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                                EMPLOYMENT AGREEMENT


     This Employment Agreement (the "Agreement") is made effective as of June
16, 1999, by and between Coast Bancorp, a California corporation and Coast
Commercial Bank, a California banking corporation on the one hand ("Employer")
and Harvey J. Nickelson ("Employee").

     Employer desires to continue to employ, as President and Chief Executive
Officer of the Employer, a person of high executive caliber with significant
prior experience in the banking services which Employer provides.

     Employee being willing to continue to be employed by Employer as President
and Chief Executive Officer and Employer being willing to continue to employ
Employee on the terms, covenants and conditions hereinafter set forth, it is
agreed as follows:

     1.   POSITION.  Employee is hereby employed as President and Chief
Executive Officer of Employer.

     2.   EMPLOYMENT TERM.  The term of this Agreement shall commence effective
June 16, 1999, and continue for 4 1/2 years thereafter through December 31,
2003, unless earlier terminated pursuant to Paragraph 6 below, such period being
the term of this Agreement.

     3.   EMPLOYEE DUTIES.  Employee shall perform the duties of the position of
President and Chief Executive Officer designated by the By-Laws of Employer and
as directed by Employer's Board of Directors.

     4.   EXTENT OF SERVICES.  Employee shall devote his full time, attention
and energies to the business of Employer, and shall not, during the term of this
Agreement, engage directly or indirectly, in any other business activity, except
personal investments, charitable and community activities, without the prior
written consent of Employer.

     5.   COMPENSATION AND BENEFITS.  Employee's salary shall be at the rate of
$179,000 per year, prorated for any partial year in which this Agreement is in
effect.  Said salary shall be payable in equal semi-monthly installments.  Any
salary increase shall be at the sole discretion of the Board.  Employer agrees
to review and evaluate Employee's performance at the end of each fiscal year to
determine whether Employee should be paid a cash bonus.  The amount of such
bonus, if any, will be determined in the sole discretion of Employer's Board of
Directors. In addition, Employee shall receive the following benefits:

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          (a)  AUTOMOBILE.  Employer shall provide Employee with the use of an
               automobile during the term of this Agreement.  In addition, the
               Bank will pay all operating costs for the operation of the
               automobile including license, gas, insurance and maintenance.

          (b)  INSURANCE.  Employee shall be a participant in such group life
               insurance, health and long-term disability plans as are
               maintained by Employer, upon the same terms and conditions as
               other executives of Employer.

          (c)  VACATION.  Employee shall receive four (4) weeks paid vacation
               per year, prorated for any partial calendar year in which this
               Agreement is in effect, which shall be taken at such time or
               times as mutually agreed upon by Employee and the Board, provided
               that at least two (2) weeks of such vacation shall be taken
               consecutively per calendar year.

          (d)  GENERAL EXPENSES.  Employer shall, upon submission and approval
               of written statements and bills in accordance with the
               then-regular procedures of Employer, pay or reimburse Employee
               for any and all necessary, customary and usual expenses
               (including entertainment) incurred by employee for or on
               behalf of Employer in the normal course of business as
               determined to be appropriate by Employer.

          (e)  Employee shall be entitled to receive directors' fees of at least
               $12,000 per year, participation in Employer's KSOP and existing
               Salary Continuation Agreement.

          (f)  OTHER BENEFITS.  In the event that Employer in the future
               establishes any other benefit plan for its senior executives
               generally, Employee shall be eligible to participate in such plan
               on the terms and conditions stated in the legal documents for
               such plan.

     6.   TERMINATION.  This Agreement may be terminated prior to December 31,
2003, with or without cause in accordance with this Paragraph 6(a) through 6(g).
In the event of such termination, Employee shall be released from all
obligations under this Agreement, except that Employee shall remain subject to
Paragraphs 7, 8, 11(c) and 11(i), and Employer shall be released from all
obligations under this Agreement, except as otherwise provided in this Paragraph
and Paragraphs 11(c), 11(e), and 11(i).

          (a)  EARLY TERMINATION BY EMPLOYER WITHOUT CAUSE.  This Agreement may
               be terminated without cause, for any reason whatsoever, in the
               sole, absolute and unreviewable discretion of Employer, upon six
               (6) months' written notice by Employer to Employee.  If this
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               Agreement is terminated pursuant to this Paragraph 6(a), or if
               the term of this Agreement is not extended upon expiration
               thereof, Employee shall receive his then current salary, the
               amount of his bonus for the most recently completed fiscal year
               and the insurance benefits as provided under the terms of this
               Agreement, for a period of twelve (12) months from the date of
               such termination provided Employee shall, at his discretion, be
               entitled to receive such salary payment in two lump sums, the
               first on his last date of employment, and the second six (6)
               months later, in lieu of receiving such salary payments over a
               period of twelve (12) months following termination.  Such salary,
               bonus and insurance benefits shall be in full and complete
               satisfaction of any and all rights which Employee may enjoy under
               this Agreement and shall be the sole compensation and/or damages
               payable to Employee as the result of termination of this
               Agreement without cause.

          (b)  EARLY TERMINATION BY EMPLOYER FOR CAUSE.  This Agreement may be
               terminated for cause by Employer immediately upon written notice
               to Employee, and Employee shall not be entitled to receive
               compensation or other benefits for any period after termination
               for cause.  Cause for termination pursuant to this Paragraph 6(b)
               shall include termination because of the Employee's personal
               dishonesty, incompetence, willful misconduct, embezzlement,
               fraud, breach of fiduciary duty involving personal profit,
               intentional failure to perform stated duties or to comply with
               Employer's policies, willful violation of any law, rule, or
               regulation (other than traffic violations or similar offenses),
               or material breach of any provision of this Agreement.

          (c)  EARLY TERMINATION BY EMPLOYEE.  This Agreement may be terminated
               by Employee upon ninety (90) days' written notice to Employer.

          (d)  EARLY TERMINATION UPON DISABILITY.  If Employee becomes disabled
               due to a physical or mental disability so that he is unable to
               perform the essential functions of his position and the
               disability cannot be reasonably accommodated without undue
               hardship, Employer may at its option terminate this Agreement.
               Employee shall be entitled to the salary and bonus provided for
               in Paragraph 5 of this Agreement for a period not to exceed six
               (6) months from the date of Employee's first absence due to the
               disability, but not beyond the termination date of this
               Agreement, and to accrued but unused vacation leave.  Employee's
               salary and bonus in the event of disability and termination
               therefor shall be offset by any payments received by Employee as
               a result of any disability insurance policy purchased by Employer
               for Employee.  All other

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               benefits provided for under this Agreement shall cease as of
               the date of termination.  For purposes of this Agreement,
               physical or mental disability shall mean the inability of
               Employee to fully perform under this Agreement for a
               continuous period of ninety (90) days, as determined by a
               physician in the case of physical disability, or a
               psychiatrist in the case of mental disability, licensed to
               practice medicine in California and selected jointly by
               Employer and Employee.  Upon demand by Employer, Employee or
               Employee's representative (but not counsel) if Employee is not
               physically able to do so shall act promptly to select such
               physician or psychiatrist jointly with Employer, shall consent
               to undergo any reasonable examination or test and shall
               authorize release of all pertinent medical records to
               Employer.  Recurrent disabilities will be treated as separate
               disabilities if they result from unrelated causes or if they
               result from the same or related cause or causes and are
               separated by a continuous period of at least six (6) full
               months during which Employee was able to perform his duties
               hereunder equal to at least eighty percent (80%) of his
               capacity prior to disability.  Otherwise, recurrent
               disabilities will be treated a a continuation of previous
               disabilities for the purpose of determining the limitations
               established in this paragraph.

          (e)  DEATH DURING EMPLOYMENT.  This Agreement shall terminate
               immediately upon the death of Employee.

          (f)  CHANGE OF CONTROL.  It is the Employer's desire that the Employee
               not suffer any personal or financial loss as a result of a Change
               in Control.  Accordingly, if within two years of a Change of
               Control Employee's: (i) employment is terminated for any reason
               other than death or cause; (ii) aggregate compensation (base
               salary, any bonus or benefits) is reduced below the amount he is
               entitled to receive on the day before any Change of Control
               occurs; (iii) situs of his employment is changed; or (iv) duties
               and responsibilities are significantly reduced from those on the
               day before any Change of Control, then Employee shall be entitled
               to a payment sufficient to insure he will receive in compensation
               for that period a sum equal to two times the aggregate of his
               then regular annual salary and the bonus he was paid for the most
               recently completed fiscal year. A "Change of Control" shall be
               deemed to have occurred if (i) a tender offer shall be made and
               consummated for the ownership of 25% or more of the outstanding
               voting securities of Employer,  (ii) the Employer shall be merged
               or consolidated with another corporation or bank and as a result
               of such merger or consolidation less than 75% of the outstanding
               voting securities of the surviving or resulting bank or
               corporation shall be owned in the aggregate by the former
               shareholders of Employer, other than affiliates (within

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               the meaning of the Securities Exchange Act of 1934) of any
               party to such merger or consolidation, as the same shall have
               existed immediately prior to such merger or consolidation,
               (iii) Employer shall sell substantially all of its assets to
               another bank or corporation which is not a wholly owned
               subsidiary, or (iv) a person, within the meaning of Section
               3(a)(9) or of Section 13(d)(3) (as in effect on the date
               hereof) of the Securities Exchange Act of 1934, shall acquire
               25% or more of the outstanding voting securities of Employer
               (whether directly, indirectly, beneficially or of record).
               For purposes hereof, ownership of voting securities shall take
               into account and shall include ownership as determined by
               applying the provisions of Rule 13d-3(d)(1)(i) (as in effect
               on the date hereof) pursuant to the Securities Exchange Act of
               1934.

     7.   PRINTED MATERIAL.  All written or printed materials used by Employee
in performing duties for Employer are and shall remain the property of Employer.
Upon termination of employment, Employee shall promptly return such written or
printed materials to Employer.

     8.   DISCLOSURE OF INFORMATION.  Employee recognizes and acknowledges that
Employer possess information concerning their business affairs and methods of
operation which constitute valuable, special and unique assets of their
businesses.  Employee shall not, at any time before or after termination of this
Agreement, disclose to anyone any confidential information relating to Employer
or any affiliate of Employer.  For purpose of this paragraph, confidential
information includes all information regarding products, services, processes,
know-how, customers, suppliers, product and/or service development, business
plans, research, finances, marketing, pricing, costs and any other proprietary
matters relating to Employer,  or any affiliate of Employer.  Employee
recognizes and acknowledges that all financial information concerning any of
Employer's customers is strictly confidential, and Employee shall not at any
time before or after termination of this Agreement disclose to anyone any such
financial information or any part thereof, for any reason or purpose whatsoever.

     9.   NONCOMPETITION BY EMPLOYEE.  During the term of this Agreement,
Employee shall not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any competing banking business; provided, however, Employee shall not be
restricted by this paragraph from owning securities of corporations listed on a
national securities exchange or regularly traded by national securities dealers,
so long as such investment does not exceed one percent (1%) of the market value
of the outstanding securities of such corporation.


     10.  SURETY BOND.  Employee agrees that he will furnish all information and

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take any steps necessary to enable Employer to obtain or maintain a fidelity
bond, satisfactory to Employer, conditional on the rendering of a true account
by Employee of all monies, goods or other property which may come into the
custody, charge or possession of Employee during the term of this employment.
Employer shall pay all premiums on the bond.  If Employee cannot qualify for a
surety bond at any time during the term of this Agreement, Employer shall have
the option to terminate this Agreement immediately.

     11.  GENERAL PROVISIONS.  This Agreement is further governed by the
following provisions:

          (a)  ENTIRE AGREEMENT.  This Agreement supersedes any and all other
               agreements, either oral or in writing, among the parties hereto
               with respect to the employment of Employee by Employer and
               contains all of the covenants and agreements among the parties
               with respect to such employment.  Each party acknowledges that no
               representations, inducements, promises or agreements, oral or
               otherwise, have been made by any party or anyone acting on behalf
               of a party which are not embodied herein, and that no other
               agreement, statement, representation, inducement or promise not
               contained in this Agreement shall be valid or binding.  Any
               modification, waiver or amendment of this Agreement will be
               effective only if it is in writing and signed by the party to be
               charged.

          (b)  WAIVER.  Any waiver by any party of a breach of any provision of
               this Agreement shall not operate as or be construed to be a
               waiver of any other breach of such provisions or of any breach of
               any other provision of this Agreement.  The failure of a party to
               insist upon strict adherence to any term of this Agreement on one
               or more occasions shall not be considered a waiver or deprive
               that party of the right thereafter to insist upon strict
               adherence to that term or any other term of this Agreement.

          (c)  CHOICE OF LAW AND FORUM.  This Agreement shall be governed by and
               construed in accordance with the laws of the State of California,
               except to the extent preempted by the laws of the United States.
               Any action or proceeding brought upon or arising out of this
               Agreement or its termination shall be brought in a forum located
               in Santa Cruz, California.

          (d)  BINDING EFFECT OF AGREEMENT.  This Agreement shall inure to the
               benefit of and be binding upon Employer, its successors and
               assigns, including without limitation, any person, partnership or
               corporation which may acquire all or substantially all of
               Employer's assets and business, or with or into which Employer
               may be

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               consolidated, merged or otherwise reorganized, and this
               provision shall apply in the event of any subsequent merger,
               consolidation, reorganization or transfer.  The provisions of
               this Agreement shall be binding upon and inure to the benefit
               of Employee and his heirs and personal representatives.  The
               rights and obligations of Employee under this Agreement shall
               not be transferable by Employee by assignment or otherwise and
               such rights shall not be subject to commutation, encumbrance
               or the claims of Employee's creditors, and any attempt to do
               any of the foregoing shall be void.

          (e)  INDEMNIFICATION.  Employer shall indemnify Employee to the
               maximum extent permitted under the Articles of Incorporation and
               By-Laws of Employer and applicable laws and regulations for any
               liability or loss arising out of Employee's actual or asserted
               misfeasance or nonfeasance in the good faith performance of his
               duties or out of any actual or asserted wrongful act against or
               by Employer, including, but not limited to, judgments, fines,
               settlements and expenses incurred in the defense of actions,
               proceedings and appeals therefrom.  If available at reasonable
               rates, which shall be determined by the Employer in its sole
               discretion, Employer shall endeavor to apply for and obtain
               Directors' and Officers' Liability Insurance to indemnify and
               insure Employer and Employee from such liability or loss.

          (f)  SEVERABILITY.  In the event that any term or condition contained
               in this Agreement shall, for any reason be held by a court of
               competent jurisdiction to be invalid, illegal or unenforceable in
               any respect, such invalidity, illegality or unenforceability
               shall not affect any other term or condition of this Agreement,
               but this Agreement shall be construed as if such invalid or
               illegal or unenforceable term or condition had never been
               contained herein.

          (g)  HEADINGS.  The headings in this Agreement are solely for
               convenience of reference and shall be given no effect in the
               construction or interpretation of this Agreement.

          (h)  NOTICES.  Any notices to be given hereunder by and party to
               another party may be effected either by personal delivery, in
               writing or by mail, registered or certified, postage prepaid with
               return receipt requested.  Mailed notices shall be addressed to
               the parties at the addresses indicated at the end of this
               Agreement, but each party may change his or her address by
               written notice in accordance with this paragraph.  Notices
               delivered personally shall be deemed communicated as of actual
               receipt; mailed notices shall be deemed communicated as of five
               (5) days after mailing.

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          (i)  ATTORNEYS' FEES AND COSTS.  If any action at law or in equity is
               brought by a party upon or arising out of this Agreement or its
               termination, the prevailing party shall be entitled to reasonable
               attorneys' fees, costs and necessary disbursements incurred in
               the action, in addition to any other relief to which he may be
               entitled.


     IN WITNESS WHEREOF, the parties hereto have set their hands this 21st day
of June, 1999, in the City of Santa Cruz, State of California.

     EMPLOYER:                COAST BANCORP



                              By: /s/  JAMES C. THOMPSON
                                  --------------------------
                                  James C. Thompson,
                                  Chairman

                                  COAST COMMERCIAL BANK



                              By: /s/  JAMES C. THOMPSON
                                  --------------------------
                                  James C. Thompson,
                                  Chairman

     EMPLOYEE:



                                  /s/  HARVEY J. NICKELSON
                                  --------------------------
                                  Harvey J. Nickelson