Document:

<PAGE>

                                                                    Exhibit 10.5

                       ACCREDITED HOME LENDERS HOLDING CO.
                        2002 EMPLOYEE STOCK PURCHASE PLAN

     1.   Establishment, Purpose and Term of Plan.

          1.1  Establishment. The Accredited Home Lenders Holding Co. 2002
Employee Stock Purchase Plan (the "Plan") is hereby established effective as of
the effective date of the initial registration by the Company of its Stock under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Effective
Date").

          1.2  Purpose. The purpose of the Plan is to advance the interests of
the Company and its stockholders by providing an incentive to attract, retain
and reward Eligible Employees of the Participating Company Group and by
motivating such persons to contribute to the growth and profitability of the
Participating Company Group. The Plan provides such Eligible Employees with an
opportunity to acquire a proprietary interest in the Company through the
purchase of Stock. The Company intends that the Plan qualify as an "employee
stock purchase plan" under Section 423 of the Code (including any amendments or
replacements of such section), and the Plan shall be so construed.

          1.3  Term of Plan. The Plan shall continue in effect until the earlier
of its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued.

     2.   Definitions and Construction.

          2.1  Definitions. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same definition
herein. Whenever used herein, the following terms shall have their respective
meanings set forth below:

               (a) "Board" means the Board of Directors of the Company. If one
or more Committees have been appointed by the Board to administer the Plan,
"Board" also means such Committee(s).

               (b) "Code" means the Internal Revenue Code of 1986, as amended,
and any applicable regulations promulgated thereunder.

               (c) "Committee" means a committee of the Board duly appointed to
administer the Plan and having such powers as specified by the Board. Unless the
powers of the Committee have been specifically limited, the Committee shall have
all of the powers of the Board granted herein, including, without limitation,
the power to amend or terminate the Plan at any time, subject to the terms of
the Plan and any applicable limitations imposed by law.

               (d) "Company" means Accredited Home Lenders Holding Co., a
Delaware corporation, or any successor corporation thereto.

                                       1

<PAGE>

               (e) "Compensation" means, with respect to any Offering Period,
base salary, overtime, bonuses and commissions. Compensation shall be limited to
amounts actually payable in cash directly to the Participant, provided however,
that Compensation shall include, unless otherwise provided below, amounts
voluntarily deferred by a Participant to a plan described in Section 401(k) of
the Code, Section 125 of the Code, or a nonqualified deferred compensation plan
maintained primarily for the benefit of a select group of management or highly
paid employees (a "Top-Hat Plan"). Compensation shall not include any amounts
required by the Company to be deferred to a Top-Hat Plan, any Participating
Company discretionary contribution to a Top-Hat Plan, other incentive payments,
shift premiums, long-term disability, workers' compensation, moving allowances,
payments pursuant to a severance agreement, termination pay, relocation
payments, sign-on bonuses, expense reimbursements, the cost of employee benefits
paid by a Participating Company, tuition reimbursements, imputed income arising
under any benefit program, contributions made by a Participating Company under
any employee benefit plan, income directly or indirectly received pursuant to
the Plan or any other stock purchase or stock option plan, or any other
compensation not included in base salary and commissions.

               (f) "Eligible Employee" means an Employee who meets the
requirements set forth in Section 5 for eligibility to participate in the Plan.

               (g) "Employee" means a person treated as an employee of a
Participating Company for purposes of Section 423 of the Code. A Participant
shall be deemed to have ceased to be an Employee either upon an actual
termination of employment or upon the corporation employing the Participant
ceasing to be a Participating Company. For purposes of the Plan, an individual
shall not be deemed to have ceased to be an Employee while on any military
leave, sick leave, or other bona fide leave of absence approved by the Company
of ninety (90) days or less. If an individual's leave of absence exceeds ninety
(90) days, the individual shall be deemed to have ceased to be an Employee on
the ninety-first (91st) day of such leave unless the individual's right to
reemployment with the Participating Company Group is guaranteed either by
statute or by contract.

               (h) "Fair Market Value" means, as of any date:

                   (i)  If the Stock is then listed on a national or regional
securities exchange or market system or is regularly quoted by a recognized
securities dealer, the closing sale price of a share of Stock (or the mean of
the closing bid and asked prices if the Stock is so quoted instead) as quoted on
the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or
regional securities exchange or market system constituting the primary market
for the Stock, or by such recognized securities dealer, as reported in The Wall
Street Journal or such other source as the Company deems reliable. If the
relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system or has been quoted by such securities
dealer, the date on which the Fair Market Value is established shall be the last
day on which the Stock was so traded or quoted prior to the relevant date, or
such other appropriate day as determined by the Board, in its discretion.

                   (ii) If, on the relevant date, the Stock is not then listed
on a national or regional securities exchange or market system or regularly
quoted by a recognized

                                       2

<PAGE>

securities dealer, the Fair Market Value of a share of Stock shall be as
determined in good faith by the Board.

                   (iii) Notwithstanding the foregoing, the Fair Market Value
of a share of Stock on the Effective Date shall be deemed to be the public
offering price set forth in the final prospectus filed with the Securities and
Exchange Commission in connection with the Company's initial public offering of
the Stock.

               (i) "Initial Offering Period Cash Exercise Notice" means a
written notice in such form as specified by the Company, which states a
Participant's election to exercise, as of the next Purchase Date, a Purchase
Right granted to such Participant with respect to the Initial Offering Period.

               (j) "Offering" means an offering of Stock as provided in Section
6.

               (k) "Offering Date" means, for any Offering, the first day of the
Offering Period.

               (l) "Offering Period" means a period established in accordance
with Section 6.

               (m) "Parent Corporation" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

               (n) "Participant" means an Eligible Employee who has become a
participant in an Offering Period in accordance with Section 7 and remains a
participant in accordance with the Plan.

               (o) "Participating Company" means the Company or any Parent
Corporation or Subsidiary Corporation designated by the Board as a corporation
the Employees of which may, if Eligible Employees, participate in the Plan. The
Board shall have the sole and absolute discretion to determine from time to time
which Parent Corporations or Subsidiary Corporations shall be Participating
Companies.

               (p) "Participating Company Group" means, at any point in time,
the Company and all other corporations collectively which are then Participating
Companies.

               (q) "Purchase Date" means, for any Offering Period, the last day
of such period.

               (r) "Purchase Price" means the price at which a share of Stock
may be purchased under the Plan, as determined in accordance with Section 9.

               (s) "Purchase Right" means an option granted to a Participant
pursuant to the Plan to purchase such shares of Stock as provided in Section 8,
which the Participant may or may not exercise during the Offering Period in
which such option is outstanding. Such option arises from the right of a
Participant to withdraw any accumulated

                                       3

<PAGE>

payroll deductions of the Participant not previously applied to the purchase of
Stock under the Plan and to terminate participation in the Plan at any time
during an Offering Period.

               (t) "Registration Date" means the effective date of the initial
registration on Form S-8 of shares of Stock issuable pursuant to the Plan.

               (u) "Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 4.2.

               (v) "Subscription Agreement" means a written agreement in such
form as specified by the Company, stating an Employee's election to participate
in the Plan and authorizing payroll deductions under the Plan from the
Employee's Compensation.

               (w) "Subscription Date" means the last business day prior to the
Offering Date of an Offering Period or such earlier date as the Company shall
establish.

               (x) "Subsidiary Corporation" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

          2.2  Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

     3.   Administration.

          3.1  Administration by the Board. The Plan shall be administered by
the Board. All questions of interpretation of the Plan, of any form of agreement
or other document employed by the Company in the administration of the Plan, or
of any Purchase Right shall be determined by the Board, and such determinations
shall be final, binding and conclusive upon all persons having an interest in
the Plan or the Purchase Right, unless fraudulent or made in bad faith. Subject
to the provisions of the Plan, the Board shall determine all of the relevant
terms and conditions of Purchase Rights; provided, however, that all
Participants granted Purchase Rights pursuant to an Offering shall have the same
rights and privileges within the meaning of Section 423(b)(5) of the Code. Any
and all actions, decisions and determinations taken or made by the Board in the
exercise of its discretion pursuant to the Plan or any agreement thereunder
(other than determining questions of interpretation pursuant to the second
sentence of this Section 3.1) shall be final, binding and conclusive upon all
persons having an interest therein. All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.

          3.2  Authority of Officers. Any officer of the Company shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election that is the responsibility of or that is
allocated to the Company herein, provided that the officer has apparent
authority with respect to such matter, right, obligation, determination or
election.

                                       4

<PAGE>

          3.3 Policies and Procedures Established by the Company. The Company
may, from time to time, consistent with the Plan and the requirements of Section
423 of the Code, establish, change or terminate such rules, guidelines,
policies, procedures, limitations, or adjustments as deemed advisable by the
Company, in its discretion, for the proper administration of the Plan,
including, without limitation, (a) a minimum payroll deduction amount required
for participation in an Offering, (b) a limitation on the frequency or number of
changes permitted in the rate of payroll deduction during an Offering, (c) an
exchange ratio applicable to amounts withheld in a currency other than United
States dollars, (d) a payroll deduction greater than or less than the amount
designated by a Participant in order to adjust for the Company's delay or
mistake in processing a Subscription Agreement or in otherwise effecting a
Participant's election under the Plan or as advisable to comply with the
requirements of Section 423 of the Code, and (e) determination of the date and
manner by which the Fair Market Value of a share of Stock is determined for
purposes of administration of the Plan. All such actions by the Company shall be
taken consistent with the requirement under Section 423(b)(5) of the Code that
all Participants granted Purchase Rights pursuant to an Offering shall have the
same rights and privileges within the meaning of such section.

          3.4 Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

     4.   Shares Subject to Plan.

          4.1 Maximum Number of Shares Issuable. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be 1,000,000, cumulatively increased on
January 1, 2004 and each January 1 thereafter until and including January 1,
2013 (the "Annual Increase") by the lesser of (a) 5% of the number of shares of
Stock issued and outstanding on the immediately preceding December 31, (b)
500,000 shares, or (c) such lesser number of shares determined by the Board, and
shall consist of authorized but unissued or reacquired shares of Stock, or any
combination thereof. If an outstanding Purchase Right for any reason expires or
is terminated or canceled, the shares of Stock allocable to the unexercised
portion of that Purchase Right shall again be available for issuance under the
Plan.

                                       5

<PAGE>

          4.2 Adjustments for Changes in Capital Structure. In the event of any
stock dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company, or
in the event of any merger (including a merger effected for the purpose of
changing the Company's domicile), sale of assets or other reorganization in
which the Company is a party, appropriate adjustments shall be made in the
number and class of shares subject to the Plan, the Annual Increase, the limit
on the shares which may be purchased by any Participant during an Offering (as
described in Section 8.1) and each Purchase Right, and in the Purchase Price. If
a majority of the shares of the same class as the shares subject to outstanding
Purchase Rights are exchanged for, converted into, or otherwise become (whether
or not pursuant to an Ownership Change Event) shares of another corporation (the
"New Shares"), the Board may unilaterally amend the outstanding Purchase Rights
to provide that such Purchase Rights are exercisable for New Shares. In the
event of any such amendment, the number of shares subject to, and the Purchase
Price of, the outstanding Purchase Rights shall be adjusted in a fair and
equitable manner, as determined by the Board, in its discretion. Notwithstanding
the foregoing, any fractional share resulting from an adjustment pursuant to
this Section 4.2 shall be rounded down to the nearest whole number, and in no
event may the Purchase Price be decreased to an amount less than the par value,
if any, of the stock subject to the Purchase Right. The adjustments determined
by the Board pursuant to this Section 4.2 shall be final, binding and
conclusive.

     5.   Eligibility.

          5.1 Employees Eligible to Participate. Each Employee of a
Participating Company is eligible to participate in the Plan and shall be deemed
an Eligible Employee, except the following:

              (a) Any Employee who is customarily employed by the Participating
Company Group for less than twenty (20) hours per week; or

              (b) Any Employee who is customarily employed by the Participating
Company Group for not more than five (5) months in any calendar year.

          5.2 Exclusion of Certain Stockholders. Notwithstanding any provision
of the Plan to the contrary, no Employee shall be treated as an Eligible
Employee and granted a Purchase Right under the Plan if, immediately after such
grant, the Employee would own or hold options to purchase stock of the Company
or of any Parent Corporation or Subsidiary Corporation possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock
of such corporation, as determined in accordance with Section 423(b)(3) of the
Code. For purposes of this Section 5.2, the attribution rules of Section 424(d)
of the Code shall apply in determining the stock ownership of such Employee.

          5.3 Determination by Company. The Company shall determine in good
faith and in the exercise of its discretion whether an individual has become or
has ceased to be an Employee or an Eligible Employee and the effective date of
such individual's attainment or termination of such status, as the case may be.
For purposes of an individual's participation in or other rights, if any, under
the Plan as of the time of the Company's determination, all such determinations
by the Company shall be final, binding and conclusive, notwithstanding that the

                                       6

<PAGE>

Company or any court of law or governmental agency subsequently makes a contrary
determination.

     6.   Offerings.

          The Plan shall be implemented on and after the Effective Date by
sequential Offerings of approximately six (6) months duration or such other
duration as the Board shall determine (an "Offering Period"); provided, however,
that the first Offering Period (the "Initial Offering Period") shall commence on
the Effective Date and end on June 30, 2003. Subsequent Offering Periods shall
commence on or about July 1 and January 1 of each year and end on or about
December 31 and June 30, respectively, occurring thereafter. Notwithstanding the
foregoing, the Board may establish a different duration for one or more Offering
Periods or different commencing or ending dates for such Offering Periods;
provided, however, that no Offering Period may have a duration exceeding
twenty-seven (27) months. If the first or last day of an Offering Period is not
a day on which the national securities exchanges or Nasdaq Stock Market are open
for trading, the Company shall specify the trading day that will be deemed the
first or last day, as the case may be, of the Offering Period.

     7.   Participation in the Plan.

          7.1 Initial Participation.

              (a) Generally. Except as provided in Section 7.1(b), an Eligible
Employee may become a Participant in an Offering Period by delivering a properly
completed Subscription Agreement to the office designated by the Company not
later than the close of business for such office on the Subscription Date
established by the Company for that Offering Period. An Eligible Employee who
does not deliver a properly completed Subscription Agreement to the Company's
designated office on or before the Subscription Date for an Offering Period
shall not participate in the Plan for that Offering Period or for any subsequent
Offering Period unless the Eligible Employee subsequently delivers a properly
completed Subscription Agreement to the appropriate office of the Company on or
before the Subscription Date for such subsequent Offering Period. An Employee
who becomes an Eligible Employee after the Offering Date of an Offering Period
shall not be eligible to participate in that Offering Period but may participate
in any subsequent Offering Period provided the Employee is still an Eligible
Employee as of the Offering Date of such subsequent Offering Period.

              (b) Automatic Participation in Initial Offering Period.
Notwithstanding Section 7.1(a), each Employee who is an Eligible Employee as of
the Effective Date shall automatically become a Participant in the Initial
Offering Period and shall be granted automatically a Purchase Right consisting
of an option to purchase the lesser of (a) a number of whole shares of Stock
determined in accordance with Section 8 or (b) a number of whole shares of Stock
determined by dividing fifteen percent (15%) of such Participant's Compensation
paid during the Initial Offering Period by the Purchase Price applicable to the
Initial Offering Period. The Company shall not require or permit any Participant
to deliver a Subscription Agreement for participation in the Initial Offering
Period; provided, however, that following the Registration Date a Participant
may deliver a Subscription Agreement to the office designated by the Company if
the Participant wishes to change the terms of the Participant's participation in
the

                                       7

<PAGE>

Initial Offering Period. Such changes may include, for example, an election to
commence payroll deductions in accordance with Section 10.

          7.2  Continued Participation.

               (a) Generally. Except as provided in Section 7.2(b), a
Participant shall automatically participate in the next Offering Period
commencing immediately after the Purchase Date of each Offering Period in which
the Participant participates provided that the Participant remains an Eligible
Employee on the Offering Date of the new Offering Period and has not either (a)
withdrawn from the Plan pursuant to Section 12.1 or (b) terminated employment as
provided in Section 13. A Participant who may automatically participate in a
subsequent Offering Period, as provided in this Section, is not required to
deliver any additional Subscription Agreement for the subsequent Offering Period
in order to continue participation in the Plan. However, a Participant may
deliver a new Subscription Agreement for a subsequent Offering Period in
accordance with the procedures set forth in Section 7.1(a) if the Participant
desires to change any of the elections contained in the Participant's then
effective Subscription Agreement.

               (b) Participation in Subsequent Offering Period. Notwithstanding
Section 7.2(a), an Eligible Employee who was automatically enrolled in the
Initial Offering Period and who wishes to participate in an Offering Period
which begins after the Initial Offering Period shall deliver a Subscription
Agreement in accordance with Section 7.1(a) no earlier than the Registration
Date and no later than the Subscription Date for such Offering Period, unless
such Employee was a Participant in the Initial Offering Period who delivered a
Subscription Agreement with respect to the Initial Offering Period as provided
in Section 7.1(b).

     8.   Right to Purchase Shares.

          8.1  Grant of Purchase Right. Except as provided in Section 7.1 with
respect to the Initial Offering Period or as set forth below (or otherwise
specified by the Board prior to the Offering Date), on the Offering Date of each
Offering Period, each Participant in such Offering Period shall be granted
automatically, on the Offering Date, a Purchase Right consisting of an option to
purchase the lesser of (a) that number of whole shares of Stock determined by
dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair Market Value
of a share of Stock on such Offering Date or (b) one thousand five hundred
(1,500) shares of Stock. No Purchase Right shall be granted on an Offering Date
to any person who is not, on such Offering Date, an Eligible Employee.

          8.2  Calendar Year Purchase Limitation. Notwithstanding any provision
of the Plan to the contrary, no Participant shall be granted a Purchase Right
which permits his or her right to purchase shares of Stock under the Plan to
accrue at a rate which, when aggregated with such Participant's rights to
purchase shares under all other employee stock purchase plans of a Participating
Company intended to meet the requirements of Section 423 of the Code, exceeds
Twenty-Five Thousand Dollars ($25,000) in Fair Market Value (or such other
limit, if any, as may be imposed by the Code) for each calendar year in which
such Purchase Right is outstanding at any time. For purposes of the preceding
sentence, the Fair Market Value of shares purchased during a given Offering
Period shall be determined as of the Offering Date for such

                                       8

<PAGE>

Offering Period. The limitation described in this Section shall be applied in
conformance with applicable regulations under Section 423(b)(8) of the Code.

     9.   Purchase Price.

          The Purchase Price at which each share of Stock may be acquired in an
Offering Period upon the exercise of all or any portion of a Purchase Right
shall be established by the Board; provided, however, that the Purchase Price on
each Purchase Date shall not be less than eighty-five percent (85%) of the
lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of
the Offering Period or (b) the Fair Market Value of a share of Stock on the
Purchase Date.

     10.  Accumulation of Purchase Price Through Payroll Deduction.

          Except as provided in Section 11.1(b) with respect to the Initial
Offering Period, shares of Stock acquired pursuant to the exercise of all or any
portion of a Purchase Right may be paid for only by means of payroll deductions
from the Participant's Compensation accumulated during the Offering Period for
which such Purchase Right was granted, subject to the following:

          10.1 Amount of Payroll Deductions. Except as otherwise provided
herein, the amount to be deducted under the Plan from a Participant's
Compensation on each payday during an Offering Period shall be determined by the
Participant's Subscription Agreement. The Subscription Agreement shall set forth
the percentage of the Participant's Compensation to be deducted on each payday
during an Offering Period in whole percentages of not less than one percent (1%)
(except as a result of an election pursuant to Section 10.3 to stop payroll
deductions effective following the first payday during an Offering) or more than
fifteen percent (15%). The Board may change the foregoing limits on payroll
deductions effective as of any Offering Date.

          10.2 Commencement of Payroll Deductions. Payroll deductions shall
commence on the first payday following the Offering Date and shall continue to
the end of the Offering Period unless sooner altered or terminated as provided
herein; provided, however, that with respect to the Initial Offering Period,
payroll deductions shall commence as soon as practicable following the Company's
receipt of the Participant's Subscription Agreement (delivered no earlier than
the Registration Date), if any.

          10.3 Election to Change or Stop Payroll Deductions. During an Offering
Period, a Participant may elect to stop deductions from his or her Compensation
by delivering to the Company's designated office an amended Subscription
Agreement authorizing such change on or before the Change Notice Date, as
defined below. A Participant who elects, effective following the first payday of
an Offering Period, to decrease the rate of his or her payroll deductions to
zero percent (0%) shall nevertheless remain a Participant in the current
Offering Period unless such Participant withdraws from the Plan as provided in
Section 12.1. The "Change Notice Date" shall be the day immediately prior to the
beginning of the first pay period for which such election is to be effective,
unless a different date is established by the Company and announced to the
Participants. Except as otherwise described above, a Participant

                                       9

<PAGE>

may not elect to increase or decrease deductions from his or her Compensation
during an Offering.

          10.4 Administrative Suspension of Payroll Deductions. The Company may,
in its sole discretion, suspend a Participant's payroll deductions under the
Plan as the Company deems advisable to avoid accumulating payroll deductions in
excess of the amount that could reasonably be anticipated to purchase the
maximum number of shares of Stock permitted (a) under the Participant's Purchase
Right or (b) during a calendar year under the limit set forth in Section 8.2.
Payroll deductions shall be resumed at the rate specified in the Participant's
then effective Subscription Agreement at the beginning of the next Offering
Period, unless the Participant has either withdrawn from the Plan as provided in
Section 12.1 or has ceased to be an Eligible Employee.

          10.5 Participant Accounts. Individual bookkeeping accounts shall be
maintained for each Participant. All payroll deductions from a Participant's
Compensation (and other amounts received from the Participant in the Initial
Offering Period) shall be credited to such Participant's Plan account and shall
be deposited with the general funds of the Company. All such amounts received or
held by the Company may be used by the Company for any corporate purpose.

          10.6 No Interest Paid. Interest shall not be paid on sums deducted
from a Participant's Compensation pursuant to the Plan or otherwise credited to
the Participant's Plan account.

     11.  Purchase of Shares.

          11.1 Exercise of Purchase Right.

               (a) Generally. Except as provided in Section 11.1(b), on each
Purchase Date of an Offering Period, each Participant who has not withdrawn from
the Plan and whose participation in the Offering has not otherwise terminated
before such Purchase Date shall automatically acquire pursuant to the exercise
of the Participant's Purchase Right the number of whole shares of Stock
determined by dividing (a) the total amount of the Participant's payroll
deductions accumulated in the Participant's Plan account during the Offering
Period and not previously applied toward the purchase of Stock by (b) the
Purchase Price. However, in no event shall the number of shares purchased by the
Participant during an Offering Period exceed the number of shares subject to the
Participant's Purchase Right. No shares of Stock shall be purchased on a
Purchase Date on behalf of a Participant whose participation in the Offering or
the Plan has terminated before such Purchase Date.

               (b) Purchase in Initial Offering Period. Notwithstanding Section
11.1(a), on the Purchase Date of the Initial Offering Period, each Participant
who has not withdrawn from the Plan and whose participation in such Offering has
not otherwise terminated before such Purchase Date shall automatically acquire
pursuant to the exercise of the Participant's Purchase Right (i) a number of
whole shares of Stock determined in accordance with Section 11.1(a) to the
extent of the total amount of the Participant's payroll deductions accumulated
in the Participant's Plan account during the Initial Offering Period, if any,
and not

                                       10

<PAGE>

previously applied toward the purchase of Stock and (ii) such additional shares
of Stock (not exceeding in the aggregate the Participant's Purchase Right) as
determined in accordance with an Initial Offering Period Cash Exercise Notice
delivered to the office designated by the Company no earlier than the
Registration Date and not later than the close of business for such office on
the business day immediately preceding the Purchase Date or such earlier date as
the Company shall establish, accompanied by payment in cash or by check of the
Purchase Price for such additional shares. However, in no event shall the number
of shares purchased by a Participant during the Initial Offering Period exceed
the number of shares subject to the Participant's Purchase Right. In addition,
if a Participant delivers a Subscription Agreement to the Company after the
Registration Date, the Participant may not elect to exercise a Purchase Right
pursuant to an Initial Offering Period Cash Exercise Notice in an amount which
exceeds fifteen percent (15%) of the Compensation paid such Participant prior to
the effectiveness of such initial Subscription Agreement. The Company shall
refund to the Participant in accordance with Section 11.4 any excess Purchase
Price payment received from the Participant.

          11.2 Pro Rata Allocation of Shares. If the number of shares of Stock
which might be purchased by all Participants in the Plan on a Purchase Date
exceeds the number of shares of Stock available in the Plan as provided in
Section 4.1, the Company shall make a pro rata allocation of the remaining
shares in as uniform a manner as practicable and as the Company determines to be
equitable. Any fractional share resulting from such pro rata allocation to any
Participant shall be disregarded.

          11.3 Delivery of Certificates. As soon as practicable after each
Purchase Date, the Company shall arrange the delivery to each Participant of a
certificate representing the shares acquired by the Participant on such Purchase
Date; provided that the Company may deliver such shares to a broker designated
by the Company that will hold such shares for the benefit of the Participant.
Shares to be delivered to a Participant under the Plan shall be registered in
the name of the Participant, or, if requested by the Participant, in the name of
the Participant and his or her spouse, or, if applicable, in the names of the
heirs of the Participant.

          11.4 Return of Cash Balance. Any cash balance remaining in a
Participant's Plan account following any Purchase Date shall be refunded to the
Participant as soon as practicable after such Purchase Date. However, if the
cash balance to be returned to a Participant pursuant to the preceding sentence
is less than the amount that would have been necessary to purchase an additional
whole share of Stock on such Purchase Date, the Company may retain the cash
balance in the Participant's Plan account to be applied toward the purchase of
shares of Stock in the subsequent Offering Period, as the case may be.

          11.5 Tax Withholding. At the time a Participant's Purchase Right is
exercised, in whole or in part, or at the time a Participant disposes of some or
all of the shares of Stock he or she acquires under the Plan, the Participant
shall make adequate provision for the federal, state, local and foreign tax
withholding obligations, if any, of the Participating Company Group which arise
upon exercise of the Purchase Right or upon such disposition of shares,
respectively. The Participating Company Group may, but shall not be obligated
to, withhold from the Participant's compensation the amount necessary to meet
such withholding obligations.

                                       11

<PAGE>

          11.6 Expiration of Purchase Right. Any portion of a Participant's
Purchase Right remaining unexercised after the end of the Offering Period to
which the Purchase Right relates shall expire immediately upon the end of the
Offering Period.

          11.7 Provision of Reports and Stockholder Information to Participants.
Each Participant who has exercised all or part of his or her Purchase Right
shall receive, as soon as practicable after the Purchase Date, a report of such
Participant's Plan account setting forth the total amount credited to his or her
Plan account prior to such exercise, the number of shares of Stock purchased,
the Purchase Price for such shares, the date of purchase and the cash balance,
if any, remaining immediately after such purchase that is to be refunded or
retained in the Participant's Plan account pursuant to Section 11.4. The report
required by this Section may be delivered in such form and by such means,
including by electronic transmission, as the Company may determine. In addition,
each Participant shall be provided information concerning the Company equivalent
to that information provided generally to the Company's common stockholders.

     12.  Withdrawal from Plan or Offering.

          12.1 Voluntary Withdrawal from the Plan. A Participant may withdraw
from the Plan by signing and delivering to the Company's designated office a
written notice of withdrawal on a form provided by the Company for this purpose.
Such withdrawal may be elected at any time prior to the end of an Offering
Period; provided, however, that if a Participant withdraws from the Plan after a
Purchase Date, the withdrawal shall not affect shares of Stock acquired by the
Participant on such Purchase Date. A Participant who voluntarily withdraws from
the Plan is prohibited from resuming participation in the Plan in the same
Offering from which he or she withdrew, but may participate in any subsequent
Offering by again satisfying the requirements of Sections 5 and 7.1. The Company
may impose, from time to time, a requirement that the notice of withdrawal from
the Plan be on file with the Company's designated office for a reasonable period
prior to the effectiveness of the Participant's withdrawal.

          12.2 Return of Payroll Deductions. Upon a Participant's voluntary
withdrawal from the Plan pursuant to Section 12.1, the Participant's accumulated
Plan account balance which has not been applied toward the purchase of shares of
Stock shall be refunded to the Participant as soon as practicable after the
withdrawal, without the payment of any interest, and the Participant's interest
in the Plan or the Offering, as applicable, shall terminate. Such amounts to be
refunded in accordance with this Section may not be applied to any other
Offering under the Plan.

     13.  Termination of Employment or Eligibility.

          Upon a Participant's ceasing, prior to a Purchase Date, to be an
Employee of the Participating Company Group for any reason, including
retirement, disability or death, or upon the failure of a Participant to remain
an Eligible Employee, the Participant's participation in the Plan shall
terminate immediately. In such event, the Participant's Plan account balance
which has not been applied toward the purchase of shares shall, as soon as
practicable, be returned to the Participant or, in the case of the Participant's
death, to the Participant's beneficiary designated in accordance with Section
20, if any, or legal representative, and all of the

                                       12

<PAGE>

Participant's rights under the Plan shall terminate. Interest shall not be paid
on sums returned pursuant to this Section 13. A Participant whose participation
has been so terminated may again become eligible to participate in the Plan by
satisfying the requirements of Sections 5 and 7.1.

     14.  Change in Control.

          14.1 Definitions.

               (a) An "Ownership Change Event" shall be deemed to have occurred
if any of the following occurs with respect to the Company: (i) the direct or
indirect sale or exchange in a single or series of related transactions by the
stockholders of the Company of more than fifty percent (50%) of the voting stock
of the Company; (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets
of the Company; or (iv) a liquidation or dissolution of the Company.

               (b) A "Change in Control" shall mean an Ownership Change Event or
a series of related Ownership Change Events (collectively, the "Transaction")
wherein the stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 14.1(a)(iii), the corporation or other business entity to
which the assets of the Company were transferred (the "Transferee"), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the
voting securities of one or more corporations or other business entities which
own the Company or the Transferee, as the case may be, either directly or
through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of
the voting securities of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

          14.2 Effect of Change in Control on Purchase Rights. In the event of a
Change in Control, the surviving, continuing, successor, or purchasing
corporation or other business entity or parent thereof, as the case may be (the
"Acquiring Corporation"), may, without the consent of any Participant, assume
the Company's rights and obligations under the Plan. If the Acquiring
Corporation elects not to assume the Company's rights and obligations under the
Plan, the Purchase Date of the then current Offering Period shall be accelerated
to a date before the date of the Change in Control specified by the Board, but
the number of shares of Stock subject to outstanding Purchase Rights shall not
be adjusted. All Purchase Rights which are neither assumed by the Acquiring
Corporation in connection with the Change in Control nor exercised as of the
date of the Change in Control shall terminate and cease to be outstanding
effective as of the date of the Change in Control.

                                       13

<PAGE>

     15.  Nontransferability of Purchase Rights.

          Neither payroll deductions or other amounts credited to a
Participant's Plan account nor a Participant's Purchase Right may be assigned,
transferred, pledged or otherwise disposed of in any manner other than as
provided by the Plan or by will or the laws of descent and distribution. (A
beneficiary designation pursuant to Section 20 shall not be treated as a
disposition for this purpose.) Any such attempted assignment, transfer, pledge
or other disposition shall be without effect, except that the Company may treat
such act as an election to withdraw from the Plan as provided in Section 12.1. A
Purchase Right shall be exercisable during the lifetime of the Participant only
by the Participant.

     16.  Compliance with Securities Law.

          The issuance of shares under the Plan shall be subject to compliance
with all applicable requirements of federal, state and foreign law with respect
to such securities. A Purchase Right may not be exercised if the issuance of
shares upon such exercise would constitute a violation of any applicable
federal, state or foreign securities laws or other law or regulations or the
requirements of any securities exchange or market system upon which the Stock
may then be listed. In addition, no Purchase Right may be exercised unless (a) a
registration statement under the Securities Act of 1933, as amended, shall at
the time of exercise of the Purchase Right be in effect with respect to the
shares issuable upon exercise of the Purchase Right, or (b) in the opinion of
legal counsel to the Company, the shares issuable upon exercise of the Purchase
Right may be issued in accordance with the terms of an applicable exemption from
the registration requirements of said Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares under the Plan shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of a
Purchase Right, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation, and to make any representation or warranty
with respect thereto as may be requested by the Company.

     17.  Rights as a Stockholder and Employee.

          A Participant shall have no rights as a stockholder by virtue of the
Participant's participation in the Plan until the date of the issuance of a
certificate for the shares purchased pursuant to the exercise of the
Participant's Purchase Right (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 4.2. Nothing herein shall confer upon a Participant any
right to continue in the employ of the Participating Company Group or interfere
in any way with any right of the Participating Company Group to terminate the
Participant's employment at any time.

                                       14

<PAGE>

     18.  Legends.

          The Company may at any time place legends or other identifying symbols
referencing any applicable federal, state or foreign securities law restrictions
or any provision convenient in the administration of the Plan on some or all of
the certificates representing shares of Stock issued under the Plan. The
Participant shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to a
Purchase Right in the possession of the Participant in order to carry out the
provisions of this Section. Unless otherwise specified by the Company, legends
placed on such certificates may include but shall not be limited to the
following:

"THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE
REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE
PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION
IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF. THE
REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE
REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE)."

     19.  Notification of Disposition of Shares.

          The Company may require the Participant to give the Company prompt
notice of any disposition of shares acquired by exercise of a Purchase Right.
The Company may require that until such time as a Participant disposes of shares
acquired upon exercise of a Purchase Right, the Participant shall hold all such
shares in the Participant's name (or, if elected by the Participant, in the name
of the Participant and his or her spouse but not in the name of any nominee)
until the later of two years after the date of grant of such Purchase Right or
one year after the date of exercise of such Purchase Right. The Company may
direct that the certificates evidencing shares acquired by exercise of a
Purchase Right refer to such requirement to give prompt notice of disposition.

     20.  Designation of Beneficiary.

          20.1 Designation Procedure. A Participant may file a written
designation of a beneficiary who is to receive (a) shares and cash, if any, from
the Participant's Plan account if the Participant dies subsequent to a Purchase
Date but prior to delivery to the Participant of such shares and cash or (b)
cash, if any, from the Participant's Plan account if the Participant dies prior
to the exercise of the Participant's Purchase Right. If a married Participant
designates a beneficiary other than the Participant's spouse, the effectiveness
of such designation shall be subject to the consent of the Participant's spouse.
A Participant may change his or her beneficiary designation at any time by
written notice to the Company.

          20.2 Absence of Beneficiary Designation. If a Participant dies without
an effective designation pursuant to Section 20.1 of a beneficiary who is living
at the time of the

                                       15

<PAGE>

Participant's death, the Company shall deliver any shares or cash credited to
the Participant's Plan account to the Participant's legal representative.

     21.  Notices.

          All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.

     22.  Amendment or Termination of the Plan.

          The Board may at any time amend or terminate the Plan, except that (a)
no such amendment or termination shall affect Purchase Rights previously granted
under the Plan unless expressly provided by the Board and (b) no such amendment
or termination may adversely affect a Purchase Right previously granted under
the Plan without the consent of the Participant, except to the extent permitted
by the Plan or as may be necessary to qualify the Plan as an employee stock
purchase plan pursuant to Section 423 of the Code or to comply with any
applicable law, regulation or rule. In addition, an amendment to the Plan must
be approved by the stockholders of the Company within twelve (12) months of the
adoption of such amendment if such amendment would authorize the sale of more
shares than are then authorized for issuance under the Plan or would change the
definition of the corporations that may be designated by the Board as
Participating Companies.

                                       16

<PAGE>

                                  PLAN HISTORY

June 24, 2002              Board of Directors of Accredited Home Lenders, Inc.,
                           a California corporation ("AHL California") adopts
                           Plan effective as of the closing of the initial
                           public offering (the "IPO") of AHL California's
                           wholly-owned subsidiary, Accredited Home Lenders
                           Holding Co., a Delaware corporation (the "Company"),
                           with an initial reserve of 1,000,000 shares. The
                           Board also established that the share reserve will be
                           increased cumulatively on each January 1 from January
                           1, 2004 through January 1, 2013 by the lesser of (i)
                           5% of the shares of common stock issued and
                           outstanding on the immediately preceding December 31,
                           (ii) 500,000 shares, or (iii) such lesser number of
                           shares determined by the Board.

June 24, 2002              Sole director and sole stockholder of the Company
                           approve Plan effective as of the closing of the IPO
                           of the Company with an initial reserve of 1,000,000
                           shares. The Board also established that the share
                           reserve will be increased cumulatively on each
                           January 1 from January 1, 2004 through January 1,
                           2013 by the lesser of (i) 5% of the shares of common
                           stock issued and outstanding on the immediately
                           preceding December 31, (ii) 500,000 shares, or (iii)
                           such lesser number of shares determined by the Board.

______________, 2002       Shareholders of AHL California approve Plan effective
                           as of the closing of the IPO of the Company, with an
                           initial reserve of 1,000,000 shares. The Board also
                           established that the share reserve will be increased
                           cumulatively on each January 1 from January 1, 2004
                           through January 1, 2013 by the lesser of (i) 5% of
                           the shares of common stock issued and outstanding on
                           the immediately preceding December 31, (ii) 500,000
                           shares, or (iii) such lesser number of shares
                           determined by the Board.

______________,            2002 Effective date of holding-company transaction,
                           whereby AHL California becomes the wholly-owned
                           operating subsidiary of the Company.

______________, 2002       Effective Date of the Plan (i.e., date on which
                           Initial Offering Period commenced).

<PAGE>

                       ACCREDITED HOME LENDERS HOLDING CO.
                        2002 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

NAME (Please print):____________________________________________________________
                    (Last)                  (First)                   (Middle)

(TM)  Original application for the Offering Period beginning (date):____________

(TM)  Stop payroll deductions effective with the pay period ending (date):______

(TM)  Change of beneficiary.

I.    SUBSCRIPTION

      I elect to participate in the 2002 Employee Stock Purchase Plan (the
"Plan") of Accredited Home Lenders Holding Co. (the "Company") and to subscribe
to purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the Plan.

      I authorize payroll deductions of __________ percent (in whole percentages
not less than 1%, unless an election to stop deductions is being made, or more
than 15%) of my "Compensation" on each payday throughout the "Offering Period"
in accordance with the Plan. I understand that these payroll deductions will be
accumulated for the purchase of shares of Common Stock at the applicable
purchase price determined in accordance with the Plan. Except as otherwise
provided by the Plan, I will automatically purchase shares on each "Purchase
Date" unless I withdraw from the Plan by giving written notice on a form
provided by the Company or unless my eligibility or employment terminates.

      I understand that I will automatically participate in each subsequent
Offering that commences immediately after the last day of an Offering in which I
am participating until I withdraw from the Plan by giving written notice on a
form provided by the Company or my eligibility or employment terminates.

      Shares I purchase under the Plan should be issued in the name(s) set forth
below. (Shares may be issued in the participant's name alone or together with
the participant's spouse as community property or in joint tenancy.)

      NAME(S) (please print):___________________________________________________

      ADDRESS:__________________________________________________________________

      MY SOCIAL SECURITY NUMBER:________________________________________________

      I agree to make adequate provision for the federal, state, local and
foreign tax withholding obligations, if any, which arise upon my purchase of
shares under the Plan and/or my disposition of shares. The Company may withhold
from my compensation the amount necessary to meet such withholding obligations.

      I agree that, unless otherwise permitted by the Company, until I dispose
of shares I purchase under the Plan, I will hold such shares in the name(s)
entered above (and not in the name of any nominee) until the later of (i) two
years after the first day of the Offering Period in which I purchased the shares
and (ii) one year after the Purchase Date on which I purchased the shares. This
restriction only applies to the name(s) in which shares are held and does not
affect my ability to dispose of Plan shares.

      I agree that I will notify the Chief Financial Officer of the Company in
writing within 30 days after any sale, gift, transfer or other disposition of
any kind prior to the end of the periods referred to in the preceding paragraph
(a "Disqualifying Disposition") of any shares I purchased

                                       1

<PAGE>

under the Plan. If I do not respond within 30 days of the date of a
Disqualifying Disposition Survey delivered to me by certified mail, the Company
is authorized to treat my nonresponse as my notice to the Company of a
Disqualifying Disposition and to compute and report to the Internal Revenue
Service the ordinary income I must recognize upon such Disqualifying
Disposition.

II.  BENEFICIARY DESIGNATION

     In the event of my death, I designate the following as my beneficiary to
receive all payments and shares then due me under the Plan:

     BENEFICIARY'S NAME (please print):_________________________________________
                                       (First)         (Middle)        (Last)

     RELATIONSHIP:_________________________       SOC. SEC. NO.:________________

     ADDRESS:___________________________________________________________________

     If you are married and your beneficiary is someone other than your spouse,
then your spouse must sign and date this form as indicated below. If you are not
married when you designate a beneficiary and you later become married, or if you
later become married to a different person, the beneficiary designation
previously made will be automatically revoked. Payments and shares then due you
upon your death will be delivered to your then spouse unless you have completed
a new beneficiary designation and it is consented to by your then spouse.

III. CONSENT OF SPOUSE

     I am the spouse of ________________________________. I consent to the above
designation of a beneficiary other than me to receive payments and shares due my
spouse under the Plan.

Date:___________________________        ________________________________________
                                        Signature of Participant's Spouse

IV.  PARTICIPANT DECLARATION

     Any election I have made on this form revokes all prior elections with
regard to this form.

     I am familiar with the provisions of the Plan and agree to participate in
the Plan subject to all of its provisions. I understand that the Board of
Directors of the Company reserves the right to terminate the Plan or to amend
the Plan and my right to purchase stock under the Plan to the extent provided by
the Plan. I understand that the effectiveness of this Subscription Agreement is
dependent upon my eligibility to participate in the Plan.

Date:___________________________        ________________________________________
                                        Signature of Participant

                                       2

<PAGE>

                       ACCREDITED HOME LENDERS HOLDING CO.
                        2002 EMPLOYEE STOCK PURCHASE PLAN
                              NOTICE OF WITHDRAWAL

NAME (Please print):____________________________________________________________
                    (Last)               (First)                  (Middle)

     I elect to withdraw from the Accredited Home Lenders Holding Co. 2002
Employee Stock Purchase Plan (the "Plan") and the Offering which began on (date)
____________________ and in which I am participating (the "Current Offering").

               I elect to terminate immediately my participation in the Current
               Offering and the Plan. I request that the Company cease all
               further payroll deductions under the Plan (provided I have given
               sufficient notice before the next payday). My payroll deductions
               not previously used to purchase shares should not be used to
               purchase shares in the Current Offering. Instead, I request that
               all such amounts be paid to me as soon as practicable. I
               understand that this election immediately terminates my interest
               in the Current Offering and in the Plan.

     I understand that I am terminating my interest in the Plan and that no
further payroll deductions will be made (provided I have given sufficient notice
before the next payday), unless I elect to become a participant in another
Offering by filing a new Subscription Agreement with the Company. I understand
that I will receive no interest on the amounts paid to me from my Plan account,
and that I may not apply such amounts to any other Offering under the Plan or
any other employee stock purchase plan of the Company.

Date: _________________________        Signature:_______________________________<PAGE>

                                                                   Exhibit 10.20

                       ACCREDITED HOME LENDERS HOLDING CO.

                           DEFERRED COMPENSATION PLAN

                            Effective January 1, 2003

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
ARTICLE I DEFINITIONS ......................................................  1
     1.1    "Account(s)" ...................................................  1
     1.2    "AHL California" ...............................................  1
     1.3    "Basic Deferral" ...............................................  1
     1.4    "Bonus Deferral" ...............................................  2
     1.5    "Benchmark Fund" ...............................................  2
     1.6    "Beneficiary" ..................................................  2
     1.7    "Benefit(s)" ...................................................  2
     1.8    "Board of Directors" or "Board" ................................  2
     1.11   "Code" .........................................................  2
     1.12   "Commission Deferral" ..........................................  2
     1.13   "Committee" ....................................................  2
     1.14   "Company" ......................................................  2
     1.15   "Company Contributions" ........................................  3
     1.16   "Company Stock" ................................................  3
     1.17   "Deferrals" ....................................................  3
     1.18   "Deferral Subaccount" ..........................................  3
     1.19   "Director" .....................................................  3
     1.20   "Disability" ...................................................  3
     1.21   "Distribution Date" ............................................  3
     1.22   "Effective Date" ...............................................  3
     1.23   "Election" .....................................................  3
     1.24   "Eligible Individual" ..........................................  3
     1.25   "Employer" .....................................................  3
     1.26   "Entry Date" ...................................................  3
     1.27   "ERISA" ........................................................  3
     1.29   "In-Service Distribution Date" .................................  4
     1.30   "Interest" .....................................................  4
     1.31   "Interest Rate" ................................................  4
     1.32   "Retirement" ...................................................  4
     1.33   "Open Enrollment Period" .......................................  4
     1.34   "Participant" ..................................................  4
     1.35   "Plan" .........................................................  4
     1.36   "Plan Year" ....................................................  4
     1.37   "Service" ......................................................  4
     1.38   "Trust" ........................................................  5
     1.39   "Trust Agreement" ..............................................  5
     1.40   "Trustee" ......................................................  5
     1.41   "Year of Service" ..............................................  5

ARTICLE II ELIGIBILITY .....................................................  5
     2.1    Eligibility. ...................................................  5
     2.2    Commencement of Participation. .................................  5
</TABLE>

                                       i

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>

     2.3    Cessation of Participation ......................................  5
     2.4    Cessation of Eligibility ........................................  5

ARTICLE III DEFERRALS AND CONTRIBUTIONS .....................................  5
     3.1    Basic Deferrals .................................................  5
     3.2    Bonus Deferrals and Commission Deferrals ........................  6
     3.3    Company Contributions ...........................................  7
     3.4    Limitations on Deferrals ........................................  7
     3.5    No Withdrawal ...................................................  8

ARTICLE IV COMPANY STOCK ....................................................  8
     4.1    Maximum Number of Shares ........................................  8
     4.2    Adjustment for Changes in Capital Structure .....................  8
     4.3    Determination of Company Stock Fair Market Value ................  8
     4.4    Shareholder Rights ..............................................  8

ARTICLE V VESTING ...........................................................  9
     5.1    Vesting of Participants' Accounts ...............................  9
     5.2    Vesting Upon Plan Termination ...................................  9

ARTICLE VI ACCOUNTS ......................................................... 10
     6.1    Accounts ........................................................ 10
     6.2    Interest Credited to Accounts at Least Monthly .................. 10
     6.3    Determination of Interest Rate .................................. 10

ARTICLE VII BENEFIT DISTRIBUTIONS AND ACCOUNT WITHDRAWALS ................... 10
     7.1    Benefit Amount .................................................. 10
     7.2    Timing of Distributions ......................................... 11
     7.3    Method of Distribution .......................................... 11
     7.4    Election of In-Service Distribution Date ........................ 12
     7.5    Distribution Upon Death of Participant .......................... 13
     7.6    Distribution Upon Disability of Participant ..................... 14
     7.7    Financial Hardship Withdrawal ................................... 14
     7.8    Early Withdrawal ................................................ 14
     7.9    Limitation on Distributions to Covered Employees ................ 15
     7.10   Supplemental Death Benefit ...................................... 15
     7.11   Tax Withholding ................................................. 16

ARTICLE VIII BENEFICIARIES .................................................. 16
     8.1    Designation of Beneficiary ...................................... 16
     8.2    No Designated Beneficiary ....................................... 16

ARTICLE IX TRUST OBLIGATION TO PAY BENEFITS ................................. 16
     9.1    Transfers to the Trust .......................................... 16
</TABLE>

                                       ii

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
     9.2   Source of Benefit Payments ......................................  16
     9.3   Investment Discretion ...........................................  16
     9.4   No Secured Interest .............................................  17

ARTICLE X PLAN ADMINISTRATION, AMENDMENT AND TERMINATION ...................  17
     10.1  Committee Powers and Responsibilities ...........................  17
     10.2  Indemnification .................................................  18
     10.3  Claims Procedure ................................................  18
     10.4  Decisions of the Committee ......................................  19
     10.5  Plan Amendment ..................................................  19
     10.6  Plan Termination ................................................  19

ARTICLE XI MISCELLANEOUS ...................................................  19
     11.1  No Assignment ...................................................  19
     11.2  No Secured Interest .............................................  19
     11.3  Successors ......................................................  20
     11.4  No Employment Agreement .........................................  20
     11.5  Attorneys' Fees .................................................  20
     11.6  Governing Law ...................................................  20
     11.7  Entire Agreement ................................................  20
</TABLE>

                                       iii

<PAGE>

                       ACCREDITED HOME LENDERS HOLDING CO.
                           DEFERRED COMPENSATION PLAN

                            Adopted October 23, 2002
                      Shareholder Approved October 23, 2002
                            Effective January 1, 2003

     The Accredited Home Lenders Holding Co. Deferred Compensation Plan (the
"Plan") is adopted effective as of January 1, 2003, by Accredited Home Lenders,
Inc., a California corporation ("AHL California"), and by AHL California's
wholly-owned subsidiary, Accredited Home Lenders Holding Co., a Delaware
corporation (the "Company"). The Board's of Directors of AHL California and the
Company approved the Plan on October 23, 2002. Shareholders of AHL California
and the Company approved the Plan on October 23, 2002. Effective as of (i) the
merger transaction by which AHL California becomes a wholly-owned subsidiary of
the Company, and (ii) the closing of the Company's initial public offering, the
Company shall become the sponsor of the Plan. The first Plan Year shall begin
effective as of January 1, 2003. The Plan has been adopted primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees of both the Company and AHL California.
Accordingly, it is intended that this Plan be exempt from the requirements of
Parts II, III and IV of Title I of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") pursuant to Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA. This Plan is intended to be an unfunded, nonqualified
deferred compensation plan. Plan participants shall have the status of unsecured
creditors of the Company with respect to the payment of Plan benefits.

                                    ARTICLE I

                                   DEFINITIONS

     Whenever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise, and the following definitions shall govern the Plan:

     1.1 "Account(s)" means the book entry account(s) established under the Plan
for each Participant to which are credited the Participant's Basic Deferrals,
Bonus Deferrals, Commission Deferrals, Company Contributions and the Interest
(if any) with respect thereto. Account balances shall be reduced by any
distributions made to the Participant or the Participant's Beneficiary(ies)
therefrom and any charges that may be imposed on such Account(s) pursuant to the
terms of the Plan. Separate Subaccounts may be established to which shall be
credited a Participant's Deferrals for each separate Plan Year, the Company
Contributions, if any, and the Interest with respect thereto. Where Subaccounts
have been established, Account shall refer to all of the Participants'
Subaccounts, collectively, as the context may require.

     1.2 "AHL California" means Accredited Home Lenders, Inc., a California
corporation.

<PAGE>

     1.3  "Basic Deferral" means the percentage of a Participant's (i) salary
and/or (ii) directors fees which the Participant elects to defer pursuant to
Article III.

     1.4  "Bonus Deferral" means the percentage of a Participant's bonus which
the Participant elects to defer pursuant to Article III.

     1.5  "Benchmark Fund" shall mean one or more of the mutual funds or
contracts selected by the Committee pursuant to Article V.

     1.6  "Beneficiary" means one, some, or all (as the context shall require)
of those persons, trusts or other entities designated by a Participant to
receive the undistributed value of his or her Account following the
Participant's death.

     1.7  "Benefit(s)" means the total vested amount credited to a Participant's
Account or Subaccount and may include the supplemental death benefit payable in
accordance with Section 7.10.

     1.8  "Board of Directors" or "Board" means the Board of Directors of the
Company. If one or more committees have been appointed by the Board to determine
employee eligibility under the Plan, Company Contributions to be made to the
Plan, or to exercise any other Company discretion with respect to such Plan,
"Board" also means such committee(s).

     1.9 "Cause" shall mean a termination of employment for any of the following
reasons: (i) theft, dishonesty or falsification of business records; (ii)
improper use or disclosure of confidential or proprietary information regarding
the Company; (iii) failure of an Employee to perform his or her job, including
all assigned duties; (iv) any material breach of a written employment agreement
which is not cured pursuant to the terms of the agreement; (v) an Employee's
conviction of a criminal act which impairs his or her ability to perform duties
for the Company; or (vi) any action by an Employee which has a detrimental
effect on the business of the Company.

     1.10 "Change in Control" shall mean: (i) the acquisition by an individual
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the "Exchange Act")) or entity or a group of individuals
or entities acting in concert, directly or indirectly, through one transaction
or a series of related transactions, of more than 50% of the outstanding voting
securities of the Company; (ii) a merger or consolidation of the Company with or
into another entity after which the stockholders of the Company immediately
prior to such transaction hold less than 50% of the voting securities of the
surviving entity; or (iii) a sale of all or substantially all of the assets of
the Company. Notwithstanding the foregoing, a Change in Control shall not be
deemed to have occurred if and to the extent that the Company completes the
initial registration of its securities under Section 12 of the Exchange Act.

     1.11 "Code" means the Internal Revenue Code of 1986, as amended.

     1.12 "Commission Deferral" means the percentage of a Participant's
commissions which the Participant elects to defer pursuant to Article III.

                                        2

<PAGE>

     1.13 "Committee" means the Deferred Compensation Committee composed of such
individuals as may be appointed by the Board which shall function as the Plan
Administrator.

     1.14 "Company" means Accredited Home Lenders Holding Co., a Delaware
corporation, and any successor organization thereto.

     1.15 "Company Contributions" means the amount, if any, of Company
contributions awarded to a Participant pursuant to Article III.

     1.16 "Company Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 4.2.

     1.17 "Deferrals" means that percentage of a Participant's salary, directors
fees, bonuses and/or commissions which is deferred pursuant to this Plan.

     1.18 "Deferral Subaccount" means the Subaccount to which a Participant's
Deferrals for a particular year are credited.

     1.19 "Director" means each member of the Board of Directors who is not
otherwise an employee of the Company.

     1.20 "Disability" means a termination of Service on account of a
determination by the insurer under the Company's long-term disability insurance
policy that the Participant is disabled and eligible for long-term disability
benefits under such policy.

     1.21 "Distribution Date" means the date on which distribution of a
Participant's Benefits is made or commenced pursuant to Article VII.

     1.22 "Effective Date" means the date on which the Plan shall be first
effective, which is January 1, 2003.

     1.23 "Election" means the form on which a Participant (i) elects to make
Deferrals pursuant to Article III, and (ii) elects a Distribution Date, and
(iii) elects the method by which his or her Benefits will be distributed. The
Election shall be in such form as may be prescribed by the Committee.

     1.24 "Eligible Individual" means (i) a Director and (ii) an employee of the
Employer who is a member of the select group of management and highly
compensated employees as more particularly described in Article II and who has
been designated by the Committee, in its sole discretion, as eligible to
participate in the Plan.

     1.25 "Employer" means (i) the Company (ii) AHL California (iii) Accredited
Home Capital, Inc. or (iv) any other subsidiary of the Company or AHL California
that has adopted this Plan.

     1.26 "Entry Date" means the first day of any Plan Year and, as to an
Eligible Individual, the date which is thirty (30) days from the date on which
such Eligible Individual is first notified by the Committee of his or her
eligibility to participate in the Plan.

                                        3

<PAGE>

     1.27 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     1.28 "Good Reason" means: (i) a Participant's compensation, including
salary, bonus and perquisites, are reduced from the compensation level in effect
for Participant during the year preceding the Change in Control (or such shorter
period of time as the Participant was employed by the Company); or (2) without
the Participant's consent, the relocation of the principal place of the
Participant's employment to a location that is more than fifty (50) miles from
the Participant's current place of employment; or (3) a material diminution of
the Participant's title or duties with the Company.

     1.29 "In-Service Distribution Date" means the date on which distribution of
a Participant's Deferral Subaccount is made or commenced pursuant to Section
7.4.

     1.30 "Interest" means the investment return or loss determined in
accordance with Article V which shall be credited to the applicable
Participants' Subaccounts.

     1.31 "Interest Rate" shall have the meaning as set forth in Section 6.3.

     1.32 "Retirement" means the Participant's termination of Service, if the
sum of such Participant's age and Years of Service with the Employer equal or
exceed seventy (70). A Participant who terminates Service with the Employer and
resumes Service more than 6 months after his or her original termination date,
will not have his or her Service with the Employer prior to his or her original
termination date count for purposes of determining Retirement. Notwithstanding
the foregoing, the Committee shall have the sole and absolute discretion to
determine on a case by case basis that such prior Service may be counted for
purposes of Retirement. The Committee will notify any rehired Participant if the
Committee has determined to count such prior Service, and in the absence of such
notification from the Committee, such Service shall not be counted for purposes
of Retirement.

     1.33 "Open Enrollment Period" means such period as the Committee may
specify which ends prior to the first day of each Plan Year, or, with respect to
an Eligible Individual who first becomes eligible to participate in the Plan
during a Plan Year, ends within thirty (30) days of becoming an Eligible
Participant.

     1.34 "Participant" means an Eligible Individual who has elected to
participate in the Plan by executing and submitting an Election to the
Committee. A Participant shall also mean an Eligible Individual for whom Company
Contributions are made, regardless of whether such Eligible Individual has
executed and submitted an Election.

     1.35 "Plan" means the Accredited Home Lenders Holding Co. Deferred
Compensation Plan, effective January 1, 2003, as it may be amended from time to
time.

     1.36 "Plan Year" means the 12-month period beginning on each January 1 and
ending on the following December 31.

     1.37 "Service" means the Participant's employment with the Employer on a
substantially full-time basis, or service as a Director. A Participant's Service
shall include

                                        4

<PAGE>

periods of employment or service with any Employer regardless of whether such
Employer has adopted this Plan. A Participant's Service shall not be deemed to
have terminated merely because of a change in the capacity under which the
Participant renders Service to the Company, provided there is no interruption or
termination of Participant's Service. A Participant's Service shall terminate
upon an actual termination of Service, whether by death, Disability, or
otherwise. Subject to the foregoing, the Committee, in its discretion, shall
determine whether Participant's Service has terminated and the effect of such
termination.

     1.38 "Trust" means any trust, including a grantor trust within the meaning
subpart E, part I, subchapter J, chapter I, subtitle A of the Code, created by
the Trust Agreement, to hold Deferrals and Company Contributions.

     1.39 "Trust Agreement" means the trust agreement entered into between the
Company and First American Trust, FSB, effective January 1, 2003, and any
amendments thereto.

     1.40 "Trustee" means the Trustee named in the Trust Agreement and any duly
appointed successor or successors thereto.

     1.41 "Year of Service" means 12 consecutive months of Service.

                                   ARTICLE II

                                   ELIGIBILITY

     2.1  Eligibility. Eligibility for participation in the Plan shall be
limited to Directors and a select group of management or highly compensated
employees of the Employer, who are designated by the Committee, in its sole
discretion, as eligible to participate in the Plan. Eligible Individuals shall
be notified as to their eligibility to participate in the Plan.

     2.2  Commencement of Participation. An Eligible Individual may begin
participation in the Plan upon any Entry Date, subject to the execution and
submission of an Election pursuant to Article III. In addition, participation of
an Eligible Individual who has not otherwise commenced participation in the
Plan, shall commence when a Company Contribution is made to the Account of such
Eligible Individual pursuant to the provisions of Section 3.3.

     2.3  Cessation of Participation. Active participation in the Plan shall end
when a Participant's Service terminates for any reason or at such time as a
Participant is notified by the Committee, pursuant to Section 2.4, below, that
he or she is no longer eligible to participate in the Plan. Upon termination of
Service or eligibility, a Participant shall remain an inactive Participant in
the Plan until all of the vested Benefits to which he or she is entitled under
this Plan have been paid in full.

     2.4  Cessation of Eligibility. The Committee may at any time, in its sole
discretion, notify any Participant that he or she is not eligible to participate
in the Plan, or is not eligible for Company Contributions in any Plan Year.

                                        5

<PAGE>

                                   ARTICLE III

                           DEFERRALS AND CONTRIBUTIONS

     3.1  Basic Deferrals.

          3.1.1 An Eligible Individual may elect to reduce his or her salary
and/or director fees by the percentage set forth in a written and signed
Election filed with the Committee, subject to the provisions of this Article
III. The Basic Deferrals shall not be paid to the Participant, but shall be
withheld from the Participant's salary and/or director fees and an amount equal
to the Basic Deferrals shall be credited to the Participant's applicable
Deferral Subaccount.

          3.1.2 The Election must be filed with the Committee during the Open
Enrollment Period for the Plan Year to which such Election applies. Unless
revoked, an Election shall remain in effect until changed by the Participant
during a subsequent Open Enrollment Period.

          3.1.3 A Participant may revoke his or her salary deferral Election at
any time during the Plan Year. Upon such revocation, no further salary deferrals
shall be made for the balance of the Plan Year in which the revocation was made.
Thereafter, a Participant may resume salary deferrals by completing a new
Election during the Open Enrollment Period for any subsequent Plan Year.

          3.1.4 Each Election to make Basic Deferrals shall apply only to salary
and/or director fees earned after the effective date of such Election.

          3.1.5 For the purpose of determining an Eligible Individual's Basic
Deferrals: (i) "salary" shall mean the base salary paid by the Employer, but
shall not include bonuses, commissions, overtime, incentive payments,
non-monetary awards, auto allowances and other forms of additional compensation,
or any other form of compensation, whether taxable or non-taxable; and (ii)
"director fees" shall mean those fees paid by the Company to a Director.

     3.2  Bonus Deferrals and Commission Deferrals.

          3.2.1 In addition to the Basic Deferral Election described above, each
Eligible Individual may elect to defer a percentage of each bonus and/or
commission which are earned or paid in the Plan Year with respect to which such
Bonus and/or Commission Deferral Election is made by filing a written Election
with the Committee, subject to the provisions of this Article III. The Bonus
Deferrals and/or Commission Deferrals shall not be paid to the Participant, but
shall be withheld from the Participant's bonus and/or commissions and an amount
equal to the Bonus Deferrals and/or Commission Deferrals, as applicable, shall
be credited to the Participant's applicable Deferral Subaccount.

          3.2.2 The Bonus and/or Commission Deferral Election must be filed with
the Committee during the Open Enrollment Period for the Plan Year to which the
Election applies. A Bonus and/or Commission Deferral Election shall remain in
effect until changed or revoked by the Participant during a subsequent Open
Enrollment Period. The Bonus and/or Commission

                                        6

<PAGE>

Deferral Election may be revoked or changed only during an Open Enrollment
Period and such revocation or change may be prospective only.

          3.2.3 For the purposes of determining an Eligible Individual's Bonus
Deferrals and/or Commission Deferrals: (i) "bonus" shall mean amounts, if any,
payable under any bonus policies maintained by the Employer; and (ii)
"commission" shall mean amounts, if any, earned under any commission policies
maintained by the Employer. A Participant's Bonus/Commission Deferral Election
shall apply to any bonus and/or commission which is earned in the Plan Year to
which such Election applies, regardless of when the bonus/commission is paid.

     3.3  Company Contributions. A Participant's Subaccount shall be credited
with any Company Contributions, in such amounts and at such times as the Company
may, in its sole discretion, determine and communicate to the Participant.

          3.3.1 Company Contributions shall be based upon the annual incentive,
sales and/or commission policies, the profitability of the Company, the
performance of the Participant, or such other factors as the Company shall
consider appropriate, in its sole discretion. The Company shall be under no
obligation to continue to make Company Contributions and may discontinue or
change the amount or method of calculating the amount of such Company
Contributions at any time.

          3.3.2 Company Contributions, in the Board's sole and absolute
discretion, may be made either in the form of cash or, following an initial
public offering of Company Stock in the form of whole shares of Company Stock,
or in any combination of the foregoing. Any Company Contribution made in the
form of Company Stock shall not be permitted to be sold, converted, liquidated,
or otherwise transferred to any other investment under the Plan. Company
Contributions made in the form of Company Stock will be distributed, in
accordance with the terms and conditions of this Plan, solely in the form of
Company Stock.

     3.4  Limitations on Deferrals. A Participant's Deferral Elections shall
be subject to the following:

          3.4.1 A Participant must defer a minimum of $5,000 each Plan Year, or
for any other Plan Year if such Participant begins participation in the Plan
after July 1 of any Plan Year a minimum of $2,500. This required minimum
deferral may be satisfied by Basic, Bonus and/or Commission Deferrals or a
combination thereof. In the event the total amount deferred by a Participant in
a Plan Year is less than the applicable minimum deferral amount, the Committee
may, in its sole discretion, direct the Company to pay the amount deferred
during that Plan Year to the Participant as soon as administratively feasible
after the end of the Plan Year.

          3.4.2 A Participant may elect to defer up to a maximum of one hundred
percent (100%) of his or her salary, director fees, bonus and/or commissions.

          3.4.3 The Basic, Bonus and/or Commission Deferrals elected by the
Participant shall be reduced by the amount(s), if any, which may be necessary:

                3.4.3.1 To satisfy all applicable income and employment taxes
withholding and FICA contributions;

                                        7

<PAGE>

                3.4.3.2 To pay all contributions elected by the Participant
pursuant to any other Company benefit plan; and

                3.4.3.3 To satisfy all garnishments or other amounts required to
be withheld by applicable law or court order.

     3.5  No Withdrawal. Except as provided in Sections 7.7 and 7.8 below,
amounts credited to a Participant's Account may not be withdrawn by a
Participant and shall be paid only in accordance with the provisions of this
Plan.

                                   ARTICLE IV

                                  COMPANY STOCK

     4.1  Maximum Number of Shares. Subject to the closing of an initial public
offering of Company Stock and subject to adjustment as provided in Section 4.2,
the maximum aggregate number of shares of Company Stock that may be issued under
the Plan shall be Two Million (2,000,000) and shall consist of authorized but
unissued or reacquired shares of Company Stock or any combination thereof. If
Company Stock allocated to any Participant's account is forfeited on account of
such Participant not being one hundred percent (100%) vested in any Company
Contribution, then such shares of Company Stock forfeited shall again be
available for issuance under the Plan.

     4.2  Adjustment for Changes in Capital Structure. In the event of any stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class of shares subject
to the Plan and to the number and class of shares which may be allocated to any
Participant Subaccount. Notwithstanding the foregoing, any fractional share
resulting from an event pursuant to this Section 4.2 shall be rounded down to
the nearest whole number.

     4.3  Determination of Company Stock Fair Market Value. The value of any
Company Stock awarded under the Plan or distributed from the Plan shall be equal
to such Company Stock's fair market value determined subject to the following:

          4.3.1 If, on such date as determined by the Company, the Company Stock
is listed on a national or regional securities exchange or market system, the
fair market value of a share of Company Stock shall be the closing price of a
share of Company Stock (or the mean of the closing bid and asked prices of a
share of Company Stock if it is so quoted instead) as quoted on the Nasdaq
National Market, the Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Company Stock, as reported in The Wall Street Journal or such other source as
the Company deems reliable. If the relevant date does not fall on a day on which
the Company Stock has traded on such securities exchange or market system, the
date on which the fair market value shall be established shall be the last day
on which the Company Stock was so traded prior to the relevant date, or such
other appropriate day as shall be determined by the Board, in its sole
discretion.

          4.3.2 If, on such date as determined by the Company, the Company Stock
is not listed on a national or regional securities exchange or market system,
the fair market value of a

                                        8

<PAGE>

share of Company Stock shall be determined by the Board in good faith without
regard to any restriction other than a restriction which, by its terms, will
never lapse.

     4.4  Shareholder Rights. A Participant shall have no rights as a
shareholder with respect to any shares of Company Stock which may be contributed
by the Company to this Plan while the shares are held by the Trust.
Notwithstanding the foregoing, Shares of Company Stock allocated to the Trust
shall be entitled to receive such Shares prorata portion of any cash dividend
declared by the Company. The Committee shall instruct the Trustee, in the
Committee's sole and absolute discretion, on how to vote, or not vote, shares of
Company Stock allocated to the Trust and nothing contained in this Plan shall be
construed as permitting the Participant to vote any such shares of Company Stock
held by the Trust.

                                    ARTICLE V

                                     VESTING

     5.1  Vesting of Participants' Accounts.

          5.1.1 Amounts credited to a Participant's Deferral Subaccounts shall
always be one hundred percent 100% vested.

          5.1.2 Each Company Contribution shall have its own four year vesting
schedule under which one hundred percent (100%) of the Company Contribution (as
adjusted for earnings and losses if such Company Contribution was made in the
form of cash) shall become vested upon the completion of four consecutive Years
of Service with the Company after the date of the Company Contribution. Thus, a
Participant shall only become one hundred percent (100%) vested in the entire
amount of each Company Contribution (as adjusted for earnings and losses if such
Company Contribution was made in the form of cash) on the fourth anniversary of
the date of each Company Contribution was made, provided that the Participant
has not terminated Service with the Employer prior to such anniversary.

          5.1.3 In the event of a Participant's Disability, Retirement or death,
provided that at the time of such Participant's death the Participant was
providing Service to the Employer, the Participant shall become one hundred
percent (100%) vested in all Company Contributions. In addition, a Participant
shall become one hundred percent (100%) vested in all Company Contributions in
the event that if within one (1) year after a Change in Control the
Participant's employment is terminated without Cause, or if the Participant
resigns for Good Reason. The Committee shall determine whether a termination of
Service is for Cause or on account of Good Reason in accordance with the Plan.

          5.1.4 The Board may, in its sole discretion, classify a Company
Contribution or any part thereof as one hundred percent (100%) vested when made
or may provide for a different vesting schedule than set forth above.

          5.1.5 At the time of any termination from Service, the Participant's
non-vested Company Contribution Subaccount shall be forfeited. The Committee
shall have the discretion to reinstate any such forfeitures if the Participant
later becomes re-employed by the Employer.

                                        9

<PAGE>

     5.2  Vesting Upon Plan Termination. Notwithstanding any other provision in
the Plan to the contrary, a Participant's Account shall be 100% vested upon the
termination of the Plan.

                                   ARTICLE VI

                                    ACCOUNTS

     6.1  Accounts. Separate Subaccounts shall be established and maintained for
each Participant. Each Participant's applicable Subaccounts shall be credited
with the Participant's Basic Deferrals, Bonus Deferrals, Commission Deferrals
and Company Contributions, if any, made for such Participant. Participants'
Accounts shall be credited (debited) with the applicable Interest (if any), as
set forth in this Article VI. Participants' Accounts shall be reduced by
distributions therefrom and any charges which may be imposed on the Accounts
pursuant to the terms of the Plan.

     6.2  Interest Credited to Accounts at Least Monthly. Each Subaccount shall
be credited (debited) monthly, or more frequently as the Committee may specify,
in an amount equal to the Subaccount balance on the first day of the prior month
multiplied by the Interest Rate applicable to such Subaccount.

     6.3  Determination of Interest Rate.

          6.3.1 The Committee shall designate the particular funds or contracts
which shall constitute the Benchmark Funds, and may, in its sole discretion,
change or add to the Benchmark Funds; provided, however, that the Committee
shall notify Participants of any such change prior to the effective date
thereof.

          6.3.2 Each Participant may select among the Benchmark Funds and
specify the manner in which each of his or her Subaccounts (except for any
portion of his or her Company Contribution Subaccount which is in the form of
Company Stock) shall be deemed to be invested, solely for purposes of
determining the Participant's Interest Rate. Each year's salary, director fees,
bonus and/or commission deferrals may have a separate investment election. The
Committee shall establish and communicate the rules, procedures and deadlines
for making and changing Benchmark Fund selections. The Company shall have no
obligation to acquire investments corresponding to the Participant's Benchmark
Fund selections.

          6.3.3 The Interest Rate is based on the asset unit value, net of
administrative fees and investment management fees and other applicable fees or
charges, of the Benchmark Fund(s) designated by the Committee and other
applicable fees or charges. The Interest Rate may be negative if the applicable
Benchmark Fund(s) sustain a loss.

                                  ARTICLE VII

                  BENEFIT DISTRIBUTIONS AND ACCOUNT WITHDRAWALS

     7.1  Benefit Amount. The value of the Participant's Benefit shall be equal
to the vested value of the Participant's Subaccount(s) on the last day of the
calendar quarter prior to the Distribution Date, or such other date as the
Committee may specify, adjusted for Deferrals,

                                       10

<PAGE>

Company Contributions, and/or withdrawals which have been subsequently credited
thereto or made therefrom prior to the Distribution Date.

     7.2  Timing of Distributions. Benefits shall be paid (or, payments shall
commence) as soon as practicable after the earlier of:

          7.2.1 The first day of the month following the end of the quarter in
which a Participant's employment with the Employer terminates; or

          7.2.2 The In-Service Distribution Date designated by the Participant;
or

          7.2.3 The date the Committee is notified that a Participant has died
or after the Committee has determined that a Participant has incurred a
Disability; or

          7.2.4 The first day of the month following the end of the quarter in
which the Plan is terminated in accordance with Section 10.6.

     7.3  Method of Distribution.

          7.3.1 Distribution Methods. A Participant's Benefits shall be paid in
one of the following methods, as specified in his or her most recent effective
Election:

                7.3.1.1 A single lump sum payment;

                7.3.1.2 In annual installment payments of substantially equal
amounts over a period as provided below:

Reason for Distribution           Age/Years of Service      Installment Period
-----------------------           --------------------      ------------------

Termination of Employment          5+ Years of Service            5 Years

                                  10+ Years of Service          5/10 Years

                                  15+ Years of Service         5/10/15 Years

                                       Retirement              5/10/15 Years

Disability                                 N/A                 5/10/15 Years

In-Service Distribution Date               N/A                  2/3/4 Years

                7.3.1.3 A Participant may amend his or her Election as to the
method of distribution by filing an amended Election provided, however, no such
amended Election shall be effective unless it is filed at least twelve (12)
months prior to the date on which the distribution is made or commenced.

                                       11

<PAGE>

          7.3.2 Company Stock. As provided in Section 3.3.2, if any portion of a
Participant's Company Contribution was awarded in the form of Company Stock,
then distributions of such Company Contributions shall be only made in the form
of Company Stock. Fractional shares of Company Stock will not be distributed and
if necessary fractional shares will be rounded down to the next whole share of
Company Stock.

          7.3.3 Failure to Qualify for Installment Term Elected. If, at the time
of his or her Distribution Date, a Participant who elects an installment
distribution does not satisfy the requirements for an installment distribution
or the installment term elected, then such Participant's Benefits shall be
distributed in a single lump sum if the Participant is not eligible for any
installment distribution or over the longest installment term for which the
Participant is qualified on his or her Distribution Date.

          7.3.4 Installment Amounts. For purposes of this Section 7.3,
installment distributions shall be paid in substantially equal annual payments
under an installment methodology established by the Committee.

          7.3.5 Reemployed After Installments Begin. If a former Participant is
reemployed after having begun to receive installment distributions from the
Plan, then such former Participant, upon once again becoming an Eligible
Individual, may begin a new period of participation in the Plan, provided,
however, that the installment distributions previously commenced will continue
to be paid to the Participant over the specified term.

          7.3.6 Minimum Account Balance Necessary for Installments.
Notwithstanding anything to the contrary in Section 7.4, if a Participant's
Account balance is less than $25,000 at the time elected to begin installment
distributions, the Participant's Benefit will automatically be distributed in a
single lump sum.

          7.3.7 Method of Distribution Following Plan Termination. All Benefits
(including installments remaining on Benefits for which payment has commenced)
shall be paid in a single lump sum cash (or if applicable stock) distribution as
soon as administratively feasible following termination of the Plan.

     7.4  Election of In-Service Distribution Date.

          7.4.1 Initial Deferral Election. Upon filing the deferral Election for
any Plan Year, a Participant may specify an In-Service Distribution Date for the
Subaccount to which such Deferrals are credited, subject to the following:

                7.4.1.1 A Participant may elect an In-Service Distribution Date
for all of the Benefits credited to such Subaccount.

                7.4.1.2 The In-Service Distribution Date for any Deferral
Subaccount must be at least two (2) years after the end of the Plan Year for
which Deferrals to such Subaccount are made.

          7.4.2 Company Contribution Distribution Election. If the Company
informs any Participant that Company Contributions will be made on behalf of
such Participant, then a

                                       12

<PAGE>

Participant may specify an In-Service Distribution Date for the Company
Contribution, subject to the following:

                7.4.2.1 A Participant may not select any In-Service Distribution
Date which would be prior to such Company Contribution becoming one hundred
percent (100%) vested in accordance with Section 5.1.

                7.4.2.2 A Participant must elect an In-Service Distribution Date
for the entire amount of any specific Company Contribution.

          7.4.3 Revocation or Amendment of Election. A Participant who has
elected an In-Service Distribution Date may revoke and/or amend the In-Service
Distribution Date Election by filing a revocation or an amended Election at
least twelve (12) months in advance of the In-Service Distribution Date
specified in the Election being revoked or amended. The amended In-Service
Distribution Date must be in a Plan Year after the In-Service Distribution Date
specified in the prior Election. If a Participant revokes an In-Service
Distribution Date Election and does not provide another In-Service Distribution
Date, the Participant shall be deemed to have elected to have the Benefit
distributed at termination of employment. An In-Service Distribution Date
Election for any Subaccount may be amended only twice.

          7.4.4 Termination Before the Planned Distribution Date.
Notwithstanding any prior Election, if the Participant terminates Service with
the Employer before his In-Service Distribution Date, distribution of the
Participant's vested Account shall be made or commenced as soon as
administratively feasible after the first day of the month following the end of
the quarter in which the Service termination occurs and in the form elected for
distributions at termination of Service.

          7.4.5 Termination After Commencement of Installment In-Service
Distributions. Notwithstanding any prior Election, if the Participant terminates
employment with the Employer while receiving installment In-Service
Distributions, the remaining installments shall be immediately distributed in a
single lump sum as soon as administratively feasible after the first day of the
month following the end of the quarter in which the employment termination
occurs.

          7.4.6 Absence of In-Service Distribution Election. If a Participant
does not elect an In-Service Distribution Date in his or her Initial Deferral
Election, Company Contribution Distribution Election, or if the Participant
revokes an In-Service Distribution Date Election, the Participant will be deemed
to have elected to have the Benefits credited to the relevant Subaccount
distributed commencing upon his or her termination of employment, and such a
deemed election shall be irrevocable.

     7.5  Distribution Upon Death of Participant. If a Participant dies before
his or her Benefit payments have commenced, then such Participant's Benefits
shall be paid to his or her designated Beneficiary in a single lump sum cash (or
if applicable stock) distribution as soon as administratively feasible after the
Committee is notified of the Participant's death and receives evidence
satisfactory to it thereof. If a Participant dies after his or her Benefit
distribution has commenced, his or her remaining Benefits shall be paid to the
deceased Participant's Beneficiary

                                       13

<PAGE>

in a single lump sum cash (or if applicable stock) distribution as soon as
administratively feasible after the Committee is notified of the Participant's
death and receives evidence satisfactory to it thereof.

     7.6 Distribution Upon Disability of Participant. If a Participant suffers
a Disability before his or her Benefit payments have commenced, then such
Participant's Benefits shall be paid in the optional form of distribution
previously selected as soon as administratively feasible after the Committee is
notified of the Participant's Disability and receives evidence satisfactory to
it thereof.

     7.7 Financial Hardship Withdrawal. A Participant, or any former Participant
who may be currently receiving installment distributions (collectively the
"Participant" for purposes of this Section 7.7 only) may withdraw up to one
hundred percent (100%) of the Benefits credited to his or her Deferral
Subaccount(s) (Company Contributions are not eligible for this hardship
withdrawal) as may be required to meet a sudden unforeseeable financial
emergency of the Participant. Such hardship distribution shall be subject to the
following provisions:

         7.7.1 The hardship withdrawal must be necessary to satisfy the
unforeseeable emergency and no more may be withdrawn than is required to relieve
the financial need after taking into account other resources that are reasonably
available to the Participant for this purpose.

         7.7.2 The Participant must certify that the financial need cannot be
relieved: (i) through reimbursement or compensation by insurance or otherwise;
(ii) by reasonablte liquidation of the Participant's assets, to the extent such
liquidation would not itself cause an immediate and heavy financial need; or
(iii) by borrowing from commercial sources on reasonable commercial terms.

         7.7.3 An unforeseeable financial emergency is a severe financial
hardship to Participant resulting from a sudden and unexpected illness or
accident of Participant or of a dependent of Participant (as defined in Section
152(a) of the Code), loss of Participant's property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of Participant. Neither the need to pay tuition
expenses on behalf of the Participant or the Participant's spouse or children
nor the desire to purchase a home shall be considered an unforeseeable
emergency.

         7.7.4 The Committee, in its sole discretion, shall determine if there
is an unforeseeable financial emergency, if the Participant has other resources
to satisfy such emergency and the amount of the hardship withdrawal that is
required to alleviate the Participant's financial hardship.

         7.7.5 Upon receiving a financial hardship withdrawal, the
Participant's Deferrals, if applicable, will be discontinued for the remainder
of the Plan Year in which a financial hardship withdrawal occurs. Such
Participants will, however, be eligible for any Company Contributions which may
be made to the Plan on their behalf if the Participant is eligible for such
Company Contributions.

                                       14

<PAGE>

     7.8  Early Withdrawal. Notwithstanding any other provision of the Plan, a
Participant, or any former Participant who may be currently receiving
installment distributions (collectively the "Participant" for purposes of this
Section 7.8 only) may withdraw any portion of the Benefits credited to his or
her Deferral Subaccounts at any time (Benefits credited to Company Contributions
Subaccounts are not eligible for early withdrawal). Ninety percent (90%) of the
requested amount shall be paid in a single lump sum distribution as soon as
administratively feasible following the Participant's request. Upon such
withdrawal, the remaining ten percent (10%) of the requested amount shall be
forfeited and the Participant shall have no further right thereto. Upon electing
an early withdrawal distribution, the Participant's Deferrals, if any, will be
discontinued for the remainder of the Plan Year in which an early withdrawal
occurs and for the entire succeeding Plan Year. Such Participants will, however,
be eligible for any Company Contributions which may be made to the Plan on their
behalf if the Participant is eligible for such Company Contributions. The
minimum amount of such an early withdrawal shall be the lesser of $5,000 or 100%
of the Benefits credited to the Participant's Deferral Subaccounts.

     7.9  Limitation on Distributions to Covered Employees. Notwithstanding any
other provision of this Article VI in the event that the Participant is a
"covered employee" as that term is defined in Section 162(m)(3) of the Code, or
would be a covered employee if Benefits were distributed in accordance with his
or her Benefit Distribution Election or early withdrawal request, the maximum
amount which may be distributed from the Participant's Account in any Plan Year
shall not exceed one million dollars ($1,000,000) less the amount of
compensation paid to the Participant in such Plan Year which is not
"performance-based" (as defined in Code Section 162(m)(4)(C)), which amount
shall be reasonably determined by the Committee at the time of the proposed
distribution. Any amount which is not distributed to the Participant in a Plan
Year as a result of this limitation shall be distributed to the Participant in
the next Plan Year, subject to compliance with the foregoing limitations set
forth in this Section 7.9.

     7.10 Supplemental Death Benefit.

          7.10.1 A supplement death benefit in the amount of $50,000 shall be
paid to the Beneficiary of an eligible Participant, who has satisfied the
criteria set forth in Section 7.10.2.

          7.10.2 To be eligible for this supplemental death benefit, a
Participant must have satisfied the following criteria prior to his or her
death:

                 7.10.2.1 The Participant is eligible to participate in the Plan
and, at the time of his or her death, had a current account balance (regardless
of whether or not the Participant actually was making basic, director fees,
bonus and/or commission deferrals at the time of his or her death);

                 7.10.2.2 The Participant was an active employee with the
Employer at the time of his or her death;

                 7.10.2.3 The Participant completed and submitted an insurance
application to the Committee; and

                                       15

<PAGE>

                 7.10.2.4 The Company subsequently purchased an insurance policy
on the life of the Participant, with a death benefit of at least $50,000, and
which policy is in effect at the time of the Participant's death.

          7.10.3 Notwithstanding any provision of this Plan or any other
document to the contrary, the supplemental death benefit payable pursuant to
this Section 7.10 shall be paid only if an insurance policy has been issued on
the Participant's life and such policy is in force at the time of the
Participant's death and the Company shall have no obligation with respect to the
payment of the supplemental death benefit, or to maintain an insurance policy
for any Participants.

          7.10.4 The supplemental death benefit provided under this Article VII
shall be taxable income when paid.

     7.11 Tax Withholding. Distribution and withdrawal payments under this
Article VII shall be subject to all applicable withholding requirements for
state and federal income taxes and to any other federal, state or local taxes
that may be applicable to such payments. The Company shall have the right, but
not the obligation, to deduct from the shares of Company Stock distributed from
the Plan, that number of whole shares of Company Stock having a fair market
value, as determined in accordance with Section 4.3, equal to all or any part of
the federal, state, local and foreign taxes, if any, required by law to be
withheld by the Company with respect to such distributions. Alternatively or in
addition, in its discretion, the Company shall have the right to require a
Participant, through payroll withholding, cash payment or otherwise, to make
adequate provision for any such tax withholding obligations of the Company
arising in connection with any distribution from the Plan. The fair market value
of any shares of Company Stock withheld to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates. The Trustee shall have no obligation to distribute
shares of Company Stock from the Trust until the Company's tax withholding
obligations have been satisfied by the Participant.

                                  ARTICLE VIII

                                  BENEFICIARIES

     8.1  Designation of Beneficiary. The Participant shall have the right to
designate on such form as may be prescribed by the Committee, one or more
Beneficiaries to receive any Benefits due under the Plan which may remain unpaid
on the date of the Participant's death. The Participant shall have the right at
any time to revoke such designation and to substitute one or more other
Beneficiaries.

     8.2  No Designated Beneficiary. If, upon the death of the Participant,
there is no valid Beneficiary designation, the Beneficiary shall be the
Participant's surviving spouse. In the event there is no surviving spouse, then
the Participant's Beneficiary shall be the Participant's estate.

                                       16

<PAGE>

                                   ARTICLE IX

                        TRUST OBLIGATION TO PAY BENEFITS

     9.1  Transfers to the Trust. The Employer may transfer the Deferrals and
Company Contributions, if any, made by or on behalf of a Participant to the
Trustee to be held pursuant to the terms of the Trust Agreement.

     9.2  Source of Benefit Payments. All benefits payable to a Participant
hereunder shall be paid by the Trustee to the extent of the assets held in the
Trust by the Trustee, and by the Employer to the extent the assets in the Trust
are insufficient to pay a Participant's Benefits as provided under this Plan.

     9.3  Investment Discretion. The Benchmark Funds established pursuant to
Section 6.3 shall be for the sole purpose of determining the Interest Rate to be
used for determining the Interest credited to the Participant's Deferral
Subaccounts. Neither the Trustee nor the Committee shall have any obligation to
invest the Participants' Account in accordance with his deemed investment
directions or in any other investment. Notwithstanding the foregoing, any
Company Contribution made in the form of Company Stock shall remain, under the
Trust in the form of Company Stock allocated to any Participant's Company
Contribution Subaccount, and such Company Stock shall be distributed from the
Trust solely in the form of Company Stock.

     9.4  No Secured Interest. Except as otherwise provided by the Trust
Agreement, the assets of the Trust, shall be subject to the claims of creditors
of the Employer. Except as provided in the Trust Agreement, the Participant (or
the Participant's Beneficiary) shall be a general unsecured creditor of the
Employer with respect to the payment of Benefits under this Plan.

                                   ARTICLE X
                 PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

     10.1 Committee Powers and Responsibilities. The Committee shall have
complete control of the administration of the Plan herein set forth with all
powers necessary to enable it properly to carry out its duties in that respect.
Not in limitation, but in amplification of the foregoing, the Committee shall
have the power and authority to:

          10.1.1 Construe the Plan and Trust Agreement to determine all
questions that shall arise as to interpretations of the Plan's provisions
including determination of which individuals are Eligible Individuals and the
determination of the amounts credited to a Participant's Account, and the
appropriate timing and method of Benefit payments;

          10.1.2 Establish reasonable rules and procedures which shall be
applied in a uniform and nondiscriminatory manner with respect to Elections, the
establishment of Accounts and Subaccounts, and all other discretionary
provisions of the Plan;

          10.1.3 Establish the rules and procedures by which the Plan will
operate that are consistent with the terms of the Plan documents;

                                       17

<PAGE>

          10.1.4 Establish the rules and procedures by which the Plan shall
determine and pay installment distributions and in-service distributions;

          10.1.5 Compile and maintain all records it determines to be necessary,
appropriate or convenient in connection with the administration of the Plan;

          10.1.6 Adopt amendments to the Plan document which are deemed
necessary or desirable to facilitate administration of the Plan and/or to bring
these documents into compliance with all applicable laws and regulations,
provided that the Committee shall not have the authority to adopt any Plan
amendment that will result in substantially increased costs to the Company
unless such amendment is contingent upon ratification by the Board before
becoming effective;

          10.1.7 Employ such persons or organizations to render service or
perform services with respect to the administrative responsibilities of the
Committee under the Plan as the Committee determines to be necessary and
appropriate, including but not limited to attorneys, accountants, and benefit,
financial and administrative consultants;

          10.1.8 Select, review and retain or change the Benchmark Funds which
are used for determining the Interest Rate under the Plan;

          10.1.9 Direct the investment of the assets of the Trust, provided,
however, that any Company Contribution made in the form of Company Stock may not
be invested in any other form and must remain solely invested in Company Stock;

          10.1.10 Review the performance of the Trustee with respect to the
Trustee's duties, responsibilities and obligations under the Plan and the Trust
Agreement;

          10.1.11 Take such other action as may be necessary or appropriate to
the management and investment of the Plan assets.

     10.2 Indemnification. To the extent permitted by law, the Company shall
indemnify each member of the Committee, and any other Employee or member of the
Board with duties under the Plan, against losses and expenses (including any
amount paid in settlement) reasonably incurred by such person in connection with
any claims against such person by reason of such person's conduct in the
performance of duties under the Plan, except in relation to matters as to which
such person has acted fraudulently or in bad faith in the performance of duties.
Notwithstanding the foregoing, the Company shall not indemnify any person for
any expense incurred through any settlement or compromise of any action unless
the Company consents in writing to the settlement or compromise.

     10.3 Claims Procedure. Benefits shall be provided from this Plan through
procedures initiated by the Committee, and the Participant need not file a
claim. However, if a Participant or Beneficiary believes he or she is entitled
to a Benefit different from the one received, then the Participant or
Beneficiary may file a claim for the Benefit by writing a letter to the
Committee.

          10.3.1 If any claim for Benefits under the Plan is wholly or partially
denied, the claimant shall be given notice in writing of such denial within 90
days of the date the letter claiming benefits is received by the Committee. If
special circumstances require an extension of

                                       18

<PAGE>

time, written notice of the extension shall be furnished to the claimant within
the initial 90-day period.

          10.3.2 Notice of the denial shall set forth the following information:
(a) the specific reason or reasons for the denial; (b) specific reference to
pertinent Plan provisions on which denial is based; (c) a description of any
additional material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is necessary; (d)
an explanation that a full review by the Committee of the decision denying the
claim may be requested by the claimant or his or her authorized representative
by filing with the company, within 60 days after such notice has been received,
a written request for such review; and (e) if such request is so filed, the
claimant or his or her authorized representative may review pertinent documents
and submit issues and comments in writing within the same 60 day period
specified in the preceding subparagraph.

          10.3.3 The decision of the Committee upon review shall be made
promptly, and not later than 60 days after the Committee's receipt of the
request for review, unless special circumstances require an extension of time
for processing, in which case the claimant shall be so notified and a decision
shall be rendered as soon as possible, but not later than 120 days after receipt
of the request for review. If the claim is denied, wholly or in part, the
claimant shall be promptly given a copy of the decision. The decision shall be
in writing and shall include specific reasons for the denial, specific
references to the pertinent Plan provisions on which the denial is based and
shall be written in a manner calculated to be understood by the claimant. No
further legal action may be initiated claiming benefits under this Plan until
the claims procedure set forth in this Article X is completed.

          10.3.4 If after review by the Committee a Participant or Beneficiary
still seeks Benefits under the Plan, then any dispute or claim relating to or
arising out of this Plan shall be fully and finally resolved by binding
arbitration conducted by the American Arbitration Association in San Diego,
California.

     10.4 Decisions of the Committee. Decisions of the Committee made in good
faith upon any matter within the scope of its authority shall be final,
conclusive and binding upon all persons, including Participants and their legal
representatives or Beneficiaries. Any discretion granted to the Committee shall
be exercised in accordance with rules and policies established by the Committee.

     10.5 Plan Amendment. This Plan may be amended by the Company at any time in
its sole discretion. Additionally, the Plan may be amended upon an action of the
members of the Committee subject to the provisions in Section 10.1. However, no
amendment may be made that alters the nature of an Election or Benefit
Distribution Election or which would reduce the amount credited to a
Participant's Account on the date of such amendment.

     10.6 Plan Termination. The Company reserves the right to terminate the Plan
in its entirety by an action of the Board at any time upon fifteen (15) days
notice to the Participants. The termination of the Plan shall automatically
revoke all outstanding Benefit Distribution Elections and all elections to have
Benefits paid in installments. If the Plan is terminated, all

                                       19

<PAGE>

benefits shall be paid as set forth in Section 7.3.7. Any amounts remaining in
the Trust after all benefits have been paid shall revert to the Company.

                                   ARTICLE XI

                                  MISCELLANEOUS

     11.1 No Assignment. The right of any Participant, any Beneficiary or any
other person to the payment of any benefits under this Plan shall not be
assigned, transferred, pledged or encumbered.

     11.2 No Secured Interest. The obligation of the Company to Participants
under this Plan shall not be funded or otherwise secured, and shall be paid out
of the general assets of the Company. Participants are general unsecured
creditors of the Company with respect to the obligations hereunder and shall
have no legal or equitable interest in the assets of the Company, including any
assets as the Company may set aside or reserve against its obligations under
this Plan.

     11.3 Successors. This Plan shall be binding upon and inure to the benefit
of the Employee, its successors and assigns and the Participant and his or her
heirs, executors, administrators and legal representatives.

     11.4 No Employment Agreement. Nothing contained herein shall be construed
as conferring upon any Participant the right to continue in the employ of the
Employer as an employee.

     11.5 Attorneys' Fees. If the Employer, the Participant, any Beneficiary,
any beneficiary under an insurance policy purchased pursuant to Section 7.10,
and/or a successor in interest to any of the foregoing, brings legal action to
enforce any of the provisions of this Plan, the prevailing party in such legal
action shall be reimbursed by the other party, the prevailing party's costs of
such legal action including, without limitation, reasonable fees of attorneys,
accountants and similar advisors and expert witnesses.

     11.6 Governing Law. This Plan shall be construed in accordance with and
governed by any applicable provisions of ERISA and the laws of the State of
California.

     11.7 Entire Agreement. This Plan constitutes the entire understanding and
agreement with respect to the subject matter contained herein, and there are no
agreements, understandings, restrictions, representations or warranties among
any Participant and the Employer other than those as set forth or provided for
herein.

                                       20

<PAGE>

     IN WITNESS WHEREOF, this Plan has been adopted by the Company and AHL
California effective as of the Effective Date.

                                             ACCREDITED HOME LENDERS HOLDING CO.

Dated:___________________, 2002              By:_______________________________

                                             AHL CALIFORNIA

Dated:___________________, 2002              By:_______________________________

                                       21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]