CALIFORNIA FIRST NATIONAL BANCORP
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>optionplan1985amend04.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<html>

<head>
<title>AMENDED AND RESTATED STOCK OPTION PLAN OF CALIFORNIA FIRST NATIONAL
BANCORP</title>
</head>

<body>

<p align="right"><b>EXHIBIT 10.1 </b></p>
<p align="center">AMENDED AND RESTATED STOCK OPTION PLAN<br>
  OF<br>
  CALIFORNIA FIRST NATIONAL BANCORP<br>
  <br>
</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; California First National Bancorp,
a corporation organized under the laws of the State of California, hereby adopts
this Amended and Restated Stock Option Plan of California First National
Bancorp, as further amended November 18, 2004. The purposes of this Plan are as
follows:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To further the growth,
development and financial success of the Company by providing additional
incentives to certain of its executives and other key Employees who have been or
will be given responsibility for the management or administration of the
Company's business affairs as well as consultants and other persons who have
made or will make major contributions toward the growth and development of the
Company by assisting them to become owners of capital stock of the Company and
thus to benefit directly from its growth, development and financial success.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; To enable the Company to
obtain and retain the services of the type of professional, technical and
managerial employees considered essential to the long-range success of the
Company by providing and offering them an opportunity to become owners of
capital stock of the Company under options, including options that are intended
to qualify as &quot;incentive stock options&quot; under Section 422A of the
Internal Revenue Code of 1954, as amended.</p>
<p align="center">ARTICLE I<br>
<br>
<u>DEFINITIONS</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Whenever the following terms are
used in this Plan, they shall have the meaning specified below unless the
context clearly indicates to the contrary.</p>
<p><u>Section 1.1 - Board</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Board&quot; shall mean the
Board of Directors of the Company.</p>
<p><u>Section 1.2 - Code</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Code&quot; shall mean the
Internal Revenue Code of 1954, as amended.</p>
<p><u>Section 1.3 - Committee</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Committee&quot; shall mean the
Stock Option Committee of the Board, appointed as provided in Section 6.1;
provided, that the Board may in all cases exercise responsibilities of the
Committee.<br>
<br>
<u>Section 1.4 - Company</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Company&quot; shall mean
California First National Bancorp<br>
<br>
<u>Section 1.5 - Director</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Director&quot; shall mean a
member of the Board.<br>
<br>
<u>Section 1.6 - Employee</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Employee&quot; shall mean any
employee (as defined in accordance with the Regulations and Revenue Rulings then
applicable under Section 3401(c) of the Code) of the Company, whether such
employee is so employed at the time this Plan is adopted or becomes so employed
subsequent to the adoption of this Plan.</p>
<p><u>Section 1.7 - Incentive Stock Option</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Incentive Stock Option&quot;
shall mean an Option which qualifies under Section 422A of the Code and which is
designated as an Incentive Stock Option by the Committee.</p>
<p><u>Section 1.8 - Non-Qualified Option</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Non-Qualified Option&quot;
shall mean an Option which is not an Incentive Stock Option and which is
designated as a Non-Qualified Option by the Committee.<br>
<br>
<u>Section 1.9 - Officer</u><br>
&quot;Officer&quot; shall mean an officer of the Company.<br>
<br>
<u>Section 1.10 - Option</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Option&quot; shall mean an
option to purchase capital stock of the Company, granted under the Plan.
&quot;Options&quot; includes both Incentive Stock Options and Non-Qualified
Options.<br>
<br>
<u>Section 1.11 - Option</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Option&quot; shall mean a
person to whom an Option is granted under the Plan.</p>
<p><u>Section 1.12 - Plan</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Plan&quot; shall mean this
Stock Option Plan of California First National Bancorp</p>
<p><u>Section 1.13 - Pronouns</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The-masculine pronoun shall include
the feminine and neuter and the singular shall include the plural, where the
context so indicates.</p>
<p><u>Section 1.14 - </u><u>Secretary<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Secretary&quot; shall mean
the Secretary of the Company.</p>
<p><u>Section 1.15 - </u><u>Special Committee<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Special Committee&quot;
shall mean the Special Committee, appointed as provided in Section 6.4.</p>
<p><u>Section 1.16 - Termination of Employment<br>
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &quot;Termination of
Employment&quot; shall mean the time when the employee-employer relationship
between the Option and the Company is terminated for any reason, including, but
not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding terminations where there is a simultaneous
reemployment by the Company. The Committee, in its absolute discretion, shall
determine the effect of all other matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; provided, however, that, with respect to Incentive Stock Options, a
leave of absence shall constitute a Termination of Employment if, and to the
extent that, such leave of absence interrupts employment for the purposes of
Section 422A(a)(2) of the Code and the then applicable Regulations and Revenue
Rulings under said Section.</p>
<p align="center"><br>
ARTICLE II<br>
<br>
<u>SHARES SUBJECT TO PLAN</u></p>
<p align="left"><u><br>
Section 2.1 - Shares Subject to Plan</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The shares of stock subject to
Options shall be shares of the Company's Common Stock. The aggregate number of
such shares which may be issued upon exercise of Options shall be as fixed in
the authorizing resolution of the Board.</p>
<p><u>Section 2.2 - Limitation on Incentive Stock Option Grants</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subject to the overall limitations
of Section 2.1, the aggregate fair market value (determined as of the time the
option is granted) of the stock for which any key Employee may be granted
&quot;incentive stock options&quot; (within the meaning of Section 422A of the
Code) in any calendar year (under the Plan and all other incentive stock option
plans of the Company, any subsidiary and any parent corporation) shall not
exceed $100,000 plus any unused limit carryover, calculated under Section
422A(c)(4) of the Code, with respect to such Employee.</p>
<p><u>Section 2.3 - Unexercised Options</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If any Option expires or is
cancelled without having been fully exercised, the number of shares subject to
such Option but as to which such Option was not exercised prior to its
expiration or cancellation may again be optioned hereunder, subject to the
limitations of Sections 2.1 and 2.2.</p>
<p><u>Section 2.4 - Changes in Company's Shares</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event that the outstanding
shares of Common Stock of the Company are hereafter changed into or exchanged
for a different number or kind of shares or other securities of the Company, or
of another corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, appropriate adjustments shall be made by the Committee in
the number and kind of shares for the-purchase of which Options may be granted,
including adjustments of the limitations in Sections 2.1 and 2.2 on the maximum
number and kind of shares which may be issued on exercise of Options.</p>
<p align="center">ARTICLE III</p>
<p align="center"><br>
<u>GRANTING OF OPTIONS</u></p>
<p><br>
<u>Section 3.1 - Eligibility</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Any executive, key Employee,
consultant, or other person who has been or will be making major contributions
to the growth and development of the Company shall be eligible to be granted
Options, except as provided in Sections 3.2 and 6.4(a).</p>
<p><u>Section 3.2 - Qualification of Incentive Stock Options</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No Incentive Stock Option shall be
granted unless such Option, when granted, qualifies as an &quot;incentive stock
option&quot; under Section 422A of the Code.</p>
<p><u>Section 3.3 - Granting of Options</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Committee shall from
time to time, in its absolute discretion:</p>
<blockquote>
  <blockquote>
<p>(i)&nbsp;&nbsp;&nbsp;&nbsp; Determine which executives, key Employees,
consultants and others (including those to whom Options have been previously
granted under the Plan) should be granted Options; and</p>
<p>(ii)&nbsp;&nbsp;&nbsp;&nbsp; Determine the number of shares to be subject to
such Options granted to such selected executives, key Employees, consultants and
others, and determine whether such Options are to be Incentive Stock Options or
Non-Qualified Options; and</p>
<p>(iii)&nbsp;&nbsp;&nbsp;&nbsp; Determine the terms and conditions of such
Options, consistent with the Plan.</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Upon the selection of a
person to be granted an Option, the Committee shall instruct the Secretary to
issue such Option and may impose such conditions on the grant of such Option as
it deems appropriate. Without limiting the generality of the preceding sentence,
the Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of a Non-Qualified Option that the Option
surrender for cancellation some or all of the unexercised Non-Qualified Options
which have been previously granted to him. A Non-Qualified Option the grant of
which is conditioned upon such surrender may have an option price lower (or
higher) than the option price of the surrendered Non-Qualified Option, may cover
the same (or a lesser or greater) number of shares as the surrendered
Non-Qualified Option, may contain such other terms as the Committee deems
appropriate and shall be exercisable in accordance with its terms, without
regard to the number of shares, price, option period or any other term or
condition of the surrendered Non-Qualified Option.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options may not be granted
by the Committee to executive or key Employees who are then Directors or
Officers unless such grants have been recommended by the Special Committee. Such
recommendation shall be in writing and shall specify the Directors or Officers
to whom such grants are recommended and the recommended number of shares to be
covered by such Options.</p>
<p align="center">ARTICLE IV</p>
<p align="center"><u>TERMS OF OPTIONS</u></p>
<p><br>
<u>Section 4.1 - </u><u>Option Agreement<br>
</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Each Option shall be evidenced by a
written Stock Option Agreement, which shall be executed by the Option and an
authorized Officer of the Company and which shall contain such terms and
conditions as the Committee shall determine, consistent with the Plan. Stock
Option Agreements evidencing Incentive Stock Options shall contain such terms
and conditions as may be necessary to qualify such Options as &quot;incentive
stock options&quot; under Section 422A of the Code.</p>
<p><u>Section 4.2 - Option Price</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The price of the shares
subject to each Option shall be set by the Committee; provided, however, that
the price per share shall be not less than 100% of the fair market value of such
shares on the date such Option is granted; provided, further, that, in the case
of an Incentive Stock Option, the price per share shall not be less than 110% of
the fair market value of such shares on the date such Option is granted in the
case of an individual then owning (within the meaning of Section 425(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company, any subsidiary or any parent corporation.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For the purpose of Section
4.2(a), the fair market value of a share of the Company's stock on the date the
Option is granted shall be: (i) the closing price of a share of the Company's
stock on the principal exchange on which shares of the Company's stock are then
trading, if any, on such date, or, if shares were not traded on such date, then
on the next preceding trading day during which a sale occurred; or (ii) if such
stock is not traded on an exchange but is quoted on NASDAQ or a successor
quotation system, (1) the last sales price (if the stock is then listed as a
National Market Issue under the NASD National Market System) or (2) the mean
between the closing representative bid and asked prices (in all other cases) for
the stock on such date as reported by NASDAQ or such successor quotation system;
or (iii) if such stock is not publicly traded on an exchange and not quoted on
NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the stock on such date as determined in good faith by the
Committee; or (iv) if the Company's stock is not publicly traded, the fair
market value established by the Committee acting in good faith.</p>
<p><u>Section 4.3 - Commencement of Exercisability</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except as the Committee may
otherwise provide, no Option may be exercised in whole or in part during the
first year after such Option is granted.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subject to the provisions of
Sections 4.3(a), 4.3(c), 4.4 and 7.3, Options shall become exercisable at such
times and in such installments (which may be cumulative) as the Committee shall
provide in the terms of each individual Option; provided, however, that by a
resolution adopted after an Option is granted the Committee may, on such terms
and conditions as it may determine to be appropriate and subject to Sections
4.3(a), 4.3(c), 4.4 and 7.3, accelerate the time at which such Option or any
portion thereof may be exercised.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No portion of an Option
which is unexercisable at Termination of Employment shall thereafter become
exercisable; provided, however, that any portion of an Option which was not
exercisable at Termination of Employment solely because of the operation of
Section 4.4 shall become exercisable if and when, prior to the time when the
Option becomes unexercisable under Section 4.5 or Section 4.8, the provisions of
Section 4.4 cease to preclude the exercise of such portion.</p>
<p><u>Section 4.4 - Effect of Prior Incentive Stock Options</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No Incentive Stock Option granted
to an Employee may be exercisable while there is outstanding (within the meaning
of Section 422A(c)(7) of the Code) any &quot;incentive stock option&quot;
(within the meaning of Section 422A of the Code) which was granted, before the
granting of such Option, to the Employee to purchase stock in the Company or in
a corporation which (at the time of the granting of such Option) is a parent
corporation or subsidiary or in a predecessor corporation of any such
corporations.</p>
<p><u>Section 4.5 - Expiration of Options</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No Incentive Stock Option
may be exercised to any extent by anyone after the first to occur of the
following events:</p>
<blockquote>
  <blockquote>
<p>(i)&nbsp;&nbsp;&nbsp;&nbsp; The expiration of ten years from the date the Option
was granted; or</p>
<p>
(ii)&nbsp;&nbsp;&nbsp;&nbsp; In the case of an Optionee owning (within the
meaning of Section 425 (d) of the Code), at the time the Option was granted,
more than 10% of the total combined voting power of all classes of stock of the
Company, any subsidiary or any parent corporation, the expiration of five years
from the date the Option was granted; or</p>
<p>
(iii)&nbsp;&nbsp;&nbsp;&nbsp; Except in the case of any Optionee who is disabled
(within the meaning of Section 105(d)(4) of the Code), the expiration of three
months from the date of the Optionee's Termination of Employment for any reason
other than such Optionee's death unless the Optionee dies within said
three-month period; or</p>
<p>
(iv)&nbsp;&nbsp;&nbsp;&nbsp; In the case of an Optionee who is disabled (within
the meaning of Section 105(d)(4) of the Code), the expiration of one year from
the date of the Optionee's Termination of Employment for any reason other than
such Optionee's death unless the Optionee dies within said one-year period; or</p>
<p>(v)&nbsp;&nbsp;&nbsp;&nbsp; The expiration of one year from the date of the
Optionee's death.</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No Non-Qualified Option may be exercised to any extent by anyone after the
expiration of ten years and one day from the date the Option was granted.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp; Subject to the provisions of Section 4.5(a), the
Committee shall provide, in the terms of each individual Option, when such
Option expires and becomes unexercisable; and (without limiting the generality
of the foregoing) the Committee may provide in the terms of individual Options
that said Options expire immediately upon a Termination of Employment for any
reason.</p>
<p><u>Section 4.6 - Consideration</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In consideration of the granting
of the Option, the Committee may require that the Optionee shall agree, in the
written Stock Option Agreement, to remain in the employ of the Company for a
period of at least one year after the Option is granted. Nothing in this Plan or
in any Stock Option Agreement hereunder shall confer upon any Optionee any right
to continue in the employ of the Company or shall interfere with or restrict in
any way the rights of the Company, which are hereby expressly reserved, to
discharge any Optionee at any time for any reason whatsoever, with or without
good cause.</p>
<p><u>Section 4.7 - Adjustments in Outstanding Options</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event that the outstanding
shares of the stock subject to Options are changed into or exchanged for a
different number or kind of shares of the Company or other securities of the
Company by reason of merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend or combination of shares, the Committee shall
make an appropriate and equitable adjustment in the number and kind of shares as
to which all outstanding Options, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment in an outstanding Option shall be made without change in the total
price applicable to the Option or the unexercised portion of the Option (except
for any change in the aggregate price resulting from roundingoff of share
quantities or prices) and with any necessary corresponding adjustment in option
price per share; provided, however, that, in the case of Incentive Stock
Options, each such adjustment shall be made in such manner as not to constitute
a &quot;modification&quot; within the meaning of Section 425(h)(3) of the Code.
Any such adjustment made by the Committee shall be final and binding upon all
Optionees, the Company and all other interested persons.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event of any distribution
of assets to stockholders other than a normal cash dividend (&quot;Extraordinary
Distribution&quot;), the Committee also may make adjustments in the exercise
price of all outstanding Options, or portions thereof then unexercised, or
number of shares into which all outstanding Options held by current employees
are exercisable. Such adjustments shall be made with the intent that after such
adjustments the rights and benefits under such Options are no greater or less
than before such Extraordinary Distribution. Adjustments, if any, and any
determination or interpretations, including any determination of whether a
distribution is other than a normal cash dividend, made by the Committee shall
be final, binding and conclusive.<br>
<br>
</p>
<p><u>Section 4.8 - Merger, Consolidation, Acquisition, Liquidation or
Dissolution</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In its absolute discretion, and on
such terms and conditions as it deems appropriate, the Committee may provide by
the terms of any Option that such Option cannot be exercised after the merger or
consolidation of the Company into another corporation, the acquisition by
another corporation of all or substantially all of the Company's assets or 80%
or more of the Company's then outstanding voting stock or the liquidation or
dissolution of the Company; and if the Committee so provides, it may, in its
absolute discretion and on such terms and conditions as it deems appropriate,
also provide, either by the terms of such Option or by a resolution adopted
prior to the occurrence of such merger, consolidation, acquisition, liquidation
or dissolution, that, for some period of time prior to such event, such Option
shall be exercisable as to all shares covered thereby, notwithstanding anything
to the contrary in Section 4.3(a), Section 4.3(b) and/or any installment
provisions of such Option.</p>
<p align="center">ARTICLE V</p>
<p align="center"><u>EXERCISE OF OPTIONS</u></p>
<p><br>
<u>Section 5.1 - Person Eligible to Exercise</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; During the lifetime of the
Optionee, only he may exercise an Option granted to him, or any portion thereof.
After the death of the Optionee, any exercisable portion of an Option may, prior
to the time when such portion becomes unexercisable under Section 4.5 or Section
4.8, be exercised by his personal representative or by any person empowered to
do so under the deceased Optionee's will or under the then applicable laws of
descent and distribution.</p>
<p><u>Section 5.2 - Partial Exercise</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At any time and from time to time
prior to the time when any exercisable Option or exercisable portion thereof
becomes unexercisable under Section 4.5 or Section 4.8, such Option or portion
thereof may be exercised in whole or in part; provided, however, that the
Company shall not be required to issue fractional shares and the Committee may,
by the terms of the Option, require any partial exercise to be with respect to a
specified minimum number of shares.</p>
<p><u>Section 5.3 - Manner of Exercise</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; An exercisable Option, or any
exercisable portion thereof, may be exercised solely by delivery to the
Secretary or his office of all of the following prior to the time when such
Option or such portion becomes unexercisable under Section 4.5 or Section 4.8:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) Notice in writing signed by the Optionee or other person then entitled to
exercise such Option or portion, stating that such Option or portion is
exercised, such notice complying with all applicable rules established by the
Committee; and</p>
<blockquote>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) Full payment (in cash or by
  check) for the shares with respect to which such Option or portion is thereby
  exercised; or</p>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) With the consent of the
    Committee, shares of any class of the Company's stock owned by the Optionee
    duly endorsed for transfer to the Company with a fair market value (as
    determinable under Section 4.2'kb)) on the date of delivery equal to the
    aggregate Option price of the shares with respect to which such Option or
    portion is thereby exercised; or</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii) With the consent of the
    Committee, a full recourse promissory note bearing interest (at at least
    such rate as shall then preclude the imputation of interest under the Code
    or any successor provision) and payable upon such terms as may be prescribed
    by the Committee. The Committee may also prescribe the form of such note and
    the security to be given for such note. No Option may, however, be exercised
    by delivery of a promissory note or by a loan from the Company when or where
    such loan or other extension of credit is prohibited by law; or</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv) Any combination of the
    consideration provided in the foregoing subsections (i), (ii) and (iii); and</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee may, in its
absolute discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars; and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d) In the event that the Option or portion thereof shall be exercised pursuant
to Section 5.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option or portion
thereof.</p>
<p><u>Section 5.4 - Conditions to Issuance of Stock Certificates</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The shares of stock issuable and
deliverable upon the exercise of an Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. The Company shall not be required to issue
or deliver any certificate or certificates for shares of stock purchased upon
the exercise of any Option or portion thereof prior to fulfillment of all of the
following conditions:</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a) The admission of such shares to listing on all stock exchanges on which such
class of stock is then listed; and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b) The completion of any registration or other qualification of such shares
under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Committee shall, in its absolute discretion,
determine to be necessary or advisable; and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d) The payment to the Company of all amounts which it is required to withhold
under federal, state or local law in connection with the exercise of the Option;
and</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(e) The lapse of such reasonable period of time following the exercise of the
Option as the Committee may establish from time to time for reasons of
administrative convenience.</p>
<p><u>Section 5.5 - Rights as Shareholders</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The holders of Options shall not
be, nor have any of the rights or privileges of, shareholders of the Company in
respect of any shares purchasable upon the exercise of any part of an Option
unless and until certificates representing such shares have been issued by the
Company to such holders.</p>
<p><u>Section 5.6 - Transfer Restrictions</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Committee, in its absolute
discretion, may impose such restrictions on the transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares. The Committee may
require the Employee to give the Company prompt notice of any disposition of
shares of stock, acquired by exercise of an Incentive Stock Option, within two
years from the date of granting such Option or one year after the transfer of
such shares to such Employee. The Committee may direct that the certificates
evidencing shares acquired by exercise of an Option refer to such requirement to
give prompt notice of disposition.</p>
<p align="center"><br>
ARTICLE VI</p>
<p align="center"><u>ADMINISTRATION</u></p>
<p><br>
<u>Section 6.1 - Stock Option Committee</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Stock Option Committee shall
consist of at least three Directors, appointed by and holding office during the
pleasure of the Board. Appointment of Committee members shall be effective upon
acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee shall be
filled by the Board.</p>
<p><u>Section 6.2 - Duties and Powers of Committee</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
Options and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such interpretations and rules in regard to Incentive
Stock Options shall be consistent with the basic purpose of the Plan to grant
&quot;incentive stock options&quot; within the meaning of Section 422A of the
Code. In its absolute discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan.</p>
<p><u>Section 6.3 - Majority Rule</u></p>
<p>The Committee shall act by a majority of its members in office. The Committee
may act either by vote at a meeting or by a memorandum or other written
instrument signed by a majority of the Committee.</p>
<p><u>Section 6.4 - Special Committee</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;&nbsp; The Special Committee, if the Board elects to
appoint one, shall<br>
consist of three persons appointed by and holding office during the pleasure of
the Board. No Options may be granted to any member of the Special Committee
during the term of his membership on the Special Committee. No person shall be
eligible to serve on the Special Committee unless he is then a
&quot;disinterested person&quot; within the meaning of paragraph (d)(3) of Rule
16b-3 which has been adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, if and as such Rule is then in effect.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp; All members of the Special Committee shall be
Directors; provided, however, that if less than three Directors are eligible to
serve on the Special Committee, eligible persons who are not Directors shall be
appointed by the Board to fill such vacancies on the Special Committee. Members
of the Special Committee (who are not Directors) may also serve as members of
the Stock Option Committee.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp;&nbsp; Appointment of Special Committee members shall be
effective upon an acceptance of appointment. Special Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Special Committee shall be filled by the Board.</p>
<p><u>Section 6.5 - Compensation; Professional Assistance; Good Faith
Actions</u><br>
</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Members of the Committee or the
Special Committee shall receive such compensation for their services as members
as may be determined by the Board. All expenses and liabilities incurred by
members of the Committee or the Special Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee and the
Special Committee may, with the approval of the Board, employ attorneys,
consultants, accountants, appraisers, brokers or other persons. The Committee,
the Special Committee, the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Special Committee in good faith shall be final and binding upon
all Optionees, the Company and all other interested persons. No member of the
Committee or the Special Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options, and all members of the Committee and the Special Committee shall be
fully protected by the Company in respect to any such action, determination or
interpretation.</p>
<p align="center">ARTICLE VII</p>
<p align="center"><u>MISCELLANEOUS PROVISIONS</u></p>
<p><u>Section 7.1 - Options Not Transferable</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No Option or interest or right
therein or part thereof shall be liable for the debts, contracts or engagements
of the Optionee or his successors in interest or shall be subject to disposition
by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation
of law by judgment, levy, attachment, garnishment or any other legal or
equitable proceedings (including bankruptcy), and any attempted disposition
thereof shall be null and void and of no effect; provided, however, that nothing
in this Section 7.1 shall prevent transfers by will or by the applicable laws of
descent and distribution.</p>
<p><u>Section 7.2 - Amendment, Suspension or Termination of the Plan</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board. However, without approval of the Company's
shareholders given within 12 months before or after the action by the Board or
the Committee, no action of the Committee or Board may, except as provided in
Section 2.4, increase any limit imposed in Section 2.1 on the maximum number of
shares which may be issued on exercise of Options, modify the eligibility
requirements of Section 3.1, amend Section 3.3(c) to permit the grant of Options
to Officers or Directors other than upon the written recommendation of the
Special Committee, reduce the minimum option price requirements of Section
4.2(a) or extend the limit imposed in this Section 7.2 an the period during
which Options may be granted. Neither the amendment, suspension nor termination
of the Plan shall, without the consent of the holder of the Option, alter or
impair any rights or obligations under any Option theretofore granted. No Option
may be granted during any period of suspension nor after termination of the
Plan, and in no event may any Option be granted under this Plan after the first
to occur of the following events:</p>
<blockquote>
  <blockquote>
    <p>(a) The expiration of ten years from the date the Plan is adopted; or</p>
    <p>(b) The expiration of ten years from the date the Plan is approved by the
    Company's shareholders under Section 7.3.</p>
  </blockquote>
</blockquote>
<p><u>Section 7.3 - Approval of Plan by Shareholders</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Plan will be submitted for
the approval of the Company's shareholders within 12 months after the date of
the Board's initial adoption of the Plan. Options may be granted prior to such
shareholder approval; provided, however, that such Options shall not be
exercisable prior to the time when the Plan is approved by the shareholders;
provided, further, that if such approval has not been obtained at the end of
said 12-month period, all Options previously granted under the Plan shall
thereupon be cancelled and become null and void.</p>
<p><u>Section 7.4 - Effect of Plan Upon Other Options and Compensation
Plans</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The adoption of this Plan shall
not affect any other compensation or incentive plans in effect for the Company
or any Subsidiary. Nothing in this Plan shall be construed to limit the right of
the Company or any Subsidiary (a) to establish any other forms of incentives or
compensation for employees of the Company or any Subsidiary or (b) to grant or
assume options otherwise than under this Plan in connection with any proper
corporate purpose, including, but not by way of limitation, the grant or
assumption of options in connection with the acquisition by purchase, lease,
merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.</p>
<p><u>Section 7.5 - Titles</u></p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Titles are provided herein for
convenience only and are not to serve as a basis for interpretation or
construction of the Plan.<br>
<br>
<br>
<br>
<br>
</p>
<p align="center">* * * *<br>
<br>
<br>
</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; I hereby certify that the
foregoing Plan was duly was duly adopted by the Board of Directors of California
First National Bancorp on August 12, 1985, approved by the shareholders of
California First National Bancorp on August 20, 1985 and duly amended by the
Board of Directors on November 18, 2004.</p>
<p>Executed on this <u> 18th </u>day of <u>November, 2004</u>.<br>
<br>
<br>
</p>
<p align="center"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Glen T.
Tsuma/s/&nbsp;&nbsp;&nbsp;&nbsp; </u><br>
Secretary</p>

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