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                                                                   Exhibit 10.29

                     EXECUTIVE SALARY CONTINUATION AGREEMENT

      This Agreement is made and entered into this l4 day of January, 1999, by
and between Tehama Bank, a banking corporation organized under the laws of the
State of California, Tehama Bancorp, a California corporation (Tehama Bank and
Tehama Bancorp together, the "Employer"), and Mark Francis, an individual
residing in the State of California (hereinafter referred to as the
"Executive").

                                    RECITALS

            WHEREAS, the Executive is an employee of the Employer and is serving
as its Vice President and Commercial Banking Manager;

            WHEREAS, the Executive's experience and knowledge of the affairs of
the Employer and the banking industry are extensive and valuable;

            WHEREAS, it is deemed to be in the best interests of the Employer to
provide the Executive with certain salary continuation benefits, on the terms
and conditions set forth herein, in order to reasonably induce the Executive to
remain in the Employer's employment; and

            WHEREAS, the Executive and the Employer wish to specify in writing
the terms and conditions upon which this additional compensatory incentive will
be provided to the Executive, or to the Executive's spouse or the Executive's
designated beneficiaries, as the case may be;

            NOW, THEREFORE, in consideration of the services to be performed in
the future, as well as the mutual promises and covenants contained herein, the
Executive and the Employer agree as follows:

                                    AGREEMENT

      1.    TERMS AND DEFINITIONS.

            1.1. ADMINISTRATOR. The Employer shall be the "Administrator" and,
solely for the purposes of ERISA, the "fiduciary" of this Agreement where a
fiduciary is required by ERISA.

            1.2. ANNUAL BENEFIT.

                  (a) The term "Annual Benefit" shall mean an annual sum of
Sixty Six Thousand Six Hundred Sixty Seven Dollars ($66,667) multiplied by the
Applicable Percentage (defined below), provided that, if the number of complete
years, determined as provided by Section 1.3, from December 16, 1998 to the date
when the Executive dies, Retires, ceases to be employed by Employer, or becomes
Disabled, equals or exceeds nine complete years, the Annual Benefit shall be
Eighty Three Thousand Three Hundred Thirty Three Dollars ($83,333);

                  (b) The Annual Benefit, determined as provided in subsection
(a) above, shall be reduced to the extent: (i) required under the other
provisions of this Agreement, including, but not limited to, Paragraphs 5, 6 and
7 hereof; (ii) required by reason of the lawful order of any regulatory agency
or body having jurisdiction over the Employer; and (iii) required in order for
the Employer to properly comply with any and all applicable state and federal
laws, including, but not limited to, income, employment and disability income
tax laws (e.g., FICA, FUTA, SDI).

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            1.3. APPLICABLE PERCENTAGE. The term "Applicable Percentage" shall
mean that percentage listed on Schedule "A" attached hereto which is adjacent to
the number of complete years (with a "year" being the performance of personal
services for or on behalf of the Employer for a period of 365 days) which have
elapsed starting from December 16, 1998 and ending on the earlier of: (a) the
date Executive dies (except as provided below in this Paragraph); (b) the date
Executive ceases to be employed by Employer (other than by reason of Retirement
or Disability, as defined below); or (c) in the case of Executive's Disability
(as defined below), the date Executive becomes Disabled (as defined below).
Notwithstanding the foregoing or the percentages set forth on Schedule "A," but
subject to all other terms and conditions set forth herein, the "Applicable
Percentage" shall be: (i) one hundred percent (100%) in the event the Executive
Retires or dies prior to Retirement but while employed full time by the
employer; and (ii) zero percent (0%) in the event the Executive takes any action
which prevents the Employer from collecting the proceeds of any life insurance
policy which the Employer may happen to own at the time of the Executive's death
and of which the Employer is the designated beneficiary.

            1.4. BENEFICIARY. The term "beneficiary" or "designated beneficiary"
shall mean the person or persons whom the Executive shall designate in a valid
Beneficiary Designation, a copy of which is attached hereto as Exhibit "B," to
receive the benefits provided hereunder. A Beneficiary Designation shall be
valid only if it is in the form attached hereto and made a part hereof and is
received by the Administrator prior to the Executive's death.

            1.5. CHANGE IN CONTROL. The term "Change in Control" shall mean,
with respect to the Employer: (i) a change in control of the Employer of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or in response to any other form or
report to the regulatory agencies or governmental authorities having
jurisdiction over the Employer or any stock exchange on which the Employer's
shares are listed which requires the reporting of a change in control; (ii) any
merger, consolidation or reorganization of the Employer in which the Employer
does not survive; (iii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) of any assets
of the Employer having an aggregate fair market value of fifty percent (50%) of
the total value of the assets of the Employer, reflected in the most recent
balance sheet of the Employer; or (iv) a transaction whereby any "person" (as
such term is used in the Exchange Act or any individual, corporation,
partnership, trust or any other entity) becomes the beneficial owner, directly
or indirectly, of securities of the Employer representing twenty-five percent
(25%) or more of the combined voting power of the Employer's then outstanding
securities.

            1.6. DISABILITY/DISABLED. The term "Disability" or "Disabled' shall
have the same meaning given such term in the principal disability insurance
policy covering the Executive, which is incorporated herein by reference to the
limited extent thereof. In the event the Executive is not covered by a
disability policy containing a definition of "Disability" or "Disabled," these
terms shall mean an illness or incapacity which, having continued for a period
of one hundred and eighty (180) consecutive days, prevents the Executive from
adequately performing the Executive's regular employment duties, as determined
by an independent physician selected by mutual agreement of the parties. For
purposes of determining the Applicable Percentage, the Executive shall be deemed
to be Disabled as of the first day on which the Executive is treated as being
Disabled under the Executive's principal disability insurance policy or, if no
such policy exists, the one hundred and eightieth (180th) consecutive day of the
Executive's illness or incapacity, as determined above.

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            1.7. EFFECTIVE DATE. The term "Effective Date" shall mean the date
upon which this Agreement was entered into by the parties, as first written
above.

            1.8. ERISA. The term "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.

            1.9. PLAN YEAR. The term "Plan Year" shall mean the Employer's
fiscal year.

            1.10. RETIREMENT. The term "Retirement" or "Retires" shall refer to
the date, occurring after Executive shall have attained seven years of
continuous full-time employment by Employer, which the Executive acknowledges in
writing to Employer to be the last day he will provide any significant personal
services, whether as an employee or independent consultant or contractor, to
Employer. For purposes of this Agreement, the phrase "significant personal
services" shall mean more than ten (10) hours of personal services rendered in
any thirty (30) day period.

            1.11. SURVIVING SPOUSE. The term "Surviving Spouse" shall mean the
person, if any, who shall be legally married to the Executive on the date of the
Executive's death.

            1.12. TERMINATION FOR CAUSE. The term "Termination for Cause" shall
mean termination of the employment of the Executive by reason of any of the
following, provider that such termination shall have been carried out fairly and
in good faith by the Employer:

                  (a) A termination "for cause" as this term may be defined in
any written employment agreement entered into by and between the Employer and
the Executive;

                  (b) The willful breach of duty by the Executive in the course
of his employment;

                  (c) The habitual neglect by the Executive of his employment
responsibilities and duties;

                  (d) The Executive's deliberate violation of any state or
federal banking or securities laws, or of the Bylaws, rules, policies or
resolutions of the Employer, or of the rules or regulations of: (i) the
California Department of Financial Institutions; (ii) the Board of Governors of
the Federal Reserve System; (iii) the Federal Deposit Insurance Corporation; or
(iv) any other state or federal regulatory agency or governmental authority
having jurisdiction over the Employer;

                  (e) The Executive is convicted of any felony or a crime
involving moral turpitude or a fraudulent or dishonest act;

                  (f) The Executive discloses without authority any secret or
confidential information not otherwise publicly available concerning the
Employer or takes any action which the Employer's Board of Directors determines,
subject to good faith, fair dealing and reasonableness, constitutes unfair
competition with or induces any customer to breach any contract with the
Employer;

      2.    SCOPE, PURPOSE AND EFFECT.

            2.1. CONTRACT OF EMPLOYMENT. Although this Agreement is intended to
provide the Executive with an additional incentive to remain in the employ of
the Employer, this Agreement shall not

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be deemed to constitute a contract of employment between the Executive and the
Employer nor shall any provision of this Agreement restrict or expand the right
of the Employer to terminate the Executive's employment. This Agreement shall
have no impact or effect upon any separate written Employment Agreement which
the Executive may have with the Employer, it being the parties' intention and
agreement that unless this Agreement is specifically referenced in said
Employment Agreement (or any modification thereto), this Agreement (and the
Employer's obligations hereunder) shall stand separate and apart and shall have
no effect upon, nor be affected by, the terms and provisions of said Employment
Agreement.

            2.2. FRINGE BENEFIT. The benefits provided by this Agreement are
granted by the Employer as a fringe benefit to the Executive and are not a part
of any salary reduction plan or any arrangement deferring a bonus or a salary
increase. The Executive has no option to take any current payments or bonus in
lieu of the benefits provided by this Agreement.

      3.    PAYMENTS UPON OR AFTER RETIREMENT.

            3.1. PAYMENTS UPON RETIREMENTS. If the Executive shall remain in the
continuous full-time employment of the Employer for seven years from the date
hereof, the Executive shall be entitled to be paid the Annual Benefit, as
defined above, in equal monthly installments, for a period of seven (7) years
(Eighty Four (84) months), with each installment to be paid on the first day of
each month, beginning with the month following the month in which the Executive
Retires or upon such later date as may be mutually agreed upon by the Executive
and the Employer in advance of said Retirement date, provided that, if such
employment shall continue uninterrupted for eight years or more, Executive shall
be entitled to payment of the Annual Benefit (in equal monthly installments as
provided above) in accordance with the following schedule:

YEARS OF EMPLOYMENT                       NUMBER OF YEARS PAYMENT

Eight but less than nine                  Eight

Nine but less than ten                    Nine

Ten but less than eleven                  Ten

Eleven but less than twelve               Eleven

Twelve but less than thirteen             Twelve

Thirteen but less than fourteen           Thirteen

Fourteen but less that fifteen            Fourteen

Fifteen or more                           Fifteen

      At the Employer's sole and absolute discretion, the Employer may increase
the Annual Benefit as and when the Employer determines the same to be
appropriate in order to reflect a substantial change in the cost of living.
Notwithstanding anything contained herein to the contrary, the Employer shall
have no obligation hereunder to make any such cost-of-living adjustment.

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            3.2. PAYMENTS IN THE EVENT OF DEATH AFTER RETIREMENT. The Employer
agrees that if the Executive Retires, but shall die before receiving all of the
monthly payments to which he is entitled hereunder, the Employer will continue
to make such monthly payments to the Executive's designated beneficiary for the
remaining period. If a valid Beneficiary Designation is not in effect, then the
remaining amounts due to the Executive under the term of this Agreement shall be
paid to the Executive's Surviving Spouse. If the Executive leaves no Surviving
Spouse, the remaining amounts due to the Executive under the terms of this
Agreement shall be paid to the duly qualified personal representative, executor
or administrator of the Executive's estate.

      4. PAYMENTS IN THE EVENT DEATH OR DISABILITY OCCURS PRIOR TO RETIREMENT.

            4.1. PAYMENTS IN THE EVENT OF DEATH PRIOR TO RETIREMENT. In the
event the Executive should die while actively employed by the Employer at any
time after the Effective Date of this Agreement, the Employer agrees to pay the
Annual Benefit to the Executive's designated beneficiary, in equal monthly
installments, for that number of years equal to the number of years (not to
exceed fifteen) Executive shall have been employed continuously and full-time by
Employer, provided that, if Executive shall die prior to attaining seven years
of continuous full-time employment, the Annual Benefit shall be paid for a
period of seven years. If a valid Beneficiary Designation is not in effect, then
the remaining amounts due to the Executive under the term of this Agreement
shall be paid to the Executive's Surviving Spouse. If the Executive leaves no
Surviving Spouse, the remaining amounts due to the Executive under the terms of
this Agreement shall be paid to the duly qualified personal representative,
executor or administrator of the Executive's estate. Each installment shall be
paid on the first day of each month, beginning with the month following the
month in which the Executive's death occurs.

            4.2. PAYMENTS IN THE EVENT OF DISABILITY PRIOR TO RETIREMENT. In the
event the Executive becomes Disabled while actively employed by the Employer at
any time after the Effective Date of this Agreement but prior to Retirement, the
Employer agrees to pay the Annual Benefit to the Executive, in equal monthly
installments, for that number of years equal to the number of years (not to
exceed fifteen) Executive shall have been employed full-time by Employer,
provided that, if Executive shall become Disabled prior to attaining seven years
of continuous full-time employment, the Annual Benefit shall be paid for a
period of seven years. The Executive shall be entitled to be paid the Annual
Benefit, as defined above, in equal monthly installments, with each installment
to be paid on the first day of each month, beginning with the month following
the date upon which the Executive is no longer entitled to receive Disability
benefits under the Executive's principal Disability insurance policy and is, at
such time, unable to return to and thereafter fulfill the responsibilities
associated with the employment position held with the Employer prior to becoming
Disabled by reason of such Disability continuing. Notwithstanding the foregoing,
if the Executive chooses to elect the Retirement payout option set forth in
Paragraph 3 hereof, the Executive may waive the payout provisions set forth in
this subparagraph 4.2 and in lieu thereof receive the Annual Benefit which the
Executive would be entitled to receive under the terms of Paragraph 3.

      5. PAYMENTS IN THE EVENT EMPLOYMENT IS TERMINATED PRIOR TO RETIREMENT. As
indicated in Paragraph 2 above, the Employer reserves the right to terminate the
Executive's employment, with or without cause but subject to any written
employment agreement which may then exist, at any time prior to the Executive's
Retirement. In the event that the employment of the Executive shall be
terminated other than by reason of Disability or death, then this Agreement
shall terminate upon the date of such termination of employment; provided,
however, that the Executive shall be entitled to the following benefits as may
be applicable depending upon the circumstances surrounding the Executive's
termination:

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            5.1. TERMINATION WITHOUT CAUSE. If the Executive's employment is
terminated by the Employer without cause, the Executive shall be entitled to be
paid the Annual Benefit, as defined above, in equal monthly installments for
that number of years during which Executive would have been entitled to payment
of the Annual Benefit if Executive had voluntarily Retired as of the date of
such termination, provided that, if Executive's employment shall be terminated
without cause prior to Executive's attainment of seven years of continuous
full-time employment, the Annual Benefit (calculated as if the Applicable
Percentage were 100%) shall be paid for a period of seven years, with each
installment to be paid on the first day of each month, beginning with the month
following the month in which Executive is terminated without cause or upon such
later date as may be mutually agreed upon by the Executive and the Employer in
advance of the effective date of the Executive's termination. For purposes of
this section, it shall constitute a termination without cause if Employer at any
time shall cause an event to occur which reasonably constitutes or results in a
demotion, a significant diminution of responsibilities or authority, or a
constructive termination (by forcing a resignation or otherwise).

            5.2. VOLUNTARY TERMINATION BY THE EXECUTIVE. It is acknowledged and
agreed by the Executive that the purpose of this Agreement is to assure the
Executive's continued employment with the Employer and that if the Executive
voluntarily terminates his employment with the Employer (other than by reason of
death, Disability or Retirement), then the Executive shall have willingly
forfeited any and all rights and benefits he may have under the terms of this
Agreement and that, furthermore, no amounts shall be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.

            5.3. TERMINATION FOR CAUSE. The Executive agrees that if his
employment with the Employer is terminated "for cause," as defined in
subparagraph 1.13 of this Agreement, he shall forfeit any and all rights and
benefits he may have under the terms of this Agreement and shall have no right
to be paid any of the amounts which would otherwise be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.

            5.4. TERMINATION BY EMPLOYER ON ACCOUNT OF OR AFTER A CHANGE OF
CONTROL. In the event: (i) the Executive's employment with the Employer is
terminated by the Employer in conjunction with, or by reason of, a "change in
control" (as defined in subparagraph 1.5 above): or (ii) by reason of the
Employer's actions any adverse and material change occurs in the scope of the
Executive's position, responsibilities, duties, salary, benefits, or location of
employment after a "change in control" (as defined in subparagraph 1.5) occurs;
or (iii) the Employer causes an event to occur which reasonably constitutes or
results in a demotion, a significant diminution of responsibilities or
authority, or a constructive termination (by forcing a resignation or otherwise)
of the Executive's employment after a "change in control" (as defined in
subparagraph 1.5) occurs, then the Executive shall be entitled to be paid the
Annual Benefit, as defined above, in equal monthly installments for that number
of years during which Executive would have been entitled to payment of the
Annual Benefit if Executive had voluntarily Retired as of the date of such
termination. If Executive's employment shall be so terminated or such adverse
and material change or such event shall occur prior to Executive's attainment of
seven years of continuous full-time employment, the Annual Benefit shall be paid
for a period of seven years, with each installment to be paid on the first day
of each month, beginning with the month following the month in which the
Executive is terminated or the action referred to above occurs, whichever is
earlier, provided that, if such termination shall occur within three years from
the date hereof, the Annual Benefit shall be calculated as if the Applicable
Percentage were 42.84%. In addition, if Executive's employment shall be so
terminated or such adverse and material change or such event shall occur prior
to one year following the date of any such "change in control," Executive shall
be entitled to receive, calculated at Executive's annual rate of pay immediately
prior to the occurrence of such "change in control," payment for the period
beginning from the date of such

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termination or such adverse and material change or such event through and
including the date which is one year after the date of such "change in control."

      6. TAX TREATMENT OF PAYMENTS. The parties acknowledge and agree that they
have entered into this Agreement based upon certain financial and tax accounting
assumptions with respect to payments or benefits paid or to be paid by the
Employer and received or to be received by the Executive, whether pursuant to
the terms of this Agreement or of any other present or future plan, arrangement
or agreement with the Employer. Accordingly, with full knowledge of the
potential risks and consequences, the parties agree that the amount of the
Annual Benefit, as well as the Employer's obligation to make monthly Annual
Benefit payments when due and payable to the Executive under the terms of this
Agreement, shall not be affected by any provision of federal or state tax law
(including but not limited to laws imposing income or excise tax), whether now
or hereafter in effect, it being the intent of the parties that each of them
shall be responsible to understand and manage their own tax obligations arising
under any present or future provisions of tax law with respect to any payments
made to Executive hereunder. The Employer and Executive specifically recognize
that, in this regard, limitations on income tax deductibility by the Employer of
payments made to Executive hereunder, and excise taxes upon the receipt of such
payments by Executive, may be imposed under Section 280G of the Internal Revenue
Code of 1986, as amended.

      7. RIGHT TO DETERMINE FUNDING METHODS. The Employer reserves the right to
determine, in its sole and absolute discretion, whether, to what extent and by
what method, if any, to provide for the payment of the amounts which may be
payable to the Executive, the Executive's spouse or the Executive's
beneficiaries under the terms of this Agreement. In the event that the Employer
elects to fund this Agreement, in whole or in part, through the use of life
insurance or annuities, or both, the Employer shall determine the ownership and
beneficial interests of any such policy of life insurance or annuity. The
Employer further reserves the right, in its sole and absolute discretion, to
terminate any such policy, and any other device used to fund its obligations
under this Agreement, at any time, in whole or in part. Consistent with
Paragraph 9 below, neither the Executive, the Executive's spouse nor the
Executive's beneficiaries shall have any right, title or interest in or to any
funding source or amount utilized by the Employer pursuant to this Agreement,
and any such funding source or amount shall not constitute security for the
performance of the Employer's obligations pursuant to this Agreement. In
connection with the foregoing, the Executive agrees to execute such documents
and undergo such medical examinations or tests which the Employer may request
and which may be reasonably necessary to facilitate any funding for this
Agreement including, without limitation, the Employer's acquisition of any
policy of insurance or annuity. Furthermore, a refusal by the Executive to
consent to, participate in and undergo any such medical examinations or tests
shall result in the immediate termination of this Agreement and the immediate
forfeiture by the Executive, the Executive's spouse and the Executive's
beneficiaries of any and all rights to payment hereunder.

      8. CLAIMS PROCEDURE. The Employer shall, but only to the extent necessary
to comply with ERISA, be designated as the named fiduciary under this Agreement
and shall have authority to control and manage the operation and administration
of this Agreement. Consistent therewith, the Employer shall make all
determinations as to the rights to benefits under this Agreement. Any decision
by the Employer denying a claim by the Executive, the Executive's spouse, or the
Executive's beneficiary for benefits under this Agreement shall be stated in
writing and delivered or mailed, via registered or certified mail, to the
Executive, the Executive's spouse or the Executive's beneficiary, as the case
may be. Such decision shall set forth the specific reasons for the denial of a
claim. In addition, the Employer shall provide the Executive, the Executive's
spouse or the Executive's beneficiary with a reasonable opportunity for a full
and fair review of the decision denying such claim.

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      9. STATUS AS AN UNSECURED GENERAL CREDITOR. Notwithstanding anything
contained herein to the contrary: (i) neither the Executive, the Executive's
spouse nor the Executive's beneficiary shall have any legal or equitable rights,
interests or claims in or to any specific property or assets of the Employer;
(ii) none of the Employer's assets shall be held in or under any trust for the
benefit of the Executive, the Executive's spouse or the Executive's
beneficiaries or held in any way as security for the fulfillment of the
obligations of the Employer under this Agreement; (iii) all of the Employer's
assets shall be and remain the general unpledged and unrestricted assets of the
Employer; (iv) the Employer's obligation under this Agreement shall be that of
an unfunded and unsecured promise by the Employer to pay money in the future;
and (v) the Executive, the Executive's spouse and the Executive's beneficiaries
shall be unsecured general creditors with respect to any benefits which may be
payable under the terms of this Agreement.

      10. MISCELLANEOUS.

            10.1 OPPORTUNITY TO CONSULT WITH INDEPENDENT COUNSEL. The Executive
acknowledges that he has been afforded the opportunity to consult with
independent counsel of his choosing regarding both the benefits granted to him
under the terms of Agreement and the terms and conditions which may affect the
Executive's right to these benefits. The Executive further acknowledges that he
has read, understands and consents to all of the terms and conditions of this
Agreement, and that he enters into this Agreement with full understanding of its
terms and conditions.

            10.2. ARBITRATION OF DISPUTES. All claims, disputes and other
matters in question arising out of or relating to this Agreement or the breach
or interpretation thereof, other than those matters which are to be determined
by the Employer in its sole and absolute discretion, shall be resolved by
binding arbitration before a representative member, selected by the mutual
agreement of the parties, of the Judicial Arbitration and Mediation Services,
Inc. ("JAMS"), presently located at Two Embarcadero Center, Suite 1100, in San
Francisco, California. In the event JAMS is unable or unwilling to conduct the
arbitration provided for under the terms of this Paragraph, or has discontinued
its business, the parties agree that a representative member, selected by the
mutual agreement of the parties, of the American Arbitration Association
("AAA"), presently located at 225 Bush Street, 18th Floor, in San Francisco,
California, shall conduct the binding arbitration referred to in this Paragraph.
Notice of the demand for arbitration shall be filed in writing with the other
party to this Agreement and with JAMS (or AAA, if necessary). In no event shall
the demand for arbitration be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. The arbitration shall
be subject to such rules of procedure used or established by JAMS, or if there
are none, the rules of procedure used or established by AAA. Any award rendered
by JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, beneficiaries, legal representatives, agents, successors
and assigns, and may be entered in any court having Jurisdiction thereof. The
obligation of the parties to arbitrate pursuant to this clause shall be
specifically enforceable in accordance with, and shall be conducted consistently
with, the provisions of Title 9 of Part 3 of the California Code of Civil
Procedure. Any arbitration hereunder shall be conducted in Red Bluff,
California, unless otherwise agreed to by the parties.

            10.3. ATTORNEYS' FEES. In the event of any arbitration or litigation
concerning any controversy, claim or dispute between the parties hereto, arising
out of or relating to this Agreement or the breach hereof, or the interpretation
hereof, the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees and costs incurred in connection therewith
or in the enforcement or collection of any judgment or award rendered therein.
The "prevailing party" means the party determined by the arbitrator(s) or court,
as the case may be, to have most nearly prevailed, even if such party did not
prevail in all matters, not necessarily the one in whose favor a judgment is
rendered.

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            10.4 NOTICE. Any notice required or permitted of either the
Executive or the Employer under this Agreement shall be deemed to have been duly
given, if by personal delivery, upon the date received by the party or its
authorized representative; if by facsimile, upon transmission to a telephone
number previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.

      If to the Employer:                       Tehama Bank
                                                239 South Main Street
                                                Red Bluff, California 96080-0890

                                                Attn: Chairman of the Board

      If to the Executive:                      Mark Francis
                                                P.O. Box 31145
                                                Chico, California 95927

            10.5. ASSIGNMENT. Neither the Executive, the Executive's spouse, nor
any other beneficiary under this Agreement shall have any power or right to
transfer, assign, anticipate, hypothecate, modify or otherwise encumber any part
or all of the amounts payable hereunder, nor, prior to payment in accordance
with the terms of this Agreement, shall any portion of such amounts be: (i)
subject to seizure by any creditor of any such beneficiary, by a proceeding at
law or in equity, for the payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Executive, the Executive's
spouse, or any designated beneficiary; or (ii) transferable by operation of law
in the event of bankruptcy, insolvency or otherwise. Any such attempted
assignment or transfer shall be void and shall terminate this Agreement, and the
Employer shall thereupon have no further liability hereunder.

            10.6. BINDING EFFECT/MERGER OR REORGANIZATION. This Agreement shall
be binding upon and inure to the benefit of the Executive and the Employer and,
as applicable, their respective heirs, beneficiaries, legal representatives,
agents, successors and assigns. Accordingly, the Employer shall not merge or
consolidate into or with another corporation, or reorganize or sell
substantially all of its assets to another corporation, firm or person, unless
and until such succeeding or continuing corporation, firm or person agrees to
assume and discharge the obligations of the Employer under this Agreement. Upon
the occurrence of such event, the term "Employer" as used in this Agreement
shall be deemed to refer to such surviving or successor firm, person, entity or
corporation.

            10.7. NONWAIVER. The failure of either party to enforce at any time
or for any period of time any one or more of the terms or conditions of this
Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.

            10.8. PARTIAL INVALIDITY. If any term, provision, covenant, or
condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall not
render any other term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.

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            10.9. ENTIRE AGREEMENT. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties with respect to the
subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect thereto. Each party to this
Agreement acknowledges that no other representations, inducements, promises, or
agreements, oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not set forth herein, and that no other
agreement, statement, or promise not contained in this Agreement shall be valid
or binding on either party.

            10.10. MODIFICATIONS. Any modification of this Agreement shall be
effective only if it is in writing and signed by each party or such party's
authorized representative.

            10.11. PARAGRAPH HEADINGS. The paragraph headings used in this
Agreement are included solely for the convenience of the parties and shall not
affect or be used in connection with the interpretation of this Agreement.

            10.12. NO STRICT CONSTRUCTION. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

            10.13. GOVERNING LAW. The laws of the State of California, other
than those laws denominated choice of law rules, and, where applicable, the
rules and regulations of (i) the California Department of Financial
Institutions; (ii) the Board of Governors of the Federal Reserve System; (iii)
the Federal Deposit Insurance Corporation; or (iv) any other regulatory agency
or governmental authority having jurisdiction over the Employer, shall govern
the validity, interpretation, construction and effect of this Agreement.

      IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Red Bluff, Tehama
County, California.

THE EMPLOYER:                                   THE EXECUTIVE:

TEHAMA BANK,
a California banking corporation

By:   /s/John W. Koeberer                          /s/Mark Francis
     ---------------------------                ---------------------------
      John W. Koeberer, Chairman                      Mark Francis

TEHAMA BANCORP,
a California corporation

By:     /s/John W. Koeberer
     ---------------------------
      John W. Koeberer, Chairman

                                       10
<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
      NUMBER OF COMPLETE
      YEARS WHICH HAVE ELAPSED                      APPLICABLE PERCENTAGE
      ------------------------                      ---------------------
<S>                                                 <C>
            1 ......................................        14.28%

            2 ......................................        28.56%

            3 ......................................        42.84%

            4 ......................................        57.12%

            5 ......................................        71.40%

            6 ......................................        85.68%

            7 ......................................       100.00%
</TABLE>

                                       11
<PAGE>

Schedule B

                         BENEFICIARY DESIGNATION NOTICE

To the Administrator of the Humboldt Bank Executive Salary Continuation
Agreement:

Pursuant to the provisions of my Executive Salary Continuation Agreement with
Humboldt Bank (successor in interest to Tehama Bank) permitting the designation
of a beneficiary or beneficiaries by a participant, I hereby designate the
following persons and entities as primary and secondary beneficiaries of any
benefit under said Agreement payable by reason of my death:

Primary Beneficiary:

Jolene Francis      2290 Burlingame Dr. Chico, CA 95928      Wife
--------------------------------------------------------------------------------
Name                Address                                  Relationship

Secondary (Contingent) Beneficiary:

Lauren Francis
Kristen Francis     2290 Burlingame Dr. Chico, CA 95928     Children
--------------------------------------------------------------------------------
Name                Address                                 Relationship

THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION IS HEREBY RESERVED.
ALL PRIOR DESIGNATIONS, IF ANY, OF PRIMARY BENEFICIARIES AND SECONDARY
BENEFICIARIES ARE HEREBY REVOKED.

The Administrator shall pay all sums payable under the Agreement by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Administrator shall pay all amounts in
accordance with the terms of my Executive Salary Continuation Agreement. In the
event that a named beneficiary survives me and dies prior to receiving the
entire benefit payable under said Agreement, then and in that event, the
remaining unpaid benefit payable according to the terms of the Agreement, shall
be payable to the personal representatives of the estate of said deceased
beneficiary, who survives me, but dies prior to receiving the total benefit

OFFICER:  /s/Mark Francis
        ------------------------------
Dated:  12/31/02
      --------------------------

                                       12<PAGE>
                                                                   Exhibit 10.70

                               MAXTOR CORPORATION

                   AMENDED AND RESTATED 1996 STOCK OPTION PLAN

         (FIFTH AMENDMENT AND RESTATEMENT APPROVED ON DECEMBER 19, 2002)

1.       ESTABLISHMENT, PURPOSE AND TERM OF PLAN

         (a)      ESTABLISHMENT. The Maxtor Corporation 1996 Stock Option Plan
was initially established effective as of May 1, 1996 (the "EFFECTIVE DATE"),
and was previously amended and restated in its entirety as the Maxtor
Corporation Amended and Restated 1996 Stock Option Plan (the "INITIAL PLAN").
The Initial Plan is hereby amended and restated in its entirety effective as of
January 1, 2003 (the "PLAN").

         (b)      PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Participating Company Group and its stockholders by providing
an incentive to attract, retain and reward persons performing services for the
Participating Company Group and by providing such persons with an additional
incentive to promote the financial success of the Participating Company Group.

         (c)      TERM OF PLAN. The Plan shall continue in effect until the
earlier of its termination by the Board of Directors or the date on which all of
the shares of Stock available for issuance under the Plan have been issued and
all restrictions on such shares under the terms of the Plan and the agreements
evidencing Awards granted under the Plan have lapsed. However, all ISOs shall be
granted, if at all, within ten (10) years from the Effective Date.

2.       DEFINITIONS

         Unless otherwise required by the context, the following terms when used
in the Plan shall have the meanings set forth in this Section 2:

         (a)      "ANNIVERSARY DATE": Each anniversary of an Outside Director's
initial election or appointment to the Board.

         (b)      "AWARD": An award of an Option or a Restricted Share under the
Plan.

         (c)      "BOARD OF DIRECTORS": The Board of Directors of the Company.
If one or more Committees have been appointed by the Board of Directors to
administer the Plan, "Board of Directors" also means such Committee(s).

         (d)      "CODE": The Internal Revenue Code of 1986, as amended from
time to time.

         (e)      "COMMITTEE": The Compensation Committee or other committee of
the Board of Directors duly appointed to administer the Plan and having such
powers as shall be specified by the Board of Directors. Unless the powers of the
Committee have been specifically limited, the Committee shall have all of the
powers of the Board of Directors 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.

                                       1

<PAGE>

         (f)      "COMPANY": Maxtor Corporation, a Delaware corporation, or any
successor thereto.

         (g)      "CONSULTANT": Any person, including an advisor, engaged by a
Participating Company to render services other than as an Employee or a
Director.

         (h)      "DIRECTOR": A member of the Board of Directors or of the board
of directors of any other Participating Company.

         (i)      "EMPLOYEE": Any person treated as an employee (including an
officer or a Director who is also treated as an employee) in the records of a
Participating Company; provided, however, that neither service as a Director nor
payment of a director's fee shall be sufficient to constitute employment for
purposes of the Plan.

         (j)      "EXCHANGE ACT": The Securities Exchange Act of 1934, as
amended.

         (k)      "EXERCISE PRICE": The price per share at which the shares of
Stock subject to an Option may be purchased upon exercise of such Option.

         (l)      "FAIR MARKET VALUE": As applied to a specific date, the fair
market value of a share of Stock on such date as determined in good faith by the
Board of Directors in the following manner:

                  (i)      The average of the high and low prices of the Stock
(or the mean of the closing bid and asked prices of the Stock if the Stock is so
reported instead) as reported on the New York Stock Exchange or such other
national or regional securities exchange or market system constituting the
primary market for the Stock, on the most recent trading day to the date in
question, or if there are no reported sales on such date, on the last preceding
date on which sales were reported; or

                  (ii)     In the absence of the foregoing, the Fair Market
Value shall be determined by the Board of Directors in its absolute discretion
based on an appraisal of the Stock and after giving consideration to the book
value, the revenues, and the earnings prospects of the Company in light of
market conditions generally.

The Fair Market Value determined under one of the preceding paragraphs shall be
final, binding and conclusive on all parties for the purposes of this Plan.

         (m)      "ISO": An Option intended to be and which qualifies as an
"incentive stock option," as defined in Section 422 of the Code or any statutory
provision that may replace such Section.

         (n)      "NQSO": An Option not intended or qualified to be an ISO
(i.e., a nonqualified stock option).

         (o)      "OPTION": Any ISO or NQSO granted under the Plan.

                                       2

<PAGE>

         (p)      "OPTION AGREEMENT": A written option agreement between the
Company and the Participant evidencing an Option in such form as approved by the
Board of Directors pursuant to the Plan.

         (q)      "OUTSIDE DIRECTOR": Any Director of the Company who is not an
Employee.

         (r)      "OUTSIDE DIRECTOR OPTION": An Option granted to an Outside
Director pursuant to Section 3(b). Outside Director Options shall be NQSOs.

         (s)      "PARENT CORPORATION": Any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

         (t)      "PARTICIPANT": A person who has been granted one or more
Awards under the Plan which remain outstanding or who owns shares of Stock as a
result of the exercise of an Option.

         (u)      "PARTICIPATING COMPANY": The Company or any Parent Corporation
or Subsidiary Corporation.

         (v)      "PARTICIPATING COMPANY GROUP": At any point in time, all
corporations collectively which are then Participating Companies.

         (w)      "RESTRICTED SHARE": A share of Stock awarded under Section 7
of the Plan.

         (x)      "RULE 16b-3": Rule 16b-3 under the Exchange Act, as amended
from time to time, or any successor rule or regulation.

         (y)      "SEC": Securities and Exchange Commission.

         (z)      "SECURITIES ACT": The Securities Act of 1933, as amended.

         (aa)     "STOCK GRANT AGREEMENT": A written agreement between the
Company and the Participant evidencing an award of Restricted Shares in such
form as approved by the Board of Directors pursuant to the Plan.

         (bb)     "STOCK": The common stock of the Company, as adjusted from
time to time under Section 4(b).

         (cc)     "SUBSIDIARY CORPORATION": Any present or future "subsidiary
corporation" of the Company or the Parent Corporation, as defined in Section
424(f) of the Code.

         (dd)     "TEN PERCENT OWNER": A Participant who, at the time an Award
is granted to the Participant, owns stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of a Participating
Company within the meaning of Section 422(b)(6) of the Code.

                                       3

<PAGE>

3.       PARTICIPATION

         (a)      PERSONS ELIGIBLE FOR AWARDS. Awards may be granted only to
Employees, Consultants, and Directors. For purposes of the foregoing sentence
and with respect to the grant of Options only, "Employees" shall include
prospective Employees to whom Options are granted in connection with written
offers of employment with the Participating Company Group, and "Consultants"
shall include prospective Consultants to whom Options are granted in connection
with written offers of engagement with the Participating Company Group. Eligible
persons may be granted more than one (1) Award.

         (b)      OUTSIDE DIRECTORS. In addition to any Award which may be
granted to an Outside Director pursuant to Section 3(a), each Outside Director
shall be granted one or more Options in accordance with this Section 3(b).

                  (i)      AUTOMATIC GRANT. Subject to the execution by the
Outside Director of an appropriate Option Agreement, Outside Director Options
shall be granted automatically and without further action of the Board of
Directors, as follows:

                           (1)      INITIAL GRANT. Each person who first becomes
an Outside Director on or after January 1, 2003, shall be granted an Outside
Director Option for seventy-five thousand (75,000) shares of Stock on the date
he or she first becomes an Outside Director; provided, however, that any
Director of the Company who previously did not qualify as an Outside Director
shall not receive an Outside Director Option pursuant to this Section 3(b)(i)(1)
in the event that such Director subsequently becomes an Outside Director as a
result of the termination of his or her status as an Employee.

                           (2)      ANNIVERSARY GRANT. Effective on and after
January 1, 2003, each Outside Director shall be granted an Outside Director
Option for ten thousand (10,000) shares of Stock upon each Anniversary Date of
such Outside Director. Outside Director Options shall be granted pursuant to
this Section 3(b)(i)(2) only to a person who, at the time of grant, is an
Outside Director.

                  (ii)     SPECIAL GRANT. On January 2, 2003, each person
serving as an Outside Director on such date who had previously received prior to
January 1, 2003 an Outside Director Option pursuant to Section 3(b)(i)(1) (as in
effect prior to January 1, 2003) shall be granted a one-time Outside Director
Option for forty-five thousand (45,000) shares.

                  (iii)    RIGHT TO DECLINE OUTSIDE DIRECTOR OPTIONS.
Notwithstanding the foregoing, any person may elect not to receive an Outside
Director Option by delivering written notice of such election to the Board of
Directors no later than the day prior to the date such Outside Director Option
would otherwise be granted. A person so declining an Outside Director Option
shall receive no payment or other consideration in lieu of such declined Outside
Director Option. A person who has declined an Outside Director Option may revoke
such election by delivering written notice of such revocation to the Board of
Directors no later than the day prior to the date such Outside Director Option
would be granted pursuant to Section 3(b).

                                       4

<PAGE>

                  (iv)     EXERCISE PRICE OF OUTSIDE DIRECTOR OPTIONS. The
exercise price per share of Stock subject to an Outside Director Option shall be
the Fair Market Value of a share of Stock on the date the Outside Director
Option is granted.

                  (v)      EXERCISABILITY OF OUTSIDE DIRECTOR OPTIONS. Except as
otherwise provided in the Plan or in the Option Agreement and provided that the
Outside Director's service with the Participating Company Group has not
terminated prior to the relevant vesting date, each Outside Director Option
granted on or after January 1, 2003 shall vest and become exercisable in
installments of 25% on the first anniversary of the date of grant and 6.25% for
each additional full calendar quarter of the Outside Director's service. Each
Outside Director Option shall terminate and cease to be exercisable on the date
ten (10) years after the date of grant of the Outside Director Option unless
earlier terminated pursuant to the terms of the Plan or the Option Agreement.

         (c)      GRANT RESTRICTIONS. Any person who is not an Employee of the
Company or a Parent Corporation or Subsidiary Corporation of the Company on the
effective date of the grant of an Award to such person may be granted only an
NQSO or Restricted Shares. An ISO granted to a prospective Employee upon the
condition that such person become an Employee shall be deemed granted on the
date such person commences service with a Participating Company, with an
Exercise Price determined as of such date in accordance with Section 5(b). An
Outside Director Option may be granted only to a person who, at the time of
grant, is an Outside Director.

         (d)      FAIR MARKET VALUE LIMITATION. To the extent that the aggregate
Fair Market Value of stock with respect to which options designated as ISOs are
exercisable by a Participant for the first time during any calendar year (under
all stock option plans of the Participating Company Group, including the Plan)
exceeds One Hundred Thousand Dollars ($100,000), the portion of such options
which exceeds such amount shall be treated as NQSOs. For purposes of this
Section, options designated as ISOs shall be taken into account in the order in
which they were granted, and the Fair Market Value of stock shall be determined
as of the time the option with respect to such stock is granted. If the Code is
amended to provide for a different limitation from that set forth in this
Section, such different limitation shall be deemed incorporated herein effective
as of the date and with respect to such Options as required or permitted by such
amendment to the Code. If an Option is treated as an ISO in part and as an NQSO
in part by reason of the limitation set forth in this Section, the Participant
may designate which portion of such Option the Participant is exercising and may
request that separate certificates representing each such portion be issued upon
the exercise of the Option. In the absence of such designation, the Participant
shall be deemed to have exercised the ISO portion of the Option first.

         (e)      SECTION 162(m) GRANT LIMIT. Subject to adjustment as provided
in Section 4(b), at any such time as a Participating Company is a "publicly held
corporation" within the meaning of Section 162(m) of the Code, no Employee shall
be granted one or more Options within any fiscal year of the Company which in
the aggregate are for the purchase of more than one million two hundred thousand
(1,200,000) shares (the "SECTION 162(m) GRANT LIMIT").

                                       5

<PAGE>

4.       SHARES SUBJECT TO PLAN

         (a)      MAXIMUM SHARES. Subject to adjustment by the operation of
Section 4(b) hereof, the maximum aggregate number of shares of Stock that may be
issued under the Plan shall be Thirty-Nine Million Nine Hundred Seventy-Four
Thousand Five Hundred Forty-Eight (39,974,548). Notwithstanding the foregoing,
except as adjusted pursuant to Section 4(b), in no event shall more than Ten
Million (10,000,000) shares of Stock be cumulatively available for issuance
pursuant to the exercise of ISOs (the "ISO SHARE ISSUANCE LIMIT"). If an
outstanding Option for any reason expires or is terminated or canceled or shares
of Stock acquired pursuant to an Award are reacquired by the Company, the shares
of Stock allocable to the unexercised portion of such Option, or such reacquired
shares of Stock, shall again be available for issuance under the Plan.

         (b)      ADJUSTMENT OF SHARES AND PRICE. 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 equitable adjustments shall be made in the number and class of
shares subject to the Plan and to any outstanding Awards, in the number and
class of shares subject to future Outside Director Options granted pursuant to
Section 3(b), in the Section 162(m) Grant Limit and the ISO Share Issuance
Limit, and in the Exercise Price per share of any outstanding Options.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4(b) shall be rounded up or down to the nearest whole
number, as determined by the Board of Directors, and in no event may the
Exercise Price of any Option be decreased to an amount less than the par value,
if any, of the stock subject to the Option. The adjustments determined by the
Board of Directors pursuant to this Section 4(b) shall be final, binding and
conclusive.

5.       GENERAL TERMS AND CONDITIONS OF OPTIONS

         (a)      GENERAL. The Board of Directors shall have full and complete
authority and discretion, except as expressly limited by the Plan, to grant
Options and to provide the terms and conditions (which need not be identical
among Participants) thereof. The terms and conditions governing any Option, as
determined by the Board of Directors, shall be set forth in an Option Agreement
consistent with this Plan. In particular, the Board of Directors shall prescribe
the following terms and conditions:

                  (i)      The number of shares of Stock subject to, and the
expiration date(s) of, any Option;

                  (ii)     The vesting schedule of any Option;

                  (iii)    The manner, time and rate (cumulative or otherwise)
of exercise of such Option;

                  (iv)     Whether such Option is intended to be an ISO or NQSO,
subject in any event to applicable provisions of the Code; and

                  (v)      The restrictions, if any, to be placed upon such
Option or upon shares which may be issued upon exercise of such Option.

                                       6

<PAGE>

         (b)      EXERCISE PRICE. Except as provided in Section 3(b) with
respect to Outside Director Options, the Exercise Price for each Option shall be
established in the sole discretion of the Board of Directors; provided, however,
that (a) the Exercise Price for an ISO shall be not less than the Fair Market
Value of a share of Stock on the effective date of grant of the Option, (b) the
Exercise Price for an NQSO shall be not less than eighty-five percent (85%) of
the Fair Market Value of a share of Stock on the effective date of grant of the
Option, and (c) no ISO granted to a Ten Percent Owner shall have an Exercise
Price less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the effective date of grant of the Option. Notwithstanding the
foregoing, an Option (whether an ISO or an NQSO) may be granted with an Exercise
Price lower than the minimum exercise price set forth above if such Option is
granted pursuant to an assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the Code.

         (c)      EXERCISE PERIOD. Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions,
performance criteria, and restrictions as shall be determined by the Board of
Directors and set forth in the Option Agreement evidencing such Option;
provided, however, that (i) no ISO shall be exercisable after the expiration of
ten (10) years after the effective date of grant of such Option, (ii) no ISO
granted to a Ten Percent Owner shall be exercisable after the expiration of five
(5) years after the effective date of grant of such Option, and (iii) no Option
granted to a prospective Employee or prospective Consultant may become
exercisable prior to the date on which such person commences service with a
Participating Company.

6.       EXERCISE OF OPTIONS

         (a)      PAYMENT OF OPTION EXERCISE PRICE. Except as otherwise provided
below, payment of the Exercise Price for the number of shares of Stock being
purchased pursuant to any Option shall be made (i) in cash, by check, or cash
equivalent, (ii) by tender to the Company of shares of Stock owned by the
Participant having a Fair Market Value not less than the Exercise Price, (iii)
by the assignment of the proceeds of a sale or loan with respect to some or all
of the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "CASHLESS EXERCISE"), (iv) by such other consideration as may be
approved by the Board of Directors from time to time to the extent permitted by
applicable law, or (v) by any combination thereof. The Board of Directors may at
any time or from time to time, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the Exercise Price or
which otherwise restrict one or more forms of consideration.

                  (i)      TENDER OF STOCK. Notwithstanding the foregoing, an
Option may not be exercised by tender to the Company of shares of Stock to the
extent such tender of Stock would constitute a violation of the provisions of
any law, regulation or agreement restricting the redemption of the Company's
stock. Unless otherwise provided by the Board of Directors, an Option may not be
exercised by tender to the Company of shares of Stock unless such shares either
have been owned by the Participant for more than six (6) months or were not
acquired, directly or indirectly, from the Company.

                                       7

<PAGE>

                  (ii)     CASHLESS EXERCISE. The Company reserves, at any and
all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise.

         (b)      RIGHTS AS A STOCKHOLDER. A Participant shall have no rights as
a stockholder with respect to any shares of Stock issuable on exercise of any
Option until the date of the issuance of such shares of Stock, 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
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such shares are issued, except as provided in Section 4(b) hereof.

7.       RESTRICTED SHARES.

         (a)      GENERAL. The Board of Directors shall have full and complete
authority and discretion, except as expressly limited by the Plan, to grant
Restricted Shares and to provide the terms and conditions (which need not be
identical among Participants) thereof. The terms and conditions governing any
grant of Restricted Shares, as determined by the Board of Directors, shall be
set forth in a Stock Grant Agreement consistent with this Plan.

         (b)      PAYMENT FOR AWARDS. Restricted Shares may be awarded under the
Plan without requiring monetary payment from the Participant, the consideration
for which shall be services actually rendered to a Participating Company or for
its benefit. The Board of Directors may also provide that payment may be
required to receive a grant of Restricted Shares, with the form of payment set
forth in the Stock Grant Agreement. Methods of such payment may include (without
limitation), cash, cash equivalents, or full recourse promissory notes.
Notwithstanding the foregoing, the Participant shall furnish consideration in
the form of cash or past services rendered to a Participating Company or for its
benefit having a value not less than the par value of the Restricted Shares
awarded to the Participant.

         (c)      VESTING CONDITIONS. Each award of Restricted Shares may or may
not be subject to vesting. Vesting shall occur, in full or in installments, upon
the satisfaction of the conditions specified in the Stock Grant Agreement. A
Stock Grant Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events.

         (d)      VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders. A Stock Grant Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid.

8.       TRANSFER OF CONTROL OF THE COMPANY

         (a)      DEFINITIONS.

                  (i)      An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company:

                                       8

<PAGE>

                                    (A)      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;

                                    (B)      a merger or consolidation in which
the Company is a party;

                                    (C)      the sale, exchange, or transfer of
all or substantially all of the assets of the Company; or

                                    (D)      a liquidation or dissolution of the
Company.

                  (ii)     A "TRANSFER OF 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 stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(s)"), 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 stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board of Directors shall have the right to
determine whether multiple sales or exchanges of the voting stock of the Company
or multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive.

         (b)      EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a
Transfer of Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may either assume the Company's rights and obligations under
outstanding Options or substitute for outstanding Options substantially
equivalent options for the Acquiring Corporation's stock. In the event the
Acquiring Corporation elects not to assume or substitute for outstanding Options
in connection with a Transfer of Control, any unexercisable or unvested portion
of the outstanding Options shall be immediately exercisable and vested in full
as of the date ten (10) days prior to the date of the Transfer of Control. The
exercise or vesting of any Option that was permissible solely by reason of this
Section shall be conditioned upon the consummation of the Transfer of Control.
Except as otherwise provided herein, any Options which are neither assumed or
substituted for by the Acquiring Corporation in connection with the Transfer of
Control nor exercised as of the date of the Transfer of Control shall terminate
and cease to be outstanding effective as of the date of the Transfer of Control.

9.       REPURCHASE OPTIONS

         Shares issued under the Plan may be subject to a right of first
refusal, one or more repurchase options, or other conditions and restrictions as
determined by the Board of Directors in its sole discretion at the time the
Award is granted. The Company shall have the right to assign at any time any
repurchase right it may have, whether or not such right is then exercisable,

                                       9

<PAGE>

to one or more persons as may be selected by the Company. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.

10.      RESTRICTIONS ON TRANSFERS; GOVERNMENT REGULATIONS

         (a)      OPTIONS NOT TRANSFERABLE. During the lifetime of the
Participant, an Option shall be exercisable only by the Participant or the
Participant's guardian or legal representative. No Option may be assigned,
encumbered, or transferred, except, in the event of the death of a Participant,
by will or the laws of descent and distribution.

         (b)      GOVERNMENT REGULATIONS. This Plan, the granting of Awards
under this Plan and the issuance or transfer of Stock (and/or the payment of
money) pursuant thereto are subject to all applicable foreign, federal and state
laws, rules and regulations and to such approvals by any regulatory or
governmental agency (including without limitation "no action" positions of the
SEC) which may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith. Without limiting the generality of the
foregoing, no Awards may be granted under this Plan, and no Stock shall be
issued by the Company, nor cash payments made by the Company, pursuant to or in
connection with any such Award, unless and until, in each such case, all legal
requirements applicable to the issuance or payment have, in the opinion of
counsel to the Company, been complied with. In connection with any stock
issuance or transfer, the person acquiring the shares shall, if requested by the
Company, give assurances satisfactory to counsel to the Company in respect of
such matters as the Company may deem desirable to assure compliance with all
applicable legal requirements. The granting of Awards under this Plan and the
issuance of Stock pursuant thereto are subject to compliance with all applicable
foreign, federal, and/or state laws or regulations with respect to such
securities. No Option may be exercised by a Participant if the issuance of Stock
pursuant to such Option upon such exercise would constitute a violation of any
applicable foreign, federal, or state securities law, rule or regulation or
other applicable law or regulation. The inability of the Company to obtain from
any regulatory body having the authority, if any, deemed by the Company's legal
counsel to be necessary to the lawful issuance and sale of any shares subject to
any Award 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.

11.      TAX WITHHOLDING

         The Company shall have the right to withhold from amounts due
Participants, or to collect from Participants directly, the amount which the
Company deems necessary to satisfy any taxes required by law to be withheld at
any time by reason of participation in the Plan, and the obligations of the
Company under the Plan shall be conditional on payment of such taxes. The
Participant may, prior to the due date of any taxes, pay such amounts to the
Company in cash, or with the consent of the Board of Directors, in Stock (which
shall be valued at its Fair Market Value on the date of payment). The Company
shall have no obligation to any Participant to determine either (i) the
existence of any tax or (ii) the correct amount of any tax. Without limiting the
generality of the foregoing, in any case where it determines that a tax is or
will be required to be withheld in connection with the issuance, transfer or
vesting of Stock issued under

                                       10

<PAGE>

this Plan, the Company may, pursuant to such rules as the Board of Directors may
establish, reduce the number of shares of Stock so issued or transferred by such
number of Stock as the Company may deem appropriate in its sole discretion to
accomplish such withholding or make such other arrangements as it deems
satisfactory. Notwithstanding any other provision of this Plan, the Board of
Directors may impose such conditions on the payment of any withholding
obligation as may be required to satisfy applicable regulatory requirements,
including, without limitation, Rule 16b-3. The Company shall have no obligation
to deliver shares of Stock, release shares of Stock from an escrow established
pursuant to an Option Agreement or Stock Grant Agreement or make any payment
pursuant to the Plan until the Participating Company Group's tax withholding
obligations have been satisfied by the Participant.

12.      ADMINISTRATION OF PLAN

         (a)      ADMINISTRATION BY THE BOARD OF DIRECTORS. The Plan shall be
administered by the Board of Directors. All decisions and determinations of the
Board of Directors shall be final, conclusive and binding upon all Participants
and upon all other persons claiming any rights under the Plan with respect to
any Options.

         (b)      BOARD OF DIRECTORS AUTHORITY. In amplification of the Board of
Directors' powers and duties, but not by way of limitation, the Board of
Directors shall have full authority and power to:

                  (i)      Construe and interpret the provisions of the Plan and
make rules and regulations for the administration of the Plan not inconsistent
with the Plan;

                  (ii)     Decide all questions of eligibility for Plan
participation and for the grant of Awards;

                  (iii)    Adopt forms of agreements and other documents
consistent with the Plan;

                  (iv)     Engage agents to perform legal, accounting and other
such professional services as it may deem proper for administering the Plan; and

                  (v)      Take such other actions as may be reasonably required
or appropriate to administer the Plan or to carry out the Board of Directors
activities contemplated by other sections of this Plan.

         (c)      ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to any
person whose transactions in Stock are subject to Section 16 of the Exchange
Act, at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in
compliance with the requirements of Rule 16b-3, if any.

         (d)      COMMITTEE COMPLYING WITH SECTION 162(m). If a Participating
Company is a "publicly held corporation" within the meaning of Section 162(m) of
the Code, the Board of Directors may establish a Committee of "outside
directors" within the meaning of Section 162(m) of the Code to approve the grant
of any Award which might reasonably be anticipated to result in the payment of
employee remuneration that would otherwise exceed the limit on employee
remuneration deductible for income tax purposes pursuant to Section 162(m) of
the Code.

                                       11

<PAGE>

         (e)      INDEMNIFICATION. In addition to such other rights of
indemnification as they may have, members of the Board of Directors and any
officers or employees of the Participating Company Group to whom authority to
act on behalf of the Board of Directors is delegated shall be indemnified by the
Company against the reasonable expenses, including court costs and reasonable
attorneys' fees, actually 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 Award granted hereunder, and against all
amounts paid by them in settlement thereof or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except where such
indemnification is expressly prohibited by applicable law.

13.      STOCKHOLDER APPROVAL

         The Plan or any increase in the maximum number of shares of Stock
issuable thereunder as provided in Section 4(a) (the "MAXIMUM SHARES") shall be
approved by the stockholders of the Company within twelve (12) months of the
date of adoption thereof by the Board of Directors. Options granted prior to
stockholder approval of the Plan or in excess of the Maximum Shares previously
approved by the stockholders shall become exercisable no earlier than the date
of stockholder approval of the Plan or such increase in the Maximum Shares, as
the case may be. No Restricted Shares may be issued if such issuance would be in
excess of the Maximum Shares previously approved by the stockholders.

14.      AMENDMENT AND TERMINATION

         The Board of Directors may terminate or amend the Plan at any time.
However, subject to changes in the law or other legal requirements that would
permit otherwise, without the approval of the Company's stockholders, there
shall be (a) no increase in the maximum aggregate number of shares of Stock that
may be issued under the Plan (except by operation of the provisions of Section
4(b)), (b) no change in the class of persons eligible to receive ISOs, and (c)
no other amendment of the Plan which would require approval of the Company's
stockholders under any applicable law, regulation or rule. In any event, no
termination or amendment of the Plan may adversely affect any then outstanding
Award or any unexercised portion of an Award, without the consent of the
Participant, unless such termination or amendment is required to enable an
Option designated as an ISO to qualify as an ISO or is necessary to comply with
any applicable law or government regulation.

15.      MISCELLANEOUS

         (a)      EMPLOYMENT OR SERVICE. Neither the establishment of the Plan
nor any amendments thereto, nor the granting of any Award under the Plan, shall
be construed as in any way modifying or affecting, or evidencing any intention
or understanding with respect to, the terms of the employment or service of any
Participant with the Participating Company Group. Nothing in the Plan or any
agreement evidencing an Award shall confer upon a Participant any right to
continued employment or service with the Participating Company Group or
interfere in any way with any right of the Participating Company Group to
terminate the Participant's employment or service at any time. No person shall
have a right to be granted Awards or, having been selected as a Participant for
one Award, to be so selected again.

                                       12

<PAGE>

         (b)      PROVISION OF INFORMATION. Each Participant shall be given
access to information concerning the Company equivalent to that information
generally made available to the Company's common stockholders.

         (c)      NO ADVICE. The Company shall not be responsible for providing
any Participant with legal, business or tax advice. Any legal or tax liabilities
incurred by a Participant as a result of Participant's participation in the Plan
shall be the sole responsibility of the Participant. Participants should consult
their own attorneys and tax advisors with respect to any questions regarding
participation in the Plan.

         (d)      WRITTEN NOTICE. As used herein, any notices required hereunder
shall be in writing and shall be given on the forms, if any, provided or
specified by the Board of Directors. Written notice shall be effective upon
actual receipt by the person to whom such notice is to be given; provided,
however, that in the case of notices to Participants and their heirs, legatees
and legal representatives, notice shall be effective upon delivery if delivered
personally, by electronic or confirmed facsimile delivery, or three (3) business
days after mailing, certified or registered first class postage prepaid, to the
last known address of the person to whom notice is given. Written notice shall
be given to the Board of Directors and the Company at the following address or
such other address as may be specified from time to time:

                                    Maxtor Corporation
                                    500 McCarthy Blvd.
                                    Milpitas, California 95035
                                    Attn: Secretary

         (e)      APPLICABLE LAW, SEVERABILITY. The Plan shall be governed by
and construed in all respects in accordance with the laws of the State of
California. If any provisions of the Plan shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.

                                       13

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