-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PtUTYe6FqNPqfeZeMDgbI7+21UOYC7QW4ZMpTTK+aljC5QEucbzXYpOksJ4oGLCZ 8ZPFrLhGN9fj0gsJCcVvRw== 0001024321-04-000004.txt : 20040203 0001024321-04-000004.hdr.sgml : 20040203 20040203171940 ACCESSION NUMBER: 0001024321-04-000004 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20040203 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GLENNON STEPHEN P CENTRAL INDEX KEY: 0001194596 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 14523 SW MILLKAN WAY STREET 2: STE 200 CITY: BEAVERTON STATE: OR ZIP: 97005 BUSINESS PHONE: 5032235600 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE FINANCIAL SERVICES GROUP INC CENTRAL INDEX KEY: 0001024321 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 931223879 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-49579 FILM NUMBER: 04563897 BUSINESS ADDRESS: STREET 1: 1776 SW MADISON STREET CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: 1776 SW MADISON ST CITY: PORTLAND STATE: OR ZIP: 97205 SC 13D 1 glennon13d.htm GLENNON 13D Glennon - 13D

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)

Wilshire Financial Services Group Inc.
(Name of Issuer)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

971867205
(CUSIP Number)

Stephen P. Glennon720
Milton Road

Rye, New York 10580

(914) 523-3923

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

January 27, 2004
(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ]

Page 1 of 8 Pages

CUSIP NO. 971867205

1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only).

	Stephen P. Glennon
	###-##-####

2.	Check the Appropriate Box if a Member of a Group (See Instructions)
	(a)
	(b) X

3.	SEC Use Only

4.	Source of Funds
	PF/BK

5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

6.	Citizenship or Place of Organization
	USA

Number of	7.	Sole Voting Power
Shares		1,275,000. Includes 25,000 shares which may be acquired through the exercise of stock options within 60 days.
Beneficially
Owned by
Each	8.	Shared Voting Power
Reporting		None
Person
With
	9.	Sole Dispositive Power
		1,275,000. Includes 25,000 shares which may be acquired through the exercise of stock options within 60 days.


	10.	Shared Dispositive Power
		None

Page 2 of 8 Pages

11.	Aggregate Amount Beneficially Owned by Each Reporting Person
	1,275,000

12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

13.	Percent of Class Represented by Amount in Row (11)
	6.2%

14.	Type of Reporting Person (See Instructions)
	IN

Page 3 of 8 Pages

INTRODUCTION

The Reporting Person herein named hereby files this Schedule 13D (the “Statement”) in respect of shares of Common Stock of Wilshire Financial Services Group Inc.

Item 1. Security and Issuer

State the title of the class of equity securities to which this statement relates and the name and address of the principal executive offices of the issuer of such securities.

          Common Stock, Par Value $0.01 Per Share

          Wilshire Financial Services Group Inc.
          14523 SW Millikan Way, Suite 200
          Beaverton, Oregon 97005

Item 2. Identity and Background

If the person filing this statement or any person enumerated in Instruction C of this statement is a corporation, general partnership, limited partnership, syndicate or other group of persons, state its name, the state or other place of its organization, its principal business, the address of its principal office and the information required by (d) and (e) of this Item. If the person filing this statement or any person enumerated in Instruction C is a natural person, provide the information specified in (a) through (f) of this Item with respect to such person(s).

(a)	Name:
	Stephen P. Glennon

(b)	Residence or business address:
	720 Milton Road
	Rye, New York 10580

(c)	Present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted.
	Chief Executive Officer
	Wilshire Financial Services Group Inc.
	(Financial Services Holding Company)
	14523 SW Millikan Way, Suite 200
	Beaverton, Oregon 97005

(d)	Mr. Glennon has not been convicted in a criminal proceeding (excluding traffic violations) during the last 5 years or ever.

Page 4 of 8 Pages

(e)

Mr. Glennon has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)	Citizenship - United States of America

Item 3. Source and Amount of Funds or Other Consideration

Mr. Glennon purchased the shares from the Issuer upon exercise of options to purchase 1,250,000 shares previously granted to him by the Board of Directors under the Issuer's 1999 Equity Participation Plan. (See Exhibits A through D.) Mr. Glennon used a $3.6 million, 7.75% bank loan and personal funds to purchase the shares and pay withholding and other tax liabilities in an aggregate amount estimated at $4.2 million. The bank loan was made in the ordinary course of business by a FDIC-Insured bank. (See Exhibit E.) By letter to the Secretary of the Commission delivered concurrently with this filing, Mr. Glennon requests that the name of the lending bank not be made available to the public.

Item 4. Purpose of Transaction

Mr. Glennon acquired his shares of Common Stock for investment. Mr. Glennon is currently the Issuer's Chief Executive Officer and a member of the Issuer's Board of Directors. Mr. Glennon has no present plans or proposals which relate to or would result in:

(a)

An acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer. However, Mr. Glennon might in the future acquire additional securities of the Issuer or dispose of some or all of his securities, depending upon market conditions and his own personal circumstances.

(b)

An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries;

(c)

A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries;

(d)

Any change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board. However, Mr. Glennon reserves the right to propose candidates for election as directors of the Issuer and to vote his shares for nominees, whether or not the Issuer’s Board of Directors has recommended and/or nominated such person.

Page 5 of 8 Pages

(e)

Any material change in the present capitalization or dividend policy of the issuer;

(f)

Any other material change in the issuer's business or corporate structure;

(g)

Changes in the issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person;

(h)

Causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

(i)

A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

(j)

Any action similar to any of those enumerated above.

Item 5. Interest in Securities of the Issuer

(a)

1,275,000 shares of the Issuer’s Common Stock or approximately 6.2% of the Issuer’s outstanding Common Stock. Includes 25,000 shares which may be acquired through the exercise of stock options within 60 days.

(b)

Mr. Glennon has the sole power to vote and to dispose of the Common shares issued to him.

(c)

Mr. Glennon has made no transactions in any securities of the Issuer during the prior 60 days except as reported herein.

(d)

No person has the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of any of Mr. Glennon’s securities.

(e)

Not applicable.

Page 6 of 8 Pages

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

There are no contracts, arrangements, understandings or relationships between Mr. Glennon and any other person with respect to Securities of the Issuer.

Item 7. Material to Be Filed as Exhibits:

The following documents are attached as Exhibits:

Exhibit A -

Amended and Restated 1999 Equity Participation Plan of Wilshire Financial Services Group Inc.

Exhibit B -

Notice of Exercise of Stock Option and Wilshire Financial Services Group Inc. Amended and Restated Stock Option Agreement dated as of January 27, 2000.

Exhibit C -

Notice of Exercise of Stock Option and Wilshire Financial Services Group Inc. Amended and Restated Stock Option Agreement dated as of February 29, 2000.

Exhibit D -

Notice of Exercise of Stock Option and Wilshire Financial Services Group Inc. Amended Stock Option Agreement dated as of March 11, 2002.

Exhibit D -

Promissory Note

Page 7 of 8 Pages

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: February 3, 2004

Signature: /s/ Stephen P. Glennon

Name/Title: Stephen P. Glennon
Chief Executive Officer
Wilshire Financial Services Group Inc.

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative’s authority to sign on behalf of such person shall be filed with the statement: provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001)

Page 8 of 8 Pages

EX-10 3 glennon13d_exa.htm WFSG EQUITY PARTICIPATION PLAN Glennon 13D - EX. A

EXHIBIT A

AMENDED AND RESTATED

1999 EQUITY PARTICIPATION PLAN

OF

WILSHIRE FINANCIAL SERVICES GROUP INC.

(As of April 23, 2003)

Wilshire Financial Services Group Inc., a Delaware corporation, has adopted The 1999 Equity Participation Plan of Wilshire Financial Services Group Inc. (the “Plan”), effective September 30, 1999 and duly amended on December 2, 1999, June 22, 2000, January 31, 2001, January 22, 2002, and April 23, 2003, for the benefit of its eligible employees and directors.

The purposes of the Plan are as follows:

(1) To provide an additional incentive for directors and key Employees (as such terms are defined below) to further the growth, development and financial success of the Company by personally benefiting through the ownership of Company stock and/or rights which recognize such growth, development and financial success.

(2) To enable the Company to obtain and retain the services of directors and key Employees considered essential to the long range success of the Company by offering them an opportunity to own stock in the Company and/or rights which will reflect the growth, development and financial success of the Company.

ARTICLE I.

DEFINITIONS

1.1. General. Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise.

1.2. Administrator. "Administrator" shall mean the entity that conducts the general administration of the Plan as provided herein. With reference to the administration of the Plan with respect to Options granted to Independent Directors, the term "Administrator" shall refer to the Board. With reference to the administration of the Plan with respect to any other Award, the term "Administrator" shall refer to the Committee unless the Board has assumed the authority for administration of the Plan generally as provided in Section 10.1.

1.3. Award. "Award" shall mean an Option, a Restricted Stock award, a Performance Award or a Stock Payment award which may be awarded or granted under the Plan (collectively, "Awards").

1.4. Award Agreement. "Award Agreement" shall mean a written agreement executed by an authorized officer of the Company and the Holder which shall contain such terms and conditions with respect to an Award as the Administrator shall determine, consistent with the Plan.

1.5. Award Limit. "Award Limit" shall mean 1,000,000 shares of Common Stock, as adjusted pursuant to Section 10.3 of the Plan.

1.6. Board. "Board" shall mean the Board of Directors of the Company.

1.7. Change in Control. shall mean the occurrence of any of the following:

(a) Any "Person" or "Group" (as such terms are defined in Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations promulgated thereunder) is or becomes the "Beneficial Owner" (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company, or of any entity resulting from a merger or consolidation involving the Company, representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of the Company or such entity.

(b) The individuals who, as of the date hereof, are members of the Board (the "Existing Directors"), cease, for any reason, to constitute more than fifty percent (50%) of the number of authorized directors of the Company as determined in the manner prescribed in the Company's Certificate of Incorporation and Bylaws; provided, however, that if the election, or nomination for election, by the Company's stockholders of any new director was approved by a vote of at least fifty percent (50%) of the Existing Directors, such new director shall be considered an Existing Director; provided further, however, that no individual shall be considered an Existing Director if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies by or on behalf of anyone other than the Board (a "Proxy Contest"), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest.

(c) The consummation of (x) a merger, consolidation or reorganization to which the Company is a party, whether or not the Company is the Person surviving or resulting therefrom, or (y) a sale, assignment, lease, conveyance or other disposition of all or substantially all of the assets of the Company, in one transaction or a series of related transactions, to any Person other than the Company, where any such transaction or series of related transactions as is referred to in clause (x) or clause (y) above in this subparagraph (iii) (a "Transaction") does not otherwise result in a "Change in Control" pursuant to subparagraph (i) of this definition of "Change in Control"; provided, however, that no such Transaction shall constitute a "Change in Control" under this subparagraph (iii) if the Persons who were the stockholders of the Company immediately before the consummation of such Transaction are the Beneficial Owners, immediately following the consummation of such Transaction, of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Person surviving or resulting from any merger, consolidation or reorganization referred to in clause (x) above in this subparagraph (iii) or the Person to whom the assets of the Company are sold, assigned, leased, conveyed or disposed of in any transaction or series of related transactions referred in clause (y) above in this subparagraph (iii), in substantially the same proportions in which such Beneficial Owners held voting stock in the Company immediately before such Transaction or series of related transactions.

(d) With respect to employees of FBBH, a Change in Control shall be deemed to occur upon the occurrence of one of the events described in subparagraphs (i), (ii) or (iii), determined as though FBBH were the Company.

(e) With respect to employees of the Company and its Subsidiaries other than FBBH, a Change in Control shall be deemed to occur upon the occurrence, at a time when the book value of FBBH is at least fifty percent (50%) of the consolidated book value of the Company and its Subsidiaries, of (A) one of the events described in subparagraphs (i), (ii) or (iii), determined as though FBBH were the Company, if the Company distributes to its shareholders with respect to their stock in the Company the proceeds of the sale, merger, or other transaction described in subparagraphs (i), (ii) or (iii), or (B) any distribution by the Company to its shareholders with respect to its stock of more than fifty percent (50%) of the combined voting power of the then outstanding securities of FBBH if the Company does not retain proceeds of or consideration for such transaction.

1.8. Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.9. Committee. "Committee" shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board, appointed as provided in Section 9.1.

1.10. Common Stock. "Common Stock" shall mean the common stock of the Company, par value $0.01 per share, and any equity security of the Company issued or authorized to be issued in the future, but excluding any preferred stock and any warrants, options or other rights to purchase Common Stock.

1.11. Company. "Company" shall mean Wilshire Financial Services Group Inc., a Delaware corporation.

1.12. Director. "Director" shall mean a member of the Board or an FBBH Director, as the context may require.

1.13. DRO. "DRO" shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder.

1.14. Employee. "Employee" shall mean any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the Company, or of any corporation which is a Subsidiary.

1.15. Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

1.16. Fair Market Value. "Fair Market Value" of a share of Common Stock as of a given date shall be (a) the price of a share of Common Stock on the principal exchange on which shares of Common Stock are then trading, if any (or as reported on any composite index which includes such principal exchange) (calculated using the trailing average of the listed high and low trading price for the preceding trading day), or (b) if Common Stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system, the mean between the closing representative bid and asked prices for the Common Stock on the trading day previous to such date as reported by NASDAQ or such successor quotation system; or (c) if Common Stock is not publicly traded on an exchange and not quoted on NASDAQ or a successor quotation system, the Fair Market Value of a share of Common Stock as established by the Administrator acting in good faith.

1.17. FBBH. "FBBH" shall mean First Bank of Beverly Hills, N.A., a Subsidiary of the Company.

1.18. FBBH Director. "FBBH Director" shall mean a member of the board of directors of FBBH.

1.19. Holder. "Holder" shall mean a person who has been granted or awarded an Award.

1.20. Incentive Stock Option. "Incentive Stock Option" shall mean an option which conforms to the applicable provisions of Section 422 of the Code and which is designated as an Incentive Stock Option by the Administrator.

1.21. Independent Company Director. "Independent Company Director" shall mean a member of the Board who is not an Employee of the Company.

1.22. Independent Director. "Independent Director" shall mean an Independent Company Director or an Independent FBBH Director, as the context may require.

1.23. Independent FBBH Director. "Independent FBBH Director" shall mean a member of the board of directors of FBBH who is neither an Employee nor an Independent Company Director.

1.24. Non-Qualified Stock Option. "Non-Qualified Stock Option" shall mean an Option which is not designated as an Incentive Stock Option by the Administrator.

1.25. Option. "Option" shall mean a stock option granted under Article IV of the Plan. An Option granted under the Plan shall, as determined by the Administrator, be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Independent Directors shall be Non-Qualified Stock Options.

1.26. Performance Award. "Performance Award" shall mean a stock bonus or other performance or incentive award that is paid in Common Stock or a combination of cash and Common Stock, awarded under Article VIII of the Plan.

1.27. Performance Criteria. "Performance Criteria" shall mean the following business criteria with respect to the Company, any Subsidiary or any division or operating unit: (a) net income, (b) pre-tax income, (c) operating income, (d) cash flow, (e) earnings per share, (f) return on equity, (g) return on invested capital or assets, (h) cost reductions or savings, (i) funds from operations, (j) appreciation in the fair market value of Common Stock and (k) earnings before any one or more of the following items: interest, taxes, depreciation or amortization.

1.28. Plan. "Plan" shall mean The 1999 Equity Participation Plan of Wilshire Financial Services Group Inc.

1.29. Reorganization. "Reorganization" shall mean the prepackaged plan of reorganization filed with the Bankruptcy Court for the State of Delaware on March 3, 1999.

1.30. Restricted Stock. "Restricted Stock" shall mean Common Stock awarded under Article VII of the Plan.

1.31. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as such Rule may be amended from time to time.

1.32. Section 162(m) Participant. "Section 162(m) Participant" shall mean any key Employee designated by the Administrator as a key Employee whose compensation for the fiscal year in which the key Employee is so designated or a future fiscal year may be subject to the limit on deductible compensation imposed by Section 162(m) of the Code.

1.33. Securities Act. "Securities Act" shall mean the Securities Act of 1933, as amended.

1.34. Stock Payment. "Stock Payment" shall mean (a) a payment in the form of shares of Common Stock, or (b) an option or other right to purchase shares of Common Stock, as part of a deferred compensation arrangement, made in lieu of all or any portion of the compensation, including without limitation, salary, bonuses and commissions, that would otherwise become payable to a key Employee in cash, awarded under Article VIII of the Plan.

1.35. Subsidiary. "Subsidiary" shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

1.36. Substitute Award. "Substitute Award" shall mean an Option granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term "Substitute Award" be construed to refer to an award made in connection with the cancellation and repricing of an Option.

1.37. Termination of Directorship. "Termination of Directorship" shall mean the time when a Holder who is an Independent Director ceases to be a Director for any reason, including, but not by way of limitation, a termination by resignation, failure to be elected, death or retirement. The Board, in its sole and absolute discretion, shall determine the effect of all matters and questions relating to Termination of Directorship with respect to Independent Directors.

1.38. Termination of Employment. "Termination of Employment" shall mean the time when the employee-employer relationship between a Holder and the Company or any Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement; but excluding (a) terminations where there is a simultaneous reemployment or continuing employment of a Holder by the Company or any Subsidiary, (b) at the discretion of the Administrator, terminations which result in a temporary severance of the employee-employer relationship, and (c) at the discretion of the Administrator, terminations which are followed by the simultaneous establishment of a consulting relationship by the Company or a Subsidiary with the former employee. The Administrator, in its absolute discretion, shall determine the effect of all 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 a particular leave of absence constitutes a Termination of Employment; provided, however, that, with respect to Incentive Stock Options, unless otherwise determined by the Administrator in its discretion, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section.

ARTICLE II.

SHARES SUBJECT TO PLAN

2.1. Shares Subject to Plan.

(a) The shares of stock subject to Awards shall initially be shares of the Company's Common Stock, par value $0.01 per share. The aggregate number of such shares which may be issued upon exercise of such Options or rights or upon any such awards under the Plan shall not exceed Four Million (4,000,000) of which no more than Five Hundred Thousand (500,000) shares may be issued as Restricted Stock or Performance Awards. The shares of Common Stock issuable upon exercise of such Options or rights or upon any such awards may be either previously authorized but unissued shares or treasury shares.

(b) The maximum number of shares which may be subject to Awards, granted under the Plan to any individual in any fiscal year shall not exceed the Award Limit. To the extent required by Section 162(m) of the Code, shares subject to Options which are canceled continue to be counted against the Award Limit.

2.2. Add-back of Options and Other Rights. If any Option, or other right to acquire shares of Common Stock under any other Award under the Plan, expires or is canceled without having been fully exercised, or is exercised in whole or in part for cash as permitted by the Plan, the number of shares subject to such Option or other right but as to which such Option or other right was not exercised prior to its expiration, cancellation or exercise may again be optioned, granted or awarded hereunder, subject to the limitations of Section 2.1. Furthermore, any shares subject to Awards which are adjusted pursuant to Section 10.3 and become exercisable with respect to shares of stock of another corporation shall be considered canceled and may again be optioned, granted or awarded hereunder, subject to the limitations of Section 2.1. Shares of Common Stock which are delivered by the Holder or withheld by the Company upon the exercise of any Award under the Plan, in payment of the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded hereunder, subject to the limitations of Section 2.1. If any shares of Restricted Stock are surrendered by the Holder or repurchased by the Company pursuant to Section 7.4 or 7.5 hereof, such shares may again be optioned, granted or awarded hereunder, subject to the limitations of Section 2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.

ARTICLE III.

GRANTING OF AWARDS

3.1. Award Agreement. Each Award shall be evidenced by an Award Agreement. Award Agreements evidencing Awards intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.

3.2. Provisions Applicable to Section 162(m) Participants.

(a) The Committee, in its discretion, may determine whether an Award is to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code.

(b) Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to a Section 162(m) Participant, including Restricted Stock the restrictions with respect to which lapse upon the attainment of performance goals which are related to one or more of the Performance Criteria and any performance or incentive award described in Article VIII that vests or becomes exercisable or payable upon the attainment of performance goals which are related to one or more of the Performance Criteria.

(c) To the extent necessary to comply with the performance-based compensation requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted under Articles VII and VIII which may be granted to one or more Section 162(m) Participants, no later than ninety (90) days following the commencement of any fiscal year in question or any other designated fiscal period or period of service (or such other time as may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (i) designate one or more Section 162(m) Participants, (ii) select the Performance Criteria applicable to the fiscal year or other designated fiscal period or period of service, (iii) establish the various performance targets, in terms of an objective formula or standard, and amounts of such Awards, as applicable, which may be earned for such fiscal year or other designated fiscal period or period of service and (iv) specify the relationship between Performance Criteria and the performance targets and the amounts of such Awards, as applicable, to be earned by each Section 162(m) Participant for such fiscal year or other designated fiscal period or period of service. Following the completion of each fiscal year or other designated fiscal period or period of service, the Committee shall certify in writing whether the applicable performance targets have been achieved for such fiscal year or other designated fiscal period or period of service. In determining the amount earned by a Section 162(m) Participant, the Committee shall have the right to reduce (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the fiscal year or other designated fiscal period or period of service.

(d) Furthermore, notwithstanding any other provision of the Plan or any Award which is granted to a Section 162(m) Participant and is intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code shall be subject to any additional limitations set forth in Section 162(m) of the Code (including any amendment to Section 162(m) of the Code) or any regulations or rulings issued thereunder that are requirements for qualification as performance-based compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent necessary to conform to such requirements.

3.3. Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.4. Consideration. In consideration of the granting of an Award under the Plan, the Holder shall agree, in the Award Agreement, to remain in the employ of (or to consult for or to serve as an Independent Director of, as applicable) the Company or any Subsidiary for a period of at least one year (or such shorter period as may be fixed in the Award Agreement or by action of the Administrator following grant of the Award) after the Award is granted (or, in the case of an Independent Director, until the next annual meeting of stockholders of the Company).

3.5. At-Will Employment. Nothing in the Plan or in any Award Agreement hereunder shall confer upon any Holder any right to continue in the employ of the Company or any Subsidiary, or as a director of the Company, or shall interfere with or restrict in any way the rights of the Company and any Subsidiary, which are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written employment agreement between the Holder and the Company and any Subsidiary.

ARTICLE IV.

GRANTING OF OPTIONS TO EMPLOYEES
AND INDEPENDENT DIRECTORS

4.1. Eligibility. Any Employee selected by the Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an Option. Each Independent Director of the Company shall be eligible to be granted Options at the times and in the manner set forth in Section 4.5.

4.2. Disqualification for Stock Ownership. No person may be granted an Incentive Stock Option under the Plan if such person, at the time the Incentive Stock Option is granted, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any then existing Subsidiary or parent corporation (within the meaning of Section 422 of the Code) unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code.

4.3. Qualification of Incentive Stock Options. No Incentive Stock Option shall be granted to any person who is not an Employee.

4.4. Granting of Options to Employees.

(a) The Committee shall from time to time, in its absolute discretion, and subject to applicable limitations of the Plan:

(i) Determine which Employees are key Employees and select from among the key Employees (including Employees who have previously received Awards under the Plan) such of them as in its opinion should be granted Options;

(ii) Subject to the Award Limit, determine the number of shares to be subject to such Options granted to the selected key Employees;

(iii) Subject to Section 4.3, determine whether such Options are to be Incentive Stock Options or Non-Qualified Stock Options and whether such Options are to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code; and

(iv) Determine the terms and conditions of such Options, consistent with the Plan; provided, however, that the terms and conditions of Options intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code shall include, but not be limited to, such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code.

(b) Upon the selection of a key Employee to be granted an Option, the Committee shall instruct the Secretary of the Company to issue the Option and may impose such conditions on the grant of the Option as it deems appropriate.

(c) Any Incentive Stock Option granted under the Plan may be modified by the Committee, with the consent of the Holder, to disqualify such Option from treatment as an "incentive stock option" under Section 422 of the Code.

4.5 Options in Lieu of Cash Compensation. Options may be granted under the Plan to Employees in lieu of cash bonuses which would otherwise be payable to such Employees and to Independent Directors in lieu of directors’ fees which would otherwise be payable to such Independent Directors, pursuant to such policies which may be adopted by the Administrator from time to time.

ARTICLE V.

TERMS OF OPTIONS

5.1. Option Price. Subject to Section 5.6, the price per share of the shares subject to each Option granted to Employees shall be set by the Committee; provided, however, that such price shall be no less than the par value of a share of Common Stock, unless otherwise permitted by applicable state law and:

(a) in the case of Options intended to qualify as performance-based compensation as described in Section 162(m)(4)(C) of the Code, such price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted;

(b) in the case of Incentive Stock Options such price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code);

(c) in the case of Incentive Stock Options granted to an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or parent corporation thereof (within the meaning of Section 422 of the Code), such price shall not be less than 110% of the Fair Market Value of a share of Common Stock on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

5.2. Option Term. The term of an Option granted to an Employee shall be set by the Committee in its discretion; provided, however, that, in the case of Incentive Stock Options, the term shall not be more than ten (10) years from the date the Incentive Stock Option is granted, or five (5) years from the date the Incentive Stock Option is granted if the Incentive Stock Option is granted to an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary or parent corporation thereof (within the meaning of Section 422 of the Code). Except as limited by requirements of Section 422 of the Code and regulations and rulings thereunder applicable to Incentive Stock Options, the Committee may extend the term of any outstanding Option in connection with any Termination of Employment of the Holder, or amend any other term or condition of such Option relating to such a termination.

5.3. Option Vesting

(a) The period during which the right to exercise, in whole or in part, an Option granted to an Employee vests in the Holder shall be set by the Committee and the Committee may determine that an Option may not be exercised in whole or in part for a specified period after it is granted; provided, however, that, unless the Committee otherwise provides in the terms of the Award Agreement or otherwise, no Option shall be exercisable by any Holder who is then subject to Section 16 of the Exchange Act within the period ending six months and one day after the date the Option is granted. At any time after grant of an Option, the Committee may, in its sole and absolute discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Option granted to an Employee vests.

(b) No portion of an Option granted to an Employee which is unexercisable at Termination of Employment shall thereafter become exercisable, except as may be otherwise provided by the Committee either in the Award Agreement or by action of the Committee following the grant of the Option.

(c) To the extent that the aggregate Fair Market Value of stock with respect to which "incentive stock options" (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year (under the Plan and all other incentive stock option plans of the Company and any parent or subsidiary corporation, within the meaning of Section 422 of the Code) of the Company, exceeds $100,000, such Options shall be treated as Non-Qualified Options to the extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be applied by taking Options into account in the order in which they were granted. For purposes of this Section 5.3(c), the Fair Market Value of stock shall be determined as of the time the Option with respect to such stock is granted.

(d) Notwithstanding any other provision of this Plan, in the event of a Change in Control as defined in Section 1.7(c) that is or is to be accounted for as a "pooling of interests", each outstanding Option shall, immediately prior to the effective date of the Change in Control, automatically become fully exercisable for all of the shares of Common Stock at the time subject to such rights and may be exercised for any or all of those shares as fully-vested shares of Common Stock.

5.4. Terms of Options Granted to Independent Directors.

(a) Subject to Section 5.6, the price per share of the shares subject to each Option granted to an Independent Director shall equal 100% of the Fair Market Value of a share of Common Stock on the date the Option is granted; provided, however, that the price of each share subject to each Option granted to Independent Directors on the date of the confirmation of the Reorganization shall equal the price per share of Common Stock calculated using the trailing average of the listed high and low trading price for the following twenty trading days. Options granted to Independent Directors shall become exercisable in cumulative annual installments of 33.3% on each of the first, second and third anniversaries of the date of Option grant and, subject to Section 6.6, the term of each Option granted to an Independent Director shall be ten (10) years from the date the Option is granted, except that any Option granted to an Independent Director may by its terms become immediately exercisable in full upon the retirement of the Independent Director in accordance with the Company's retirement policy applicable to directors. No portion of an Option which is unexercisable at Termination of Directorship shall thereafter become exercisable.

(b) Notwithstanding any other provision of this Plan, in the event of a Change in Control, each outstanding Award to an Independent Director shall, immediately prior to the effective date of the Change in Control, automatically become fully exercisable for all of the shares of Common Stock at the time subject to such rights and may be exercised for any or all of those shares as fully-vested shares of Common Stock.

5.5. Substitute Awards.

Notwithstanding the foregoing provisions of this Article V to the contrary, in the case of an Option that is a Substitute Award, the price per share of the shares subject to such Option may be less than the Fair Market Value per share on the date of grant, provided, that the excess of:

(a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award; over

(b) the aggregate exercise price thereof does not exceed the excess of;

(c) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company; over

(d) the aggregate exercise price of such shares.

5.6. Repricing. Notwithstanding anything herein to the contrary, no Option may be cancelled and reissued in any transaction or series of related transactions for the purpose of modifying the price per share of the shares subject to such Option.

ARTICLE VI.

EXERCISE OF OPTIONS

6.1. Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional shares and the Administrator may require that, by the terms of the Option, a partial exercise be with respect to a minimum number of shares.

6.2. Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company or his office:

(a) A written notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;

(b) Such representations and documents as the Administrator, in its absolute discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations. The Administrator 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 notices to agents and registrars;

(c) In the event that the Option shall be exercised pursuant to Section 10.1 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option; and

(d) Full cash payment to the Secretary of the Company for the shares with respect to which the Option, or portion thereof, is exercised. However, the Administrator, may in its discretion (i) allow a delay in payment up to thirty (30) days from the date the Option, or portion thereof, is exercised; (ii) allow payment, in whole or in part, through the delivery of shares of Common Stock which have been owned by the Holder for at least six months, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; (iii) allow payment, in whole or in part, through the surrender of shares of Common Stock then issuable upon exercise of the Option having a Fair Market Value on the date of Option exercise equal to the aggregate exercise price of the Option or exercised portion thereof; (iv) allow payment, in whole or in part, through the delivery of property of any kind which constitutes good and valuable consideration; (v) allow payment, in whole or in part, through the delivery of a full recourse promissory note bearing interest (at no less than such rate as shall then preclude the imputation of interest under the Code) and payable upon such terms as may be prescribed by the Administrator; (vi) allow payment, in whole or in part, through the delivery of a notice that the Holder has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that payment of such proceeds is then made to the Company upon settlement of such sale; or (vii) allow payment through any combination of the consideration provided in the foregoing subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory note, the Administrator may also prescribe the form of such note and the security to be given for such note. The Option may not be exercised, however, 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.

6.3. Conditions to Issuance of Stock Certificates. 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:

(a) The admission of such shares to listing on all stock exchanges on which such class of stock is then listed;

(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 Administrator shall, in its absolute discretion, deem necessary or advisable;

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable;

(d) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may establish from time to time for reasons of administrative convenience; and

(e) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by the Holder to pay for such shares under Section 6.2(d).

6.4. Rights as Stockholders. Holders shall not be, nor have any of the rights or privileges of, stockholders 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.

6.5. Ownership and Transfer Restrictions. The Administrator, in its absolute discretion, may impose such restrictions on the ownership and 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 Award Agreement and may be referred to on the certificates evidencing such shares. The Holder shall give the Company prompt notice of any disposition of shares of Common Stock acquired by exercise of an Incentive Stock Option within (a) two years from the date of granting (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such Holder or (b) one year after the transfer of such shares to such Holder.

6.6. Limitations on Exercise of Options Granted to Independent Directors. No Option granted to an Independent Director may be exercised to any extent by anyone after the first to occur of the following events:

(a) the expiration of twelve (12) months from the date of the Holder's death;

(b) the expiration of twelve (12) months from the date of the Holder's Termination of Directorship by reason of his permanent and total disability (within the meaning of Section 22(e)(3) of the Code);

(c) the expiration of three (3) months from the date of the Holder's Termination of Directorship for any reason other than such Holder's death or his permanent and total disability, unless the Holder dies within said three-month period; or

(d) the expiration of ten (10) years from the date the Option was granted.

6.7. Additional Limitations on Exercise of Options. Holders may be required to comply with any timing or other restrictions with respect to the settlement or exercise of an Option, including a window-period limitation, as may be imposed in the discretion of the Administrator.

ARTICLE VII.

AWARD OF RESTRICTED STOCK

7.1. Eligibility. Subject to the Award Limit, Restricted Stock may be awarded to any Employee who the Committee determines is a key Employee.

7.2. Award of Restricted Stock

(a) The Committee may from time to time, in its absolute discretion:

(i) Determine which Employees are key Employees and select from among the key Employees (including Employees who have previously received other awards under the Plan) such of them as in its opinion should be awarded Restricted Stock; and

(ii) Determine the purchase price, if any, and other terms and conditions applicable to such Restricted Stock, consistent with the Plan.

(b) The Committee shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that such purchase price shall be no less than the par value of the Common Stock to be purchased, unless otherwise permitted by applicable state law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.

(c) Upon the selection of a key Employee to be awarded Restricted Stock, the Committee shall instruct the Secretary of the Company to issue such Restricted Stock and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.

7.3. Rights as Stockholders. Subject to Section 7.4, upon delivery of the shares of Restricted Stock to the escrow holder pursuant to Section 7.6, the Holder shall have, unless otherwise provided by the Committee, all the rights of a stockholder with respect to said shares, subject to the restrictions in his Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the shares; provided, however, that in the discretion of the Committee, any extraordinary distributions with respect to the Common Stock shall be subject to the restrictions set forth in Section 7.4.

7.4. Restriction. All shares of Restricted Stock issued under the Plan (including any shares received by holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of each individual Award Agreement, be subject to such restrictions as the Committee shall provide, which restrictions may include, without limitation, restrictions concerning voting rights and transferability and restrictions based on duration of employment with the Company, Company performance and individual performance; provided, however, that, unless the Committee otherwise provides in the terms of the Award Agreement or otherwise, no share of Restricted Stock granted to a person subject to Section 16 of the Exchange Act shall be sold, assigned or otherwise transferred until at least six months and one day have elapsed from the date on which the Restricted Stock was issued, and provided, further, that, except with respect to shares of Restricted Stock granted to Section 162(m) Participants, by action taken after the Restricted Stock is issued, the Committee may, on such terms and conditions as it may determine to be appropriate, remove any or all of the restrictions imposed by the terms of the Award Agreement. Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire. If no consideration was paid by the Holder upon issuance, a Holder's rights in unvested Restricted Stock shall lapse, and such Restricted Stock shall be surrendered to the Company without consideration, upon Termination of Employment with the Company; provided, however, that except with respect to shares of Restricted Stock granted to Section 162(m) Participants, the Committee in its sole and absolute discretion may provide that no such lapse or surrender shall occur in the event of a Termination of Employment without cause or following any Change in Control of the Company or because of the Holder's retirement, death, disability or otherwise. Notwithstanding anything to the contrary in this Section 7.4, in the event of and immediately prior to a Change in Control as defined in Section 1.7(c) that is to be accounted for as a "pooling of interests", all unvested shares of Restricted Stock shall immediately vest such that no such lapse or surrender shall occur following such Change in Control.

7.5. Repurchase of Restricted Stock. The Committee shall provide in the terms of each individual Award Agreement that the Company shall have the right to repurchase from the Holder the Restricted Stock then subject to restrictions under the Award Agreement immediately upon a Termination of Employment between the Holder and the Company, at a cash price per share equal to the price paid by the Holder for such Restricted Stock; provided, however, that, except with respect to shares of Restricted Stock granted to Section 162(m) Participants, the Committee in its sole and absolute discretion may provide that no such right of repurchase shall exist in the event of a Termination of Employment without cause or following any Change in Control of the Company or because of the Holder's retirement, death, disability or otherwise. Notwithstanding anything to the contrary in this Section 7.5, in the event of and immediately prior to a Change in Control as defined in Section 1.7(c) that is to be accounted for as a "pooling of interests", any such repurchase rights shall expire.

7.6. Escrow. The Secretary of the Company or such other escrow holder as the Committee may appoint shall retain physical custody of each certificate representing Restricted Stock until all of the restrictions imposed under the Award Agreement with respect to the shares evidenced by such certificate expire or shall have been removed.

7.7. Legend. In order to enforce the restrictions imposed upon shares of Restricted Stock hereunder, the Committee shall cause a legend or legends to be placed on certificates representing all shares of Restricted Stock that are still subject to restrictions under Award Agreements, which legend or legends shall make appropriate reference to the conditions imposed thereby.

7.8. Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code, or any successor section thereto, to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service.

ARTICLE VIII.

PERFORMANCE AWARDS AND STOCK PAYMENTS

8.1. Eligibility. Subject to the Award Limit, one or more Performance Awards and/or Stock Payments may be granted to any Employee whom the Committee determines is a key Employee.

8.2. Performance Awards. Any key Employee selected by the Committee may be granted one or more Performance Awards. The value of such Performance Awards may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular key Employee.

8.3. Stock Payments. Any key Employee selected by the Committee may receive Stock Payments in the manner determined from time to time by the Committee. The number of shares shall be determined by the Committee and may be based upon the Performance Criteria or other specific performance criteria determined appropriate by the Committee, determined on the date such Stock Payment is made or on any date thereafter.

8.4. Term. The term of a Performance Award and/or Stock Payment shall be set by the Committee in its discretion

8.5. Exercise or Purchase Price. The Committee may establish the exercise or purchase price of a Performance Award or shares received as a Stock Payment; provided, however, that such price shall not be less than the par value for a share of Common Stock, unless otherwise permitted by applicable state law.

8.6. Exercise Upon Termination of Employment. A Performance Award, and/or Stock Payment is exercisable or payable only while the Holder is an Employee; provided, however, that except with respect to Performance Awards granted to Section 162(m) Participants, the Administrator in its sole and absolute discretion may provide that Performance Awards may be exercised or paid following a Termination of Employment without cause, or following a Change in Control of the Company, or because of the Holder's retirement, death or disability, or otherwise. Notwithstanding anything to the contrary in this Article 8, in the event of a Change in Control as defined in Section 1.7(c) that is or is to be accounted for as a "pooling of interests", all outstanding Performance Awards and Stock Payments shall be immediately exercisable or payable following such Change in Control.

8.7. Form of Payment. Payment of the amount determined under Section 8.2 or 8.3 above shall be in cash, in Common Stock or a combination of both, as determined by the Committee. To the extent any payment under this Article VIII is effected in Common Stock, it shall be made subject to satisfaction of all provisions of Section 6.3.

ARTICLE IX.

ADMINISTRATION

9.1. Compensation Committee. The Compensation Committee (or another committee or a subcommittee of the Board assuming the functions of the Committee under the Plan) shall consist solely of two or more Independent Company Directors appointed by and holding office at the pleasure of the Board, each of whom is both a "non-employee director" as defined by Rule 16b-3 and an "outside director" for purposes of Section 162(m) of the Code. 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 may be filled by the Board.

9.2. Duties and Powers of Committee. 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 Award Agreements, and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith, to interpret, amend or revoke any such rules and to amend any Award Agreement provided that the rights or obligations of the Holder of the Award that is the subject of any such Award Agreement are not affected adversely. Any such grant or award under the Plan need not be the same with respect to each Holder. Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 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 except with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee. Notwithstanding the foregoing, the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Options granted to Independent Directors.

9.3. Majority Rule; Unanimous Written Consent. The Committee shall act by a majority of its members in attendance at a meeting at which a quorum is present or by a memorandum or other written instrument signed by all members of the Committee.

9.4. Compensation; Professional Assistance; Good Faith Actions. Members of the Committee shall receive such compensation, if any, for their services as members as may be determined by the Board. All expenses and liabilities which members of the Committee incur in connection with the administration of the Plan shall be borne by the Company. The Committee may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers, or other persons. The Committee, the Company and the Company's 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 Board in good faith shall be final and binding upon all Holders, the Company and all other interested persons. No members of the Committee or Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or Awards, and all members of the Committee and the Board shall be fully protected by the Company in respect of any such action, determination or interpretation.

9.5. Delegation of Authority to Grant Awards. The Committee may, but need not, delegate from time to time some or all of its authority to grant Awards under the Plan to a committee consisting of one or more members of the Committee or of one or more officers of the Company; provided, however, that the Committee may not delegate its authority to grant Awards to individuals (i) who are subject on the date of the grant to the reporting rules under Section 16(a) of the Exchange Act, (ii) who are Section 162(m) Participants or (iii) who are officers of the Company who are delegated authority by the Committee hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of such delegation of authority and may be rescinded at any time by the Committee. At all times, any committee appointed under this Section 9.5 shall serve in such capacity at the pleasure of the Committee.

ARTICLE X.

MISCELLANEOUS PROVISIONS

10.1. Not Transferable. No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed. No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder 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, except to the extent that such disposition is permitted by the preceding sentence.

During the lifetime of the Holder, only he may exercise an Option or other Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of with the consent of the Administrator pursuant to a DRO. After the death of the Holder, any exercisable portion of an Option or other Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Holder’s will or under the then applicable laws of descent and distribution. Notwithstanding the foregoing provisions of this Section 10.1, the Administrator, in its sole discretion, may determine to grant to any Holder an Award which, by its terms as set forth in the applicable Award Agreement, may be transferred by the Holder, in writing and with prior written notice to the Administrator, by gift, without the receipt of any consideration, to a member of the Holder’s immediate family, as defined in Rule 16a-1 under the Exchange Act, or to a trust for the exclusive benefit of, or any other entity owned solely by, such members, provided, that an Award that has been so transferred shall continue to be subject to all of the terms and conditions of the Award as applicable to the original Holder, and the transferee shall execute any and all such documents requested by the Administrator in connection with the transfer, including without limitation to evidence the transfer and to satisfy any requirements for an exemption for the transfer under applicable federal and state securities laws.

10.2. Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 10.2, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator. However, without approval of the Company's stockholders given within twelve months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 10.3, increase the limits imposed in Section 10.3 on the maximum number of shares which may be issued under the Plan. No amendment, suspension or termination of the Plan shall, without the consent of the Holder alter or impair any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and in no event may any Incentive Stock Option be granted under the Plan after the first to occur of the following events:

(a) The expiration of ten years from the date the Plan is adopted by the Board; or

(b) The expiration of ten years from the date the Plan is approved by the Company's stockholders under Section 10.4.

10.3. Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events.

(a) Subject to Section 10.3 (d), in the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, in the Administrator's sole discretion, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to an Award, then the Administrator shall, in such manner as it may deem equitable, adjust any or all of

(i) the number and kind of shares of Common Stock (or other securities or property) with respect to which Awards may be granted or awarded (including, but not limited to, adjustments of the limitations in Section 2.1 on the maximum number and kind of shares which may be issued and adjustments of the Award Limit),

(ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards, and

(iii) the grant or exercise price with respect to any Award.

(b) Subject to Sections 5.3(d), 5.4(b) and 10.3(d), in the event of any transaction or event described in Section 10.3(a) or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in applicable laws, regulations, or accounting principles, the Administrator, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder's request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

(i) To provide for either the purchase of any such Award for an amount of cash equal to the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested or the replacement of such Award with other rights or property selected by the Administrator in its sole discretion;

(ii) To provide that the Award cannot vest, be exercised or become payable after such event;

(iii) To provide that such Award shall be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the provisions of such Award;

(iv) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

(v) To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding options, rights and awards and options, rights and awards which may be granted in the future;

(vi) To provide that, for a specified period of time prior to such event, the restrictions imposed under an Award Agreement upon some or all shares of Restricted Stock may be terminated, and, in the case of Restricted Stock, some or all shares of such Restricted Stock may cease to be subject to repurchase under Section 7.5 or forfeiture under Section 7.4 after such event

(vii) To provide that, in the event of a Change in Control, each outstanding Award shall, immediately prior to the effective date of the Change in Control, automatically become fully exercisable for all of the shares of Common Stock at the time subject to such rights and may be exercised for any or all of those shares as fully-vested shares of Common Stock; and

(viii) To provide that, in the event of any transaction described in Section 10.3(a), each outstanding Award shall, immediately prior to the effective date of such transaction, automatically become fully exercisable for all of the shares of Common Stock at the time subject to such rights or fully vested, as applicable, and may be exercised for any or all of those shares as fully-vested shares of Common Stock. However, an outstanding right shall not so accelerate if and to the extent: (i) such right is, in connection with such transaction, either to be assumed by the successor or survivor corporation (or parent thereof) or to be replaced with a comparable right with respect to shares of the capital stock of the successor or survivor corporation (or parent thereof) or (ii) the acceleration of exercisability of such right is subject to other limitations imposed by the Administrator at the time of grant. The determination of comparability of rights under clause (i) above shall be made by the Administrator, and its determination shall be final, binding and conclusive.

(c) Subject to Sections 3.2, 3.3, 5.3(d), 5.4(b), 7.4, 7.5, 8.6 and 10.3(d), the Administrator may, in its discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company.

(d) With respect to Awards which are granted to Section 162(m) Participants and are intended to qualify as performance-based compensation under Section 162(m)(4)(C), no adjustment or action described in this Section 10.3 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify under Section 162(m)(4)(C), or any successor provisions thereto. No adjustment or action described in this Section 10.3 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions. The number of shares of Common Stock subject to any Award shall always be rounded to the next whole number.

(e) Notwithstanding the foregoing, in the event that the Company becomes a party to a transaction that is intended to qualify for "pooling of interests" accounting treatment and, but for one or more of the provisions of this Plan or any Award Agreement would so qualify, then this Plan and any Award Agreement shall be interpreted so as to preserve such accounting treatment, and to the extent that any provision of the Plan or any Award Agreement would disqualify the transaction from pooling of interests accounting treatment (including, if applicable, an entire Award Agreement), then such provision shall be null and void. All determinations to be made in connection with the preceding sentence shall be made by the independent accounting firm whose opinion with respect to "pooling of interests" treatment is required as a condition to the Company's consummation of such transaction.

(f) The existence of the Plan, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

10.4. Approval of Plan by Stockholders. The Plan will be submitted for the approval of the Company's stockholders within twelve months after the date of the Board's initial adoption of the Plan. Awards may be granted or awarded prior to such stockholder approval, provided that such Awards shall not be exercisable nor shall such Awards vest prior to the time when the Plan is approved by the stockholders, and provided further that if such approval has not been obtained at the end of said twelve-month period, all Awards previously granted or awarded under the Plan shall thereupon be canceled and become null and void. In addition, if the Board determines that Awards other than Options which may be granted to Section 162(m) Participants should continue to be eligible to qualify as performance-based compensation under Section 162(m)(4)(C) of the Code, the Performance Criteria must be disclosed to and approved by the Company's stockholders no later than the first stockholder meeting that occurs in the fifth year following the year in which the Company's stockholders previously approved the Performance Criteria.

10.5. Tax Withholding. The Company shall be entitled to require payment in cash or deduction from other compensation payable to each Holder of any sums required by federal, state or local tax law to be withheld with respect to the issuance, vesting, exercise or payment of any Award. The Administrator may in its discretion and in satisfaction of the foregoing requirement allow such Holder to elect to have the Company withhold shares of Common Stock otherwise issuable under such Award (or allow the return of shares of Common Stock) having a Fair Market Value equal to the sums required to be withheld.

10.6. Loans. The Committee may, in its discretion, extend one or more loans to key Employees in connection with the exercise or receipt of an Award granted or awarded under the Plan, or the issuance of Restricted Stock awarded under the Plan. The terms and conditions of any such loan shall be set by the Committee.

10.7. Forfeiture Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in the terms of Awards made under the Plan, or to require a Holder to agree by separate written instrument, that (a) (i) any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Common Stock underlying the Award, must be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (b)(i) a Termination of Employment or Termination of Directorship occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (ii) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (iii) the Holder incurs a Termination of Employment or Termination of Directorship for cause.

10.8. Effect of Plan Upon Options and Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company (a) to establish any other forms of incentives or compensation for Employees or Directors of the Company or any Subsidiary or (b) to grant or assume options or other rights or awards otherwise than under the 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, partnership, limited liability company, firm or association.

10.9. Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of shares of Common Stock and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law and federal margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

10.10. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan.

10.11. Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Oregon without regard to conflicts of laws thereof.

* * *

I hereby certify that the foregoing Amended and Restated Plan was duly adopted by the Board of Directors of Wilshire Financial Services Group Inc.

Executed as of this 23rd day of April 2003.

	__________________________________________________
	Mark H. Peterman, Secretary

EX-10 4 glennon13d_exb.htm STOCK OPTION AGREEMENT DATED JANUARY 27, 2000 Glennon 13D - Exhibit B

EXHIBIT B

WILSHIRE FINANCIAL SERVICES GROUP INC.
GLENNON STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as of January 27, 2000, by and between Wilshire Financial Services Group Inc., a Delaware corporation (the “Company”), and Stephen Glennon (the “Optionee”), an Employee of the Company.

A. Pursuant to the Plan, the Administrator has determined that it is to the advantage and best interest of the Company to grant to Optionee this option (the "Option") to purchase a total of Four Hundred Thousand (400,000) shares of the Common Stock of the Company (the "Shares" or the "Option Shares"), at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Wilshire Financial Services Group Inc. 1999 Equity Incentive Plan (the "Plan") adopted by the Company, which is incorporated herein by reference.

B. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings set forth in the Plan.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and the Company hereby agree as follows:

1. Grant and Terms of Stock Option.

1.1 Grant of Option. The Company hereby grants to the Optionee the right and option to purchase, subject to the terms and conditions set forth in the Plan and this Agreement, all or any part of 400,000 Shares at the purchase price of $1.0625 per Share.

1.2 Nature of the Option. This Option is intended by the Company and Optionee to be an Incentive Stock Option, as defined in Section 422 of the Code with respect to 282,352 Option Shares and is intended to be a non-qualified stock option with respect to 117,648 Option Shares.

1.3 Vesting and Exercisability.

1.3.1 Subject to the provisions of the Plan and the other provisions of this Agreement, this Option shall vest and become exercisable with respect to 33.33% of the Shares subject to this Option on each of January 27, 2000, June 10, 2001, and June 10, 2002 (the “Vesting Date”). Subject to Section 1.3.2 hereof, in the event of a Termination of Employment with respect to Optionee, this Option shall immediately cease vesting and shall be cancelled to the extent of the number of Shares as to which this Option has not vested as of the date of termination.

1.3.2 Notwithstanding anything to the contrary in Section 1.3.1 hereof, in the event of a Termination of Employment with respect to Optionee that occurs within six (6) months of a Change in Control (as defined in the Plan) and (x) is by the Company other than with Cause (as defined below) or (y) is by Optionee with Good Reason (as defined below), any unvested portion of this Option shall, upon such termination, immediately vest and become exercisable.

2. Term of Option. No portion of this Option may be exercised more than ten (10) years from the date of this Agreement. Subject to Section 1.3.2 hereof, in the event of Termination of Employment with respect to Optionee, this Option shall be cancelled as to any unvested Shares as provided in Section 1.3.1, and shall terminate and be cancelled with respect to any vested Shares on the earlier of (i) the expiration of the ten (10) year period set forth in the first sentence of this Section 1.4, or (ii) thirty (30) days after such Termination of Employment (or six (6) months in the case of such termination as a result of Optionee's disability or death); provided, however, if Optionee's Termination of Employment is with Cause, this entire Option shall be cancelled and terminated as of the date of such termination and shall no longer be exercisable as to any Shares, whether or not previously vested. For purposes of this Agreement, "Cause" shall mean (i) as such term is defined in the employment agreement between the Optionee and the Company and (ii) if no such employment agreement exists, any of the following acts or circumstances: (a) willful destruction by Optionee of Company property having a material value to the Company; (b) fraud, embezzlement, theft, or comparable dishonest activity committed by Optionee (excluding acts involving a de minimis dollar value and not related to the Company); (c) Optionee's conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any misdemeanor involving fraud, dishonesty or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Company); (d) Optionee's breach, neglect, refusal, or failure to materially discharge Optionee's duties (other than due to physical or mental illness) commensurate with Optionee's title and function or Optionee's failure to comply with the lawful directions of the Board of Directors or the Chief Executive Officer of the Company, in any such case that is not cured within fifteen (15) days after Optionee has received written notice thereof from the Board of Directors or the Chief Executive Officer of the Company; or (e) a willful and knowing material misrepresentation to the Board of Directors or the Chief Executive Officer of the Company. For purposes of this Agreement, "Good Reason" shall mean (i) the transfer of Optionee's principal place of employment to a geographic location more than 30 miles from the location of Optionee's current principal place of employment; or (ii) a reduction in Optionee's gross annual base compensation (excluding any year-end or other bonuses) except if such reduction is pursuant to an agreement with the Optionee in consideration of an additional award of options.

3. Method of Exercise.

3.1 Delivery of Notice of Exercise. This Option shall be exercisable by written notice in the form attached hereto as Exhibit A which shall state the election to exercise this Option, the number of Shares in respect of which this Option is being exercised, and such other representations and agreements with respect to such Shares as may be required by the Company pursuant to the provisions of this Agreement and the Plan. Such written notice shall be signed by Optionee (or by Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s death under the Plan) and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the exercise price. This Option shall not be deemed exercised until the Company receives such written notice accompanied by the exercise price and any other applicable terms and conditions of this Agreement are satisfied. This Option may not be exercised for a fraction of a Share.

3.2 Restrictions on Exercise. No Shares will be issued pursuant to the exercise of this Option unless and until there shall have been full compliance with all applicable requirements of the Securities Act of 1933, as amended (whether by registration or satisfaction of exemption conditions), all Applicable Laws, and all applicable listing requirements of any national securities exchange or other market system on which the Common Stock is then listed. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be necessary or appropriate, in the judgment of the Administrator, to comply with any Applicable Law. For purposes of this Agreement, the term “Applicable Laws” means any applicable statute, ordinance, writ, judgment, injunction, rule, regulation, order or decree of any court or other governmental or regulatory body, agency or authority, federal, state, local or foreign.

3.3 Method of Payment. Payment of the exercise price shall be made in full at the time of exercise in cash or by check payable to the order of the Company, or, subject in each case to the advance approval of the Administrator in its sole discretion, by delivery of shares of Common Stock already owned by Optionee, by delivery of a full recourse promissory note made by Optionee in favor of the Company or by any combination or the foregoing. Shares of Common Stock used to satisfy the exercise price of this Option shall be valued at their Fair Market Value determined on the date of exercise (or if such date is not a business day, as of the close of the business day immediately preceding such date). In addition, the Administrator may impose such other conditions in connection with the delivery of shares of Common Stock in satisfaction of the exercise price as it deems appropriate in its sole discretion, including without limitation a requirement that the shares of Common Stock delivered have been held by the Optionee for a specified period of time. Any promissory note delivered pursuant to this Section 3.3 shall have terms and provisions (including, without limitation, those relating to the maturity date, payment schedule and interest rate) as determined by the Administrator in its sole discretion, shall be secured by the Shares acquired and shall comply with all Applicable Laws (including, without limitation, state and federal margin requirements).

4. Non-Transferability of Option.

4.1 Transfer Restrictions. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution or to a beneficiary designated pursuant to the Plan, and may be exercised during the lifetime of Optionee only by Optionee. During the six (6) month period after the death of Optionee, this Option may, to the extent it remained unexercised (but vested and exercisable by Optionee in accordance with its terms) on the date of death, be exercised by Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s death under the Plan.

4.2 Disqualifying Disposition. If Optionee sells or otherwise disposes of any of the Shares acquired upon exercise of this Option on or before the later of (i) two (2) years after the date hereof or (ii) one year after the date such Shares were acquired, Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that he or she may be subject to income tax withholding by the Company on the taxable income recognized as a result of such disposition and that Optionee shall be required to satisfy such withholding obligations either by making a payment to the Company in cash or by withholding from current earnings of Optionee.

5. General.

5.1 Governing Law. This Agreement shall be governed by and construed under the laws of the state of Oregon applicable to Agreements made and to be performed entirely in Oregon, without regard to the conflicts of law provisions of Oregon or any other jurisdiction.

5.2 Notices. Any notice required or permitted under this Agreement shall be given in writing by express courier or by postage prepaid, United States registered or certified mail, return receipt requested, to the address set forth below or to such other address for a party as that party may designate by ten (10) days advance written notice to the other parties. Notice shall be effective upon the earlier of receipt or three (3) days after the mailing of such notice.

If to the Company:	Wilshire Financial Services Group Inc.
	1776 S.W. Madison Street
	Portland, Oregon 97205
	Attn: Chief Financial Officer

If to Optionee, at the address set forth on the signature page.

5.3 Community Property. Without prejudice to the actual rights of the spouses as between each other, for all purposes of this Agreement, the Optionee shall be treated as agent and attorney-in-fact for that interest held or claimed by his or her spouse with respect to this Option and the parties hereto shall act in all matters as if the Optionee was the sole owner of this Option. This appointment is coupled with an interest and is irrevocable.

5.4 Modifications. This Agreement may be amended, altered or modified only by a writing signed by the Company and the Optionee hereto.

5.5 Additional Documents. Each party agrees to execute any and all further documents and writings, and to perform such other actions, which may be or become reasonably necessary or expedient to be made effective and carry out this Agreement.

5.6 No Third-Party Benefits. Except as otherwise expressly provided in this Agreement, none of the provisions of this Agreement shall be for the benefit of, or enforceable by, any third-party beneficiary.

5.7 Successors and Assigns. Except as provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns.

5.8 No Assignment. Except as otherwise provided in this Agreement, the Optionee may not assign any of his, her or its rights under this Agreement without the prior written consent of the Company, which consent may be withheld in its sole discretion. The Company shall be permitted to assign its rights or obligations under this Agreement, but no such assignment shall release the Company of any obligations pursuant to this Agreement.

5.9 Severability. The validity, legality or enforceability of the remainder of this Agreement shall not be affected even if one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable in any respect.

5.10 Equitable Relief. The Optionee acknowledges that, in the event of a threatened or actual breach of any of the provisions of this Agreement, damages alone will be an inadequate remedy, and such breach will cause the Company great, immediate and irreparable injury and damage. Accordingly, the Optionee agrees that the Company shall be entitled to injunctive and other equitable relief, and that such relief shall be in addition to, and not in lieu of, any remedies they may have at law or under this Agreement.

5.11 Attorneys’ Fees. Should any litigation or arbitration be commenced (including any proceedings in a bankruptcy court) between the parties hereto or their representatives concerning any provision of this Agreement or the rights and duties of any Person or entity hereunder, the party or parties prevailing in such proceeding shall be entitled, in addition to such other relief as may be granted, to the reasonable attorneys’ fees and costs incurred by reason of such litigation.

5.12 Headings. The section headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of any particular section.

5.13 Number and Gender. Throughout this Agreement, as the context may require, (a) the masculine gender includes the feminine and the neuter gender includes the masculine and the feminine; (b) the singular tense and number includes the plural, and the plural tense and number includes the singular; (c) the past tense includes the present, and the present tense includes the past; (d) references to parties, sections, paragraphs and exhibits mean the parties, sections, paragraphs and exhibits of and to this Agreement; and (e) periods of days, weeks or month mean calendar days, weeks or months.

5.14 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

5.15 Complete Agreement. This Agreement and the Plan constitute the parties’ entire agreement with respect to the subject matter hereof and supersede all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof.

[COMPANY SIGNATURE PAGE]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth herein above.


                                    WILSHIRE FINANCIAL SERVICES GROUP INC.



                                    By:_________________________________________
                                    Name:
                                    Its:

[OPTIONEE SIGNATURE PAGE]

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES UNVESTED AS OF THE DATE OF THIS AGREEMENT PURSUANT TO SECTION 1.2 HEREOF IS EARNED ONLY BY CONTINUOUS STATUS AS AN EMPLOYEE (NOT THROUGH THE ACT OF BEING HIRED OR RETAINED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OF THE COMPANY FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL. NOTHING IN THIS AGREEMENT OR THE PLAN SHALL LIMIT IN ANY MANNER WHATSOEVER THE RIGHT OR POWER OF THE COMPANY OR THE OPTIONEE TO TERMINATE OPTIONEE’S RELATIONSHIP WITH THE COMPANY WITH OR WITHOUT CAUSE.

OPTIONEE ACKNOWLEDGES RECEIPT OF A COPY OF THE PLAN. OPTIONEE REPRESENTS THAT HE IS FAMILIAR WITH THE TERMS AND PROVISIONS OF THE PLAN, AND HEREBY ACCEPTS THIS OPTION SUBJECT TO ALL OF THE TERMS AND PROVISIONS THEREOF. OPTIONEE ALSO ACKNOWLEDGES THAT THE GRANT OF THIS OPTION, THE PURCHASE OF SHARES UPON EXERCISE OF THIS OPTION, AND THE SALE OF SUCH SHARES HAS IMPORTANT TAX IMPLICATIONS. OPTIONEE HAS REVIEWED THE PLAN AND THIS OPTION IN THEIR ENTIRETY, HAS HAD AN OPPORTUNITY AND HAS BEEN ENCOURAGED TO OBTAIN THE ADVICE OF HIS OR HER INDEPENDENT LEGAL COUNSEL AND TAX ADVISOR PRIOR TO EXECUTING THIS OPTION AND FULLY UNDERSTANDS ALL PROVISIONS OF THIS OPTION. OPTIONEE HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE BOARD OR THE ADMINISTRATOR UPON ANY QUESTIONS ARISING UNDER THE PLAN.

	_______________________________
	Stephen P. Glennon

	_______________________________
	Name:

	Address:
	_______________________________
	_______________________________
	_______________________________

CONSENT OF SPOUSE TO AGREEMENT

By his or her signature below, the spouse of Optionee affirms that he/she has read in its entirety and agrees to be bound by all of the terms and conditions of the foregoing Agreement and the Plan.

	_______________________________
	Name:

EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION

Wilshire Financial Services Group Inc.
1776 S.W. Madison Street
Portland, Oregon 97205
Attn: Chief Financial Officer

Ladies and Gentlemen:

The undersigned hereby elects to exercise the option indicated below::

        Option Grant Date: December 2, 1999
        Type of Option: Incentive Stock Option
        Number of Shares Being Exercised: ____________
        Exercise Price Per Share: $_____________
        Total Exercise Price: $_____________
        Method of Payment: ______________

Enclosed herewith is payment in full of the total exercise price, a copy of the Option Agreement and, if required by the Company, an executed copy of an Investment Representation Statement (Exhibit B to the Option Agreement).

My exact name, current address and social security number for purposes of the stock certificates to be issued and the shareholder list of the Company are:


                  Name:_______________________________

                  Address:_____________________________
                          _____________________________

                  Social Security Number:________________


                                                 Sincerely,




Dated:_________________                          ______________________________
                                                 (Optionee's Signature)

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

In connection with the purchase of common stock (the “Common Stock”) of Wilshire Financial Services Group, Inc. (the “Company”) pursuant to the exercise of an option, I, the purchaser, represent to the following:

(a) I am sufficiently aware of the Company's business affairs and financial condition to reach an informed and knowledgeable decision to acquire the Common Stock. I am purchasing this Common Stock for my own account for investment purposes only and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended (the "Securities Act").

(b) I understand that the Common Stock has not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of my investment intent as expressed herein. In addition, I understand the Common Stock have not been registered under any state securities law.

(c) I further understand that the Common Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is otherwise available (such as Rule 144 under the Securities Act). Moreover, I understand that the Company is under no obligation to register the Common Stock. In addition, I understand that the certificate evidencing the Common Stock will be imprinted with a legend which prohibits the transfer of the Common Stock unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) I further understand that at the time I wish to sell the Common Stock there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public information requirements of Rule 144, and that, in such event, I would be precluded from selling the Common Stock under Rule 144 even if the minimum holding periods had been satisfied.


                                              Signature of Purchaser:


                                              _____________________________

                                              Date: __________________, ____

EX-10 5 glennon13d_exc.htm INCENTIVE STOCK OPTION AGREEMENT DATED 2/29/2000 Glennon 13D - Exhibit C

EXHIBIT C

WILSHIRE FINANCIAL SERVICES GROUP INC.
AMENDED AND RESTATED STOCK OPTION AGREEMENT

THIS AMENDED AND RESTATED STOCK OPTION AGREEMENT (the “Agreement”) is made and entered into as of February 29, 2000, by and between Wilshire Financial Services Group Inc., a Delaware corporation (the “Company”), and Stephen P. Glennon (the “Optionee”), an Employee of the Company, and amends, restates and supersedes in its entirety a prior Incentive Stock Option Agreement, dated as of February 29, 2000, for 575,000 options.

A. Pursuant to the Plan, the Administrator has determined that it is to the advantage and best interest of the Company to grant to Optionee this option (the "Option") to purchase a total of 575,000 shares of the Common Stock of the Company (the "Shares" or the "Option Shares"), at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Wilshire Financial Services Group Inc. 1999 Equity Incentive Plan (the "Plan") adopted by the Company, which is incorporated herein by reference.

B. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings set forth in the Plan.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and the Company hereby agree as follows:

1. Grant and Terms of Stock Option.

1.1 Grant of Option. The Company hereby grants to the Optionee the right and option to purchase, subject to the terms and conditions set forth in the Plan and this Agreement, all or any part of 575,000 Shares at the purchase price of $1.187 per Share.

1.2 Nature of the Option. To the extent this Option does not qualify as an Incentive Stock Option pursuant to Section 422 of the Code, this Option shall be a nonqualified stock option for purposes of the Code. Accordingly, all options granted hereunder are nonqualified.

1.3 Vesting and Exercisability.

1.3.1 Subject to the provisions of the Plan and the other provisions of this Agreement, this Option shall vest and become exercisable with respect to 1/23^rd of the Shares on the last day of each month following February 29, 2000, such that this Option shall be fully-vested and exercisable on February 28, 2002. Subject to Section 1.3.2 hereof, in the event of a Termination of Employment with respect to Optionee, this Option shall immediately cease vesting and shall be cancelled to the extent of the number of Shares as to which this Option has not vested as of the date of termination.

1.3.2 Notwithstanding anything to the contrary in Section 1.3.1 hereof, upon the occurrence of a Change in Control (as defined in the Plan), any unvested portion of this Option shall immediately vest and become exercisable.

1.4 Term of Option. No portion of this Option may be exercised more than ten (10) years from the date of this Agreement. Subject to Section 1.3.2 hereof, in the event of Termination of Employment with respect to Optionee, this Option shall be cancelled as to any unvested Shares as provided in Section 1.3.1, and shall terminate and be cancelled with respect to any vested Shares on the earlier of (i) the expiration of the ten (10) year period set forth in the first sentence of this Section 1.4, or (ii) ninety (90) days after such Termination of Employment (or six (6) months in the case of such termination as a result of Optionee’s disability or death); provided, however, if Optionee’s Termination of Employment is with Cause, this entire Option shall be cancelled and terminated as of the date of such termination and shall no longer be exercisable as to any Shares, whether or not previously vested. For purposes of this Agreement, “Cause” shall mean (i) as such term is defined in the employment agreement between the Optionee and the Company and (ii) if no such employment agreement exists, any of the following acts or circumstances: (a) willful destruction by Optionee of Company property having a material value to the Company; (b) fraud, embezzlement, theft, or comparable dishonest activity committed by Optionee (excluding acts involving a de minimis dollar value and not related to the Company); (c) Optionee’s conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any misdemeanor involving fraud, dishonesty or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Company); or (d) Optionee’s breach, neglect, refusal, or failure to materially discharge Optionee’s duties (other than due to physical or mental illness) commensurate with Optionee’s title and function or Optionee’s failure to comply with the lawful directions of the Board of Directors of the Company, in any such case that is not cured within fifteen (15) days after Optionee has received written notice thereof from the Board of Directors.

2. Method of Exercise.

2.1 Delivery of Notice of Exercise. This Option shall be exercisable by written notice in the form attached hereto as Exhibit A which shall state the election to exercise this Option, the number of Shares in respect of which this Option is being exercised, and such other representations and agreements with respect to such Shares as may be required by the Company pursuant to the provisions of this Agreement and the Plan. Such written notice shall be signed by Optionee (or by Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s death under the Plan) and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the exercise price. This Option shall not be deemed exercised until the Company receives such written notice accompanied by the exercise price and any other applicable terms and conditions of this Agreement are satisfied. This Option may not be exercised for a fraction of a Share.

2.2 Restrictions on Exercise. No Shares will be issued pursuant to the exercise of this Option unless and until there shall have been full compliance with all applicable requirements of the Securities Act of 1933, as amended (whether by registration or satisfaction of exemption conditions), all Applicable Laws, and all applicable listing requirements of any national securities exchange or other market system on which the Common Stock is then listed. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be necessary or appropriate, in the judgment of the Administrator, to comply with any Applicable Law. For purposes of this Agreement, the term “Applicable Laws” means any applicable statute, ordinance, writ, judgment, injunction, rule, regulation, order or decree of any court or other governmental or regulatory body, agency or authority, federal, state, local or foreign.

2.3 Method of Payment. Payment of the exercise price shall be made in full at the time of exercise in cash or by check payable to the order of the Company, or, subject in each case to the advance approval of the Administrator in its sole discretion, by delivery of shares of Common Stock already owned by Optionee, by delivery of a full recourse promissory note made by Optionee in favor of the Company or by any combination or the foregoing. Shares of Common Stock used to satisfy the exercise price of this Option shall be valued at their Fair Market Value determined on the date of exercise (or if such date is not a business day, as of the close of the business day immediately preceding such date). In addition, the Administrator may impose such other conditions in connection with the delivery of shares of Common Stock in satisfaction of the exercise price as it deems appropriate in its sole discretion, including without limitation a requirement that the shares of Common Stock delivered have been held by the Optionee for a specified period of time. Any promissory note delivered pursuant to this Section 2.3 shall have terms and provisions (including, without limitation, those relating to the maturity date, payment schedule and interest rate) as determined by the Administrator in its sole discretion, shall be secured by the Shares acquired and shall comply with all Applicable Laws (including, without limitation, state and federal margin requirements).

3. Non-Transferability of Option.

3.1 Transfer Restrictions. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution or to a beneficiary designated pursuant to the Plan, and may be exercised during the lifetime of Optionee only by Optionee. During the six (6) month period after the death of Optionee, this Option may, to the extent it remained unexercised (but vested and exercisable by Optionee in accordance with its terms) on the date of death, be exercised by Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s death under the Plan.

3.2 Disqualifying Disposition. If Optionee sells or otherwise disposes of any of the Shares acquired upon exercise of this Option on or before the later of (i) two (2) years after the date hereof or (ii) one year after the date such Shares were acquired, Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that he or she may be subject to income tax withholding by the Company on the taxable income recognized as a result of such disposition and that Optionee shall be required to satisfy such withholding obligations either by making a payment to the Company in cash or by withholding from current earnings of Optionee.

4. General.

4.1 Governing Law. This Agreement shall be governed by and construed under the laws of the state of Oregon applicable to Agreements made and to be performed entirely in Oregon, without regard to the conflicts of law provisions of Oregon or any other jurisdiction.

4.2 Notices. Any notice required or permitted under this Agreement shall be given in writing by express courier or by postage prepaid, United States registered or certified mail, return receipt requested, to the address set forth below or to such other address for a party as that party may designate by ten (10) days advance written notice to the other parties. Notice shall be effective upon the earlier of receipt or three (3) days after the mailing of such notice.


         If to the Company:         Wilshire Financial Services Group Inc.
                                    1776 S.W. Madison Street
                                    Portland, Oregon 97205
                                    Attn: Chief Financial Officer

If to Optionee, at the address set forth on the signature page.

4.3 Community Property. Without prejudice to the actual rights of the spouses as between each other, for all purposes of this Agreement, the Optionee shall be treated as agent and attorney-in-fact for that interest held or claimed by his or her spouse with respect to this Option and the parties hereto shall act in all matters as if the Optionee was the sole owner of this Option. This appointment is coupled with an interest and is irrevocable.

4.4 Modifications. This Agreement may be amended, altered or modified only by a writing signed by the Company and the Optionee hereto.

4.5 Additional Documents. Each party agrees to execute any and all further documents and writings, and to perform such other actions, which may be or become reasonably necessary or expedient to be made effective and carry out this Agreement.

4.6 No Third-Party Benefits. Except as otherwise expressly provided in this Agreement, none of the provisions of this Agreement shall be for the benefit of, or enforceable by, any third-party beneficiary.

4.7 Successors and Assigns. Except as provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns.

4.8 No Assignment. Except as otherwise provided in this Agreement, the Optionee may not assign any of his, her or its rights under this Agreement without the prior written consent of the Company, which consent may be withheld in its sole discretion. The Company shall be permitted to assign its rights or obligations under this Agreement, but no such assignment shall release the Company of any obligations pursuant to this Agreement.

4.9 Severability. The validity, legality or enforceability of the remainder of this Agreement shall not be affected even if one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable in any respect.

4.10 Equitable Relief. The Optionee acknowledges that, in the event of a threatened or actual breach of any of the provisions of this Agreement, damages alone will be an inadequate remedy, and such breach will cause the Company great, immediate and irreparable injury and damage. Accordingly, the Optionee agrees that the Company shall be entitled to injunctive and other equitable relief, and that such relief shall be in addition to, and not in lieu of, any remedies they may have at law or under this Agreement.

4.11 Attorneys’ Fees. Should any litigation or arbitration be commenced (including any proceedings in a bankruptcy court) between the parties hereto or their representatives concerning any provision of this Agreement or the rights and duties of any Person or entity hereunder, the party or parties prevailing in such proceeding shall be entitled, in addition to such other relief as may be granted, to the reasonable attorneys’ fees and costs incurred by reason of such litigation.

4.12 Headings. The section headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of any particular section.

4.13 Number and Gender. Throughout this Agreement, as the context may require, (a) the masculine gender includes the feminine and the neuter gender includes the masculine and the feminine; (b) the singular tense and number includes the plural, and the plural tense and number includes the singular; (c) the past tense includes the present, and the present tense includes the past; (d) references to parties, sections, paragraphs and exhibits mean the parties, sections, paragraphs and exhibits of and to this Agreement; and (e) periods of days, weeks or month mean calendar days, weeks or months.

4.14 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4.15 Complete Agreement. This Agreement and the Plan constitute the parties’ entire agreement with respect to the subject matter hereof and supersede all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof.

[COMPANY SIGNATURE PAGE]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth herein above.

	WILSHIRE FINANCIAL SERVICES GROUP INC.


	By: _________________________________________
	Name: Mark H. Peterman
	Title: Executive Vice President and Secretary

[OPTIONEE SIGNATURE PAGE]

	_______________________________
	Optionee: Stephen P. Glennon

	Address:
	_______________________________
	_______________________________
	_______________________________

CONSENT OF SPOUSE TO AGREEMENT

By his or her signature below, the spouse of Optionee affirms that he/she has read in its entirety and agrees to be bound by all of the terms and conditions of the foregoing Agreement and the Plan.

	_______________________________
	Name:

EXHIBIT A
NOTICE OF EXERCISE OF STOCK OPTION

Wilshire Financial Services Group Inc.
1776 S.W. Madison Street
Portland, Oregon 97205
Attn: Chief Financial Officer

Ladies and Gentlemen:

The undersigned hereby elects to exercise the option indicated below::

        Option Grant Date: February 29, 2000
        Number of Shares Being Exercised: ____________
        Exercise Price Per Share: $1.187
        Total Exercise Price: $_____________
        Method of Payment: ______________

Enclosed herewith is payment in full of the total exercise price and copy of the Option Agreement.

My exact name, current address and social security number for purposes of the stock certificates to be issued and the shareholder list of the Company are:


                  Name:_______________________________

                  Address:_____________________________
                            _____________________________

                  Social Security Number:________________


                                                     Sincerely,




Dated:_________________                              ______________________________
                                                     (Optionee's Signature)

EX-10 6 glennon13d_exd.htm AMENDED STOCK OPTION AGREEMENT DATED 3/11/2002 Glennon 13D - EX. D

EXHIBIT D

WILSHIRE FINANCIAL SERVICES GROUP INC.
AMENDED STOCK OPTION AGREEMENT

THIS AMENDED STOCK OPTION AGREEMENT (the “Agreement”) amends and restates in its entirety a Nonqualified Stock Option Agreement dated as of March 11, 2002 between Wilshire Financial Services Group Inc., a Delaware corporation (the “Company”), and Stephen P. Glennon (the “Optionee”), an Employee of the Company, to correct an error therein, and is entered into as of March 11, 2002.

A. Pursuant to the Plan (as defined below), the Administrator has determined that it is to the advantage and best interest of the Company to grant to Optionee this option (the "Option") to purchase a total of Three Hundred Thousand (300,000) shares of the Common Stock of the Company (the "Shares" or the "Option Shares"), at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Wilshire Financial Services Group Inc. Amended and Restated 1999 Equity Participation Plan (the "Plan") adopted by the Company, which is incorporated herein by reference.

B. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings set forth in the Plan.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and the Company hereby agree as follows:

1. Grant and Terms of Stock Option.

1.1 Grant of Option. The Company hereby grants to the Optionee the right and option to purchase, subject to the terms and conditions set forth in the Plan and this Agreement, all or any part of 300,000 Shares at the purchase price of $2.34 per Share.

1.2 Nature of the Option. To the extent this Option does not qualify as an Incentive Stock Option, this Option shall be a Nonqualified Stock Option, as defined in Section 422 of the Code.

1.3 Vesting and Exercisability. Subject to the provisions of the Plan and the other provisions of this Agreement, this Option shall vest and become exercisable with respect to 1/24^th of the Shares on the last day of each month during which the Optionee is the Chief Executive Officer of the Company, with the first 12,500 shares vesting on March 31, 2002, and on the last day of each month thereafter such that this Option shall be fully-vested and exercisable on February 29, 2004. In addition, this Option will vest in full upon any Change in Control as defined in the Plan. In the event of a Termination of Employment with respect to Optionee, this Option shall immediately cease vesting and shall be cancelled to the extent of the number of Shares as to which this Option has not vested as of the date of termination.

provided, however, if Optionee’s Termination of Employment is with Cause, this entire Option shall be cancelled and terminated as of the date of such termination and shall no longer be exercisable as to any Shares, whether or not previously vested. For purposes of this Agreement, “Cause” shall mean (i) as such term is defined in the employment agreement between the Optionee and the Company and (ii) if no such employment agreement exists, any of the following acts or circumstances: (a) willful destruction by Optionee of Company property having a material value to the Company; (b) fraud, embezzlement, theft, or comparable dishonest activity committed by Optionee (excluding acts involving a de minimis dollar value and not related to the Company); (c) Optionee’s conviction of or entering a plea of guilty or nolo contendere to any crime constituting a felony or any misdemeanor involving fraud, dishonesty or moral turpitude (excluding acts involving a de minimis dollar value and not related to the Company); (d) Optionee’s breach, neglect, refusal, or failure to materially discharge Optionee’s duties (other than due to physical or mental illness) commensurate with Optionee’s title and function or Optionee’s failure to comply with the lawful directions of the Board of Directors or the Chief Executive Officer of the Company, in any such case that is not cured within fifteen (15) days after Optionee has received written notice thereof from the Board of Directors or the Chief Executive Officer of the Company; or (e) a willful and knowing material misrepresentation to the Board of Directors or the Chief Executive Officer of the Company. For purposes of this Agreement, “Good Reason” shall mean (i) the transfer of Optionee’s principal place of employment to a geographic location more than 30 miles from the location of Optionee’s current principal place of employment; or (ii) a reduction in Optionee’s gross annual base compensation (excluding any year-end or other bonuses).

3. Method of Exercise.

3.3 Method of Payment. Payment of the exercise price shall be made in full at the time of exercise in cash or by check payable to the order of the Company, or, subject in each case to the advance approval of the Administrator in its sole discretion, by delivery of shares of Common Stock already owned by Optionee, by delivery of a full recourse promissory note made by Optionee in favor of the Company or by any combination of the foregoing. Shares of Common Stock used to satisfy the exercise price of this Option shall be valued at their Fair Market Value determined on the date of exercise (or if such date is not a business day, as of the close of the business day immediately preceding such date). In addition, the Administrator may impose such other conditions in connection with the delivery of shares of Common Stock in satisfaction of the exercise price as it deems appropriate in its sole discretion, including without limitation a requirement that the shares of Common Stock delivered have been held by the Optionee for a specified period of time. Any promissory note delivered pursuant to this Section shall have terms and provisions (including, without limitation, those relating to the maturity date, payment schedule and interest rate) as determined by the Administrator in its sole discretion, shall be secured by the Shares acquired and shall comply with all Applicable Laws (including, without limitation, state and federal margin requirements).

4. Non-Transferability of Option.

5. General.


         If to the Company:         Wilshire Financial Services Group Inc.
                                    1776 S.W. Madison Street
                                    Portland, Oregon 97205
                                    Attn: Chief Financial Officer

If to Optionee, at the address set forth on the signature page.

5.4 Modifications. This Agreement may be amended, altered or modified only by a writing signed by the Company and the Optionee hereto.

5.7 Successors and Assigns. Except as provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns.

5.16 Complete Agreement. This Agreement and the Plan constitute the parties’ entire agreement with respect to the subject matter hereof and supersede all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth herein above.


                                  WILSHIRE FINANCIAL SERVICES GROUP INC.



                                  By:_________________________________________
                                  Name:       Mark H. Peterman
                                  Its:        Executive Vice President

Optionee acknowledges and agrees that the vesting of shares unvested as of the date of this agreement pursuant to section 1.2 hereof is earned only by continuous status as an employee (not through the act of being hired or retained, being granted this option or acquiring shares hereunder). Optionee further acknowledges and agrees that this option, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of continued engagement as an employee of the company for the vesting period, for any period, or at all. Nothing in this agreement or the plan shall limit in any manner whatsoever the right or power of the company or the Optionee to terminate Optionee’s relationship with the company with or without cause.

Optionee acknowledges receipt of a copy of the plan. Optionee represents that he is familiar with the terms and provisions of the plan, and hereby accepts this option subject to all of the terms and provisions thereof. Optionee also acknowledges that the grant of this option, the purchase of shares upon exercise of this option, and the sale of such shares has important tax implications. Optionee has reviewed the plan and this option in their entirety, has had an opportunity and has been encouraged to obtain the advice of his or her independent legal counsel and tax advisor prior to executing this option and fully understands all provisions of this option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the board or the administrator upon any questions arising under the plan.

	_______________________________
	Stephen P. Glennon

	Address:
	_______________________________
	_______________________________
	_______________________________

NOTICE OF EXERCISE OF STOCK OPTION

Wilshire Financial Services Group Inc.
14523 SW Millikan Way, Suite 200
Beaverton, Oregon 97005
Attn: Chief Financial Officer

Ladies and Gentlemen:

The undersigned hereby elects to exercise the option indicated below:


         Option Grant Date:         March 11, 2002
         Type of Option:   ISO/NQO
         Number of Shares Being Exercised:  275,000
         Exercise Price Per Share:          $2.34
         Total Exercise Price:                       $643,500
         Method of Payment: ______________

Enclosed herewith is payment in full of the total exercise price and a copy of the Option Agreement.

My exact name, current address and social security number for purposes of the stock certificates to be issued and the shareholder list of the Company are:


                  Name:             Stephen P. Glennon

                  Address:          720 Milton Road
                                    Rye, New York  10580

                  Social Security Number:    ###-##-####


                                                     Sincerely,




Dated:_________________                           ______________________________
                                                  Stephen P. Glennon

EX-10 7 promissory.htm PROMISSORY NOTE Glennon - Prommisory Note

EXHIBIT E

PROMISSORY NOTE


- ----------------- -------------- -------------- ----------- --------------- ----------- ----------- ------------
    Principal        Loan Date      Maturity      Loan No.    Call / Coll     Account     Officer     Initials
  $3,600,000.00     01-23-2004     10-23-2004     2165294      RC6 / D13
- ----------------- -------------- -------------- ----------- --------------- ----------- ----------- ------------

References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item. Any item above containing***** has been omitted due to text length limitations.


Borrower:         Stephen P Glennon (SSN: ###-##-####)      Lender: ____________________Bank
                  720 Milton Road
                  Rye, NY 10580
___________________________________________________________________________________________________________________________
Principal Amount:      $3,600,000.00                 Initial Rate:   7.750%                  Date of Note: January 23, 2004

PROMISE TO PAY. I (“Borrower”) promise to pay to ____________________ BANK (“Lender”), or order, in lawful money of the United States of America, the principal amount of Three Million Six Hundred Thousand and 00/100 Dollars ($3,600,000.00) together with interest on the unpaid principal balance from JANUARY 23, 2004, until paid in full.

PAYMENT. I will pay this loan in one principal payment of $3,600,000.00 plus interest on OCTOBER 23, 2004. This payment due on October 23, 2004, will be for all principal and all accrued interest not yet paid. In addition, I will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning FEBRUARY 23, 2004, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any unpaid collection costs and then to any late charges. Interest on this Note is computed on a 365/365 simple interest basis; that is, by applying the ratio of the annual interest rate over the number of days in a year, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. I will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this NOTE is subject to change from time to time based on changed in an independent index, which is the Wall Street Journal Prime Rate (the “Index”). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to me. Lender will tell me the current Index rate upon my request. The interest rate change will not occur more often than each day. I understand that Lender may make loans based on other rates as well. The Index currently is 4.000% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be a rate of 1.000 percentage point over the index, adjusted if necessary for any minimum rate limitations described below, resulting in an initial rate of 7.750% per annum. Notwithstanding the foregoing, the variable interest rate or rates provided for in this Note will be subject to the following minimum and maximum rates. NOTICE: Under no circumstances will the interest rate on this Note be less than 7.750% per annum or more than the maximum rate allowed by applicable law. Unless waived by Lender, any increase rate will increase the amounts of my interest payments.

PREPAYMENT. I agree that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will not be refunded to me upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, I may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve me of my obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due. I agree not to send Lender payments marked "paid in full", "without recourse", or similar language. If I send such a payment, Lender may accept it without losing any of Lender's rights under this Note, and I will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicated that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to:
BANK, ________________

LATE CHARGE. If a payment is 16 days or more late, I will be charged 5.000% of the regularly scheduled payment or $50.00, whichever is less.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, Lender, at its option, may, if permitted under applicable law, increase the variable interest rate on this Note to 26.000% per annum. The interest rate will not exceed the maximum rate permitted by applicable law.
DEFAULT. I will be in default under this Note if any of the following happen:

Payment Default. I fail to make any payment when due under this Note.

Break Other Promises. I break any promise made to Lender or fail to perform promptly at this time and strictly in the manner provided in this Note or in any agreement related to this Note, or in any other agreement or loan I have with Lender.

False Statements. Any representation or statement made or furnished to Lender by me or on my behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished.

Death or Insolvency. Any Borrower dies or becomes insolvent; a receiver is appointed for any part of my property; I make an assignment for the benefit of creditors; or any proceeding is commenced either by me or against me under any bankruptcy or insolvency laws.

Taking of the Property. Any creditor or governmental agency tries to take any of the property or any other of my property in which Lender has a lien. This includes taking of, garnishing of or levying on my accounts with Lender. However, if I dispute in good faith whether the claim on which the taking of the property is based is valid or reasonable, and if I give Lender written notice of the claim and furnish Lender with monies or a surety bond satisfactory to Lender to satisfy the claim, then this default provision will not apply.

Defective Collateralization. This Note or any of the related documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

Collateral Damage or Loss. Any collateral securing this Note is lost, stolen, substantially damaged or destroyed and the loss, theft, substantial damage or destruction is not covered by insurance.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor’s estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and in doing so, cure any Event of Default.

Insecurity. Lender is good faith believes itself insecure.

Cure Provisions. If any default, other than a default in payment or failure to satisfy Lender’s requirement in the insufficient Market Value of Securities section is curable and if I have not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) it I, after receiving written notice from Lender demanding cure of such default: (1) cure the default within twenty (20) days; or (2) if the cure requires more than twenty (20) days, immediately initiate steps which Lender deems in Lender’s sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

	PROMISSORY NOTE
Loan No. 2165294	(Continued)	Page 2

LENDERS’S RIGHTS. Upon default, subject to my rights to cure under Missouri law, if any, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then I will pay that amount.

ATTORNEYS’ FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if I do not pay. I will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses whether or not there is a lawsuit, including attorneys’ fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, I also will pay any court costs, in addition to all other sums provided by law.

GOVERNING LAW. This note will be governed by and interpreted in accordance with federal law and the laws of the State of Missouri. This Note has been accepted by Lender in the State of Missouri.

CHOICE OF VENUE. If there is a lawsuit, I agree upon Lender’s request to submit to the jurisdiction of the courts of Jackson County, State of Missouri.

DISHONORED ITEM FEE. I will pay a fee to Lender of $20.00 if I make a payment on my loan and the check or preauthorized charge with which I pay is later dishonored.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in al my accounts with Lender (whether checking, savings, or some other account). This includes all accounts I hold jointly with someone else and all accounts I may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. I authorize Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect lender’s charge and setoff rights provided in the paragraph.

COLLATERAL. I acknowledge this Note is secured by the following collateral described in the security instrument listed herein, all the terms and conditions of which are hereby incorporated and make a part of this Note: securities or investment property described in a Consumer Pledge Agreement dated January 23, 2004.

ADDITIONAL PROVISION. At the present time that stick is valued at $7.00 per share, but if at any time the value falls below $7,500,000.00 ($6.00 per share based on current outstanding shares), the borrower agrees to pledge additional collateral in order to cover any shortfall.

ADDITIONAL PROVISION. Borrower has agreed to deposit _____ with ______ Bank. The account will be used to pay interest over the life of the loan.

ADDITIONAL PROVISION. The borrower will have sixty (60) days to cure any default.

SUCCESSOR INTERESTS. The terms of this note shall be binding upon me, and upon my heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISION. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. I and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as a maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or prefect Lender’s security interest in the collateral. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are join and several. This means that if more than one person signs this Note and Lender brings a lawsuit, Lender may sue any one or more of us.

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE TO PROTECT YOU (I (S) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE NAD EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

PRIOR SIGNING THIS NOTE, I READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. I AGREE TO THE TERMS OF THE NOTE.

I ACKNOWLEDGE RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

X COPY
Stephen P. Glennon

CONSUMER PLEDGE AGREEMENT


- ----------------- -------------- -------------- ----------- --------------- ----------- ----------- ------------
    Principal        Loan Date      Maturity      Loan No.    Call / Coll     Account     Officer     Initials
  $3,600,000.00     01-23-2004     10-23-2004     2165294      RC6 / D13
- ----------------- -------------- -------------- ----------- --------------- ----------- ----------- ------------


Grantor:      Stephen P Glennon (SSN: ###-##-####)        Lender: ____________________________BANK
              720 Milton Road
              Rye, NY 10580

THIS CONSUMER PLEDGE AGREEMENT dated January 23, 2004, is entered into between STEPHEN P. GLENNON (referred to below as "I") and _______________________________ BANK (referred to below as "Lender").

GRANT OF SECURITY INTEREST. To secure the indebtedness described below (including all obligations under the Note and this Agreement), I grant to Lender a security interest in all of the Property described below. I understand that the following statements set forth my responsibilities, as well as Lender’s rights concerning the Property. I agree as follows:

PROPERTY DESCRIPTION. The word “Property” as used in this Agreement means all of my property (however owned if more than one), in the possession of Lender (or in the possession of a third party subject to the control of Lender), whether existing now or later and whether tangible or intangible in character, including without limitation each and all of the following:

1,250,000 Shares of Wilshire Financial Services Group, Inc. Stock

In addition, the word “Property” includes all of my property (however owned), in the possession of Lender (or in the possession of a third party subject to the control of Lender), whether now or hereafter existing and whether tangible or intangible in character, including without limitation each of the following:

	A.	All property to which Lender acquires title or documents of Title.
	B.	All property assigned to Lender.
	C.	All promissory notes, bills of exchange, stock certificates, bonds, savings passbooks, time certificates of deposit, insurance policies, and all other instruments and evidences of an obligation.
	D.	All records relating to any of the property described in this Property section, whether in the form of a writing, microfilm, microfiche, or electronic media.
		All Income and Proceeds from the Property as defined herein.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all my accounts with Lender (whether checking, savings, or some other account). This includes all accounts I hold jointly with someone else and all accounts I may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. I authorized Lender, to the extend permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in this paragraph.

REPRESENTATIONS AND PROMISES WITH RESPECT TO GRANTOR. I represent and promise to Lender that my correct legal name and address is: Stephen P. Glennon, 720 Milton Road, Rye, NY 10580.

REPRESENTATIONS AND PROMISES WITH RESPECT TO THE PROPERTY. I represent and promise to Lender that:

Ownership. I am the lawful owner of the Property. The property is free of all loans, liens, mortgages, and claims of others except for those I have disclosed to lender in writing, and which have been accepted by Lender, prior to my signing of this Agreement.

Right to Pledge. I have the full right, power and authority to enter into this Agreement and to grand a security interest in the Property to Lender.

Delivery of Pledged Property. If I am unable to deliver any portion of the Property to Lender at the time this Agreement is signed, or if I should ever withdraw or obtain temporary possession of any of the Property while this Agreement remains in effect, whether under a trust receipt or otherwise, I agree to immediately delivery to Lender such Property or, alternatives, such substitute or replacement Property that may be then satisfactory to Lender.

No Further Transfer. I have not and will not sell, transfer, mortgage, or otherwise dispose of any of my rights in the Property except as allowed in this Agreement.

No Defaults. There are no defaults existing under the Property, and there are no offsets or counterclaims to the same. I will strictly and promptly do everything required of me under all the terms, conditions, promises, and agreements contained in or relating to the Property.

Validity; Binding Effect. This Agreement is binding upon me and my successors and assigns and is legally enforceable in accordance with its terms.

Financing Statements. I authorize Lender to file a UCC-1 financing statement, or alternatively, a copy of this Agreement to perfect Lender’s security interest. At Lender’s required, I additionally agree to sign all other documents that are necessary to perfect, protect, and continue Lender’s security interest in the Property. I will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. I irrevocably appoint Lender as my attorney-in-fact to execute financing statements and documents of title in my name and to execute all documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If I change my name or address, or the name or address of any person granting a security interest under this Agreement changes, I will promptly notify the Lender of such change.

LENDER’S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE PROPERTY. Lender may hold the Property until all indebtedness has been paid. Thereafter Lender may deliver the Property to me or to any other owner of the Property. Lender will have the following rights in addition to all other rights Lender may have by law:

Maintenance and Protection of Property. Lender may do such things as it thinks necessary or desirable to protect, maintain, insure, store, or care for the Property, including paying of any liens or claims against the Property. This may include such things as hiring other people, such as attorneys, appraisers, or other experts. Lender may charge me for any cost incurred in so doing. When applicable law provides more than one method of perfection of Lender’s security interest, Lender may choose the method(s) to be used. If the Property consists of stock, bonds or other investment property for which no certificate has been issued, I agree, at Lender’s request, either to request issuance of an appropriate certificate or to give instructions on Lender’s forms to the issuer, transfer agent, mutual fund company, or broker, as the case may be, to record on its books or records Lender’s security interest in the Property.

	CONSUMER PLEDGE AGREEMENT
Loan No. 2165294	(Continued)	Page 2

Income and Proceeds from the Property. Lender may receive all Income and Proceeds and add it to the Property held by Lender under this Agreement. If I receive any Income and Proceeds from the Property, and if Lender requires me to do so, I immediately will advise Lender. If Lender requests, I will deliver the Income and Proceeds to Lender immediately upon my receipt in the exact form received. Unless permitted by Lender, I will not mix the Income and Proceeds with any of my accounts or other property, and if required by Lender, I w3ill deliver the Income and Proceeds to Lender whether the Income and Proceeds are an addition to, in discharge of, in substitution of, or in exchange for any of the property.

Application of Cash. Lender, at its option, may apply any cash (whether Included in the Property or received as Income or proceeds of a sale of any of the Property) to the payment of part or all of the indebtedness, whether or not the indebtedness is then due.

Modifying the Indebtedness. Lender may (a) extend time for payment or other performance, (b) grant a renewal or change, or (c) compromise or release any obligation, with any one or more Borrowers, endorsers, or guarantors of the Indebtedness, as Lender deems advisable, without obtaining my prior written consent. No such act or failure to act will affect Lender’s rights against me or the Property.

All Property Secures Indebtedness. All Property will be security for the Indebtedness, whether the Property is located at one or more offices or branches of Lender. This will be the case whether or not the office or branch where I obtained my loan knows about the Property or relies upon the Property as security.

Collection of Property. Lender at Lender’s option may, but need not, collect the Income and Proceeds directly from the Obligors. I authorize and direct the Obligors, if Lender decides to collect the Income and Proceeds, to pay and deliver to Lender all Income and Proceeds from the Property and to accept Lenders receipt for the payments.

Power of Attorney. I appoint Lender as my attorney-in-fact, with full power to act for me. This power of attorney will remain in effect until all Indebtedness is paid in full. Lender, as my attorney-in-fact, may among other things (1) demand, collect, receive, receipt for, sue and recover all Income and Proceeds and other sums and other property which may now or hereafter become due, owing or payable from the Obligors in accordance with the terms of the Property; (2) execute, sign and endorse any and all instruments, receipts, checks, drafts and warrants issued as Income and Proceeds or in payment for the Property; (3) settle or compromise any and all claims arising under the Property and, in my placed and name, execute and deliver its release and acquaintance for me; (4) file any claim or claims or take any action or institute or take part in any proceedings , either in Lender’s own name or in my name, or otherwise, which in Lender’s opinion may see to be necessary or advisable; and (5) execute in my name and deliver to the obligors on my behalf, at the time and in the manner specified by the Property, any necessary instruments or documents.

LENDER’S EXPENDITURES. If I fail (A) to keep the Property free of all taxes, liens, security interests, encumbrances, and other claims, (B) to provide any required insurance on the Property, or (C) to make repairs to the Property, then lender may do so. If any action or proceeding is commended that would materially affect Lender’s interests in the Property, then Lender on my behalf may, but is not required to, take any action that Lender believes to be appropriate to protect Lender’s interest. All expenses incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by me. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable Insurance policy; or (2) the remaining term of the Note; or (c) be treated as a balloon payment which will be due and payable at the Note’s maturity. The Agreement also will secure payment of these amounts. The rights provided for in this paragraph shall be in addition to any other rights or any remedies to which Lender may be entitled on account of any default. Any such action by Lender shall not be construed as curing the default so as to bar Lender from any remedy that it otherwise would have had.

LIMITATIONS ON OBLIGATIONS OF LENDER. Lender will use ordinary reasonable care in the physical preservation and custody of the Property in Lender’s possession, but will have no other obligation to protect eh Property or it’s value. Lender will not be responsible for (A) collecting or protecting any income from the Property; (B) preserving rights against parties to the property or against third persons; (C) ascertaining any maturities, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of the Property; or (D) informing me about any of these matters, whether or not Lender has or is deemed to have knowledge of such matters. Except as provided above, Lender will have no responsibility or liability whatsoever to me or anyone else for any deterioration or decrease in the value of the Property.

DEFAULT. I will be in default if any of the following happens:

Payment Default. I fail to make any payment w3hen due under the Indebtedness.

Break Other Promises: I break any promise made to Lender or fail to perform promptly at the time and strictly in the manner provided in this Agreement or in any agreement related to this Agreement.

False Statements. Any representation or statement made or furnished to Lender by me or on my behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished.

Death or Insolvency. I die or become incompetent or insolvent, a receiver is appointed for any part of my property. I make as assignment for the benefit of creditors, or any proceeding is commenced either by me or against me under any bankruptcy or insolvency laws.

Taking of the Property. Any creditor or governmental agency tries to take any of the Property or any other of my property in which Lender has a lien. This includes taking of, garnishing of or levying on my accounts with Lender. However, if I dispute in good faith whether the claim on which the taking of the Property is based is valid or reasonable, and if I give Lender written notice of the claim and furnish Lender with monies or a surety bond satisfactory to Lender to satisfy the claim, then this default provision will not apply.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

Property Damage or Loss. The property is lost, stolen, substantially damaged, sold, borrowed against, levied upon, seized, or attached.

Insecurity. Lender in good faith believes itself insecure.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes Incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor’s estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default.

	CONSUMER PLEDGE AGREEMENT
Loan No. 2165294	(Continued)	Page 3

Cure Provisions. If any default, other than a default in payment or failure to satisfy Lender’s requirement in the Insufficient market Value of Securities section is curable and if I have not been given a notice of a breach of the same provision of the Agreement within the preceding twelve (12) months, it may be cured (and no event of default will have occurred) If I, after receiving written notice from Lender demanding cure of such default: (1) cure the default within twenty (20) days: or (2) if the cure requires more than twenty (20) days, Immediately initiate steps which Lender seems in Lender’s sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If I am in default under this Agreement, Lender may do any or all of the following:

Accelerate Indebtedness. Lender may, subject to any cure and notice provisions required by law, declare all indebtedness immediately due and payable, without notice.

Collect the Property. Collect any of the Property, and, at Lender’s option and to the extent permitted by applicable law, retain possession of the Property while suing on the indebtedness.

Sell the Property. Sell the Property, at Lender’s discretion, as a unit or in parcels, at one or more public or private sales. Unless the Property is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender shall give or mail to me, and other persons as required by law, reasonable notice of the time and place of any public sale, or of the time after which any private sale may be made. I agree that any requirement of reasonable notice is satisfied if Lender mails notice by ordinary mail addressed to me at the last address I have given Lender in writing. I further agree that such notice is sent within a reasonable time if it is sent at least fifteen 915) days in advance of the time of sale or disposition, except as otherwise required by applicable law. If public sale is held, there will be sufficient compliance with all requirements of notice to the public by a single publication in any newspaper of general circulation in the country where the Property is located. The notice will set for the time and place of sale and a brief description of the property to be sold. Lender may be a purchaser at any public sale.

Rights and Remedies with Respect to Investment Property, Financial Assets and Related Collateral. In addition to other rights and remedies granted under this Agreement and under applicable law, Lender may exercise any or all of the following rights and remedies: 91) register with any issuer or broker or other securities intermediary any of the Property consisting of investment property or financial assets (collectively herein, “investment property”) in Lender’s sole name or in the name of Lender’s broker, agent or nominee; (2) cause any issuer, broker or other securities intermediary to deliver to Lender any of the Property consisting of securities, or investment property capable of being delivered; (3)enter into a control agreement or power of attorney with any issuer or securities intermediary with respect to any Property consisting of investment property, on such terms as Lender may deem appropriate, in its sole discretion, including without limitation, an agreement granting to Lender any of the rights provided hereunder without further notice to or consent by me; (4) execute any such control agreement on my behalf and in my name, and hereby irrevocable appoint Lender as agent and attorney-in-fact, coupled with an interest, for the purpose of executing such control agreement on my behalf; (5) exercise any and all rights of Lender under any such control agreement or power of attorney; (6) exercise any voting, conversion, registration, purchase, option, or other rights with respect to any Property; (7) collect, with or without legal action, and issue receipts concerning any notes, checks, drafts, remittances or distributions that are paid or payable with respect to any Property consisting of investment property. Any control agreement entered with respect to any investment property shall contain the following provisions, at Lender’s discretion. Lender shall be authorized to instruct the issuer, broker or other securities intermediary to take or to refrain from taking such actions with respect to the investment property as Lender may instruct, without further notice to or consent by me. Such actions may include without limitation the issuance of entitlement orders, account instructions, general trading or buy or sell orders, transfer and redemption orders, and stop loss orders. Lender shall be further entitled to instruct the issuer, broker, or securities intermediary to sell or to liquidate any investment property, or to pay the cash surrender or account termination value with respect to any and all investment property, and to deliver all such payments and liquidation proceeds to Lender. Any such control agreement shall contain such authorizations as are necessary to place Lender in “control” of such investment collateral, as contemplated under the provisions of the Uniform Commercial Code, and shall fully authorize Lender to issue “entitlement orders” concerning the transfer, redemption, liquidation or disposition of investment collateral, in conformance with the provisions of the Uniform Commercial Code.

Sell Securities. Sell any securities included in the Property in a manner consistent with applicable federal and state securities laws. If, because of restrictions under such laws, Lender is unable, or believes Lender is unable, to sell the securities in an open market transaction, I agree that Lender will have no obligation to delay sale until the securities can be registered. Then Lender may make a private sale to one or more persons or to a restricted group of persons, even though such sale may result in a price that is less favorable than might be obtained in an open market transaction. Such a sale will be considered commercially reasonable. If any securities held as Property are “restricted securities” as defined in the Rules of the Securities and Exchange Commission (such as Regulation D or Rule 144) or the rules of state securities departments under state “Blue Sky” laws, or if I or any other owner of the Property is an affiliate of the issuer of the securities, I agree that neither I, nor any other member of my family, nor any other person signing this Agreement will sell or dispose of any securities of such issuer without obtaining Lender’s prior written consent.

Transfer Title. Transfer title to the Property upon the sale of all or part of the Property. For this purpose, I irrevocably appoint Lender as my attorney-in-fact to execute such endorsements, assignments and instruments in my name as Lender in Lender’s judgment may think to be necessary or reasonable.

Other Rights and Remedies. Exercise any or all of the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, at law, in equity, or otherwise.

Application of Proceeds. Apply any cash which is part of the Property or Income or which is received from the collection or sale of the Property as follows: (a) to reimbursement of Lender’s expenses incurred in connection with costs of securities registration or commissions incurred in connection with a sale, and other costs of sale; (b) to the payment of the indebtedness; and (c any excess funds to be paid to me or to any other Borrower as our interest may appear. I agree, to the extent permitted by law, to pay any deficiency remaining after application of the proceeds of the Property to the indebtedness.

Election of Remedies. All of Lender’s rights and remedies will be cumulative and may be exercised alone or together. An election of Lender to choose any one remedy will not bar Lender from using any other remedy. If Lender decides to spend money or to perform any of my obligations under this Agreement, after my failure to do so, that decision by Lender will not affect Lender’s right to declare me in default and to exercise Lender’s remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of the Agreement.

Amendments and Interpretation. (1) What is written in this Agreement is my entire agreement with Lender concerning the Property. This Agreement may not be changed except by another written agreement between us. (2) If more than one person signs below, our obligations are joint and several. This means that the words “I,” “me,” and “my” mean each and every person or entity signing this Agreement, and that, if Lender brings a lawsuit, Lender may sue any one or more of us. I also understand Lender need not sue Borrower first, and that Borrower need not be joined in any lawsuit. (3) The names given to paragraphs or sections in this Agreement are for convenience purposes only. They are not to be used to interpret or define the provisions of this Agreement. (4) I agree that this Agreement is the best evidence of my agreements with Lender.

	CONSUMER PLEDGE AGREEMENT
Loan No. 2165294	(Continued)	Page 4

Attorneys’ Fees; Expenses. I agree to pay all of Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s legal expenses incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement or to collect the indebtedness, and I shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. I also shall pay all court costs, in addition to all other sums provided by law. This Agreement also secures all of these amounts.

Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret to define the provisions of this Agreement.

Governing Law. This Agreement will be governed by and interpreted in accordance with federal law and the laws of the State of Missouri, except and only to the extent of procedural matters related to the perfection and enforcement of Lender’s rights and remedies against the Property, which will be governed by the laws of the State of Oregon. However, if there ever is a question about whether any provision of this Agreement is valid or enforceable, the provision that is questioned will be governed by whichever state or federal law would find the provision to be valid and enforceable. The loan transaction which is evidence by the Note and this Agreement has been applied for, considered, approved and made, and all necessary loan documents have been accepted by Lender in the State of Missouri.

Choice of Venue. If there is a lawsuit, I agree upon Lender’s request to submit to the jurisdiction of the courts of Jackson County, State of Missouri.

Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any person may change his or her address for notices under this Agreement by giving formal written notice to the other person or persons, specifying that the purpose of the notice is to change the person's address. For notice purposes, I agree to keep Lender informed at all times of my current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. It will be my responsibility to tell the others of the notice from Lender.

No Waiver by Lender. I understand Lender will not give up any of Lender’s rights under this Agreement unless Lender does so in writing. The fact that Lender delays or omits to exercise any right will not mean that Lender has given up that right. If Lender does agree in writing to give up one of Lender’s rights, that does not mean I will have to comply with the other provisions of this Agreement. I also understand that if Lender does consent to a request, that does not mean that I will not have to get Lender’s consent again if the situation happens again. I further understand that just because Lender consents to one or more of my requests, that does not mean Lender will be required to consent to any of my future requests. I waive presentment, demand for payment, protest, and notice of dishonor.

Preference Payments. Any monies Lender pays because of an asserted preference claim in my bankruptcy will become a part of the indebtedness and, at Lender’s option, shall be payable by me as provided in this Agreement.

Severability. If a court finds that any provision of this Agreement is not valid or should not be enforced, that fact by itself will not mean that the rest of this Agreement will not be valid or enforced. Therefore, a court will enforce the rest of the provisions of this Agreement even if a provision of this Agreement may be found to be invalid or unenforceable.

Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of my interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than me, Lender, without notice to me, may deal with my successors with reference to this Agreement and the indebtedness by way of forbearance or extension without releasing me from the obligations of this Agreement or liability under the indebtedness.

Waiver of Co-Obligor’s Rights. If more than one person is obligated for the indebtedness, I irrevocably waive, disclaim and relinquish all claims against such other person which I have or would otherwise have by virtue of payment of the indebtedness or any part thereof, specifically including but not limited to all rights of indemnity, contribution or exoneration.

Time is of the Essence. Time is of the essence in the performance of this Agreement.

DEFINITIONS. The following words shall have the following meanings when used in this Agreement.

Agreement. The word "Agreement" means this consumer Pledge Agreement, as this Consumer Pledge Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Consumer Pledge Agreement from time to time.

Borrower. The word "Borrower" means Stephen P. Glennon and includes all co-signers and co-makers signing the Note.

Event of Default. The words “Event of Default” mean any of the events of default set forth in this Agreement in the default section of this Agreement.

Grantor. The word "Grantor" means Stephen P. Glennon.

Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Lender, including without limitation a guaranty of all or part of the Note.

Income and Proceeds. The words “Income and Proceeds” mean all present and future income, proceeds, earning, increases, and substitutions from or for the Property of every kind and nature, including without limitation all payments, interest, profits, distributions, benefits, rights, options, warrants, dividends, stock dividends, stock splits, stock rights, regulatory dividends, subscriptions, monies, claims for money due and to become due, proceeds of any insurance on the Property, shares of stock of different par value or no par value issued in substitution or exchange for shares included in the Property, and all other property I am entitled to receive on account of such Property, including accounts, documents, instruments, chattel paper, and general intangibles.

Indebtedness. The word "Indebtedness: means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which I am responsible under this Agreement or under any of the Related Documents.

Lender. The word "Lender" means __________ BANK, its successors and assigns. The words "successors or assigns" mean any person or company that acquires any interest in the Note.

	CONSUMER PLEDGE AGREEMENT
Loan No. 2165294	(Continued)	Page 5

Note. The word "Note" means the note or credit agreement dated January 23, 2004, in the principal amount of ________ from Stephen P. Glennon to Lender, together with all renewals of, extensions of, modifications of, refinancing of, consolidations of an substitutions for the note or credit agreement.

Obligor. The word "Obligor" means each and every person or company that is obligated to pay money or to perform some other act under the Property such as the person who pays dividends on stock.

Property. The word "Property" means all of my right, title and interest in and to all the Property as described in the "Property Description" section of this agreement.

Related Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments agreements and documents, whether now or hereafter existing, executed in connection with the indebtedness.

I HAVE READ AND UNDERSTAND ALL THE PROVISIONS OF THIS CONSUMER PLEDGE AGREEMENT AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED JANUARY 23, 2004.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

SCHEDULE 13D (Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)

Stephen P. Glennon720 Milton Road

Rye, New York 10580

(914) 523-3923

INTRODUCTION

Item 1. Security and Issuer

Item 2. Identity and Background

Item 3. Source and Amount of Funds or Other Consideration

Item 4. Purpose of Transaction

Item 5. Interest in Securities of the Issuer

Signature

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001)

EXHIBIT A

AMENDED AND RESTATED

1999 EQUITY PARTICIPATION PLAN

OF

WILSHIRE FINANCIAL SERVICES GROUP INC.

ARTICLE I.

DEFINITIONS

ARTICLE II.

SHARES SUBJECT TO PLAN

ARTICLE III.

GRANTING OF AWARDS

ARTICLE IV.

GRANTING OF OPTIONS TO EMPLOYEES AND INDEPENDENT DIRECTORS

ARTICLE V.

TERMS OF OPTIONS

ARTICLE VI.

EXERCISE OF OPTIONS

ARTICLE VII.

AWARD OF RESTRICTED STOCK

ARTICLE VIII.

PERFORMANCE AWARDS AND STOCK PAYMENTS

ARTICLE IX.

ADMINISTRATION

ARTICLE X.

MISCELLANEOUS PROVISIONS

EXHIBIT B

WILSHIRE FINANCIAL SERVICES GROUP INC. GLENNON STOCK OPTION AGREEMENT

[COMPANY SIGNATURE PAGE]

[OPTIONEE SIGNATURE PAGE]

CONSENT OF SPOUSE TO AGREEMENT

EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION

EXHIBIT B

INVESTMENT REPRESENTATION STATEMENT

EXHIBIT C

WILSHIRE FINANCIAL SERVICES GROUP INC. AMENDED AND RESTATED STOCK OPTION AGREEMENT

[COMPANY SIGNATURE PAGE]

[OPTIONEE SIGNATURE PAGE]

CONSENT OF SPOUSE TO AGREEMENT

EXHIBIT A NOTICE OF EXERCISE OF STOCK OPTION

EXHIBIT D

WILSHIRE FINANCIAL SERVICES GROUP INC. AMENDED STOCK OPTION AGREEMENT

NOTICE OF EXERCISE OF STOCK OPTION

PROMISSORY NOTE

BORROWER:

X COPY Stephen P. Glennon

CONSUMER PLEDGE AGREEMENT

1,250,000 Shares of Wilshire Financial Services Group, Inc. Stock

GRANTOR:

X_____________________________ Stephen P. Glennon

LENDER:

________________________BANK

By:____________________________ Authorized Signer

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)

Stephen P. Glennon720
Milton Road

Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001)

GRANTING OF OPTIONS TO EMPLOYEES
AND INDEPENDENT DIRECTORS

WILSHIRE FINANCIAL SERVICES GROUP INC.
GLENNON STOCK OPTION AGREEMENT

WILSHIRE FINANCIAL SERVICES GROUP INC.
AMENDED AND RESTATED STOCK OPTION AGREEMENT

EXHIBIT A
NOTICE OF EXERCISE OF STOCK OPTION

WILSHIRE FINANCIAL SERVICES GROUP INC.
AMENDED STOCK OPTION AGREEMENT

X COPY
Stephen P. Glennon

X_____________________________
Stephen P. Glennon

By:____________________________
Authorized Signer