Document:

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                              SHAREHOLDER AGREEMENT

      THIS AGREEMENT is entered into this 20th day of October, 2004, by and
between John Plavan ("Shareholder") and Discovery Bancorp ("Corporation"), a
California corporation with its principal executive office at 1145 San Marino
Drive, Suite 346, San Marcos, California 92069.

                                    RECITALS

      A.    WHEREAS, the Articles of Incorporation of Corporation authorize the
issuance of up to 10,000,000 shares of its no par value common stock ("Common
Stock");

      B.    WHEREAS, the Board of Directors of Corporation has authorized the
sale and issuance of 200 shares of Corporation's Common Stock at the purchase
price of $10.00 per share to Shareholder; and

      C.    WHEREAS, Shareholder desires to purchase 200 shares of Corporation's
Common Stock for the purchase price of $10.00 per share pursuant to the terms
and conditions herein set forth;

      NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED by and between Corporation
and Shareholder as follows:

                                    AGREEMENT

      1.    Purchase. Corporation agrees to sell and Shareholder agrees to
purchase 200 shares of Corporation's Common Stock at the purchase price of
$10.00 per share for an aggregate purchase price of $2,000.00.

      2.    Transfer of Shares. Shareholder agrees not to sell, assign,
transfer, encumber, hypothecate, or make any other disposition of any of the
shares of the Common Stock to be purchased except with the prior written consent
of Corporation and except in accordance with the

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terms of this Shareholder Agreement. This Shareholder Agreement shall be binding
upon and shall operate for the benefit of Corporation and Shareholder and the
respective executors or administrators and any transferees or assignees of
Shareholder, whether such transfers or assignments are in accordance with or in
violation of the provisions of this Shareholder Agreement.

      3.    Repurchase by Corporation. Upon consummation of the merger between
Corporation's wholly-owned subsidiary, DB Merger Company, and Discovery Bank,
pursuant to which Corporation will issue shares of its Common Stock to the
shareholders of Discovery Bank (the "Merger"), Corporation shall be obligated to
repurchase and Shareholder shall be obligated to resell to Corporation the 200
shares of Corporation's Common Stock at the repurchase price of $10.00 per
share, for a total repurchase price of $2,000.00. The repurchase and repayment
therefor shall occur simultaneously with the consummation of the Merger, at
which time Shareholder's share certificate shall be returned and cancelled.

      4.    Termination. This Shareholder Agreement shall terminate upon the
occurrence of any of the following events:

            (a)   The bankruptcy, receivership, or dissolution of Corporation;

            (b)   Mutual agreement of Corporation and Shareholder; or

            (c)   The failure of the consummation of the Merger for any reason
                  whatsoever.

      5.    Legend. Upon execution of this Shareholder Agreement, the
certificate representing the number of shares of Corporation's Common Stock to
be issued shall be endorsed as follows:

            "This certificate is transferable only upon compliance with the
            provisions of a Shareholder Agreement dated October 20, 2004."

      6.    Governing Law. This Shareholder Agreement shall be construed and
governed by

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the laws of the State of California.

      7.    Entire Agreement. This Shareholder Agreement constitutes the sole
and only agreement of the parties hereto respecting the sale and purchase of the
shares of Corporation's Common Stock and the resale or repurchase of the shares
of Corporation's Common Stock and correctly sets forth the rights, duties, and
obligations of each party to the other in relation thereto as of this date. Any
prior agreements, promises, negotiations or representations concerning the
subject matter of this Shareholder Agreement not expressly set forth in this
Shareholder Agreement are of no force or effect.

      IN WITNESS WHEREOF, the parties hereto have executed this Shareholder
Agreement in San Marcos, California, on the date first above written.

"SHAREHOLDER"                                       DISCOVERY BANCORP

/s/ John Plavan                                     By: /s/ James P. Kelly, II
----------------------                                  ------------------------
John Plavan                                             James P. Kelly, II,
                                                        President and CEO

                                                    By: /s/ Robert Cairns
                                                        ------------------------
                                                        Robert Cairns,
                                                        Secretary

                                       3<PAGE>

                                DISCOVERY BANCORP
                             2004 STOCK OPTION PLAN
                            Adopted October 20, 2004

1.    Purpose

      The purpose of the Discovery Bancorp 2004 Stock Option Plan (the "Plan")
is to strengthen Discovery Bancorp (the "Company") and those banks and
corporations which are or hereafter become subsidiary corporations (the
"Subsidiary" or "Subsidiaries") by providing additional means of attracting and
retaining competent managerial personnel and by providing to participating
directors, officers, key employees and consultants added incentive for high
levels of performance and for unusual efforts to increase the earnings of the
Company and any Subsidiaries. The Plan seeks to accomplish these purposes and
achieve these results by providing a means whereby such directors, officers, key
employees and consultants may purchase shares of the Common Stock of the Company
pursuant to Stock Options granted in accordance with this Plan.

      Stock Options granted pursuant to this Plan are intended to be Incentive
Stock Options or Non-Qualified Stock Options, as shall be determined and
designated by the Stock Option Committee upon the grant of each Stock Option
hereunder.

2.    Definitions

      For the purposes of this Plan, the following terms shall have the
following meanings:

            a.    "Affiliation" or "affiliated." For purposes of Sections 10,
      11, 12, 13 and 14 hereof, these terms shall mean services as a director of
      the Company or any Subsidiary.

            b.    "Common Stock." This term shall mean shares of the Company's
      Common Stock, subject to adjustment pursuant to Section 15 (Adjustment
      Upon Changes in Capitalization) hereunder.

            c.    "Company." This term shall mean Discovery Bancorp, a
      California corporation.

            d.    "Consultants." This term shall mean those individuals,
      including but not limited to attorneys, accountants and other
      professionals, who provide services to the Company or any Subsidiary, but
      only to the extent a Stock Option is granted as fair compensation for
      services rendered.

            e.    "Eligible Participants." This term shall mean: (i) all
      directors of the Company or any Subsidiary; (ii) all officers (whether or
      not they are also directors) of the Company or any Subsidiary; (iii) all
      Consultants to the Company or any Subsidiary; and (iv) all key employees
      (as such persons may be determined by the Stock Option Committee from time
      to time) of the Company or any Subsidiary, provided that such officers and
      key employees have a customary work week of at least forty hours in the
      employ of the Company or a Subsidiary.

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            f.    "Fair Market Value." This term shall mean the fair market
      value of the Common Stock as determined in accordance with any reasonable
      valuation method selected by the Stock Option Committee, including the
      valuation methods described in Treasury Regulations Section 20.2031-2.

            g.    "Incentive Stock Option." This term shall mean a Stock Option
      which is an "incentive stock option" within the meaning of Section 422 of
      the Internal Revenue Code of 1986, as amended.

            h.    "Non-Qualified Stock Option." This term shall mean a Stock
      Option which is not an Incentive Stock Option.

            i.    "Option Shares." This term shall mean Common Stock covered by
      and subject to any outstanding unexercised Stock Option granted pursuant
      to this Plan.

            j.    "Optionee." This term shall mean any Eligible Participant to
      whom a Stock Option has been granted pursuant to this Plan, provided that
      at least part of the Stock Option is outstanding and unexercised.

            k.    "Plan." This term shall mean the Discovery Bancorp 2004 Stock
      Option Plan as embodied herein and as may be amended from time to time in
      accordance with the terms hereof and applicable law.

            l.    "Stock Option." This term shall mean the right to purchase a
      specified number of shares of Common Stock under this Plan, at a price and
      upon the terms and conditions determined by the Stock Option Committee.

            m.    "Stock Option Committee." The Board of Directors of the
      Company may select and designate a Stock Option Committee consisting of
      three or more directors of the Company, having full authority to act in
      the matter. Regardless of whether a Stock Option Committee is selected,
      the Board of Directors of the Company may act as the Stock Option
      Committee and any action taken by said Board as such shall be deemed to be
      action taken by the Stock Option Committee. All references in the Plan to
      the "Stock Option Committee" shall be deemed to refer to the Board of
      Directors of the Company acting as the Stock Option Committee and to a
      duly appointed Stock Option Committee, if there be one. In the event of
      any conflict between action taken by the Board acting as a Stock Option
      Committee and action taken by a duly appointed Stock Option Committee, the
      action taken by the Board shall be controlling and the action taken by the
      duly appointed Stock option Committee shall be disregarded.

            n.    "Subsidiary." This term shall mean each "subsidiary
      corporation" (treating the Company as the employer corporation) as defined
      in Section 424(f) of the Internal Revenue Code of 1986, as amended.

3.    Administration

            a.    Stock Option Committee. This Plan shall be administered by the
      Stock Option Committee. The Board of Directors of the Company shall have
      the right, in its sole and absolute discretion, to remove or replace any
      person from or on the Stock Option Committee at any time for any reason
      whatsoever.

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            b.    Administration of the Plan. Any action of the Stock Option
      Committee with respect to the administration of the Plan shall be taken
      pursuant to a majority vote, or pursuant to the unanimous written consent,
      of its members. Any such action taken by the Stock Option Committee in the
      administration of this Plan shall be valid and binding, so long as the
      same is not inconsistent with the terms and conditions of this Plan.
      Subject to compliance with the terms, conditions and restrictions set
      forth in this Plan, the Stock Option Committee shall have the exclusive
      right, in its sole and absolute discretion, to establish the terms and
      conditions of all Stock Options granted under the Plan, including, without
      meaning any limitation, the power to: (i) establish the number of Stock
      Options, if any, to be granted hereunder, in the aggregate and with regard
      to each Eligible Participant; (ii) determine the time or times when such
      Stock Options, or parts thereof, may be exercised; (iii) determine and
      designate which Stock Options granted under the Plan shall be Incentive
      Stock Options and which shall be Non-Qualified Stock Options; (iv)
      determine the Eligible Participants, if any, to whom Stock Options are
      granted; (v) determine the duration and purposes, if any, of leaves of
      absence which may be permitted to holders of unexercised, unexpired Stock
      Options without such constituting a termination of employment under the
      Plan; and (vi) prescribe and amend the terms, provisions and form of each
      instrument and agreement setting forth the terms and conditions of every
      Stock Option granted hereunder.

            c.    Decisions and Determinations. Subject to the express
      provisions of the Plan, the Stock Option Committee shall have the
      authority to construe and interpret this Plan, to define the terms used
      herein, to prescribe, amend, and rescind rules and regulations relating to
      the administration of the Plan, and to make all other determinations
      necessary or advisable for administration of the Plan. Determinations of
      the Stock Option Committee on matters referred to in this Section 3(c)
      shall be final and conclusive so long as the same are not inconsistent
      with the terms of this Plan.

4.    Shares Subject to the Plan

      Subject to adjustments as provided in Section 15 hereof, the maximum
number of shares of Common Stock which may be issued upon exercise of all Stock
Options granted under this Plan is limited to Five Hundred Thousand (500,000) in
the aggregate. If any Stock Option shall be canceled, surrendered, or expire for
any reason without having been exercised in full, the unpurchased Option Shares
represented thereby shall again be available for grants of Stock Options under
this Plan.

5.    Eligibility

      Only Eligible Participants shall be eligible to receive grants of Stock
Options under this Plan.

6.    Grants of Stock Options

            a.    Grant. Subject to the express provisions of the Plan, the
      Stock option Committee, in its sole and absolute discretion, may grant
      Stock Options:

                  (i)   In the case of grants to Eligible Participants who are
            Consultants, officers or key employees of the Company or any
            Subsidiary, for a number of Option Shares, at the price(s) and
            time(s), and on the terms and conditions as it deems advisable and
            specifies in the respective grants; provided that the number of
            Option Shares outstanding to any such Eligible Participant shall at
            no time

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            exceed ten percent (10%) of the total outstanding shares of the
            Company's Common Stock issued and outstanding; and

                  (ii)  In the case of grants to Eligible Participants who are
            directors and who are not full-time officers or key employees of the
            Company or any Subsidiary, for a number of Option Shares, at the
            price(s) and time(s), and on the terms and conditions as it deems
            advisable and specifies in the respective grants; provided, however,
            that the number of Option Shares granted pursuant to this Section
            6(a)(ii), including all previously granted and then still
            outstanding Stock Options, shall not exceed the number of shares of
            the Company's Common Stock then held by the Eligible Participant;
            and provide further, however, that the number of Option Shares
            outstanding to any such Eligible Participant shall at no time exceed
            ten percent (10%) of the total outstanding shares of the Company's
            Common Stock issued and outstanding.

            The terms upon which and the times at which, or the periods within
      which, the Option Shares subject to such Stock Options may become acquired
      or such Stock Options may be acquired and exercised shall be as set forth
      in the Plan and the related Stock Option Agreements.

            Subject to the limitations and restrictions set forth in the Plan,
      an Eligible Participant who has been granted a Stock Option may, if
      otherwise eligible, be granted additional Stock Options if the Stock
      Option Committee shall so determine. The Stock Option Committee shall
      designate in each grant of a Stock Option whether the Stock Option is an
      Incentive Stock Option or a Non-Qualified Stock Option.

            b.    Date of Grant and Rights of Optionee. The determination of the
      Stock Option Committee to grant a Stock Option shall not in any way
      constitute or be deemed to constitute an obligation of the Company, or a
      right of the Eligible Participant who is the proposed subject of the
      grant, and shall not constitute or be deemed to constitute the grant of a
      Stock Option hereunder unless and until both the Company and the Eligible
      Participant have executed and delivered to the other a Stock Option
      Agreement in the form then required by the Stock Option Committee as
      evidencing the grant of the Stock Option, together with such other
      instrument or instruments as may be required by the Stock Option Committee
      pursuant to this Plan; provided, however, that the Stock Option Committee
      may fix the date of grant as any date on or after the date of its final
      determination to grant the Stock Option (or if no such date is fixed, then
      the date of grant shall be the date on which the determination was finally
      made by the Stock Option Committee to grant the Stock Option), and such
      date shall be set forth in the Stock Option Agreement. The date of grant
      as so determined shall be deemed the date of grant of the Stock Option for
      purposes of this Plan.

            c.    Shareholder-Employees. A Stock Option granted hereunder to an
      Eligible Participant who is also an officer or key employee of the Company
      or any Subsidiary, who owns, directly or indirectly, at the date of the
      grant of the Stock Option, more than ten percent (10%) of the total
      combined voting power of all classes of capital stock of the Company or a
      Subsidiary (if permitted in accordance with the provisions of Section 5
      herein) shall not qualify as an Incentive Stock Option unless: (i) the
      purchase price of the Option Shares subject to said Stock Option is at
      least one hundred ten percent (110%) of the Fair Market Value of the
      Option Shares, determined as of the date said Stock Option is granted; and
      (ii) the stock Option by its terms is not exercisable after five (5) years
      from the date that it is granted. The attribution rules of Section 424(d)
      of the Internal

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      Revenue Code of 1986, as amended, shall apply in the determination of
      indirect ownership of stock.

            d.    Maximum Value of Stock Options. No grant of Incentive Stock
      Options hereunder may be made when the aggregate Fair Market Value of
      Option Shares with respect to which Incentive Stock Options (pursuant to
      this Plan or any other Incentive Stock Option Plan of the Company or any
      Subsidiary) are exercisable for the first time by the Eligible Participant
      during any calendar year exceeds One Hundred Thousand Dollars ($100,000).

            e.    Substituted Stock Options. If all of the outstanding shares of
      common stock of another corporation are changed into or exchanged solely
      for Common Stock in a transaction to which Section 424(a) of the Internal
      Revenue Code of 1986, as amended, applies, then, subject to the approval
      of the Board of Directors of the Company, Stock Options under the Plan may
      be substituted ("Substituted Options") in exchange for valid, unexercised
      and unexpired stock options of such other corporation. Substituted options
      shall qualify as Incentive Stock Options under the Plan, provided that
      (and to the extent) the stock options exchanged for the Substituted
      Options were Incentive Stock Options within the meaning of Section 422 of
      the Internal Revenue Code of 1986, as amended.

            f.    Non-Qualified Stock Options. Stock Options and Substituted
      Options granted by the Stock Option Committee shall be deemed
      Non-Qualified Stock Options under this Plan if they: (i) are designated at
      the time of grant as Incentive Stock Options but do not so qualify under
      the provisions of Section 422 of the Code or any regulations or rulings
      issued by the Internal Revenue Service for any reason; (ii) are not
      granted in accordance with the provisions of Section 6(c); (iii) are in
      excess of the fair market value limitations set forth in Section 6(d);
      (iv) are granted to an Eligible Participant who is not an officer or key
      employee of the Company or any subsidiary; or (v) are designated at the
      time of grant as Non-Qualified Stock Options. Non-Qualified Stock Options
      granted or substituted hereunder shall be so designated in the Stock
      Option Agreement entered into between the Company and the Optionee.

7.    Stock Option Exercise Price

            a.    Minimum Price. The exercise price of any Option Shares shall
      be determined by the Stock Option Committee, in its sole and absolute
      discretion, upon the grant of a Stock Option. Except as provided elsewhere
      herein, said exercise price shall not be less than one hundred percent
      (100%) of the Fair Market Value of the Common Stock represented by the
      Option Shares on the date of grant of the related Stock Option.

            b.    Substituted Options. The exercise price of the Option Shares
      subject to each Substituted Option may be fixed at a price less than one
      hundred percent (100%) of the Fair Market Value of the Common Stock at the
      time such Substituted Option is granted if said exercise price has been
      computed to be not less than the exercise price set forth in the stock
      option of the other corporation for which it was exchanged immediately
      before substitution, with appropriate adjustment to reflect the exchange
      ratio of the shares of stock of the other corporation into the shares of
      Common Stock.

8.    Exercise of Stock Options

            a.    Exercise. Except as otherwise provided elsewhere herein, each
      Stock Option shall be exercisable in such increments, which need not be
      equal, and upon such

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      contingencies as the Stock Option Committee shall determine at the time of
      grant of the Stock Option; provided, however, that if an Optionee shall
      not in any given period exercise any part of a Stock Option which has
      become exercisable during that period, the Optionee's right to exercise
      such part of the Stock Option shall continue until expiration of the Stock
      Option or any part thereof as may be provided in the related Stock Option
      Agreement. No Stock Option or part thereof shall be exercisable except
      with respect to whole shares of Common Stock, and fractional share
      interests shall be disregarded except that they may be accumulated.

            b.    Prior Outstanding Incentive-Stock Options. Incentive Stock
      Options granted (or substituted) to an Optionee under the Plan may be
      exercisable while such Optionee has outstanding and unexercised any
      Incentive Stock Option previously granted (or substituted) to him or her
      pursuant to this Plan or any other Incentive Stock Option Plan of the
      Company or any Subsidiary. An Incentive Stock Option shall be treated as
      outstanding until it is exercised in full or expires by reason of lapse of
      time.

            c.    Notice and Payment. Stock Options granted hereunder shall be
      exercised by written notice delivered to the Company specifying the number
      of Option Shares with respect to which the Stock Option is being
      exercised, together with concurrent payment in full of the exercise price
      as hereinafter provided. If the Stock Option is being exercised by any
      person or persons other than the Optionee, said notice shall be
      accompanied by proof, satisfactory to the counsel for the Company, of the
      right of such person or persons to exercise the Stock Option. The
      Company's receipt of a notice of exercise without concurrent receipt of
      the full amount of the exercise price shall not be deemed an exercise of a
      Stock Option by an Optionee, and the Company shall have no obligation to
      an Optionee for any Option Shares unless and until full payment of the
      exercise price is received by the Company and all of the terms and
      provisions of the Plan and the related Stock Option Agreement have been
      fully complied with.

            d.    Payment of Exercise Price. The exercise price of any Option
      Shares purchased upon the proper exercise of a Stock Option shall be paid
      in full at the time of each exercise of a Stock Option in cash (or bank,
      cashier's or certified check) and/or, with the prior written approval of
      the Stock Option Committee at or before the time of exercise, in Common
      Stock of the Company which, when added to the cash payment, if any, which
      has an aggregate Fair Market Value equal to the full amount of the
      exercise price of the Stock Option, or part thereof, then being exercised.
      Payment by an Optionee as provided herein shall be made in full
      concurrently with the Optionee's notification to the Company of his
      intention to exercise all or part of a Stock Option. If all or any part of
      a payment is made in shares of Common Stock as heretofore provided, such
      payment shall be deemed to have been made only upon receipt by the Company
      of all required share certificates, and all stock powers and all other
      required transfer documents necessary to transfer the shares of Common
      Stock to the Company.

            e.    Minimum Exercise. Not less than ten (10) Option Shares may be
      purchased at any one time upon exercise of a Stock Option unless the
      number of shares purchased is the total number which remains to be
      purchased under the Stock Option.

            f.    Compliance With Law. No shares of Common Stock shall be issued
      upon exercise of any Stock Option, and an Optionee shall have no right or
      claim to such shares, unless and until: (i) payment in full as provided
      hereinabove has been received by the Company; (ii) in the opinion of the
      counsel for the Company, all applicable requirements

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      of law and of regulatory bodies having jurisdiction over such issuance and
      delivery have been fully complied with; and (iii) if required by federal
      or state law or regulation, the Optionee shall have paid to the Company
      the amount, if any, required to be withheld on the amount deemed to be
      compensation to the Optionee as a result of the exercise of his or her
      Stock Option, or made other arrangements satisfactory to the Company, in
      its sole discretion, to satisfy applicable income tax withholding
      requirements.

            g.    Acceleration Upon Reorganization. Notwithstanding any
      provision in any Stock Option Agreement pertaining to the time of exercise
      of a Stock Option, or part thereof, upon adoption by the requisite holders
      of the outstanding shares of Common Stock of any plan of dissolution,
      liquidation, reorganization, merger, consolidation or sale of all or
      substantially all of the assets of the Company to another corporation
      which would, upon consummation, result in termination of a Stock Option in
      accordance with Section 16 hereof, all Stock Options previously granted
      shall become immediately exercisable, whether or not vested under the Plan
      or Stock Option Agreement, as to all unexercised Option Shares for such
      period of time as may be determined by the Stock Option Committee, but in
      any event not less than thirty (30) days, on the condition that the
      terminating event described in Section 16 hereof is consummated. If such
      terminating event is not consummated or if the surviving entity (successor
      entity) assumes such obligation or gives appropriate substitution thereof,
      Stock Options granted pursuant to the Plan shall be exercisable in
      accordance with the terms of their respective Stock Option Agreements.

9.    Nontransferability of Stock Options

      Each Stock Option shall, by its terms, be non-transferable by the Optionee
other than by will or the laws of descent and distribution, and shall be
exercisable during the Optionee's lifetime only by the optionee.

10.   Continuation of Affiliation

      Nothing contained in this Plan (or in any Stock Option Agreement) shall
obligate the Company or any Subsidiary to employ or continue to employ or remain
affiliated with any Optionee or any Eligible Participant for any period of time
or interfere in any way with the right of the Company or a Subsidiary to reduce
or increase the Optionee's or Eligible Participant's compensation.

11.   Cessation of Affiliation

      Except as provided in Section 12 hereof, if, for any reason other than
disability or death, an Optionee ceases to be employed by or affiliated with the
Company or a Subsidiary, the Stock Options granted to such Optionee shall expire
on the expiration dates specified for said Stock Options at the time of their
grant, or ninety (90) days after the optionee ceases to be so employed or
affiliated, whichever is earlier. During such period after cessation of
employment or affiliation, such Stock Options shall be exercisable only as to
those increments, if any, which had become exercisable as of the date on which
such Optionee ceased to be employed by or affiliated with the Company or the
Subsidiary, and any Stock Options or increments which had not become exercisable
as of such date shall expire automatically on such date.

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12.   Termination for Cause

      If the Stock Option Agreement so provides and if an Optionee's employment
by or affiliation with the Company or a Subsidiary is terminated for cause, the
Stock Options granted to such Optionee shall automatically expire and terminate
in their entirety immediately upon such termination; provided, however, that the
Stock Option Committee may, in its sole discretion, within thirty (30) days of
such termination, reinstate such Stock Options by giving written notice of such
reinstatement to the Optionee. In the event of such reinstatement, the Optionee
may exercise the Stock Options only to such extent, for such time, and upon such
terms and conditions as if the Optionee had ceased to be employed by or
affiliated with the Company or a Subsidiary upon the date of such termination
for a reason other than cause, disability or death. Termination for cause shall
include, but shall not be limited to, termination for malfeasance or gross
misfeasance in the performance of duties or conviction of illegal activity in
connection therewith and, in any event, the determination of the Stock option
Committee with respect thereto shall be final and conclusive.

13.   Death of Optionee

      If an Optionee dies while employed by or affiliated with the Company or a
Subsidiary, or during the ninety (90)-day period referred to in Section 11
hereof, the Stock Options granted to such Optionee shall expire on the
expiration dates specified for said Stock Options at the time of their grant, or
one (1) year after the date of such death, whichever is earlier. After such
death, but before such expiration, subject to the terms and provisions of the
Plan and the related Stock Option Agreements, the person or persons to whom such
Optionee's rights under the Stock Options shall have passed by will or by the
applicable laws of descent and distribution, or the executor or administrator of
the Optionee's estate, shall have the right to exercise such Stock Options to
the extent that increments, if any, had become exercisable as of the date on
which the Optionee died.

14.   Disability of Optionee

      If an Optionee is disabled while employed by or affiliated with the
Company or a Subsidiary or during the ninety (90)-day period referred to in
Section 11 hereof, the Stock Options granted to such Optionee shall expire on
the expiration dates specified for said Stock Options at the time of their
grant, or one (1) year after the date such disability occurred, whichever is
earlier. After such disability occurs, but before such expiration, the Optionee
or the guardian or conservator of the Optionee's estate, as duly appointed by a
court of competent jurisdiction, shall have the right to exercise such Stock
Options to the extent that increments, if any, had become exercisable as of the
date on which the Optionee became disabled or ceased to be employed by or
affiliated with the Company or a Subsidiary as a result of the disability. An
Optionee shall be deemed to be "disabled" if it shall appear to the Stock Option
Committee, upon written certification delivered to the Company of a qualified
licensed physician, that the Optionee has become permanently and totally unable
to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected to result in
the Optionee's death, or which has lasted or can be expected to last for a
continuous period of not less than 12 months.

15.   Adjustment Upon Changes in Capitalization

      If the outstanding shares of Common Stock of the Company are increased,
decreased, or changed into or exchanged for a different number or kind of shares
or securities of the Company, through a reorganization, merger,
recapitalization, reclassification, stock split, stock dividend,

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stock consolidation, or otherwise, without consideration to the Company, an
appropriate and proportionate adjustment shall be made in the number and kind of
shares as to which Stock Options may be granted. A corresponding adjustment
changing the number or kind of Option Shares and the exercise prices per share
allocated to unexercised Stock Options, or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Such adjustments
shall be made without change in the total price applicable to the unexercised
portion of the Stock Option, but with a corresponding adjustment in the price
for each Option Share subject to the Stock Option. Adjustments under this
Section shall be made by the Stock Option Committee, whose determination as to
what adjustments shall be made, and the extent thereof, shall be final and
conclusive. No fractional shares of stock shall be issued or made available
under the Plan on account of such adjustments, and fractional share interests
shall be disregarded, except that they may be accumulated.

16.   Terminating Events

      Upon consummation of a plan of dissolution or liquidation of the Company,
or upon consummation of a plan of reorganization, merger or consolidation of the
Company with one or more corporations, as a result of which the Company is not
the surviving entity, or upon the sale of all or substantially all the assets of
the Company to another corporation, the Plan shall automatically terminate and
all Stock Options theretofore granted shall be terminated, unless provision is
made in connection with such transaction for assumption of Stock Options
theretofore granted (in which case such Stock Options shall be converted into
Stock Options for a like number and kind for shares of the surviving entity), or
substitution for such Stock Options with new stock options covering stock of a
successor employer corporation, or a parent or subsidiary corporation thereof,
solely at the discretion of such successor corporation, or parent or subsidiary
corporation, with appropriate adjustments as to number and kind of shares and
prices.

17.   Amendment and Termination

      The Board of Directors of the Company may at any time and from time to
time suspend, amend, or terminate the Plan and may, with the consent of an
Optionee, make such modifications of the terms and conditions of that Optionee's
Stock Option as it shall deem advisable; provided that, except as permitted
under the provisions of Section 15 hereof, no amendment or modification may be
adopted without the Company having first obtained the approval of the holders of
a majority of the Company's outstanding shares of Common Stock present, or
represented, and entitled to vote at a duly held meeting of shareholders of the
Company, or by written consent, if the amendment or modification would:

            (a)   materially increase the number of securities which may be
      issued under the Plan;

            (b)   materially increase the number of securities which may be
      issued at any time under the Plan to all directors who are not also
      officers or key employees of the Company or any Subsidiary;

            (c)   materially modify the requirements as to eligibility for
      participation in the Plan;

            (d)   increase or decrease the exercise price of any Stock Option
      granted under the Plan;

            (e)   increase the maximum term of Stock Options provided for
      herein;

                                       9
<PAGE>

            (f)   permit Stock Options to be granted to any person who is not an
      Eligible Participant; or

            (g)   change any provision of the Plan which would affect the
      qualification as an Incentive Stock Option under the Internal Revenue laws
      then applicable of any Stock Option granted as an Incentive Stock Option
      under the Plan.

      No Stock Option may be granted during any suspension of the Plan or after
termination of the Plan. Amendment, suspension, or termination of the Plan shall
not (except as otherwise provided in Section 15 hereof), without the consent of
the optionee, alter or impair any rights or obligations under any Stock Option
theretofore granted.

18.   Rights of Eligible Participants and Optionees

      No Eligible Participant, Optionee or other person shall have any claim or
right to be granted a Stock Option under this Plan, and neither this Plan nor
any action taken hereunder shall be deemed to give or be construed as giving any
Eligible Participant, Optionee or other person any right to be retained in the
employ of the Company or any Subsidiary. Without limiting the generality of the
foregoing, no person shall have any rights as a result of his or her
classification as an Eligible Participant or optionee, such classifications
being made solely to describe, define and limit those persons who are eligible
for consideration for privileges under the Plan.

19.   Privileges of Stock Ownership; Regulatory Law Compliance; Notice of Sale

      No Optionee shall be entitled to the privileges of stock ownership as to
any Option Shares not actually issued and delivered. No Option Shares may be
purchased upon the exercise of a Stock option unless and until all then
applicable requirements of all regulatory agencies having jurisdiction and all
applicable requirements of the securities exchanges upon which securities of the
Company are listed (if any) shall have been fully complied with. The Optionee
shall, not more than five (5) days after each sale or other disposition of
shares of Common Stock acquired pursuant to the exercise of Stock Options, give
the Company notice in writing of such sale or other disposition.

20.   Effective Date of the Plan

      The Plan shall be deemed adopted as of October 20, 2004 and shall be
effective immediately, subject to approval of the Plan by the holders of at
least a majority of the Company's outstanding shares of Common Stock represented
and voting at a meeting of shareholders.

21.   Termination

      Unless previously terminated as aforesaid, the Plan shall terminate ten
(10) years from the earliest date of: (i) adoption of the Plan by the Board of
Directors of the Company; or (ii) approval of the Plan by holders of at least a
majority of the outstanding shares of Common Stock. No Stock Options shall be
granted under the Plan thereafter, but such termination shall not affect any
Stock Option theretofore granted.

                                       10
<PAGE>

22.   Option Agreement

      Each Stock Option granted under the Plan shall be evidenced by a written
Stock Option Agreement executed by the Company and the optionee, and shall
contain each of the provisions and agreements herein specifically required to be
contained therein, and such other terms and conditions as are deemed desirable
by the Stock Option Committee and are not inconsistent with this Plan.

23.   Stock Option Period

      Each Stock Option and all rights and obligations thereunder shall expire
on such date as the Stock Option Committee may determine, but not later than ten
(10) years from the date such Stock Option is granted, and shall be subject to
earlier termination as provided elsewhere in this Plan.

24.   Exculpation and Indemnification of Stock Option Committee

      The present, former and future members of the Stock Option Committee, and
each of them, who is or was a director, officer or employee of the Company shall
be indemnified by the Company to the extent authorized in and permitted by the
Company's Articles of Incorporation, and/or Bylaws in connection with all
actions, suits and proceedings to which they or any of them may be a party by
reason of any act or omission of any member of the Stock Option Committee under
or in connection with the Plan or any Stock Option granted thereunder.

25.   Agreement and Representations of Optionee

      Unless the shares of Common Stock covered by this Plan have been
registered with the Securities and Exchange Commission pursuant to the
registration requirements under the Securities Act of 1933, each Optionee shall:
(i) by and upon accepting a Stock Option, represent and agree in writing, in the
form of the letter attached hereto as Exhibit "A," for himself or herself and
his or her transferees by will or the laws of descent and distribution, that the
Option Shares will be acquired for investment purposes and not for resale or
distribution; and (ii) by and upon the exercise of a Stock Option, or a part
thereof, furnish evidence satisfactory to counsel for the Company, including
written and signed representations in the form of the letter attached hereto as
Exhibit "B," to the effect that the Option Shares are being acquired for
investment purposes and not for resale or distribution, and that the Option
Shares being acquired shall not be sold or otherwise transferred by the Optionee
except in compliance with the registration provisions under the Securities Act
of 1933, as amended, or an applicable exemption therefrom. Furthermore, the
Company, at its sole discretion, to assure itself that any sale or distribution
by the Optionee complies with this Plan and any applicable federal or state
securities laws, may take all reasonable steps, including placing stop transfer
instructions with the Company's transfer agent prohibiting transfers in
violation of the Plan and affixing the following legend (and/or such other
legend or legends as the Stock Option Committee shall require) on certificates
evidencing the shares:

            "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, PLEDGED,
            HYPOTHECATED OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE
            ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM
            UNDER THE ACT OR A WRITTEN OPINION OF COUNSEL FOR THE HOLDER
            THEREOF, WHICH OPINION SHALL BE ACCEPTABLE TO DISCOVERY BANCORP,
            THAT REGISTRATION IS NOT REQUIRED."

                                       11
<PAGE>

      At any time that an Optionee contemplates the disposition of any of the
Option Shares (whether by sale, exchange, gift or other form of transfer), he or
she shall first notify the Company of such proposed disposition and shall
thereafter cooperate with the Company in complying with all applicable
requirements of law which, in the opinion of counsel for the Company, must be
satisfied prior to the making of such disposition. Before consummating such
disposition, the Optionee shall provide to the Company an opinion of Optionee's
counsel, at the Company's expense, of which both such opinion and such counsel
shall be satisfactory to the Company, that such disposition will not result in a
violation of any state or federal securities laws or regulations. The Company
shall remove any legend affixed to certificates for Option Shares pursuant to
this Section if and when all of the restrictions on the transfer of the Option
Shares, whether imposed by this Plan or federal or state law, have terminated.

26.   Annual Report to Optionees

      The Company shall deliver a copy of its most current annual report to each
Optionee at the time of grant of any Stock Options under this Plan and
thereafter on an annual basis.

27.   Notices

      All notices and demands of any kind which the Stock Option Committee, any
Optionee, Eligible Participant, or other person may be required or desires to
give under the terms of this Plan shall be in writing and shall be delivered in
hand to the person or persons to whom addressed (in the case of the Stock Option
Committee, with the Chief Executive Officer, Cashier or Secretary of the
Company), by leaving a copy of such notice or demand at the address of such
person or persons as may be reflected in the records of the Company, or by
mailing a copy thereof, properly addressed as above, by certified or registered
mail, postage prepaid, with return receipt requested. Delivery by mail shall be
deemed made upon receipt by the notifying party of the return receipt request
acknowledging receipt of the notice or demand.

28.   Limitation on Obligations of the Company

      All obligations of the Company arising under or as a result of this Plan
or Stock Options granted hereunder shall constitute the general unsecured
obligations of the Company, and not of the Board of Directors of the Company,
any member thereof, the Stock Option Committee, any member thereof, any officer
of the Company, or any other person or any Subsidiary, and none of the
foregoing, except the Company, shall be liable for any debt, obligation, cost or
expense hereunder.

29.   Limitation of Rights

      The Stock Option Committee, in its sole and absolute discretion, is
entitled to determine who, if anyone, is an Eligible Participant under this
Plan, and which, if any, Eligible Participant shall receive any grant of a Stock
Option. No oral or written agreement by any person on behalf of the Company
relating to this Plan or any Stock Option granted hereunder is authorized, and
such may not bind the Company or the Stock Option Committee to grant any Stock
Option to any person.

30.   Severability

      If any provision of this Plan as applied to any person or to any
circumstance shall be adjudged by a court of competent jurisdiction to be void,
invalid, or unenforceable, the same

                                       12
<PAGE>

shall in no way affect any other provision hereof, the application of any such
provision in any other circumstances, or the validity or enforceability hereof.

31.   Construction

      Where the context or construction requires, all words applied in the
plural herein shall be deemed to have been used in the singular and vice versa,
and the masculine gender shall include the feminine and the neuter and vice
versa.

32.   Headings

      The headings of the several sections herein are inserted solely for
convenience of reference and are not intended to form a part of and are not
intended to govern, limit or aid in the construction of any term or provision
hereof.

33.   Successors

      This Plan shall be binding upon the respective successors, assigns, heirs,
executors, administrators, guardians and personal representatives of the Company
and Optionees.

34.   Governing Law

      To the extent not governed by the laws of the United States, this Plan
shall be governed by and construed in accordance with the laws of the State of
California.

35.   Conflict

      In the event of any conflict between the terms and provisions of this
Plan, and any other document, agreement or instrument, including, without
meaning any limitation, any Stock Option Agreement, the terms and provisions of
this Plan shall control.

                                * * * * * * * * *

                                       13
<PAGE>

                       SECRETARY'S CERTIFICATE OF ADOPTION

I, the undersigned, do hereby certify:

            1.    That I am the duly elected or appointed and acting Secretary
      of Discovery Bancorp; and

            2.    That the foregoing Discovery Bancorp 2004 Stock Option Plan
      was duly adopted by the Board of Directors of Discovery Bancorp as the
      2004 Stock Option Plan for the Company at a meeting duly called as
      required by law and convened on the 20th day of October 2004.

IN WITNESS WHEREOF, I have hereunto subscribed my name this 20th day of October
2004.

                                               /s/ Robert Cairns
                                               ---------------------------------
                                               Robert Cairns, Secretary

<PAGE>

                           SECRETARY'S CERTIFICATE OF
                              SHAREHOLDER APPROVAL

I, the undersigned, do hereby certify:

            1.    That I am the duly elected or appointed and acting Secretary
      of Discovery Bancorp; and

            2.    That the Discovery Bancorp 2004 Stock Option Plan was duly
      adopted by the affirmative vote of the holders of at least a majority of
      the outstanding shares of the Company's Common Stock at a meeting of the
      shareholders duly called and noticed as required by law and convened on
      the ___ day of ____________, 2005 (the "Meeting").

IN WITNESS WHEREOF, I have hereunto subscribed my name this ____ day of
____________, 2005.

                                                   _____________________________
                                                   Robert Cairns, Secretary

<PAGE>

                                   EXHIBIT "A"

                               __________ , 20____

Discovery Bancorp
1145 San Marino Drive, Suite 346
San Marcos, California 92069

Gentlemen:

      On this day of , 20 , the undersigned has received, pursuant to the
Discovery Bancorp 2004 Stock Option Plan (the "Plan") and the Stock Option
Agreement (the "Agreement") by and between Southwest Community Bancorp (the
"Corporation") and the undersigned, dated , 20 an option to purchase shares of
the common stock, no par value, of the Corporation (the "Stock").

      In consideration of the grant of such option by the Corporation:

      1. I hereby represent and warrant to you that the Stock to be acquired
pursuant to the option will be acquired by me in good faith and for my own
personal account, and not with a view to distributing the Stock to others or
otherwise reselling the stock in violation of the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder.

      2. I hereby acknowledge and agree that: (a) the Stock to be acquired by me
pursuant to the Plan has not been registered and that there is no obligation on
the part of Corporation to register such Stock under the Securities Act of 1933,
as amended, and the rules and regulations thereunder; and (b) the Stock to be
acquired by me will not be freely tradeable unless the Stock is either
registered under the Securities Act of 1933, as amended, or the holder presents
a legal opinion acceptable to the Corporation that the transfer will not violate
the federal securities laws.

      3. I understand that the Corporation is relying upon the truth and
accuracy of the representations and agreements contained herein in determining
to grant such options to me and upon subsequently issuing any Stock pursuant to
the Plan without the Corporation first registering the same under the Securities
Act of 1933, as amended.

      4. I understand that the certificate evidencing the Stock to be issued
pursuant to the Plan will contain a legend upon the face thereof to the effect
that the Stock is not registered under the Securities Act of 1933 and that stop
transfer orders will be placed against the shares with the Corporation's
transfer agent.

      5. In further consideration for the grant of an option to purchase Stock
of Corporation, the undersigned hereby agrees to indemnify you and hold you
harmless against all liability, cost, or expenses (including reasonable
attorney's fees) arising out of or as a result of any distribution or resale of
shares of Stock issued by the undersigned in violation of the securities laws.
The

<PAGE>

agreements contained herein shall inure to the benefit of and be binding upon
the respective legal representatives, successors and assigns of the undersigned
and the Corporation.

                                          Very truly yours,

                                         (Signature)

                                         (Type or Print Name)

<PAGE>

                                   EXHIBIT "B"

                               __________ , 20____

Discovery Bancorp
1145 San Marino Drive, Suite 346
San Marcos, California 92069

Gentlemen:

      On this ____ day of ____, 20____, the undersigned has acquired, pursuant
to the Discovery Bancorp 2004 Stock Option Plan (the "Plan") and the Stock
Option Agreement (the "Agreement") by and between Southwest Community Bancorp
(the "Corporation") and the undersigned, dated ____, ____20____, ____ (____)
shares of the Common Stock, no par value, of the Corporation (the "Stock"). In
consideration of the issuance by the Corporation to the undersigned of said
shares of its Common Stock:

      1. I hereby represent and warrant to you that the Stock is being acquired
by me in good faith for my own personal account, and not with a view to
distributing the Stock to others or otherwise reselling the Stock in violation
of the Securities Act of 1933, as amended, or the rules and regulations
promulgated thereunder.

      2. I hereby acknowledge and agree that: (a) the Stock being acquired by me
pursuant to the Plan has not been registered and that there is no obligation on
the part of the Corporation to register such Stock under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder; and (b)
the Stock being acquired by me is not freely tradeable and must be held by me
for investment purposes unless the Stock is either registered under the
Securities Act of 1933 or transferred pursuant to an exemption from such
registration, as accorded by the Securities Act of 1933 and under the rules and
regulations promulgated thereunder. I further represent and acknowledge that I
have been informed by legal counsel in connection with said Plan of the
restrictions on my ability to transfer the Stock and that I understand the scope
and effect of those restrictions.

      3. I understand that the effects of the above representations are the
following: (i) that the undersigned does not presently intend to sell or
otherwise dispose of all or any part of the shares of the Stock to any person or
entity except in compliance with the terms described above, in the Plan and in
the Agreement; and (ii) that the Corporation is relying upon the truth and
accuracy of the representations and agreements contained herein in issuing said
shares of the Stock to me without first registering the same under the
Securities Act of 1933, as amended.

      4. I hereby agree that the certificate evidencing the Stock may contain
the following legend stamped upon the face thereof to the effect that the Stock
is not registered under the Securities Act of 1933, as amended, and that the
Stock has been acquired pursuant to the representations and restrictions in this
letter, the Plan and in the Agreement:

<PAGE>

      "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
      OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR A WRITTEN
      OPINION OF COUNSEL FOR THE HOLDER THEREOF, WHICH OPINION SHALL BE
      ACCEPTABLE TO DISCOVERY BANCORP, THAT REGISTRATION IS NOT REQUIRED."

      5. I hereby agree and understand that the Corporation will place a stop
transfer notice with its stock transfer agent to ensure that the restrictions on
transfer described herein will be observed.

      6. In further consideration of the issuance of the Stock, the undersigned
does hereby agree to indemnify you and hold you harmless against all liability,
costs, or expenses (including reasonable attorney's fees) arising out of or as a
result of any distribution or resale by the undersigned of any of the Stock. The
Agreements contained herein shall inure to the benefit of and be binding upon
the respective legal representatives, successors and assigns of the undersigned
and the Corporation.

                                 Very truly yours,

                                 (Signature)

                                 (Type or Print Your Name)

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