Option Grant. In addition, in the
event (i) there is a Change in Control before the Optionee's Service terminates
and (ii) the Restricted Stock is cancelled without substitution of successor
stock or payment of any consideration, the Right of Repurchase shall lapse and
all of the remaining Restricted Stock shall become vested.

      7.4 EXERCISE OF RIGHT OF REPURCHASE. The Company shall exercise the Right
of Repurchase by written notice delivered to the Optionee prior to the
expiration of the 90-day period specified in Section 7.3 above. The notice shall
set forth the date on which the repurchase is to be effected, which must occur
within 31 days of the notice. The certificate(s) representing the Restricted
Stock to be repurchased shall, prior to the close of business on the date
specified for the repurchase, be delivered to the Company properly endorsed for
transfer. The Company shall, concurrently with the receipt of such
certificate(s), pay to the Optionee the Purchase Price determined according to
this Section 7. Payment shall be made in cash or cash equivalents or by
canceling indebtedness to the Company incurred by the Optionee in the purchase
of the Restricted Stock. The Right of Repurchase shall terminate with respect to
any Restricted Stock for which it has not been timely exercised pursuant to this
Section 7.

                                       5
<PAGE>
      7.5 RIGHTS OF REPURCHASE ADJUSTMENTS. If there is any change in the number
of outstanding shares of Stock by reason of a stock split, reverse stock split,
stock dividend, recapitalization, combination, reclassification, dissolution or
liquidation of the Company, any corporate separation or division (including, but
not limited to, a split-up, a split-off or a spin-off), a merger or
consolidation; a reverse merger or similar transaction, then (i) any new,
substituted or additional securities or other property (including money paid
other than as an ordinary cash dividend) distributed with respect to any
Restricted Stock (or into which such Restricted Stock thereby become
convertible) shall immediately be subject to the Right of Repurchase; and (ii)
appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number and/or class of the Restricted Stock and to
the price per share to be paid upon the exercise of the Right of Repurchase;
provided, however, that the aggregate Purchase Price payable for the Restricted
Stock shall remain the same.

      7.6 TERMINATION OF RIGHTS AS SHAREHOLDER. If the Company makes available,
at the time and place and in the amount and form provided in this Agreement, the
consideration for the Restricted Stock to be repurchased in accordance with this
Section 7, then after such time the person from whom such Restricted Stock is to
be repurchased shall no longer have any rights as a holder of such Restricted
Stock (other than the right to receive payment of such consideration in
accordance with this Agreement). Such Restricted Stock shall be deemed to have
been repurchased in accordance with the applicable provisions hereof, whether or
not the certificate(s) therefor have been delivered as required by this
Agreement.

      7.7 ESCROW. Upon issuance, the certificates for Restricted Stock shall be
deposited in escrow with the Company to be held in accordance with the
provisions of this Agreement. Any new, substituted or additional securities or
other property described in Section 7.6 above shall immediately be delivered to
the Company to be held in escrow, but only to the extent the Shares are at the
time Restricted Stock. All regular cash dividends on Restricted Stock (or other
securities at the time held in escrow) shall be paid directly to the Optionee
and shall not be held in escrow. Restricted Stock, together with any other
assets or securities held in escrow hereunder, shall be (i) surrendered to the
Company for repurchase and cancellation upon the Company's exercise of its Right
of Repurchase or Right of First Refusal or (ii) released to the Optionee upon
the Optionee's request to the extent the Shares are no longer Restricted Stock
(but not more frequently than once every six months). In any event, all Shares
which have vested (and any other vested assets and securities attributable
thereto) shall be released within 60 days after the Optionee's cessation of
Service.

                     SECTION 8: LEGALITY OF INITIAL ISSUANCE

      No Shares shall be issued upon the exercise of this option unless and
until the Company has determined that:

      8.1 It and the Optionee have taken any actions required to register the
Shares under the Securities Act of 1933, as amended (the "SECURITIES ACT") or to
perfect an exemption from the registration requirements thereof;

      8.2 Any applicable listing requirement of any stock exchange on which
Stock is listed has been satisfied; and

      8.3 Any other applicable provision of state or federal law has been
satisfied.

                                       6
<PAGE>
                        SECTION 9: NO REGISTRATION RIGHTS

      The Company may, but shall not be obligated to, register or qualify the
sale of Shares under the Securities Act or any other applicable law. The Company
shall not be obligated to take any affirmative action in order to cause the sale
of Shares under this Agreement to comply with any law.

                      SECTION 10: RESTRICTIONS ON TRANSFER

      10.1 SECURITIES LAW RESTRICTIONS. Regardless of whether the offering and
sale of Shares under the Plan have been registered under the Securities Act or
have been registered or qualified under the securities laws of any state, the
Company at its discretion may impose restrictions upon the sale, pledge or other
transfer of such Shares (including the placement of appropriate legends on stock
certificates or the imposition of stop-transfer instructions) if, in the
judgment of the Company, such restrictions are necessary or desirable in order
to achieve compliance with the Securities Act, the securities laws of any state
or any other law.

      10.2 MARKET STAND-OFF. In the event of an underwritten public offering by
the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, the Optionee shall not sell, make any
short sale of, loan, hypothecate, pledge, grant any option for the repurchase
of, transfer the economic consequences of ownership or otherwise dispose or
transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to any Stock without the prior written consent of the
Company or its underwriters, for such period of time from and after the
effective date of such registration statement as may be requested by the Company
or such underwriters (the "MARKET STAND-OFF"). In order to enforce the Market
Stand-Off, the Company may impose stop-transfer instructions with respect to the
Shares acquired under this Agreement until the end of the applicable stand-off
period. If there is any change in the number of outstanding shares of Stock by
reason of a stock split, reverse stock split, stock dividend, recapitaliztion,
combination, reclassification, dissolution or liquidation of the Company, any
corporate separation of division (including, but not limited to, a split-up, a
split-off or a spin-off), a merger or consolidation; a reverse merger or similar
transaction, then any new, substituted or additional securities which are by
reason of such transaction distributed with respect to any Shares subject to the
Market Stand-Off, or into which such Shares thereby become convertible, shall
immediately be subject to the Market Stand-Off.

      10.3 LEGENDS. All certificates evidencing Shares purchased under this
Agreement in an unregistered transaction shall bear the following legend (and
such other restrictive legends as are required or deemed advisable under the
provisions of any applicable law):

        "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
      OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH
      ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL,
      THAT SUCH REGISTRATION IS NOT REQUIRED."

      10.4 REMOVAL OF LEGENDS. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing Shares sold under
this Agreement no longer is

                                       7
<PAGE>
required, the holder of such certificate shall be entitled to exchange such
certificate for a certificate representing the same number of Shares but without
such legend.

      10.5 ADMINISTRATION. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section 9 shall be
conclusive and binding on the Optionee and all other persons.

                      SECTION 11: MISCELLANEOUS PROVISIONS

      11.1 RIGHTS AS A SHAREHOLDER. Neither the Optionee nor the Optionee's
representative shall have any rights as a shareholder with respect to any Shares
subject to this option until the Optionee or the Optionee's representative
becomes entitled to receive such Shares by filing a notice of exercise and
paying the Exercise Price pursuant to Section 4 and Section 5 hereof.

      11.2 ADJUSTMENTS. If there is any change in the number of outstanding
shares of Stock by reason of a stock split, reverse stock split, stock
dividend, recapitalization, combination, reclassification, dissolution or
liquidation of the Company, any corporate separation or division (including,
but not limited to, a split-up, a split-off or a spin-off), a merger or
consolidation; a reverse merger of similar transaction, then, then (i) the
number and/or class of shares subject to this option and (ii) the Exercise Price
of this option, in effect prior to such change, shall be proportionately
adjusted to reflect any increase or decrease in the number of issued shares of
Stock; provided, however, that any fractional shares resulting from the
adjustment shall be eliminated.

      11.3 LIQUIDATION, DISSOLUTION, MERGER OR CONSOLIDATION. In the event of a
dissolution or liquidation of the Company, or any corporate separation or
division, including, but not limited to, a split-up, a split-off or a spin-off,
or a sale of substantially all of the assets of the Company; a merger or
consolidation in which the Company is not the Surviving Entity; or a reverse
merger in which the Company is the Surviving Entity, but the shares of Company
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, then, the Company, to the extent permitted by applicable law, but
otherwise in its sole discretion may provide for: (i) the continuation of this
option by the Company (if the Company is the Surviving Entity); (ii) the
assumption of the Plan and this option by the Surviving Entity or its parent;
(iii) the substitution by the Surviving Entity or its parent of an option with
substantially the same terms for this option; or (iv) the cancellation of this
option without payment of any consideration, provided that if this option would
be canceled in accordance with the foregoing, Optionee shall have the right,
exercisable during the later of the ten-day period ending on the fifth day prior
to such merger or consolidation or ten days after the Administrator provides the
Optionee with a notice of cancellation, to exercise this option in whole or in
part without regard to any installment exercise provisions in this Agreement.

      11.4 NO RETENTION RIGHTS. Nothing in this option or in the Plan shall
confer upon the Optionee 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 Parent or Subsidiary employing or retaining the Optionee)
or of the Optionee, which rights are hereby expressly reserved by each, to
terminate his or her Service at any time and for any reason, with or without
Cause.

                                       8
<PAGE>
      11.5 NOTICE. Any notice required by the terms of this Agreement shall be
given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. Notice shall be addressed the Optionee at the
address set forth in the records of the Company. Notice shall be addressed to
the Company at:

                           Vineyard National BANCORP
                            9590 Foothill Boulevard
                                  P.O. Box 727
                           Rancho Cucamonga, CA 91730

      11.6 ENTIRE AGREEMENT. The Notice of Stock Option Grant, this Agreement
and the Plan constitute the entire contract between the parties hereto with
regard to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) that relate to the subject matter hereof.

      11.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ITS
CHOICE OF LAW PROVISIONS, AS CALIFORNIA LAWS ARE APPLIED TO CONTRACTS ENTERED
INTO AND PERFORMED IN SUCH STATE.

                                       9
<PAGE>
                                    EXHIBIT A

                               NOTICE OF EXERCISE

                 (To be signed only upon exercise of the Option)

                            Vineyard National Bancorp
                      9590 Foothill Boulevard P.0. Box 727
                           Rancho Cucamonga, CA 91730

      The undersigned, the holder of the enclosed Stock Option Agreement, hereby
irrevocably elects to exercise the purchase rights represented by the Option and
to purchase thereunder ----- * shares of Common Stock of Vineyard National
Bancorp (the "COMPANY"), and herewith encloses payment of $----- and/or-----
shares of the Company's common stock in full payment of the purchase price of
such shares being purchased.

Dated:

YOUR STOCK MAY BE SUBJECT TO RESTRICTIONS AND FORFEITABLE UNDER THE NOTICE OF
STOCK OPTION GRANT AND STOCK OPTION AGREEMENT

                              --------------------------------------------------
                              (Signature must conform in all respects to name of
                                  holder as specified on the face of the Option)

                              --------------------------------------------------
                              (Please Print Name)

                              --------------------------------------------------
                              (Address)

      *     Insert here the number of shares called for on the face of the
            Option, or, in the case of a partial exercise, the number of shares
            being exercised, in either case without making any adjustment for
            additional Common Stock of the Company, other securities or property
            that, pursuant to the adjustment provisions of the Option, may be
            deliverable upon exercise.

                                       1
<PAGE>
                    FORM OF WRITTEN CONSENT FOR OPTION GRANTS

                RESOLUTIONS ADOPTED BY UNANIMOUS WRITTEN CONSENT
                           OF THE ADMINISTRATOR OF THE
        AMENDED AND RESTATED 1997 INCENTIVE STOCK OPTION PLAN OF VINEYARD
                                NATIONAL BANCORP

                   As of --------------------, ------------.

      The undersigned, constituting all of the members of the administrative
Committee (the "COMMITTEE") of the Amended and Restated 1997 Incentive Stock
Option Plan of Vineyard National Bancorp (the "PLAN"), hereby take the
following actions, adopt the following resolutions, and transact the following
business, by written consent without a meeting, as of the date above written,
pursuant to Section 3.5 of the Plan.

      WHEREAS, Vineyard National Bancorp (the "COMPANY") previously adopted the
Plan and has delegated the responsibility to administer the Plan to the
Committee;

      WHEREAS, ---------------- shares of Common Stock of the Company were
originally reserved for issuance under the Plan;

      WHEREAS; as of the date hereof,---------------- shares remain available
for issuance under the Plan; and

      WHEREAS, the Committee has determined that it is in the best interests of
this Company and its shareholders to provide, under the Plan, equity incentives
to those individuals identified below.

      NOW, THEREFORE, BE IT RESOLVED, that the persons listed on the Exhibit A,
which exhibit was reviewed by the Committee and shall be included with this
Consent, are hereby granted, as of the date hereof, an option (the "OPTION") to
purchase the number of shares with the vesting schedule and exercise price as
set forth in Exhibit A;

      RESOLVED FURTHER, that each of the Options shall be either a Non-Qualified
Stock Option or an IS0 (as such terms are defined in the Plan) as specified in
Exhibit A;

      RESOLVED FURTHER, that the Options shall be evidenced by stock option
agreements and be subject to the restrictions (including transfer and/or
repurchase rights), if any, set forth in such stock option agreements;

                                       1
<PAGE>
      RESOLVED FURTHER, that there is hereby reserved and set aside under the
Plan the number of shares adequate to cover the shares underlying the Options
granted herein; and

      RESOLVED FURTHER, that the Committee and/or the officers of this Company,
and each of them, be, and they hereby are, authorized, directed and empowered
for and on behalf of the Company to do or cause to be done all such acts and
things and to sign, deliver and/or file all such documents and notices as any of
such officers may deem necessary or advisable in order to carry out and perform
the foregoing resolutions and the intention thereof.

      The Secretary or the Assistant Secretary, if any, of the Corporation is
directed to file the original executed copy of this Consent with the minutes of
proceedings of the Committee.

      IN WITNESS WHEREOF, each of the undersigned has executed this consent as
of the date first written above.

COMMITTEE MEMBERS:

-----------------------------------           ---------------------------------

-----------------------------------           ---------------------------------

-----------------------------------           ---------------------------------

-----------------------------------           ---------------------------------

-----------------------------------           ---------------------------------

                                       2
<PAGE>
                                    EXHIBIT A

                         STOCK OPTION GRANT INFORMATION
<TABLE>
<CAPTION>

NAME              No.        ISO or    EXERCISE       VESTING SCHEDULE
                SHARES       NQSO       PRICE*
<S>             <C>          <C>       <C>            <C>

</TABLE>

      * In the case of an ISO, the per share exercise price must be at least
      100% of the Fair Market Value (as such term is defined in the Plan) of the
      underlying share as of the Date of Grant. In the case of an IS0 granted to
      a Ten Percent Shareholder (as such term is defined in the Plan), the
      exercise price per share must be at least 110% of the Fair Market Value of
      the underlying share as of the Date of Grant.

                                       3
<PAGE>
                        GUIDELINES FOR ADMINISTERING THE
       AMENDED AND RESTATED 1997 INCENTIVE STOCK OPTION PLAN OF VINEYARD
                                NATIONAL BANCORP
<PAGE>
                                   GUIDELINES

      The purpose of these Guidelines is to suggest procedures for administering
the Amended and Restated 1997 Incentive Stock Option Plan of Vineyard National
Bancorp (the "PLAN"). If you have any questions about the Plan or the Guidelines
please feel free to telephone Akin, Gump, Strauss, Hauer & Feld, LLP.

      Under the Plan, the Board of Directors, or a duly authorized Committee of
the Board of Directors (the "ADMINISTRATOR"), is authorized to grant incentive
stock options or non-qualified stock options for cash, notes or shares of the
Company's Common Stock. An aggregate of 526,452 shares of the Company's Stock
may be sold under the Plan.

                         SECTION 1: CHOICE OF INCENTIVE

             The choice of which type of equity incentive to use -- incentive
 stock options or non-qualified stock options -- will be based upon an analysis
 of several factors including: (a) tax liability to the participant; (b) tax
 consequences to the Company; (c) financial risks to the participant; and (d)
 special restrictions applicable to incentive stock options. These
 considerations are summarized below:

      1.1    Federal Income Tax Consequences to the Participant.

      1.1.1 Incentive Stock Options. The following are the principal Federal
income tax consequences to participants in connection with options that are
intended to be incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986 (the "CODE").

             1.1.1.1 Grant of an Option. A participant will not be required to
recognize income for federal income tax purposes as a result of the grant to him
or her of an incentive stock option under the Plan. Only employees (including
officers) are eligible to receive incentive stock options.

             1.1.1.2 Exercise of an Option. Except in certain circumstances in
which the exercise price is paid with previously acquired shares of the
Company's Stock, a participant will not be required to recognize income for
federal income tax purposes as a result of the purchase of shares upon exercise
of an incentive stock option. However, the amount by which the fair market value
of the shares at the time of exercise exceeds the exercise price for the shares
will constitute an item of adjustment for purposes of calculating the
alternative minimum tax of the participant (unless the shares are disposed of in
a "Disqualifying Disposition," as defined below under the caption "Disposition
of Shares Acquired").

      If the participant pays the exercise price, in full or in part, by
transferring to the Company previously acquired shares of the Company's Stock,
the transfer will not affect the tax treatment of the exercise. However, if the
participant pays the exercise price using shares of the Company's Stock acquired
by the participant upon exercise of an incentive stock option, the
<PAGE>
 exchange will be considered a disposition of the previously acquired shares for
the purpose of determining whether a Disqualifying Disposition has occurred (see
below).

            1.1.1.3 Disposition of Shares Acquired. Upon disposition of shares
acquired by the participant through an exercise of an incentive stock option,
long-term capital gain or loss is recognized in an amount equal to the
difference between the sale price and the exercise price, provided the
disposition (whether through the sale of shares on the open market, by transfer
to the Company as payment for shares issued upon exercise of the option, or
otherwise) has not occurred (i) within two years from the date of grant or (ii)
within one year from the date of exercise. If the participant disposes of the
acquired shares without complying with both holding period requirements (a
"DISQUALIFYING DISPOSITION"), the participant recognizes ordinary income at the
time of the disposition in an amount equal to the lesser of the amount of gain
realized or the amount by which the fair market value of the shares on the date
of exercise exceeds the option exercise price. Any remaining gain or loss is
treated as a short-term or long-term capital gain or loss depending upon whether
the shares were held for more than one year. A Disqualifying Disposition will
also result if, within one year after acquiring shares through exercise of an
incentive stock option, a participant transfers those shares to the Company to
exercise an incentive stock option or a Non-Qualified Stock option under the
Plan.

      1.1.2 Non-Qualified Stock Options. The following are the Federal income
tax consequences to participants in connection with options that are not
intended to be incentive stock options within the meaning of Section 422 of the
Code.

            1.1.2.1 Grant of a Non-Qualified Stock Option. A participant will
not be required to recognize income for federal income tax purposes as a result
of the grant to the participant of a Non-Qualified Stock Option, assuming (as is
usually the case in a plan of this type) that the option does not have a readily
ascertainable fair market value at the time it is granted.

            1.1.2.2 Exercise of a Non-Qualified Stock Option. A participant will
be required to include in gross income in the year of exercise an amount equal
to the excess of the fair market value of the shares on the date of exercise
over the exercise price, unless the stock received is not transferable and is
subject to a substantial risk of forfeiture (stock received by a participant
while it is subject to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 is deemed to be not transferable and subject to a
substantial risk of forfeiture). In such a case, the participant will recognize
taxable income when the shares are transferable or the risk of forfeiture
lapses, in an amount equal to the difference between the fair market value of
the stock as of such date and the exercise price.

      1.1.3 Disposition of Shares Acquired. A participant will recognize taxable
gain or loss on the sale of shares acquired upon exercise of a Non-Qualified
Stock Option in an amount equal to the difference between the selling price and
the tax basis of the shares in the hands of the participant. The tax basis of
the shares of the participant equals the exercise price plus any amount included
in the participant's taxable income as a result of the exercise of the option.
The gain or loss will generally be capital gain or loss, long term if the shares
were held by the participant for more than one year.
<PAGE>
      1.2   TAX CONSEQUENCES TO THE COMPANY, PARENT OR SUBSIDIARY.

            1.2.1 Incentive Stock Options. With respect to sales of shares
received by a participant as a result of exercising incentive stock options, if
the participant makes a Disqualifying Disposition, the Company, Parent or
Subsidiary for whom the participant provides services will generally be entitled
to a deduction equal to the amount includable in the participant's ordinary
income. Although the Company, Parent or Subsidiary is entitled to a deduction
for payment of compensation upon a participant's "disqualifying disposition,"
there is authority indicating the amount in question is not "wages" that will
require any withholding for federal income taxes.

            1.2.2 Non-Qualified Stock Options. With respect to non-qualified
stock options, the Company, Parent or Subsidiary for whom the participant
provides services will be entitled to a deduction at the time of exercise equal
to the difference between the fair market value of the stock on the date of
exercise and the exercise price. However, if the stock received upon exercise is
not transferable and is subject to a substantial risk of forfeiture, and if the
participant does not make a timely election under Section 83(b) of the Code,
then the Company, Parent or Subsidiary will be entitled to a deduction at the
time the shares are transferable or the risk of forfeiture lapses, in an amount
equal to the difference between the fair market value of the stock as of such
date and the exercise price. Generally, the Company, Parent or Subsidiary
realizes no other tax benefits with respect to sales of its shares under the
Plan.

      1.3 FINANCIAL RISKS TO THE PARTICIPANT. One of the advantages of stock
options is that, because the participant is not required to make any capital
outlay until exercise of the options, and because in almost all cases a
participant would not exercise an option unless the value of the stock exceeded
the option price at the date of exercise, option grants represent little, if
any, financial risk to participants. On the other hand, once the option is
exercised, the participant is at financial risk with respect to shares issued
thereby. If the Company's fortunes deteriorate, the purchased Stock may be worth
significantly less than the price the participant paid for it.

      1.4 SPECIAL RESTRICTIONS APPLICABLE TO INCENTIVE STOCK OPTIONS. Incentive
stock options &e subject to limitations not applicable to Non-Qualified Stock
Options or purchased shares subject to restrictions. For example, a participant
may not be granted incentive stock options which can be exercised in any one
calendar year to purchase Stock valued in excess of $100,000 on the grant date.

      The actual decision as to which of the equity incentives available under
the Plan should be used will depend upon the individual circumstances of the
Company and the participant.

                         SECTION 2: OPTION INSTRUCTIONS

      2.1 DOCUMENTS. The following documents are provided for use in connection
with stock options:

            2.1.1 A copy of the Plan.

<PAGE>
            2.1.2 Form of Notice of Stock Option Grant and Stock Option
Agreement (with exhibit Notice of Exercise) and Form of Resolution for Option
Grants for use under the Plan.

      2.2 GRANTS OF OPTIONS. Participants should not be promised that they will
be granted options. Only the Administrator has the power to grant options. When
the Administrator grants an option under the Plan, the following procedures
should be followed:

            2.2.1 Determine whether the option to be granted is to be an
incentive stock option ("ISO") or non-qualified stock option ("NQSO") and the
Notice of Stock Option Grant in the following manner:

                  2.2.1.1 Name. Fill in the name of the Optionee.

                  2.2.1.2 Number of Shares. Fill in the Number of Shares
specified by the Administrator.

                  2.2.1.3 Type of Option. Fill in the type of Option as either
an ISO or NQSO.

                  2.2.1.4 Exercise Price Per Share. Fill in the Option Exercise
Price per share. The Option Exercises Price of an ISO is the fair market value
of the Stock on the date the option was granted, as determined in good faith by
the Administrator. If the Optionee owns more than 10% of company's voting stock,
then minimum exercise price of an ISO is 110% of the fair market.

                  2.2.1.5 Date of Grant. Fill in the effective date of the
Option grant.

                  2.2.1.6 Vesting Commencement Date and Vesting Schedule. For
the Vesting Commencement Date and the Exercise Schedule, note that an option
becomes exercisable in installments, commencing one year after the date the
option was granted, unless the Administrator decides otherwise. (Samples of an
Exercise Schedule are discussed in Section 2.5).

                  2.2.1.7 Expiration Date. Fill in the Option Expiration Date.
The Option Expiration Date is ten years from the date the option was granted,
unless the Administrator designates a shorter duration. If the Option is an ISO
granted to an Optionee who owns more than 10% of the Company's voting stock, the
Expiration Date may not be longer than five years from the date the option was
granted.

            2.2.2 The Form of the Resolution should be copied, completed and
adopted by the Administrator and placed in the corporate minute book to reflect
the grant of options under the Plan.

            2.2.3 Have the completed Notice of Stock Option Grant signed by an
appropriate corporate officer; then deliver the executed Notice of Stock Option
Grant along with the Stock Option Agreement to the Optionee for his or her
signature. Be sure to tell the Optionee NOT TO SIGN the Notice of Exercise
(attached to the Stock Option Agreement as Exhibit A) at
<PAGE>
that time; it is to be signed only when all or a part of the option is
exercised. See "Exercise of Options," below.

            2.2.4 Give the signed Notice of Stock Option Grant with the Stock
Option Agreement to the Optionee and place a copy of each, marked "Copy" in a
separately maintained file for stock option grants.

      2.3 RECORDS. We suggest that you maintain in one place (either in a book
or in a file) a stock option ledger (the "LEDGER") of all options granted under
the Plan. The Ledger should set forth for each participant the name of the
Optionee, the date the option was granted, the number of shares covered by the
option, the option exercise price and the option termination date. If the
Optionee's employment with the Company terminates, you should note that fact and
the termination date next to the Optionee's name on the Ledger.

      Further, you should maintain in a separate file for stock options a copy
of each signed Notice of Stock Option Grant, along with the relevant Stock
Option Agreement.

      Finally, the Company should ensure that the name of each Optionee is
placed on the Company's shareholder mailing list so that the participant will
receive the Company's Annual Report to Shareholders, proxy statement, quarterly
reports to shareholders (if any), and any other documents delivered to the
Company's shareholders generally.

      2.4 EXERCISE OF OPTIONS. To exercise all or part of an option under the
Plan, the Optionee must complete and sign a Notice of Exercise and deliver it to
the Company, along with payment of the exercise price, either in cash, by check,
or in shares of stock, for the shares of Stock being purchased. If at the time
of exercise the Company is not public, the Optionee must also furnish you with
an appropriate "investment letter." We will, at your request, prepare such an
investment letter, and advise you of the legends to be placed upon the stock
certificates. When you have received the Notice of Exercise and the payment, you
should then complete a stock certificate appropriately legended and deliver it
to the Optionee or with respect to Restricted Stock, deposit the stock
certificate in escrow with the Company.

      The exercise of a NQSO is a taxable event, which will necessitate
withholding of income taxes. You should contact us at the time of exercise of an
option for further advice as to how to effect withholding.

      2.5 TERMINATION OF EMPLOYMENT. Shares of Stock subject to options under
the Plan may become exercisable immediately (subject to a vesting schedule and a
right of repurchase) or may become exercisable in installments. If the Option is
immediately exercisable the Notice of Stock Option Grant will state: "This
option may be exercised, in whole or in part, for 100% of the Shares subject to
this option at any time after the Date of Grant." If the Option is immediately
exercisable, the stock acquired upon exercise may be subject to a vesting
schedule. Upon termination of Service, the unvested shares will be subject to
the Company's right to repurchase at the exercise price. If the Option becomes
exercisable in installments and an Optionee's employment with the Company,
Parent and Subsidiaries terminates for any reason other than permanent
disability or death, the number of installments exercisable is fixed on the
<PAGE>
termination date, but the participant will be able to exercise the installments
that were exercisable on the termination date until 30 days after the
termination date.

            2.5.1 For example, assume that on January 1, 2002, the Company
granted to Participant X an option to purchase 4,000 shares of Stock under the
Plan. Assume further that the Notice of Stock Option Grant states: "This option
may be exercised, in whole or in part, for the first 25% of the Shares subject
to this option when the Optionee completes 12 months of continuous Service after
the Vesting Commencement Date. The option may be exercised, in whole or in part,
with respect to an additional 25% of the Shares subject to this option when the
Optionee completes each year of continuous Service thereafter." Thus, the option
becomes exercisable in four equal annual installments of 1,000 shares, on
January 1, 2003, 2004, 2005, and 2006. Although the example below is for vesting
in equal annual installments, you may wish to consider vesting in monthly
installments commencing at the beginning of the second year of the vesting
schedule.

            2.5.2 If Participant X's employment with the Company terminates on
July 1, 2002, Participant X would not be able to exercise any portion of his
option, because no installments would be exercisable on the termination date. On
that date, the option would terminate and expire.

            2.5.3 If Participant X's termination date is instead July 1, 2003,
then Participant X could exercise a portion of his option to purchase up to
1,000 shares until July 31, 2003, which is 30 days after the termination date.
After July 31, 2003, the option would terminate and expire.

      If an Optionee's employment is terminated because of permanent disability,
then unless the option agreement otherwise provides, the option period is
extended from thirty days to one year. If an Optionee's employment is terminated
because of death, then unless the option agreement otherwise provides, the
option may be exercised, to the extent exercisable, by the Optionee's executors,
administrators or heirs. In the above example, if Participant X were to become
permanently disabled on July 1,2003, Participant X could exercise up to 1,000
shares until June 30, 2003, after which date the option would terminate and
expire.

      2.6 STOCKHOLDER LEDGER AND DISCLOSURE. Finally, the Company should ensure
that the name of each Optionee who purchases shares pursuant to the exercise of
an Option granted under the Plan is placed on the Company's shareholder mailing
list so that the Purchaser will receive the Company's Annual Report to
Shareholders, proxy statement, quarterly reports to shareholders (if any) and
any other documents delivered to the Company's shareholders generally. Optionees
should also receive copies of annual reports and financial statements.<PAGE>
                                                                    Exhibit 10.4

                           VINEYARD NATIONAL BANCORP

                           2002 RESTRICTED SHARE PLAN

                                    * * * * *

      1. PURPOSE. The purpose of the 2002 Restricted Share Plan (the "Plan") is
to further and promote the interests of Vineyard National Bancorp (the
"Company"), its Subsidiaries and its shareholders by enabling the Company and
its Subsidiaries to attract, retain and motivate employees and officers or those
who will become employees or officers, and to align the interests of those
individuals and the Company's shareholders. To do this, the Plan offers
restricted share awards providing such employees and officers with a proprietary
interest in maximizing the growth, profitability and overall success of the
Company and its Subsidiaries.

      2. DEFINITIONS. For purposes of the Plan, the following terms shall have
the meanings set forth below:

            2.1 "AWARD" means an award of Restricted Shares made to a
Participant under Section 6 of the Plan.

            2.2 "AWARD AGREEMENT" means the agreement executed by a Participant
pursuant to Sections 3.2 and 11.6 of the Plan in connection with the granting of
an Award.

            2.3 "BOARD" means the Board of Directors of the Company, as
constituted from time to time or any Committee established by the Board.

            2.4 "CODE" means the Internal Revenue Code of 1986, as in effect
and as amended from time to time, or any successor statute thereto, together
with any rules, regulations and interpretations promulgated thereunder or with
respect thereto.

            2.5 "COMMITTEE" means the committee of the Board established from
time to time in the sole discretion of the Board to administer the Plan, as
described in Section 3 of the Plan. Any committee established by the Board shall
be composed solely of two or more Non-Employee Directors (as defined in Rule
16b-3 promulgated under the Exchange Act.)

            2.6 "COMMON STOCK" means the Common Stock, no par value per share,
of the Company or any security of the Company issued by the Company in
substitution or exchange therefor.

            2.7 "COMPANY" means Vineyard National Bancorp, a California
corporation, or any successor corporation to Vineyard National Bancorp.
<PAGE>
            2.8 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as in
effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.

            2.9 "FAIR MARKET VALUE" means on, or with respect to, any given
date(s), the average of the highest and lowest market prices of the Common
Stock, as reported on the Nasdaq Small Cap or National Market for such date(s)
or, if the Common Stock was not traded on such date(s), on the next preceding
day or days on which the Common Stock was traded. If at any time the Common
Stock is not traded on such exchange, the Fair Market Value of a share of the
Common Stock shall be determined in good faith by the Board.

            2.10 "PARTICIPANT" means any individual who is selected from time to
time under Section 5 to receive an Award under the Plan.

            2.11 "PLAN" means the Vineyard National Bancorp 2002 Restricted
Share Plan, as set forth herein and as in effect and as amended from time to
time (together with any rules and regulations promulgated by the Board with
respect thereto).

            2.12 "RESTRICTED SHARES" means the restricted shares of Common Stock
granted pursuant to the provisions of Section 6 of the Plan and the relevant
Award Agreement.

            2.13 "SUBSIDIARY(IES)" means any corporation (other than the
Company) in an unbroken chain of corporations, including and beginning with the
Company, if each of such corporations, other than the last corporation in the
unbroken chain, owns, directly or indirectly, more than fifty percent (50%) of
the voting stock in one of the other corporations in such chain.

            2.14 "SURVIVING ENTITY" means the Company, if immediately following
any merger, consolidation or similar transaction, the holders of outstanding
voting securities of the Company immediately prior to the merger or
consolidation own equity securities possessing more than 50% of the voting power
of the corporation existing following the merger, consolidation or similar
transaction. In all other cases, the other entity to the transaction and not the
Company shall be the Surviving Entity. In making the determination of ownership
by the shareholders of an entity immediately after the merger, consolidation or
similar transaction, equity securities the shareholders owned immediately before
the merger, consolidation or similar transaction as shareholders of another
party to the transaction shall be disregarded. Further, outstanding voting
securities of an entity shall be calculated by assuming the conversion of all
equity securities convertible (immediately or at some future time) into shares
entitled to vote.

      3.    ADMINISTRATION.

            3.1 GENERAL. The Plan shall be administered by the Board or the
Committee, as determined by the Board in its sole discretion. Members of the
Committee shall serve at the pleasure of the Board and the Board may from time
to time remove members from, or add members to, the Committee.

            3.2 PLAN ADMINISTRATION AND PLAN RULES. The Board is authorized to
construe and interpret the Plan and to promulgate, amend and rescind rules and
regulations

                                     - 2 -
<PAGE>
relating to the implementation, administration and maintenance of the Plan.
Subject to the terms and conditions of the Plan, the Board shall make all
determinations necessary or advisable for the implementation, administration and
maintenance of the Plan including, without limitation, (a) selecting the Plan's
Participants, (b) making Awards in such amounts and form as the Board shall
determine, (c) imposing such restrictions, terms and conditions upon such Awards
as the Board shall deem appropriate, and (d) correcting any technical defect(s)
or technical omission(s), or reconciling any technical inconsistency(ies), in
the Plan and/or any Award Agreement. The Board may designate persons other than
members of the Board to carry out the day-to-day ministerial administration of
the Plan under such conditions and limitations as it may prescribe. The Board's
determinations under the Plan need not be uniform and may be made selectively
among Participants, whether or not such Participants are similarly situated. Any
determination, decision or action of the Board in connection with the
construction, interpretation, administration, implementation or maintenance of
the Plan shall be final, conclusive and binding upon all Participants and any
person(s) claiming under or through any Participants. The Company shall effect
the granting of Awards under the Plan, in accordance with the determinations
made by the Board, by execution of written agreements and/or other instruments
in such form as is approved by the Board. The Board may, in its sole discretion,
delegate its authority to one or more senior executive officers for the purpose
of making Awards to Participants who are not subject to Section 16 of the
Exchange Act.

            3.3 LIABILITY LIMITATION. Neither the Board nor the Committee, nor
any member of either, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan (or
any Award Agreement), and the members of the Board and the Committee shall be
entitled to indemnification and reimbursement by the Company in respect of any
claim, loss, damage or expense (including, without limitation, attorneys' fees)
arising or resulting therefrom to the fullest extent permitted by law and/or
under any directors and officers liability insurance coverage which may be in
effect from time to time.

      4.    TERM OF PLAN/COMMON STOCK SUBJECT TO PLAN.

            4.1 TERM. The Plan shall terminate on such date as is ten years from
the date the first Award is granted hereunder, except with respect to Awards
then outstanding. After such date no further Awards shall be granted under the
Plan.

            4.2 COMMON STOCK. The maximum number of shares of Common Stock in
respect of which Awards may be granted or paid out under the Plan, subject to
adjustment as provided in Section 8.2 of the Plan, shall not exceed 25,000
shares. In the event of a change in the Common Stock of the Company that is
limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be the Common Stock
for purposes of the Plan. Common Stock which may be issued under the Plan may be
either authorized and unissued shares or issued shares which have been
reacquired by the Company (in the open-market or in private transactions) and
which are being held as treasury shares. No fractional shares of Common Stock
shall be issued under the Plan.

                                     - 3 -
<PAGE>
            4.3 COMPUTATION OF AVAILABLE SHARES. For the purpose of computing
the total number of shares of Common Stock available for Awards under the Plan,
there shall be counted against the limitations set forth in Section 4.2 of the
Plan the number of shares of Common Stock issued under grants of Restricted
Shares pursuant to Section 6 of the Plan determined as of the date on which such
Awards are granted. If any Awards are forfeited, surrendered, cancelled,
terminated or settled in cash in lieu of Common Stock, the shares of Common
Stock which were theretofore subject to such Awards shall again be available for
Awards under the Plan to the extent of such forfeiture, surrender, cancellation,
termination or settlement of such Awards.

      5. ELIGIBILITY. Individuals eligible for Awards under the Plan shall
consist of key employees and officers, or those who will become key employees or
officers of the Company and/or its Subsidiaries whose performance or
contribution, in the sole discretion of the Board, benefits or will benefit the
Company or any Subsidiary.

      6. RESTRICTED SHARES.

            6.1 TERMS AND CONDITIONS. Grants of Restricted Shares shall be
subject to the terms and conditions set forth in this Section 6 and any
additional terms and conditions, not inconsistent with the express terms and
provisions of the Plan, as the Board shall set forth in the relevant Award
Agreement. Subject to the terms of the Plan, the Board shall determine the
number of Restricted Shares to be granted to a Participant and the Board may
provide or impose different terms and conditions on any particular Restricted
Share grant made to any Participant. With respect to each Participant receiving
an Award of Restricted Shares, there shall be issued a stock certificate (or
certificates) in respect of such Restricted Shares. Such stock certificate(s)
shall be registered in the name of such Participant, shall be accompanied by a
stock power duly executed by such Participant, and shall bear, among other
required legends, the following legend:

            "The transferability of this certificate and the shares of stock
            represented hereby are subject to the terms and conditions
            (including, without limitation, forfeiture events) contained in the
            Vineyard National Bancorp 2002 Restricted Share Plan and an Award
            Agreement entered into between the registered owner hereof and
            Vineyard National Bancorp. Copies of such Plan and Award Agreement
            are on file in the office of the Secretary of Vineyard National
            Bancorp, 9590 Foothill Blvd., Rancho Cucamonga, CA 91730. Vineyard
            National Bancorp will furnish to the recordholder of the
            certificate, without charge and upon written request at its
            principal place of business, a copy of such Plan and Award
            Agreement. Vineyard National Bancorp reserves the right to refuse to
            record the transfer of this certificate until all such restrictions
            are satisfied, all such terms are complied with and all such
            conditions are satisfied."

Such stock certificate evidencing such shares shall, in the sole discretion of
the Board, be deposited with and held in custody by the Company until the
restrictions thereon shall have lapsed and all of the terms and conditions
applicable to such grant shall have been satisfied.

                                     - 4 -
<PAGE>
            6.2 RESTRICTED SHARE GRANTS. A grant of Restricted Shares is an
Award of shares of Common Stock granted to a Participant, subject to such
restrictions, terms and conditions as the Board deems appropriate, including,
without limitation, (a) restrictions on the sale, assignment, transfer,
hypothecation or other disposition of such shares, (b) the requirement that the
Participant deposit such shares with the Company while such shares are subject
to such restrictions, and (c) the requirement that such shares be forfeited upon
termination of employment for specified reasons within a specified period of
time or for other reasons (including, without limitation, the failure to achieve
designated performance goals).

            6.3 RESTRICTION PERIOD. In accordance with Sections 6.1 and 6.2 of
the Plan and unless otherwise determined by the Board (in its sole discretion)
at any time and from time to time, Restricted Shares shall only become
unrestricted and vested in the Participant in accordance with such vesting
schedule relating to such Restricted Shares, if any, as the Board may establish
in the relevant Award Agreement (the "Restriction Period"). During the
Restriction Period, such stock shall be and remain unvested and a Participant
may not sell, assign, transfer, pledge, encumber or otherwise dispose of or
hypothecate such Award. Upon satisfaction of the vesting schedule and any other
applicable restrictions, terms and conditions, the Participant shall be entitled
to receive payment of the Restricted Shares or a portion thereof, as the case
may be, as provided in Section 6.4 of the Plan.

            6.4 PAYMENT OF RESTRICTED SHARE GRANTS. After the satisfaction
and/or lapse of the restrictions, terms and conditions established by the Board
in respect of a grant of Restricted Shares, a new certificate, without the
legend set forth in Section 6.1 of the Plan, for the number of shares of Common
Stock which are no longer subject to such restrictions, terms and conditions
shall, as soon as practicable thereafter, be delivered to the Participant.

            6.5 SHAREHOLDER RIGHTS. A Participant shall have, with respect to
the shares of Common Stock underlying a grant of Restricted Shares, all of the
rights of a shareholder of such stock (except as such rights are limited or
restricted under the Plan or in the relevant Award Agreement). Any stock
dividends paid in respect of unvested Restricted Shares shall be treated as
additional Restricted Shares and shall be subject to the same restrictions and
other terms and conditions that apply to the unvested Restricted Shares in
respect of which such stock dividends are issued.

      7. NON-TRANSFERABILITY OF AWARDS. Unless otherwise provided in the Award
Agreement, no Award under the Plan or any Award Agreement, and no rights or
interests herein or therein, shall or may be assigned, transferred, sold,
exchanged, encumbered, pledged, or otherwise hypothecated or disposed of by a
Participant or any beneficiary(ies) of any Participant, except by testamentary
disposition by the Participant or the laws of intestate succession. No such
interest shall be subject to execution, attachment or similar legal process,
including, without limitation, seizure for the payment of the Participant's
debts, judgments, alimony, or separate maintenance.

      8. CHANGES IN CAPITALIZATION AND OTHER MATTERS.

            8.1 NO CORPORATE ACTION RESTRICTION. The existence of the Plan, any
Award Agreement and/or the Awards granted hereunder shall not limit, affect or
restrict in any way the

                                     - 5 -
<PAGE>
right or power of the Board or the shareholders of the Company to make or
authorize (a) any adjustment, recapitalization, reorganization or other change
in the Company's or any Subsidiary's capital structure or its business, (b) any
merger, consolidation or change in the ownership of the Company or any
Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior
preference stocks ahead of or affecting the Company's or any Subsidiary's
capital stock or the rights thereof, (d) any dissolution or liquidation of the
Company or any Subsidiary, (e) any sale or transfer of all or any part of the
Company's or any Subsidiary's assets or business, or (f) any other corporate act
or proceeding by the Company or any Subsidiary. No Participant, beneficiary or
any other person shall have any claim against any member of the Board or the
Committee, the Company or any Subsidiary, or any employees, officers,
shareholders or agents of the Company or any subsidiary, as a result of any such
action.

            8.2 RECAPITALIZATION ADJUSTMENTS. In the event that the Board
determines that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, Change of Control or exchange of Common Stock
or other securities of the Company, or other corporate transaction or event
affects the Common Stock such that an adjustment is determined by the Board, in
its sole discretion, to be necessary or appropriate in order to prevent dilution
or enlargement of benefits or potential benefits intended to be made available
under the Plan, the Board may, in such manner as it in good faith deems
equitable, adjust any or all of (i) the number of shares of Common Stock or
other securities of the Company (or number and kind of other securities or
property) with respect to which Awards may be granted, and (ii) the number of
shares of Common Stock or other securities of the Company (or number and kind of
other securities or property) subject to outstanding Awards. In addition, the
Company may make provision for an immediate cash payment to the holder of an
outstanding Award in consideration for the cancellation of such Award.

      9. CHANGE OF CONTROL.

            9.1 ACCELERATION OF AWARDS VESTING. Anything in the Plan to the
contrary notwithstanding, if a Change of Control of the Company occurs all
restrictions, terms and conditions applicable to all Restricted Shares then
outstanding shall be deemed lapsed and satisfied as of the date of the Change of
Control. The immediately preceding sentence shall apply to only those
Participants who are employed by the Company and/or one of its Subsidiaries as
of the date of the Change of Control.

            9.2 CHANGE OF CONTROL. For the purpose of this Agreement, "Change of
Control" shall mean:

               9.2.1 The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power (which voting power shall be
calculated by assuming the conversion of all equity securities convertible
(immediately or at some future time) into shares entitled to vote, but not
assuming the exercise of any warrant or right to subscribe to or purchase those
shares) of the continuing or Surviving Entity's securities outstanding
immediately after such merger, consolidation or other reorganization is owned,
directly

                                     - 6 -
<PAGE>
or indirectly, by persons who were not shareholders of the Company immediately
prior to such merger, consolidation or other reorganization; provided, however,
that in making the determination of ownership by the shareholders of the
Company, immediately after the reorganization, equity securities which persons
own immediately before the reorganization as shareholders of another party to
the transaction shall be disregarded; or

               9.2.2 The sale, transfer or other disposition of all or
substantially all of the Company's assets.

               9.2.3 A transaction shall not constitute a Change in Control if
its sole purpose is to change the state of the Company's incorporation or to
create a holding company that will be owned in substantially the same
proportions by the persons who held the Company's securities immediately before
such transaction.

      10. AMENDMENT, SUSPENSION AND TERMINATION.

            10.1 IN GENERAL. The Board may suspend or terminate the Plan (or any
portion thereof) at any time and may amend the Plan at any time and from time to
time in such respects as the Board may deem advisable to insure that any and all
Awards conform to or otherwise reflect any change in applicable laws or
regulations, or to permit the-company or the Participants to benefit from any
change in applicable laws or regulations, or in any other respect the Board may
deem to be in the best interests of the Company or any Subsidiary. No such
amendment, suspension or termination shall materially adversely affect the
rights of any Participant under any outstanding Restricted Share grant, without
the consent of such Participant.

            10.2 AWARD AGREEMENT MODIFICATIONS. The Board may (in its sole
discretion) amend or modify at any time and from time to time the terms and
provisions of any outstanding Restricted Share grant, in any manner to the
extent that the Board under the Plan or any Award Agreement could have initially
determined the restrictions, terms and provisions of such Restricted Share
grant, including, without limitation, changing or accelerating the date or dates
as of which such Restricted Share grants shall become vested. No such amendment
or modification shall, however, materially adversely affect the rights of any
Participant under any such Award without the consent of such Participant.

      11. MISCELLANEOUS.

            11.1 TAX WITHHOLDING. The Company shall have the right to deduct
from any payment or settlement under the Plan, including, without limitation,
the delivery, transfer or vesting of any Common Stock or Restricted Shares, any
federal, state, local or other taxes of any kind which the Board, in its sole
discretion, deems necessary to be withheld to comply with the Code and/or any
other applicable law, rule or regulation. Shares of Common Stock may be used to
satisfy any such tax withholding. Such Common Stock shall be valued based on the
Fair Market Value of such stock as of the date the tax withholding is required
to be made, such date to be determined by the Board. In addition, the Company
shall have the right to require payment from a Participant to cover any
applicable withholding or other employment taxes due upon any payment or
settlement under the Plan.

                                     - 7 -
<PAGE>
            11.2 NO RIGHT TO EMPLOYMENT. Neither the adoption of the Plan, the
granting of any Award, nor the execution of any Award Agreement, shall confer
upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.

            11.3 UNFUNDED PLAN. The Plan shall be unfunded and the Company shall
not be required to segregate any assets in connection with any Awards under the
Plan. Any liability of the Company to any person with respect to any Award under
the Plan or any Award Agreement shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any such award or
agreement. No such obligation of the Company shall be deemed to be secured by
any pledge of, encumbrance on, or other interest in, any property or asset of
the Company or any Subsidiary. Nothing contained in the Plan or any Award
Agreement shall be construed as creating in respect of any Participant (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Participant, any beneficiary thereof or any other person.

            11.4 OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and
other benefits received by a Participant under an Award made pursuant to the
Plan shall not be deemed a part of a Participant's compensation for purposes of
the determination of benefits under any other employee welfare or benefit plans
or arrangements, if any, provided by the Company or any Subsidiary unless
expressly provided in such other plans or arrangements, or except where the
Board expressly determines in writing that inclusion of an Award or portion of
an Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive annual base salary or other cash compensation. Awards under the Plan
may be made in addition to, in combination with, or as alternatives to, grants,
awards or payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.

            11.5 LISTING, REGISTRATION AND OTHER LEGAL COMPLIANCE. No Awards or
shares of the Common Stock shall be required to be issued or granted under the
Plan unless legal counsel for the Company shall be satisfied that such issuance
or grant will be in compliance with all applicable federal and state securities
laws and regulations and any other applicable laws or regulations. The Board may
require, as a condition of any payment or share issuance, that certain
agreements, undertakings, representations, certificates, and/or information, as
the Board may deem necessary or advisable, be executed or provided to the
Company to assure compliance with all such applicable laws or regulations.
Certificates for shares of the Restricted Shares and/or Common Stock delivered
under the Plan may be subject to such stock-transfer orders and such other
restrictions as the Board may deem advisable under the rules, regulations, or
other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable federal or state
securities law. In addition, if, at

                                     - 8 -
<PAGE>
any time specified herein (or in any Award Agreement or otherwise) for (a) the
making of any Award, or the making of any determination, (b) the issuance or
other distribution of Restricted Shares and/or Common Stock, or (c) the payment
of amounts to or through a Participant with respect to any Award, any law, rule,
regulation or other requirement of any governmental authority or agency shall
require either the Company, any Subsidiary or any Participant (or any estate,
designated beneficiary or other legal representative thereof) to take any action
in connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
to persons subject to Section 16 of the Exchange Act, transactions under the
Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act.

            11.6 AWARD AGREEMENTS. Each Participant receiving an Award under the
Plan shall enter into an Award Agreement with the Company in a form specified by
the Board. Each such Participant shall agree to the restrictions, terms and
conditions of the Award set forth therein and in the Plan.

            11.7 DESIGNATION OF BENEFICIARY. Each Participant to whom an Award
has been made under the Plan may designate a beneficiary or beneficiaries to
receive any payment which under the terms of the Plan and the relevant Award
Agreement may become payable on or after the Participant's death. At any time,
and from time to time, any such designation may be changed or cancelled by the
Participant without the consent of any such beneficiary. Any such designation,
change or cancellation must be on a form provided for that purpose by the Board
and shall not be effective until received by the Board. If no beneficiary has
been designated by a deceased Participant, or if the designated beneficiaries
have predeceased the Participant, the beneficiary shall be the Participant's
estate. If the Participant designates more than one beneficiary, any payments
under the Plan to such beneficiaries shall be made in equal shares unless the
Participant has expressly designated otherwise, in which case the payments shall
be made in the shares designated by the Participant.

            11.8 LEAVES OF ABSENCE/TRANSFERS. The Board shall have the power to
promulgate rules and regulations and to make determinations, as it deems
appropriate, under the Plan in respect of any leave of absence from the Company
or any Subsidiary granted to a Participant. Without limiting the generality of
the foregoing, the Board may determine whether any such leave of absence shall
be treated as if the Participant has terminated employment with the Company or
any such Subsidiary. If a Participant transfers within the Company, or to or
from any Subsidiary, such Participant shall not be deemed to have terminated
employment as a result of such transfers.

            11.9 GOVERNING LAW. The Plan and all actions taken thereunder shall
be governed by and construed in accordance with the laws of the State of
California, without reference to the principles of conflict of laws thereof. Any
titles and headings herein are for reference purposes only, and shall in no way
limit, define or otherwise affect the meaning, construction or interpretation of
any provisions of the Plan.

            11.10 EFFECTIVE DATE. The Plan shall be effective upon its approval
by the Board and adoption by the Company.

                                     - 9 -
<PAGE>
      IN WITNESS WHEREOF, this Plan is adopted by the Company on this 26th day
of June 2002.

                                                   VINEYARD NATIONAL BANCORP

                                                   By: /s/ NORMAN MORALES
                                                      --------------------------
                                                   Name:  Norman Morales
                                                   Title: President & Chief
                                                          Executive Officer

                                     - 10 -

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