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

                                    FORM 10-Q

                                   (Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                     For the period ended September 30, 1998

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934.
                        For the transition period from to

                        Commission File Number : 0-12499


                             First Financial Bancorp
             (Exact name of registrant as specified in its charter)


         California                                       94-28222858
 (State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                         Identification No.)

701 South Ham Lane ,  Lodi,  California                     95242
(Address of principal executive offices)                 (Zip Code)

                                 (209)-367-2000
              (Registrant's telephone number, including area code)

                                       NA
      (Former name, former address and former fiscal year, if changed since
                                  last report.)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                            [ X ] Yes         [   ] No

     As of September 30, 1998 there were  1,346,442  shares of Common Stock,  no
par value, outstanding.


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<PAGE>


                             FIRST FINANCIAL BANCORP

                                    FORM 10-Q

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1998
                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----

                                     PART I

Item 1.   Financial Statements ...........................................     1

Item 2.   Management's Discussion  and Analysis of Financial Condition and
          Results of Operations .......................................        7

Item 3.   Quantitative and Qualitative Disclosures about Market Risk .....    14



                                     PART II

Item 1.   Legal Proceedings ..............................................    14

Item 2.   Changes in Securities ..........................................    14

Item 3.   Defaults Upon Senior Securities ................................    14

Item 4.   Submission of Matters to a Vote of Security Holders ............    14

Item 5.   Other Information ..............................................    15

Item 6.   Exhibits and Reports on Form 8-K ...............................    15


                                       i
<PAGE>



<TABLE>
ITEM 1. FINANCIAL STATEMENTS

                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                           Consolidated Balance Sheets
                       (in thousands except share amounts)
<CAPTION>
                                                                                      Sept. 30        Dec. 31
Assets                                                                                  1998           1997
                                                                                      --------       --------
<S>                                                                                   <C>            <C>
Cash and due from banks                                                               $  6,700       $  7,183
Federal funds sold                                                                       3,700          4,900
Investment Securities:
     Held-to-maturity securities at amortized cost, market value of
         $1,754 and $1,785 at September 30, 1998 and Dec. 31, 1997,respectively
                                                                                         1,705          1,716
     Available-for-sale securities, at fair value                                       48,818         60,201
                                                                                      --------       --------
     Total investments                                                                  50,523         61,917

Loans                                                                                   81,917         63,541
Less allowance for loan losses (Note 3)                                                  1,375          1,313
                                                                                      --------       --------
  Net loans                                                                             80,542         62,228
Bank premises and equipment, net                                                         7,267          7,233
Accrued interest receivable                                                              1,277          1,473
Other assets (Note 4)                                                                    7,068          2,916
                                                                                      --------       --------
                                                                                      $157,077       $147,850
                                                                                      ========       ========
Liabilities and Stockholders' Equity

Liabilities:
    Deposits
       Noninterest bearing                                                            $ 19,160       $ 14,928
       Interest bearing                                                                123,688        118,963
                                                                                      --------       --------
          Total deposits                                                               142,848        133,891

    Accrued interest payable                                                               386            429
    Other liabilities                                                                      301            669
                                                                                      --------       --------
          Total liabilities                                                            143,535        134,989


Stockholders' equity:
    Common stock - no par value; authorized 9,000,000 shares, issued and
          outstanding in 1998 and 1997, 1,346,442 and 1,332,842 shares                   7,566          7,455
    Retained earnings                                                                    5,697          5,188
     Accumulated other comprehensive income (Note 1)                                       279            218
                                                                                      --------       --------
          Total stockholders' equity                                                    13,542         12,861
                                                                                      --------       --------
                                                                                      $157,077       $147,850
                                                                                      ========       ========
</TABLE>

<PAGE>

<TABLE>
                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                        Consolidated Statements of Income
                     (in thousands except per share amounts)
<CAPTION>
                                                             Three months ended Sept. 30    Nine months ended Sept. 30
                                                                   
                                                                 1998          1997          1998          1997
                                                               -------       -------       -------       -------
                                                            (Dollar amounts in thousands,  (Dollar amounts in thousands,
                                                               except per share amounts)    except per share amounts)
<S>                                                            <C>           <C>           <C>           <C>
Interest income:
   Loans, including fees                                       $ 1,986       $ 1,591       $ 5,448       $ 4,919
   Investment securities:
            Taxable                                                790           908         2,515         2,407
            Exempt from Federal taxes                               64            56           181           202
   Federal funds sold                                               74            78           258           280
                                                               -------       -------       -------       -------
            Total interest income                                2,914         2,633         8,402         7,808
Interest expense:
   Deposit accounts                                              1,049           984         3,075         2,769
                                                               -------       -------       -------       -------
            Total interest expense                               1,049           984         3,075         2,769
                                                               -------       -------       -------       -------
            Net interest income                                  1,865         1,649         5,327         5,039
Provision for loan losses                                           60          --             120           (60)
                                                               -------       -------       -------       -------
            Net interest income after provision for loan         1,805         1,649         5,207         5,099
              losses
Noninterest income:
    Service charges                                                218           192           662           574
    Premiums and fees from SBA and mortgage operations             208           160           552           445
    Miscellaneous (Note 4)                                          64            15           131            42
                                                               -------       -------       -------       -------
            Total noninterest income                               490           367         1,345         1,061
Noninterest expense:
    Salaries and employee benefits                                 835           733         2,559         2,266
    Occupancy                                                      207           156           519           422
    Equipment                                                      126           115           397           327
    Other                                                          741           694         2,119         2,006
                                                               -------       -------       -------       -------
            Total noninterest expense                            1,909         1,698         5,594         5,021
                                                               -------       -------       -------       -------
            Income before provision for income taxes               386           318           958         1,139
Provision for income taxes                                          86           102           247           377
                                                               -------       -------       -------       -------
            Net income                                         $   300       $   216       $   711       $   762
            Unrealized gain on available for sale
                   securities, net of tax                          103           104            61            79
                                                               -------       -------       -------       -------
            Total comprehensive income                         $   403       $   320       $   772       $   841
                                                               =======       =======       =======       =======
Net income per share:
            Basic (Note 2)                                     $  0.22       $  0.16       $  0.53       $  0.58
                                                               =======       =======       =======       =======
            Diluted (Note 2)                                   $  0.21       $  0.15       $  0.50       $  0.55
                                                               =======       =======       =======       =======
</TABLE>



                                                        2
<PAGE>
<TABLE>
                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (in thousands)
                           Nine Months Ended Sept. 30

<CAPTION>
                                                                                         1998            1997
                                                                                       --------        --------
<S>                                                                                    <C>             <C>
Cash flows from operating activities:
Net income                                                                             $    711        $    762
     Adjustments  to  reconcile  net  income to net cash  provided  by (used in)
     operating activities:
          Increase (decrease) in loans held for sale                                        767          (1,559)
          Increase in deferred loan income                                                   94             147
          Provision for other real estate owned losses                                       16              70
          Depreciation and amortization                                                     783             787
          Provision for loan losses                                                         120             (60)
          Provision for deferred taxes                                                       (4)              2
          Decrease (increase) in accrued interest receivable                                196            (341)
          (Decrease) increase in accrued interest payable                                   (43)            137
          (Increase) decrease in other liabilities                                         (368)            238
          Increase in cash surrender value of life insurance                               (101)           --
          Decrease in other assets                                                         (284)           (320)
                                                                                       --------        --------
                  Net cash provided by (used in) operating activities                     1,887            (137)

Cash flows from investing activities:
    Proceeds from maturity of held-to-maturity securities                                    10              70
    Proceeds from maturity of available-for-sale securities                              15,486          13,474
    Proceeds from sale of available-for-sale securities                                    --            26,000
    Purchases of available-for-sale securities                                           (4,000)        (59,210)
    Net increase in loans made to customers                                             (19,295)         (7,510)
    Proceeds from the sale of other real estate                                              24             227
    Purchases of bank premises and equipment                                               (536)         (3,024)
    Purchase of cash surrender value life insurance                                      (4,125)           --
                                                                                       --------        --------

                  Net cash used in investing activities                                 (12,436)        (29,973)

Cash flows from financing activities:
    Net increase in deposits                                                              8,957          37,007
    Dividends paid                                                                         (202)           (198)
    Proceeds from issuance of common stock                                                  111             131
                                                                                       --------        --------
                  Net cash provided by financing activities                               8,866          36,940
                  Net (decrease) increase in cash and
                  cash equivalents                                                       (1,683)          6,830

Cash and cash equivalents at beginning of period                                         12,083           5,848
                                                                                       --------        --------
Cash and cash equivalents at end of period                                             $ 10,400        $ 12,678
                                                                                       ========        ========
</TABLE>

                                       3
<PAGE>


                    FIRST FINANCIAL BANCORP AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                    September 30, 1998 and December 31, 1997

(1) Summary of Significant Accounting Policies

The accounting and reporting  policies of First Financial  Bancorp (the Company)
and its  subsidiaries,  Bank of Lodi,  N.A.,  (the Bank) and  Western  Auxiliary
Corporation  (WAC) conform with  generally  accepted  accounting  principles and
prevailing practices within the banking industry.  In preparing the consolidated
financial  statements,  Management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the date of the
balance  sheet and revenue and expense  for the  period.  Actual  results  could
differ  from those  estimates  applied in the  preparation  of the  consolidated
financial  statements.  The  following  is a  description  of a  new  accounting
standard adopted during the current period.


(a) Reporting Comprehensive Income

In June 1997, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standard (SFAS) No. 130, Reporting Comprehensive Income.
SFAS No. 130 is  effective  for  interim  and  annual  periods  beginning  after
December 15, 1997 and is to be applied  retroactively to all periods  presented.
SFAS No. 130  establishes  standards for reporting and display of  comprehensive
income and its components in a full set of general purpose financial statements.
It does not,  however,  specify when to  recognize or how to measure  items that
make up comprehensive  income.  SFAS No. 130 was issued to address concerns over
the practice of reporting  elements of comprehensive  income directly in equity.
This  statement  requires  all items that are  required to be  recognized  under
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  in equal  prominence  with  the  other
financial  statements.  It does not require a specific format for that financial
statement but requires that an enterprise  display an amount  representing total
comprehensive income for the period in that financial statement. Enterprises are
required to classify  items of "other  comprehensive  income" by their nature in
the financial  statement and display the balance of other  comprehensive  income
separately in the equity section of a statement of financial position.



                                       4
<PAGE>

(2) Weighted Average Shares Outstanding
<TABLE>
     Basic and diluted  earnings  per share for the three and nine months  ended
September 30, 1998 and 1997 were computed as follows:
<CAPTION>
                                                                         Income              Shares        Per-Share
         Three months ended September 30, 1998                         (numerator)       (denominator)       Amount
         ------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                 <C>            <C>
         Basic earnings per share                                           $ 300,000           1,346,291      $ .22
         Effect of dilutive securities                                              -              83,929          -
                                                                    --------------------------------------
         Diluted earnings per share                                         $ 300,000           1,430,220      $ .21
                                                                    ======================================


                                                                         Income              Shares        Per-Share
         Nine months ended September 30, 1998                          (numerator)       (denominator)       Amount
         ------------------------------------------------------------------------------------------------------------
         Basic earnings per share                                           $ 711,000           1,339,127      $ .53
         Effect of dilutive securities                                              -              86,576          -
                                                                    --------------------------------------
         Diluted earnings per share                                         $ 711,000           1,425,683      $ .50
                                                                    ======================================


                                                                         Income              Shares        Per-Share
         Three months ended September 30, 1997                         (numerator)       (denominator)       Amount
         -----------------------------------------------------------------------------------------------------------
         Basic earnings per share                                           $ 216,000           1,329,864      $ .16
         Effect of dilutive securities                                              -              73,894          -
                                                                    --------------------------------------
         Diluted earnings per share                                         $ 216,000           1,403,758      $ .15
                                                                    ======================================


                                                                         Income              Shares        Per-Share
         Nine months ended September 30, 1997                          (numerator)       (denominator)       Amount
         ------------------------------------------------------------------------------------------------------------
         Basic earnings per share                                           $ 762,000           1,320,250      $ .58
         Effect of dilutive securities                                              -              65,221          -
                                                                    --------------------------------------
         Diluted earnings per share                                         $ 762,000           1,385,472      $ .55
                                                                    ======================================
</TABLE>

<TABLE>
(3) Allowance for Loan Losses
<CAPTION>
                                                                      9/30/98            12/31/97
                                                                   -----------         ----------
<S>                                                                <C>                  <C>
         Balance at beginning of period                            $ 1,313,000          1,207,000

            Loans charged off                                         (122,000)          (290,000)
            Recoveries                                                  64,000            456,000
            Provisions charged to operations                           120,000            (60,000)
                                                                   -----------         ----------

         Balance at end of period                                  $ 1,375,000          1,313,000
                                                                   ===========          =========
</TABLE>


(4) Other Assets

    Other  assets  includes  the  cash  surrender  value  of life  insurance  of
    $4,226,000 at September 30, 1998. The cash surrender value of life insurance
    consists  primarily of the Bank's  contractual  rights under  single-premium
    life  insurance  policies  written on the lives of certain  officers and the
    directors of the Company and the Bank.  The policies were purchased in order
    to indirectly offset  anticipated costs of certain benefits payable upon the
    retirement,  and the  death or  disability  of the  directors  and  officers
    pursuant to  deferred  compensation  agreements.  The cash  surrender  value
    accumulates  tax-free  based  upon each  policy's  crediting  rate  which is
    adjusted by the insurance company on an annual basis.



                                       5
<PAGE>

(5) Supplemental Compensation Plans

    Effective  April 3, 1998 the Company and the Bank entered into  nonqualified
    supplemental  compensation  agreements with all of the directors and certain
    executive  officers for the  provision of differing  death,  disability  and
    post-employment/retirement  benefits.  The agreement with directors includes
    elective provisions for service as a director emeritus following termination
    of service as a member of the Bank's Board of Directors. Directors who elect
    to serve as a director  emeritus receive certain benefits during such period
    of service  in  addition  to  benefits  applicable  to all  directors  which
    commence upon expiration of the three year emeritus period. The Company will
    accrue for the  compensation  based on anticipated  years of service and the
    vesting schedule  provided in the agreements.  The executive officer program
    is a defined  contribution  program  whereby the benefit  accruals under the
    plan are the amount by which,  if any, the increase in cash surrender  value
    of the related  insurance  policies  exceeds a  predetermined  profitability
    index.  At September 30, 1998,  accrued  compensation  under these plans was
    $16,000.

(6) Western Auxiliary Corporation

    On June 9,  1998 the  Company  incorporated  Western  Auxiliary  Corporation
    (WAC). The Company  capitalized WAC as a wholly-owned  subsidiary during the
    quarter ended September 30, 1998 with an initial  capitalization of $10,000.
    WAC  earns  fee  income  by  acting as  trustee  on the  Bank's  trust  deed
    transactions  and  receives the  necessary  operational  resources  under an
    intercompany services agreement between WAC and the Bank.

(7) Prospective Accounting Pronouncements

    Accounting for Derivative Instruments and Hedging Activity

    In June 1998,  the FASB  issued  SFAS No.  133,  Accounting  for  Derivative
    Instruments and Hedging Activities.  SFAS No. 133 establishes accounting and
    reporting standards for derivative instruments, including certain derivative
    instruments  embedded in other  contracts,  and for hedging  activities.  It
    requires  recognition of all  derivatives as either assets or liabilities on
    the balance sheet and  measurement of those  instruments  at fair value.  If
    certain  conditions are met, a derivative may be designated  specifically as
    (a) a hedge of the  exposure  to changes  in the fair value of a  recognized
    asset or liability or an  unrecognized  firm commitment (a fair value hedge)
    or (b) a hedge of the  exposure  to  variable  cash  flows  of a  forecasted
    transaction  (a cash flow hedge).  SFAS No. 133 is effective  for all fiscal
    quarters of fiscal years  beginning after June 15, 1999. The Company adopted
    the Statement  beginning  October 1, 1998.  Management  does not expect that
    adoption  of SFAS No.  133 will  have a  material  impact  on the  Company's
    consolidated financial statements.

    Accounting for Mortgage-Backed Securities Retained  after the Securitization
    of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise
 
    In  October   1998,   the  FASB  issued  SFAS  No.   134,   Accounting   for
    Mortgage-Backed  Securities  Retained after the  Securitization  of Mortgage
    Loans Held for Sale by a Mortgage Banking Enterprise.  SFAS No. 134 requires
    that after the  securitization  of mortgage  loans held for sale,  an entity
    engaged   in   mortgage   banking   activities    classify   the   resulting
    mortgage-backed  securities or other retained interests based on its ability
    and intent to sell or hold those investments.  SFAS No. 134 is effective for
    the first fiscal quarter beginning after December 15, 1998.  Management does
    not expect that adoption of SFAS No. 134 will have a material  impact on the
    Company's consolidated financial statements.

    Accounting  for the Costs of Computer  Software  Developed  or Obtained  for
    Internal Use

    In March 1998, the American Society of Certified Public Accountants  (AICPA)
    issued  Statement  of  Position  (SOP)  98-1,  Accounting  for the  Costs of
    Computer Software  Developed or Obtained for Internal Use. SOP 98-1 provides
    guidance on  accounting  for the costs of  computer  software  developed  or
    obtained  for internal  use. It specifies  that  computer  software  meeting
    certain  characteristics  be  designated as  internal-use  software and sets
    forth criteria for  expensing,  capitalizing,  and amortizing  certain costs
    related to the development or acquisition of internal-use software. SOP 98-1
    is effective for fiscal years beginning after December 15, 1998. The Company
    expects to adopt the Statement  beginning  January 1, 1999.  Management does
    not expect  that  adoption  of SOP 98-1 will have a  material  impact on the
    Company's consolidated financial statements.

    Reporting on the Costs of Start-Up Activities

    In April 1998, the AICPA issued SOP 98-5, Reporting on the Costs of Start-Up
    Activities.  SOP  98-5  provides  guidance  on the  financial  reporting  of
    start-up  costs  and  organization  costs.  It  requires  costs of  start-up
    activities and  organization  costs to be expensed as incurred.  SOP 98-5 is
    effective for fiscal years  beginning  after  December 15, 1998. The Company
    expects to adopt the Statement  beginning  January 1, 1999.  Management does
    not expect  that  adoption  of SOP 98-5 will have a  material  impact on the
    Company's consolidated financial statements.

                                       6
<PAGE>

Item 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATION

Cautionary  Statement  for the  Purposes  of the Safe Harbor  Provisions  of the
Private Securities Litigation Reform Act of 1995.

The Company is including the following cautionary statement to take advantage of
the "Safe Harbor" provisions of the Private Securities  Litigation Reform act of
1995 for any  forward-looking  statement  made by, or on behalf of, the Company.
The factors  identified in this cautionary  statement are important factors (but
not necessarily all important factors) that could cause actual results to differ
materially from those expressed in any forward-looking  statement made by, or on
behalf of, the Company.

Where any such forward-looking statement includes a statement of the assumptions
of bases underlying such forward-looking  statement,  the Company cautions that,
while it believes such  assumptions  or bases to be reasonable and makes them in
good faith,  assumed facts or bases almost always vary from actual results,  and
the  differences  between  assumed  facts or bases  and  actual  results  can be
material,  depending  on  the  circumstances.   Where,  in  any  forward-looking
statement, the Company expresses an  expectation or belief as to future results,
such  expectation  or belief is  expressed  in good faith and believed to have a
reasonable  basis,  but  there  can  be  no  assurance  that  the  statement  of
expectation or belief will result, or be achieve or accomplished.

Taking into account the foregoing, such risks and uncertainties include, but are
not  limited  to, the  following  factors:  competitive  pressure in the banking
industry; changes in the interest rate environment; general economic conditions,
either  nationally  or  regionally  becoming  less  favorable  than expected and
resulting  in, among other  things,  a  deterioration  in credit  quality and an
increase in the provision for possible  loan losses;  changes in the  regulatory
environment;  changes  in  business  conditions;  volatility  of rate  sensitive
deposits; operational risks, including data processing system failures or fraud;
asset/liability   matching  risks  and  liquidity  risks;  and  changes  in  the
securities markets.

In addition,  the dates on which the Company believes the Year 2000 project will
be  completed  are based on  management's  best  estimates,  which were  derived
utilizing  numerous  assumptions  of  future  events,  including  the  continued
availability  of certain  resources,  third-party  modification  plans and other
factors.  However,  there  can be no  guarantee  that  these  estimates  will be
achieved,  or that there will not be a delay in, or increased  costs  associated
with, the  implementation of the Year 2000 Project.  Specific factors that might
cause differences between the estimates and actual results include,  but are not
limited to, the  availability and cost of trained  personnel,  ability to locate
and correct all computer related issues,  timely responses to and corrections by
third-parties and suppliers,  the availability to implement  interfaces  between
new systems and the systems not being replaced, and similar  uncertainties.  Due
to the general uncertainty inherent in the Year 2000 problem,  resulting in part
from the  uncertainty of the Year 2000 readiness of  third-parties,  the Company
cannot  ensure  its  ability  to timely and  cost-effectively  resolve  problems
associated  with  the Year  2000  issues  that may  affect  its  operations  and
business,  or expose  it to  third-party  liability.

The  following  discussion  addresses  information  pertaining  to the financial
condition  and results of  operations  of the Company  that may not be otherwise
apparent  from a review of the  consolidated  financial  statements  and related
footnotes.  It should be read in  conjunction  with those  statements  and notes
found on pages 1 through 6, as well as other  information  presented  throughout
this report.

Changes in Financial Condition

Consolidated  total  assets at September  30, 1998 were $9.2  million  above the
comparable  level at  December  31,  1997.  The 6%  increase  in assets  was due
primarily to an increase in deposits of $9.0 million, or 7%. Noninterest bearing
deposits grew by 28%. Growth of 4% in interest bearing deposits occurred in core
NOW account deposits and certificates of deposit.  The company  experienced a 1%
increase in deposits  during the first  quarter that ran

                                       7
<PAGE>

contrary  to  historical  trends  which  reflect a seasonal  decline in deposits
during  the  first  quarter  that  is  typically   associated   with  the  local
agricultural  industry.  Deposits  grew an additional 5% subsequent to the first
quarter.  Although  management  cannot  determine  with certainty why a seasonal
decline in deposits has not occurred,  the  unseasonably  wet weather during the
first quarter  impacted local  agriculture and may have impacted  deposit flows.
Nothwithstanding  seasonal  trends,  monthly  deposit  account growth has ranged
between 5% and 12% through  September 30, 1998 and has impacted  deposit  growth
favorably.

The loan portfolio increased by 29%, or $18.4 million, from December 31, 1997 to
September  30,  1998.  The  increase  reflects  the  success of officer  calling
disciplines within the Bank's business  development  program as well as economic
improvement  in the Bank's market area. The real estate,  construction,  SBA and
commercial  loan portfolios  increased by 43%, 65%, 59%, and 15%,  respectively.
From a  geographic  perspective,  the  fastest  loan  portfolio  growth rate has
occurred in the markets of Galt, Plymouth, and San Andreas,  California that the
Bank began to serve in February,  1997 after  acquiring the local  branches from
Wells Fargo Bank, and Folsom,  where a loan  production  office was restaffed in
June of 1998. Since December 31, 1997, the loan portfolios of these offices have
increased by 98%.

The allowance for loan losses at September 30, 1998 is in excess of the December
31, 1997 allowance by $62 thousand,  or 5%. Nonperforming loans declined by $123
thousand, to $282 thousand from December 31, 1997 to September 30, 1998, and the
allowance for loan losses to nonperforming loan coverage ratio increased to 4.89
times from 3.24 times.  Total  portfolio  delinquency  at September 30, 1998 was
 .67%,  compared to 1.09% at December  31,  1997.  Management  believes  that the
allowance  for loan losses at  September  30, 1998 is  adequate.  The  following
tables  depict  activity  in the  allowance  for loan losses and  allocation  of
reserves  for and at the nine and twelve  months  ended  September  30, 1998 and
December 31, 1997, respectively:
<TABLE>
Analysis of the Allowance for Loan Losses
<CAPTION>

                                                                     9/30/98           12/31/97
                                                                     -------           --------

<S>                                                                  <C>                  <C>  
Balance at beginning of period                                       $ 1,313              1,207
Charge-offs:
   Commercial                                                             66                249
   Real estate                                                            25                 --
   Consumer                                                               31                 41
                                                                     -------              -----
   Total charge-offs                                                     122                290
Recoveries:
   Commercial                                                             46                434
   Real estate                                                            --                 --
   Consumer                                                               18                 22
                                                                     -------              -----
   Total recoveries                                                       64                456
                                                                     -------              -----
Net charge-offs                                                           58              (166)
additions/(reductions) charged to/(credited to) operations               120               (60)
                                                                     -------              -----
Balance at end of period                                             $ 1,375              1,313
                                                                     =======              =====
</TABLE>

<TABLE>
Allocation of the Allowance for Loan Losses
<CAPTION>
                                     9/30/98        9/30/98             12/31/97        12/31/97
           Loan Category              Amount       % of Loans             Amount       % of Loans
           -------------           ---------       ----------             ------       ----------
<S>                                <C>              <C>                    <C>           <C>   
Commercial                         $     203         56.71%                  309          60.95%
Real Estate                              146         40.78%                  192          37.87%
Consumer                                   9          2.51%                    6           1.18%
Unallocated                            1,017            N/A                  806             N/A
                                    --------        -------              -------         -------
                                   $   1,375        100.00%                1,313         100.00%
                                   =========        =======              =======         =======
</TABLE>

                                       8
<PAGE>

Other Assets

Other  assets  increased by $4.2  million,  or 142%,  from  December 31, 1997 to
September  30,  1998.  During the second  quarter of 1998,  the Bank's  Board of
Directors  adopted a director  emeritus  program and a  supplemental  retirement
compensation program for certain executive officers.  Similar programs have been
endorsed  by  the  California  Bankers  Association  and  the  American  Bankers
Association  and have been  implemented  at  financial  institutions  throughout
California and the United States.  The nature of these programs  enable the Bank
to fund the related  financial  obligations in a  cost-effective  manner through
investments in life  insurance.  Accordingly,  the Bank invested $4.2 million in
single-premium  life  insurance  contracts  written  on the  lives  of the  plan
participants.  The contracts provide for a cash surrender value to the Bank that
increases each year based upon a crediting rate that is adjusted  annually.  The
increase in cash  surrender  value is recognized on a tax-free basis because the
Bank's  intent  is to  carry  the  policies  until  the  death  of  the  insured
individuals.  The tax-equivalent  yield on the insurance investment provides for
an incremental return over alternative  investment securities that both improves
profitability  and  ultimately  provides  the  funds  necessary  to  settle  the
financial  obligations  under the emeritus and  retirement  programs.  Under the
supplemental  retirement  program for  certain  executive  officers,  retirement
benefits are credited annually only after a pre-determined  profitability target
for the insurance investment is met.

Investment Securities

The growth in the loan  portfolio  and other assets was funded by  maturities of
investment  securities  in  addition  to the  deposit  growth  discussed  above.
Investment  securities declined by $11.4 million, or 18%, from December 31, 1997
to September 30, 1998. The decline  represents  maturities of approximately  $15
million net of  investment  purchases of $4.0  million.  Some of the  maturities
represent  callable  agency  securities  that  were  called  by the  issuer.  At
September 30, 1998, the bank held approximately $14.5 million in callable agency
securities with an average maturity,  months to first call, and average yield of
9 years, 6 months, and 6.99%, respectively.

Equity

Consolidated  equity  increased  by $681  thousand  from  December  31,  1997 to
September  30,  1998.   Consolidated   equity   represented  8.6%  and  8.7%  of
consolidated  assets at September 30, 1998 and December 31, 1997,  respectively.
Stock option exercises during the nine months ended September 30, 1998 increased
equity by $111  thousand.  The increase in equity from earnings of $711 thousand
for the nine months ended  September 30, 1998 exceeded  reductions from dividend
payments of $202  thousand.  Equity also  increased  by $61  thousand due to the
after-tax  market value  appreciation of the  available-for-sale  portion of the
investment  securities  portfolio.  The  increase  in  the  investment  security
portfolio's market value reflects the decline in the level market interest rates
at September 30, 1998 compared to December 31, 1997.

The total risk-based  capital ratio for the Company's  wholly owned  subsidiary,
Bank of Lodi was 11.60% at September 30, 1998 compared to 12.95% at December 31,
1997. The decline in the total risk-based capital ratio is largely a function of
the  increase in loan volume.  Loans carry a risk weight of 100%  compared to an
average  risk-weight of 20% for the funds used to make loans. For each dollar in
new loans,  risk-weighted  assets increase by eighty cents.  The Bank's leverage
capital ratio was 7.15% at September 30, 1998 versus 7.11% at December 31, 1997.
The  capital   ratios  are  in  excess  of  the   regulatory   minimums   for  a
well-capitalized bank.

Year 2000

The potential impact of the Year 2000 compliance issue on the financial services
industry  could be  material,  as  virtually  every  aspect of the  industry and
processing of transactions will be affected.  Due to the size of the task facing
the  financial   services  industry  and  the   interdependent   nature  of  its
transactions,  the Company may be adversely affected by this problem,  depending
on whether it and the entities  with which it does  business  address this issue
successfully. The impact of Year 2000 issues on the Company will depend not only
on corrective  actions that the Company takes, but also on the way in which Year
2000 issues are addressed by governmental  agencies,  businesses and other third
parties that provide  services or data to, or receive services or data from, the
Company, or whose financial condition or operational  capability is important to
the Company.

                                       9
<PAGE>

The Company's State of Readiness

The Company  engages the services of  third-party  software  vendors and service
providers for  substantially  all of its electronic data  processing.  Thus, the
focus  of the  Company  is to  monitor  the  progress  of its  primary  software
providers toward Year 2000 compliance and prepare to test future-data  sensitive
data of the Company in simulated processing.

The Company's Year 2000 compliance  program has been divided into phases, all of
them common to all  sections of the  process:  (1)  inventorying  date-sensitive
information  technology and other business systems;  (2) assigning priorities to
identified  items and assessing the efforts required for Year 2000 compliance of
those  determined  to be material to the  Company;  (3)  upgrading  or replacing
material  items that are  determined  not to be Year 2000  compliant and testing
material items; (4) assessing the status of third party risks; and (5) designing
and implementing contingency and business continuation plans.

As part of the on-going  supervision of the banking  industry,  bank  regulatory
agencies are  continuously  surveying the Company's  progression  and results of
each one of these phases.

In the first  phase,  the  Company  conducted a thorough  evaluation  of current
information technology systems, software and embedded technologies, resulting in
the identification of 21 Mission Critical Systems that could be affected by Year
2000 issues. Non-information technology systems such as climate control systems,
elevators and vault security  equipment,  were also surveyed.  This stage of the
Year 2000 process is complete.

In phase  two of the  process,  results  from the  inventory  were  assessed  to
determine  the Year 2000 impact and what  actions  were  required to obtain Year
2000  compliance.  For the Company's  mission-critical  systems,  actions needed
consist principally of upgrades to application versions that vendors have tested
for Year 2000  compliance.  The Bank's  core  information  system is The Phoenix
Banking System (PBS) from Phoenix International Ltd., which was developed in the
early  1990's.  The Bank  converted to PBS in 1996.  PBS was  developed  with an
eight-digit  date field.  Phoenix  International  Ltd. has  completed  year 2000
testing  on  version  2.01 of PBS.  No code  changes  to PBS were  necessary  to
complete those tests.

The third  phase  includes  the  upgrading,  replacement  and/or  retirement  of
systems,  and  testing.  This stage of the Year 2000  process is ongoing  and is
scheduled to be substantially completed for mission critical systems by December
31, 1998. The Company and the Bank plan to upgrade to version 2.01 of PBS during
the fourth  quarter of 1998 and complete  on-site  testing by December 31, 1998.
The Company  estimates that it is on schedule to be substantially  complete with
testing of mission-critical  systems by December 31, 1998. Each of the upgrades,
to the extent economically feasible, is run through a test environment before it
is  implemented.  It is also  tested  to see how  well it  integrates  with  the
Company's overall data processing  environment.  Final "future-date"  testing of
system upgrades and  replacements is scheduled to be completed by the end of the
first quarter of 1999.

The  fourth  phase,  assessing  third  party  risks,  includes  the  process  of
identifying  and  prioritizing  critical  suppliers  and customers at the direct
interface  level,  as well as other  material  relationship  with third parties,
including various  exchanges,  clearing houses,  other banks,  telecommunication
companies and public utilities.  This evaluation includes communicating with the
third  parties  about their plans and progress in  addressing  Year 2000 issues.
Detailed  evaluations  of the most critical  third parties have been  initiated.
These evaluations will be followed with contingency plans, which are ongoing and
scheduled to be completed in the second quarter of 1999,  with follow up reviews
scheduled through the remainder of 1999.

                                       10
<PAGE>

Contingency Plan

The  final  phase of the  Company's  Year 2000  compliance  program  relates  to
contingency plans. The Company maintains  contingency plans in the normal course
of business designed to be deployed in the event of various  potential  business
interruptions.  These  plans have been  expanded to address  Year  2000-specific
interruptions such as power and telecommunication  infrastructure  failures, and
will continue to be supplemented if and when the results of systems  integration
testing identify  additional business functions at risk. The Company is defining
core business  processes  that are dependent upon  mission-critical  systems and
reviewing  the business  impact on those  processes  from the failure of mission
critical systems in order to develop specific  business  resumption  contingency
plans.

Costs

As the Company relies upon third-party  software  vendors and service  providers
for substantially all of its electronic data processing, the primary cost of the
Year 2000 Project has been and will continue to be the  reallocation of internal
resources and, therefore, does not represent incremental expense to the Company.
Management  estimates  that the  incremental  cost of mitigating  Year 2000 risk
exclusive of  management  time that has been  redirected to focus on this matter
will be approximately $50 thousand.

Risks

Failure to correct a material Year 2000 problem could result in an  interruption
in, or a failure of,  certain  normal  business  activities or  operations.  The
Company believes that, with the  implementation of upgraded business systems and
completion of the Year 2000 Project as scheduled, the possibility of significant
interruptions  of normal  operations due to the failure of those systems will be
reduced.   However,   the  Company  is  also   dependent   upon  the  power  and
telecommunications  infrastructure within the United States, and processes large
volumes of transactions through various clearing houses and correspondent banks.
The most  reasonably  likely worst case  scenario  would be that the Company may
experience  disruption in its operations if any of these  third-party  suppliers
reported a system failure.  Although the Company's Year 2000 Project will reduce
the level of  uncertainty  about the  compliance  and  readiness of its material
third-party  providers,  due to the general uncertainty over Year 2000 readiness
of these third-party suppliers,  the Company is unable to determine at this time
whether the consequences of Year 2000 failures will have a material impact.

Readers are cautioned that forward-looking  statements contained in this section
should be read in conjunction with the Company's  disclosures  under the heading
"Cautionary  Statement  for the Purposes for the Safe Harbor  Provisions  of the
Private Securities Litigation Reform Act of 1995."

                                       11
<PAGE>

<TABLE>
Changes in Results of Operation - Three Months ended September 30, 1998
<CAPTION>
Summary of Earnings Performance

------------------------------------------------------------------------------------------------------

                                                         For the three months ended September 30:
                                                     -------------------------------------------------

                                                                         1998                    1997
                                                                         ----                    ----
<S>                                                                    <C>                        <C>
Net income (in thousands)                                                $   300                     216

---------------------------------------------------------------------------------------------------------

Basic net income per share                                               $   .22                     .16

Diluted net income per share                                                 .21                     .15

Return on average assets                                                    0.78%                   0.61%

Return on average equity                                                    9.00%                   6.90%

Dividend payout ratio                                                      23.81%                  33.33%

---------------------------------------------------------------------------------------------------------

"Cash" net income (in thousands) (1)                                      $  354                     286

Diluted "cash" net income per share                                          .25                     .20

"Cash" return on average assets                                             0.92%                    .81%

"Cash" return on average equity                                            10.62%                   9.20%
---------------------------------------------------------------------------------------------------------

Operating "cash" net income (in thousands) (2)                            $  354                     286

Diluted operating "cash" net income per share                                .25                     .20

Operating "cash" return on average assets                                   0.92%                   0.81%

Operating "cash" return on average equity                                  10.62%                   9.20%
---------------------------------------------------------------------------------------------------------

Average equity to average assets                                            8.67%                   8.84%
---------------------------------------------------------------------------------------------------------
<FN>
(1)  "Cash"  net income  represent  net income  based  upon  generally  accepted
     accounting  principles  plus the after-tax,  non-cash effect on earnings of
     the  amortization of intangible  assets.  Following the 1997 acquisition of
     three  branches  from Wells  Fargo  Bank,  the "cash"  earnings,  return on
     assets, and return on equity are the most comparable to prior year numbers.
     They are  also the more  relevant  performance  measures  for  shareholders
     because  they  measure  the  Company's  ability to  support  growth and pay
     dividends.
(2)  Operating  "Cash" net income is computed by excluding the after-tax  impact
     of  significant  elements of revenue or costs that  obscure  the  operating
     results of core  operations.  There were no adjustments  for operating cash
     earnings for the third quarter of 1998.
</FN>
</TABLE>
Net income for the quarter increased by 39% compared to the prior year  quarter.
Net interest  income  increased  by 13%, or $216  thousand.  Noninterest  income
increased by 34%, or $123 thousand, while noninterest expenses increased by 12%,
or $211 thousand.  Based upon the earnings for the three months ended  September
30, 1998, the Company's board of directors  declared a cash dividend of $.05 per
share payable November 27, 1998 to shareholders of record on November 13, 1998.

Net Interest Income

Net  interest  income  increased  by  $216  thousand,  or 13%,  relative  to the
comparable  prior year quarter.  Net interest margin  increased to 5.47% for the
quarter  compared to 5.31% in the prior year quarter.  Interest income increased
by $281 thousand,  or 11%, while interest expense increased by $65 thousand,  or
7%. The yield on average earning assets for the three months ended September 30,
1998 was 8.74%  compared  to 8.66% in the prior year  period.  The  increase  in
interest  income  was the  result of growth in  average  earning  assets  and an
improved mix of average  earning assets.  The yield on average  deposits for the
three months ended  September 30, 1998 was 2.93%  compared to 3.08% in the prior
year  period.  The  increase  in  interest  expense  reflects  growth in average
deposits,  although  favorable  changes in the mix of deposits and cost of funds
reductions for  transaction  accounts  offset a portion of the gross increase in
interest expense related to the increase in deposits.

                                       12
<PAGE>

Average  earning assets for the three months ended  September 30, 1998 increased
by $11.9  million,  or 9.6%,  compared to the prior year quarter.  Earning asset
growth  would have been $16  million,  or 13%,  without the  investment  in life
insurance  contracts  discussed  above  under  Changes in  Financial  Condition.
Although the insurance  contracts  have a cash  surrender  value that  increases
based upon an annual  earnings  rate,  the  contracts are accounted for as other
assets,  and the  earnings  are  recorded  as a component  of other  noninterest
income.

Loan yields declined by 10 basis points,  while average loans increased by $15.8
million,  or 26%, over the prior year. The increase in average loans outstanding
increased  loans as a percentage of earning assets to 56% compared to 49% in the
prior year  quarter.  The  increased  mix of loans in earning  assets offset the
effect of declines in investment  portfolio  yields,  which declined by 37 basis
points.  The  growth in  average  loans was the  result of  persistent  business
development  efforts on the part of the banks  officers  and  employees  in both
existing and  new-branch  markets and favorable  economic  conditions  that have
stimulated mortgage demand and real estate activity.

Average  deposits for the three months ended September 30, 1998 increased by $15
million,  or 11.8%,  compared  to the prior year  quarter.  Average  noninterest
bearing  deposits  increased  to 12%  of  average  deposits  from  11%.  Average
certificates  of deposit  were 34% of average  deposits  compared  to 33% in the
prior year quarter.  The impact of the changed  deposit mix offset $123 thousand
of the gross  increase in interest  expense that  resulted  from the increase in
deposits. In addition, reductions in deposit interest rates offset an additional
$42 thousand in interest expense.

Provision for Loan Losses

The  provision for loan losses  increased by $60 thousand  compared to the prior
year  quarter.  The growth in the  provision  is  attributable  to general  loss
reserves that have been  established in connection  with loan portfolio  growth.
The  allowance  for loan losses is  discussed  above under  Changes in Financial
Condition.

Noninterest Income

Noninterest  income  increased  by $123  thousand,  or 34%,  over the prior year
quarter.  Increased  service  charge income  combined with income related to new
investment in insurance  contracts  combined with an increase in income from the
sale and servicing of loans. Service charge income increased by $26 thousand, or
13%, as a result of increases in deposit accounts.  Other noninterest income was
$64  thousand  compared to $15  thousand in the prior year due  primarily to $57
thousand in income from the  increase in the cash  surrender  value of insurance
contracts discussed above under Other Assets.

Income from the sale and servicing of loans  increased by $48 thousand,  or 30%,
compared  to  the  prior  year  quarter.   The  increased   mortgage  income  is
attributable to declining  interest rates,  improving economic  conditions,  and
business  development efforts in the mortgage and construction lending area. The
increase  resulted  from an increase in income  from the sale and  servicing  of
mortgage loans. Mortgage income for the quarter was 73% higher than in the prior
year. SBA loan sales income for the quarter  increased by $17 thousand,  or 27%.
The pipeline of SBA loans in process is currently larger than in the prior year,
however;  the  departments  production  cycle has extended due to an increase in
loans involving new construction which take longer to fully fund.

Noninterest Expenses

Noninterest  expenses increased by $211 thousand,  or 12%, compared to the prior
year quarter.  Salaries and benefit expenses increased by $102 thousand, or 14%.
Approximately  $27  thousand  of the  increase  is related to new offices in Elk
Grove and Folsom, CA. Staffing was also increased by three full-time equivalents
in the mortgage  department as a result of the increase in  origination  volume.
Excluding the new offices and the staffing change in the mortgage area, salaries
and benefits increased by $48 thousand,  or 5.5%. Occupancy expense increased by
$51 thousand,  or 33%, due  primarily to the occupancy  costs for the new office
locations.  Occupancy increases were partially offset by increased rental income
resulting  from  increased  occupancy at Bank of Lodi's main office  building in
Lodi. Other noninterest  expenses increased by $47 thousand,  or 7%, and reflect
both  expenses  at new office  locations  as well as costs  associated  with the
business  development efforts and deposit account growth.

                                       13
<PAGE>

Changes in Results of Operation - Nine Months ended September 30, 1998
<TABLE>
Summary of Earnings Performance
<CAPTION>
------------------------------------------------------------------------------------------------------

                                                          For the nine months ended September 30:
                                                     -------------------------------------------------

                                                                         1998                   1997
                                                                         ----                   ----
<S>                                                                    <C>                     <C>
Net income (in thousands)                                                $  711                    762

-------------------------------------------------------------------------------------------------------

Basic net income per share                                               $  .53                    .58

Diluted net income per share                                             $  .50                    .55

Return on average assets                                                   0.62%                   .77%

Return on average equity                                                   7.18%                  8.30%

Dividend payout ratio                                                     30.00%                 27.27%

-------------------------------------------------------------------------------------------------------

"Cash" net income (in thousands) (1)                                       $873                   $971

Diluted "cash" net income per share                                         .61                    .70

"Cash" return on average assets                                            0.76%                   .98%

"Cash" return on average equity                                            8.82%                 10.50%
-------------------------------------------------------------------------------------------------------

Operating "cash" net income (in thousands) (2)                             $980                    971

Diluted operating "cash" net income per share                               .69                    .70

Operating "cash" return on average assets                                  0.85%                   .98%

Operating "cash" return on average equity                                  9.90%                 10.50%
-------------------------------------------------------------------------------------------------------

Average equity to average assets                                           8.63%                  9.28%
-------------------------------------------------------------------------------------------------------
<FN>
(1)  "Cash"  net income  represent  net income  based  upon  generally  accepted
     accounting  principles  plus the after-tax,  non-cash effect on earnings of
     the  amortization of intangible  assets.  Following the 1997 acquisition of
     three  branches  from Wells  Fargo  Bank,  the "cash"  earnings,  return on
     assets, and return on equity are the most comparable to prior year numbers.
     They are  also the more  relevant  performance  measures  for  shareholders
     because  they  measure  the  Company's  ability to  support  growth and pay
     dividends.
(2)  Operating  "Cash" net income is computed by excluding the after-tax  impact
     of  significant  elements of revenue or costs that  obscure  the  operating
     results of core operations. Adjustments for the nine months ended September
     30, 1998 have been made to exclude from net income the preliminary costs of
     a strategic growth  initiative for which the company ceased further pursuit
     in May, 1998.
</FN>
</TABLE>

Net income  declined by $51 thousand,  or 7%, compared to the prior year period.
Operating "Cash" earnings for the nine months ended September 30, 1998 increased
by $9  thousand,  or 1%  compared  to the prior year  period.  Operating  "Cash"
earnings  for the prior year  period  included  a  significant  contribution  to
performance  that was realized  when several  loans that had been charged off in
prior periods were paid in full.  The  repayment of these loans  resulted in the
recognition  of $445  thousand  in  recovered  interest  income  and a  negative
provision for loan losses of $80 thousand. Excluding the after-tax impact of the
recovered  interest from operating  "cash" earnings for the prior year,  current
year operating  "cash"  earnings  would have exceeded the comparable  prior year
amount by $267 thousand,  or 37%.  Excluding the prior year recovery of interest
income,  net interest  income for the current  period  increased by 15%, or $733
thousand,  over the prior year period.  Noninterest  income increased by 22%, or
$239 thousand,  while  noninterest  expenses  increased by 7%, or $344 thousand,
before the costs  associated with the strategic growth  initiative  discussed in
footnote two of the above table.

Net Interest Income

Excluding the prior year recovery of interest,  net interest income increased by
$733 thousand,  or 15%,  relative to the prior year period.  Net interest margin
increased  to 5.42% for the quarter  compared to 5.26% in the prior year period,
exclusive of the prior year recovery of interest.  Interest income  increased by
$1,039 thousand,  or 14%,  excluding the prior year recovery of interest,  while
interest  expense  increased  by $306  thousand,  or 11%.  The yield on  average
earning  assets for the nine months ended  September 30, 1998 was 8.55% compared
to 8.42% in the prior  year  period,  exclusive  of the prior year  recovery  of
interest.  The  increase in interest  income was the result of growth in average
earning  assets  combined  with the 13 basis  point  increase  in earning  asset
yields.  The yield on average

                                       14
<PAGE>

deposits  for the nine months  ended  September  30, 1998 was 2.98%  compared to
3.12% in the prior year period. The increase in interest expense reflects growth
in average deposits,  although favorable changes in the mix of deposits offset a
portion of the gross  increase in interest  expense  related to the  increase in
deposits.

Average earning assets for the nine months ended September 30, 1998 increased by
$14.5  million,  or 12.4%,  compared to the prior year period.  A portion of the
increase  in  average  earning  assets  relative  to the  prior  year  period is
attributable  to the  acquisition  of three  branches  from Wells  Fargo Bank on
February  22, 1997.  Deposits  totaling  $34 million  were  acquired  with these
branches and are only  reflected in seven out of the nine months used to compute
the average in the prior year.  Excluding the impact of the initial  acquisition
of the branches,  average earning assets would have increased by $7 million,  or
6%. The gross  earning  asset  growth would have been $17.3  million,  or 14.8%,
without the investment in life insurance contracts discussed above under Changes
in Financial  Condition.  Although the insurance contracts have a cash surrender
value that  increases  based upon an annual  earnings  rate,  the  contracts are
accounted for as other  assets,  and the earnings are recorded as a component of
other noninterest income.

Loan yields  declined by 4 basis points,  while average loans increased by $12.6
million,  or 22.2%,  over the prior year period.  The increase in average  loans
outstanding increased loans as a percentage of earning assets to 53% compared to
49% in the prior year period.  The  increased  mix of loans as a  percentage  of
earning  assets offset the effect of declines in loan and  investment  portfolio
yields.  The  growth in  average  loans was the  result of  persistent  business
development  efforts on the part of the banks  officers  and  employees  in both
existing and  new-branch  markets and favorable  economic  conditions  that have
stimulated mortgage demand and real estate activity.

Average deposits for the nine months ended September 30, 1998 increased by $19.2
million, or 16.2%,  compared to the prior year period. A portion of the increase
in average  deposits  relative to the prior year period is  attributable  to the
acquisition  of three  branches  from Wells  Fargo Bank on  February  22,  1997.
Deposits  totaling $34 million were  acquired  with these  branches and are only
reflected  in seven out of the nine  months  used to compute  the average in the
prior year.  Excluding  the impact of the initial  acquisition  of the branches,
average  deposits  would have  increased by $11.6  million,  or 9.2%. The mix of
deposits shifted away from higher cost certificates of deposit to lower yielding
noninterest  bearing and  interest  bearing  demand  deposit  accounts.  Average
certificates  of deposit  were 33% of average  deposits  compared to 347% in the
prior year quarter. The impact of the changed deposit mix offset $65 thousand of
the gross  increase in  interest  expense  that  resulted  from the  increase in
deposits.  In addition,  reductions  in the interest  rates paid on  transaction
accounts offset an additional $76 thousand in interest expense.

Provision for Loan Losses

The provision for loan losses is $120 thousand in the current period compared to
the  negative  $60 thousand  recorded in the prior year  period.  The  principal
reasons for the increase are the significant recoveries in the prior year period
that led to the  negative  provision  in the prior year  combined  with  general
reserves  established  in the current year in connection  with the growth in the
loan  portfolio.  Total  recoveries  of loans charged off in previous year added
$456  thousand to the  allowance  for loan  losses  during the prior year period
compared to $64 thousand in the current year.

Noninterest Income

Noninterest  income  increased  by $284  thousand,  or 27%,  over the prior year
period.  Service charge income increased by $88 thousand, or 15%, as a result of
both the  acquisition  of three  branches  from Wells Fargo Bank on February 22,
1997 and increases in deposit accounts  bankwide.  Other noninterest  income was
$131 thousand compared to $42 thousand in the prior year due to $112 thousand in
income from the investment in insurance  contracts  discussed  above under Other
Assets.



Income from the sale and servicing of loans increased by $107 thousand,  or 24%,
compared to the prior year period. The increase was dampened by a decline in SBA
loan  sales  income.  SBA loan  sales  income  for the  period  declined  by $51
thousand, or 22%, compared to the prior year period. Income from the origination
and sale of mortgage loans  increased by $111 thousand,  or 208%, over the prior
year period. The increased mortgage income is attributable to declining interest
rates,  improving economic  conditions,  and business development efforts in the
mortgage and construction lending area.

                                       15
<PAGE>

Noninterest Expenses

Noninterest  expenses increased by $573 thousand,  or 11%, compared to the prior
year  quarter.  Approximately  $184  thousand of the increase  represents  costs
associated  with a strategic  growth  initiative  that was  discontinued  by the
company in May, 1998.  Excluding those costs,  noninterest expenses increased by
7.5%.  Salaries  and benefit  expenses  increased  by $293  thousand,  or 13%. A
significant  portion of the increase is attributable to the acquisition of three
branches  from Wells Fargo Bank on February 22,  1997.  Some of the increase was
also  related to a new loan  production  office in Folsom,  California  that was
opened earlier in 1998. Mortgage department staffing was also increased by three
full-time  equivalents relative to the prior year as a result of the increase in
mortgage loan volume.  Occupancy expense increased by $97 thousand,  or 23%. The
increase in  occupancy  expenses is  principally  the result of four  additional
branch locations and the new loan production office in Folsom, California. These
costs were partially  offset by increased rental income resulting from increased
occupancy  at Bank of Lodi's main office  building  in Lodi.  Other  noninterest
expenses increased by $113 thousand,  or 6%.  Approximately $72 thousand of this
increase was related to the strategic costs that were discussed  earlier in this
paragraph.  Excluding those costs,  other  noninterest  expense increased by $41
thousand due to the expanded branch network, increased business development, and
deposit account transaction volumes.


Basis of Presentation

First  Financial  Bancorp is the  holding  company  for Bank of Lodi,  N.A.  and
Western Auxiliary  Corporation.  In the opinion of management,  the accompanying
unaudited consolidated financial statements reflect all adjustments  (consisting
of normal  recurring  accruals and other accruals as explained  above) necessary
for a fair  presentation  of financial  position as of the dates  indicated  and
results of operations for the periods shown. All material  intercompany accounts
and  transactions  have been  eliminated  in  consolidation.  In  preparing  the
financial  statements,  management is required to make estimates and assumptions
that  affect the  reported  amounts.  The  results for the three and nine months
ended September 30, 1998 are not necessarily indicative of the results which may
be expected for the year ended  December 31, 1998.  The  unaudited  consolidated
financial  statements  presented  herein should be read in conjunction  with the
consolidated  financial  statements and notes included in the 1997 Annual Report
to Shareholders.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

While there are several  varieties of market risk,  the market risk  material to
the Company and the Bank is interest  rate risk.  Within the context of interest
rate risk,  market  risk is the risk of loss due to  changes in market  interest
rates that have an adverse effect on net interest income,  earnings,  capital or
the fair  value of  financial  instruments.  Exposure  to this type of risk is a
regular part of a financial institution's operations. The fundamental activities
of making  loans,  purchasing  investment  securities,  and  accepting  deposits
inherently  involve  exposure to interest  rate risk.  The Company  monitors the
repricing  differences  between  assets and  liabilities  on a regular basis and
estimates  exposure to net interest income,  net income,  and capital based upon
assumed  changes in the  market  yield  curve.  As of and for the three and nine
months ended  September 30, 1998,  there were no material  changes in the market
risk profile of the Company or the Bank as described in the Company's  1997 Form
10-K.




PART II -- OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS

           Not Applicable.

ITEM 2.    CHANGES IN SECURITIES


                                       16
<PAGE>

           Not Applicable.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

           Not Applicable.


ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           Not Applicable

ITEM 5.    OTHER INFORMATION

           Not Applicable

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

    (a)    Exhibits


Exhibit No.      Description
-----------      -----------

    3(a)         Articles of Incorporation,  as amended, filed as Exhibit 3.1 to
                 the Company's  General Form for  Registration  of Securities on
                 Form 10, filed on September 21, 1983, is hereby incorporated by
                 reference.

    3(b)         Bylaws,  as  amended,  filed as Exhibit  3(b) to the  Company's
                 Annual  Report on Form 10-K for the period  ended  December 31,
                 1997, is hereby incorporated by reference.

    4            Specimen Common Stock Certificate,  filed as Exhibit 4.1 to the
                 Company's  General Form for  Registration of Securities on Form
                 10, filed on  September  21, 1983,  is hereby  incorporated  by
                 reference.

    10(a)        First  Financial  Bancorp 1991  Director  Stock Option Plan and
                 form of Nonstatutory  Stock Option Agreement,  filed as Exhibit
                 4.1  to  the   Company's   Form  S-8   Registration   Statement
                 (Registration No.  33-40954),  filed on May 31, 1991, is hereby
                 incorporated by reference.

    10(b)        Amendment to First Financial Bancorp 1991 Director Stock Option
                 Plan,  filed as  Exhibit  4.3 to the  Company's  Post-Effective
                 Amendment   No.   1  to   Form   S-8   Registration   Statement
                 (Registration  No.  33-40954),  filed  as  Exhibit  10  to  the
                 Company's  Quarterly  Report on Form 10-Q for the period  ended
                 March 31, 1995, is hereby incorporated by reference.

    10(c)        First  Financial  Bancorp 1991  Employee  Stock Option Plan and
                 forms of Incentive  Stock  Option  Agreement  and  Nonstatutory
                 Stock Option  Agreement,  filed as Exhibit 4.2 to the Company's
                 Form S-8 Registration  Statement  (Registration  No. 33-40954),
                 filed on May 31, 1991, is hereby incorporated by reference.

    10(d)        Bank of Lodi Employee Stock Ownership Plan, filed as Exhibit 10
                 to the Company's  Annual Report on Form 10-K for the year ended
                 December 31, 1992, is hereby incorporated by reference.

                                       17
<PAGE>

    10(e)        First  Financial  Bancorp  1997  Stock  Option  Plan,  filed as
                 Exhibit 10 to the Company's  Quarterly  Report on Form 10-Q for
                 the period ended September 30, 1997, is hereby  incorporated by
                 reference.

    10(f)        Bank of Lodi  Incentive  Compensation  Plan,  filed as  Exhibit
                 10(f) to the Company's  Annual Report on Form 10-K for the year
                 ended December 31, 1997, is hereby incorporated by reference.

    10(g)        First  Financial  Bancorp 401(k) Profit Sharing Plan,  filed as
                 Exhibit 10(g) to the  Company's  Annual Report on Form 10-K for
                 the year ended  December 31, 1997,  is hereby  incorporated  by
                 reference.

    10(h)        Employment  Agreement  dated as of September 30, 1998,  between
                 First Financial Bancorp and Leon J. Zimmerman.

    10(i)        Employment  Agreement  dated as of September 30, 1998,  between
                 First Financial Bancorp and David M. Philipp.

    10(j)        Executive  Supplemental  Compensation Agreement effective as of
                 April  3,  1998,  between  Bank  of  Lodi,  N.A.  and  Leon  J.
                 Zimmerman.

    10(k)        Executive  Supplemental  Compensation Agreement effective as of
                 April 3, 1998, between Bank of Lodi, N.A. and David M. Philipp.

    10(l)        Life Insurance  Endorsement  Method Split Dollar Plan Agreement
                 effective as of April 3, 1998,  between Bank of Lodi,  N.A. and
                 Leon J. Zimmerman.

    10(m)        Life Insurance  Endorsement  Method Split Dollar Plan Agreement
                 effective as of April 3, 1998,  between Bank of Lodi,  N.A. and
                 David M. Philipp.

    10(n)        Form of Director Supplemental Compensation Agreement, effective
                 as of April 3, 1998, as executed between Bank of Lodi, N.A. and
                 each of  Benjamin R.  Goehring,  Michael D.  Ramsey,  Weldon D.
                 Schumacher and Dennis R. Swanson.

    10(o)        Form of Life  Insurance  Endorsement  Method  Split Dollar Plan
                 Agreement,  effective as of April 3, 1998, as executed  between
                 Bank of Lodi, N.A. and each of Benjamin R. Goehring, Michael D.
                 Ramsey, Weldon D. Schumacher and Dennis R. Swanson.

    10(p)        Form of Director Supplemental Compensation Agreement, effective
                 as of April 3, 1998, as executed between Bank of Lodi, N.A. and
                 each of Angelo J. Anagnos, Raymond H. Coldani, Bozant Katzakian
                 and Frank M. Sasaki.

    10(q)        Form of Life  Insurance  Endorsement  Method  Split Dollar Plan
                 Agreement,  effective as of April 3, 1998, as executed  between
                 Bank of Lodi,  N.A. and each of Angelo J.  Anagnos,  Raymond H.
                 Coldani, Bozant Katzakian and Frank M. Sasaki.

    11           Statement re computation of earnings per share is  incorporated
                 herein by reference to Footnote 2 to the consolidated financial
                 statements included in this report.

    27           Financial Data Schedule.


      (b)        Reports on Form 8-K


                                       18
<PAGE>

                 On October 30, 1998 the Company filed a Current  Report on Form
                 8-K regarding earnings for the quarter ended September 30, 1998
                 and  the  declaration  of a cash  dividend  of $.05  per  share
                 payable November 27, 1998 to shareholders of record on November
                 13, 1998.

                                       19

<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                                       FIRST FINANCIAL BANCORP




Date: November 13, 1998                                /s/     David M. Philipp
      ----------------                                 ------------------------
                                                       David M. Philipp
                                                       Executive Vice-President
                                                       Chief Financial Officer
                                                       Corporate Secretary



                                       20

<PAGE>



                  Index to Exhibits

    Exhibit                                                                Page
    -------                                                                ----
    
    10(h)        Employment  Agreement  dated as of September 30, 1998,       22
                 between First Financial Bancorp and Leon J. Zimmerman.
    
    10(i)        Employment  Agreement  dated as of September 30, 1998,       32
                 between First Financial Bancorp and David M. Philipp.
    
    10(j)        Executive    Supplemental    Compensation    Agreement       41
                 effective  as of April 3, 1998,  between Bank of Lodi,
                 N.A. and Leon J. Zimmerman.
    
    10(k)        Executive    Supplemental    Compensation    Agreement       58
                 effective  as of April 3, 1998,  between Bank of Lodi,
                 N.A. and David M. Philipp.
    
    10(l)        Life  Insurance  Endorsement  Method Split Dollar Plan       75
                 Agreement  effective as of April 3, 1998, between Bank
                 of Lodi, N.A. and Leon J. Zimmerman.
    
    10(m)        Life  Insurance  Endorsement  Method Split Dollar Plan       80
                 Agreement  effective as of April 3, 1998, between Bank
                 of Lodi, N.A. and David M. Philipp.
    
    10(n)        Form of Director Supplemental  Compensation Agreement,       85
                 effective  as of April 3, 1998,  as  executed  between
                 Bank of Lodi,  N.A. and each of Benjamin R.  Goehring,
                 Michael D. Ramsey,  Weldon D. Schumacher and Dennis R.
                 Swanson.
    
    10(o)        Form of Life Insurance Endorsement Method Split Dollar      101
                 Plan  Agreement,  effective  as of April 3,  1998,  as
                 executed  between  Bank  of  Lodi,  N.A.  and  each of
                 Benjamin R.  Goehring,  Michael D.  Ramsey,  Weldon D.
                 Schumacher and Dennis R. Swanson.
    
    10(p)        Form of Director Supplemental  Compensation Agreement,      106
                 effective  as of April 3, 1998,  as  executed  between
                 Bank of Lodi,  N.A.  and each of  Angelo  J.  Anagnos,
                 Raymond  H.  Coldani,  Bozant  Katzakian  and Frank M.
                 Sasaki.
    
    10(q)        Form of Life Insurance Endorsement Method Split Dollar      123
                 Plan  Agreement,  effective  as of April 3,  1998,  as
                 executed between Bank of Lodi, N.A. and each of Angelo
                 J. Anagnos,  Raymond H. Coldani,  Bozant Katzakian and
                 Frank M. Sasaki.
    
                                       21

    <PAGE>

         Exhibit 10(h)     Employment  Agreement dated as of September 30, 1998,
         between First Financial Bancorp and Leon J. Zimmerman.

                              EMPLOYMENT AGREEMENT


         This  Agreement is made and entered into as of September  30, 1998,  by
and among FIRST FINANCIAL  BANCORP,  a California  corporation  ("Employer") and
LEON J. ZIMMERMAN ("Employee").

         WHEREAS,  Employer is the sole  shareholder and holding company of Bank
of Lodi, N.A., a national banking association ("Bank"); and

         WHEREAS, Employee is presently serving as President and Chief Executive
Officer of Employer and as President and Chief Executive Officer and Director of
Bank; and

         WHEREAS,  Employer recognizes that the contributions of Employee to the
growth  and  success  of  Employer  and Bank have been and will  continue  to be
substantial and desires to assure Employer and Bank of the continued  service of
Employee,  and Employee  desires to continue in the  employment  of Employer and
Bank;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Employer and Employee agree as follows:

         1. Term of Employment.  Employer  employs  Employee and Employee hereby
accepts employment with Employer,  upon the terms and conditions hereinafter set
forth,  for a period of one (1) year  commencing  on May 1, 1998,  and ending on
April 30,  1999,  subject to the early  termination  provisions  of Paragraph 15
hereof.  Employee's  term of  employment  will  be  automatically  extended  for
additional  one-year  periods (without any action by either party) on completion
of each year of employment under this Agreement,  unless Employer gives Employee
at least sixty (60) days prior written notice that  Employee's  employment is to
terminate  at the end of the current  period,  subject at all times to the early
termination provisions of Paragraph 15 hereof.

         2.  Duties and  Obligations  of  Employee.  Employee  shall serve as an
executive  officer of Employer and Bank with the titles of  President  and Chief
Executive Officer of Employer and Bank and shall perform the customary duties of
such  office  and  such  other  duties  as may from  time to time be  reasonably
requested  of him by the  respective  Boards of  Directors of Employer and Bank,
including, without limitation, the following:

                  (a)  Participating  in community  affairs which are beneficial
to Employer and Bank;

                  (b)  Maintaining a cordial  relationship with Employer's Board
of Directors and shareholders and with Bank's Board of Directors;

                  (c)  Maintaining a professional  relationship  with regulatory
agencies and  governmental  authorities  having  jurisdiction  over Employer and
Bank;

                                       22

<PAGE>

                  (d)  Providing  leadership  in planning and  implementing  the
conduct  of  Employer's  and  Bank's  business  and  in  setting  the  strategic
objectives of Employer and Bank;

                  (e)  Hiring and firing of all other  officers,  employees  and
agents of Employer and Bank, subject at all times to the policies and directives
set by the respective Boards of Directors of Employer and Bank.

         So long as Employee  shall serve as the President  and Chief  Executive
Officer  of  Bank,  he  shall  also  serve  as a  Director  of Bank  and on such
committees  of the Bank Board of  Directors as the Board shall from time to time
designate.  At the first regular meeting of the Employer Board of Directors held
after the  execution  and  delivery of this  Agreement,  the Board of  Directors
undertakes  and agrees to increase  and fix the number of Board  members at nine
(9) and to appoint Employee to the vacancy thereby created.  Thereafter, so long
as Employee shall serve as President and Chief Executive Officer of Employer, he
shall  also  serve as a  Director  of  Employer  and on such  committees  of the
Employer Board of Directors as the Board shall from time to time designate. Upon
termination of service as President and Chief  Executive  Officer of Employer or
Bank for any reason,  Employee  agrees to  immediately  resign from the Employer
Board of  Directors  and the Bank Board of  Directors,  effective as of the same
date as termination of his employment.

         The salary and other  compensation  and  benefits to which  Employee is
entitled as an executive officer of Employer and Bank shall include his services
as a Director and committee member for Employer and Bank.  Employee shall not be
entitled to receive any fees for  attending  meetings as a Director or committee
member.  Employee  shall be entitled to coverage  under any director and officer
liability  insurance  policy  obtained  by Employer  or Bank for  directors  and
officers of  Employer  and Bank as a group.  Employee  shall also be entitled to
indemnification  for  actions  taken by  Employee  in good faith and in a manner
Employee reasonably believes to be in the best interests of Employer and Bank in
accordance  with  Employer's  Articles  of  Incorporation  and Bylaws and Bank's
Articles of Association and Bylaws and applicable laws and regulations.

         3.       Devotion to Employer's Business.

                  (a)  Employee  shall  devote  his  full  time,  ability,   and
attention to the business of Employer and Bank during the term of this Agreement
and shall not during  the term of this  Agreement  engage in any other  business
activities, duties, or pursuits whatsoever, or directly or indirectly render any
services of a business,  commercial,  or professional nature to any other person
or  organization,  whether  for  compensation  or  otherwise,  without the prior
approval  of  Employer's  Board  of  Directors.   However,  the  expenditure  of
reasonable  amounts of time,  for which  Employee  shall not be  compensated  by
Employer or Bank, for educational,  charitable, or professional activities shall
not be deemed a breach of this  Agreement if those  activities do not materially
interfere with the services required of Employee under this Agreement.

                  (b) Employee  agrees to conduct  himself at all times with due
regard to public  conventions and morals.  Employee  further agrees not to do or
commit any act that will reasonably tend to shock or offend a reasonable person,
or to prejudice Employer or Bank or the banking industry in general.

                  (c) Employee hereby represents and agrees that the services to
be  performed  under  the  terms of this  Agreement  are of a  special,  unique,
unusual,  extraordinary,  and intellectual  character that gives them a peculiar
value,  the loss of which cannot be  reasonably  or  adequately  compensated  in
damages in an action at law. Employee therefore  expressly agrees that Employer,
in addition to any other rights or remedies that Employer may possess,  shall be
entitled to injunctive and other equitable  relief to prevent or remedy a breach
of this Agreement by Employee.

         4.  Noncompetition  by  Employee.  Subject to  Paragraph 3 hereof,  and
absent the prior written  consent of Employer,  Employee  shall not,  during the
term of this Agreement, directly or indirectly, either as an employee,

                                       23
<PAGE>

employer,  consultant, agent, principal,  stockholder,  officer, director, or in
any other individual or  representative  capacity,  engage or participate in any
competitive banking or financial services business,  provided,  however,  that a
passive portfolio investment in shares of stock of a publicly traded company, in
an amount not  exceeding  five  percent (5%) of the  outstanding  shares of said
company, would not be prevented by this Paragraph 4.

         5.       Indemnification.

                  (a) To the extent  required by law,  Employee shall  indemnify
and hold Employer and Bank harmless  from all  liability  for loss,  damage,  or
injury to persons or property resulting from the gross negligence or intentional
misconduct of Employee.

                  (b) To the extent  permitted by law,  Employer shall indemnify
Employee  if he was or is a party  or is  threatened  to be made a party  in any
action  brought by a third party  against  Employee  (whether or not Employer or
Bank is  joined  as a  party  defendant)  against  expenses,  judgments,  fines,
settlements  and other amounts  actually and  reasonably  incurred in connection
with  said  action if  Employee  acted in good  faith  and in a manner  Employee
reasonably  believed to be in the best  interests of Employer and Bank (and with
respect to a criminal  proceeding if Employee had no reasonable cause to believe
his conduct was unlawful),  provided that the alleged  conduct of Employee arose
out of and was within the course  and scope of his  employment  as an  executive
officer of Employer and Bank.

         6.  Disclosure of  Information.  Employee  shall not,  either before or
after termination of this Agreement, disclose to anyone any information relating
to Employer or any financial  information,  trade or business secrets,  customer
lists,  computer software or other information not otherwise  publicly available
concerning the business or operations of Employer or Bank.  Employee  recognizes
and acknowledges that any financial information  concerning any of Employer's or
Bank's  customers,  as it may exist from time to time, is strictly  confidential
and is a valuable,  special and unique asset of Employer's and Bank's  business.
Employee  shall  not,  either  before or after  termination  of this  Agreement,
disclose to anyone  said  financial  information  or any part  thereof,  for any
reason or purpose whatsoever, except as required by way of legal process, notice
of which  will be  provided  to  Employer  and Bank  prior to  disclosure.  This
Paragraph 6 shall survive the expiration or termination of this Agreement.

         7.  Written  or Printed  Material.  All  written or printed  materials,
notebooks  and records  used by Employee in  performing  duties for Employer and
Bank, other than Employee's personal notes,  personal files and diaries, are and
shall remain the sole  property of Employer.  Upon  termination  of  employment,
Employee  shall  promptly  return all such  material  (including  all copies) to
Employer.  This  Paragraph 7 shall  survive  expiration or  termination  of this
Agreement.

         8. Surety Bond.  Employee  agrees that he will furnish all  information
and take any other steps necessary from time to time to enable Employer and Bank
to obtain or maintain a fidelity  bond  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  his
employment.  The surety company issuing the bond and the amount of the bond must
be acceptable to Employer. All premiums on the bond shall be paid by Employer or
Bank. 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 without any further obligation to Employee other than to pay accrued
salary, benefits or reimbursements.

         9. Base  Salary.  In  consideration  for the  services to be  performed
hereunder,  Employee  shall  receive a salary at the rate of One  Hundred  Forty
Thousand Dollars ($140,000) per annum,  payable in equal installments during the
term of this Agreement on the first and fifteenth days of each month, subject to
applicable  adjustments  for  withholding  taxes and  prorations for any partial
employment  period.  Such base salary shall be reviewed annually by the Board of
Directors  of  Employer  at the same time as all other  executive  officers  are
reviewed.  Each annual

                                       24
<PAGE>

review  shall  be  conducted   diligently  and  concluded  as  expeditiously  as
practicable.  Any increase in such base salary that may be approved by the Board
of  Directors  shall be  considered  effective  on January 1 of each  succeeding
calendar year, beginning January 1, 1999.

         10. Incentive  Compensation.  As further  consideration  for Employee's
services under this Agreement,  Employee shall be entitled to participate in any
officer bonus plan or employee  profit  sharing plan which may be established by
Employer or Bank for their officers and/or  employees  generally or for Employee
personally and Employer shall pay Employee  annually  incentive  compensation as
determined by the Board of Directors of Employer or Bank in accordance  with the
provisions of said plans.

         11. Salary Continuation  During Disability.  If Employee for any reason
(except as expressly provided below) becomes temporarily or permanently disabled
so that he is unable to perform the duties under this Agreement, Employer agrees
to pay  Employee  the base  salary  otherwise  payable to  Employee  pursuant to
Paragraph 9 of this Agreement,  reduced by the amounts received by Employee from
state disability insurance,  or worker's compensation or other similar insurance
benefits through policies  provided by Employer,  for a period of six (6) months
from the date of disability or the end of the term of this Agreement,  whichever
shall first occur;  provided,  however,  that payments from Employer shall cease
upon  qualification  of Employee for  long-term  disability  benefits  under any
Employer paid insurance program. For purposes of this Paragraph 11, "disability"
shall be  defined  as  provided  in  Employer's  disability  insurance  program.
Notwithstanding  anything  herein  to  the  contrary,  Employer  shall  have  no
obligation to make payments for a self-inflicted  disability  resulting from the
deliberate,  intentional  actions  of  Employee,  such as, but not  limited  to,
attempted suicide or chemical dependence of Employee.

         12. Stock Options. Employer acknowledges and agrees that Employee shall
be eligible  for the grant of stock  options  for the  purchase of shares of the
Common Stock of Employer under and pursuant to the terms of the First  Financial
Bancorp 1997 Stock Option Plan.  Any such grants,  the vesting  schedule of said
options  and  other  terms and  conditions  consistent  with such Plan  shall be
evidenced by stock option agreements entered into between Employer and Employee.
Employer hereby  acknowledges  and confirms the stock option  agreement  between
Employer and Employee  currently  outstanding  under the First Financial Bancorp
1991 Employee Stock Option Plan.

         13.  Other  Benefits.  Employee  shall be  entitled  to those  employee
benefits  adopted by Employer  and Bank for all  employees of Employer and Bank,
subject  to  applicable  qualification   requirements  and  regulatory  approval
requirements,  if any. This  includes  participation  in the Bank of Lodi,  N.A.
Employee  Stock  Ownership  Plan and the First  Financial  Bancorp 401(k) Profit
Sharing Plan.  Employee  shall be further  entitled to the following  additional
benefits  which shall  supplement or replace,  to the extent  duplicative of any
part or all of the general employee benefits, the benefits otherwise provided to
Employee:

                  (a)  Vacation.  Employee  shall be  entitled to four (4) weeks
annual  vacation leave at his then existing rate of full salary each year during
the term of this  Agreement.  Employee  may be absent  from his  employment  for
vacation  as long as such  leave  is  reasonable  and does  not  jeopardize  his
responsibilities and duties specified in this Agreement.  Employee shall take at
least two (2) consecutive weeks of vacation annually.

                  (b)  Group Insurance.  Employer and Bank shall provide, during
the term of this Agreement,  group life, health (including  medical,  dental and
hospitalization),  accident and disability  insurance  coverage for Employee and
his dependents  through the insurer(s)  selected by Employer and provided to all
employees generally.  The premium costs for such group insurance shall be shared
and borne by  Employer/Bank  and  Employee on the basis of the same  percentages
applicable to all other participating employees.

                  (c)  Automobile.  Employer  shall  provide  Employee  with  an
automobile  for  Employee's  personal  and  business use during the term of this
Agreement or until this  Agreement is  terminated as provided  herein.  Employee
acknowledges  that he is currently  provided with an  automobile  that meets the
requirements  of this

                                       25
<PAGE>

paragraph. Any replacement for such automobile shall be selected by Employee and
then  purchased  by  Employer  with a  purchase  price  not to  exceed  $40,000,
exclusive of tax and license  charges.  Employer  agrees to procure and maintain
liability,   collision  and  comprehensive   insurance  coverage  for  any  such
automobile.  All expenses  incurred by Employee in utilizing any such automobile
in the  performance  of his duties  hereunder  will be paid for or reimbursed to
Employee in accordance with  Employer's  expense  allowance  guidelines for such
matters.

         14.  Business  Expenses.  Employee shall be reimbursed for ordinary and
necessary  expenses  incurred  by Employee in  connection  with his  employment,
subject to expense account  guidelines  established by the Board of Directors of
Employer.  Employee shall also be reimbursed for expenses incurred in activities
associated  with  promoting  the  business  of  Employer  that are  specifically
authorized  from time to time by the Board of Directors  of Employer,  including
expenses for entertainment,  travel and similar items. Travel and other expenses
for  attendance at  conventions  and  educational  programs that are approved in
advance by the Board of Directors of Employer shall also be reimbursed. Employer
will pay for or will reimburse  Employee for such expenses upon  presentation by
Employee  from time to time of  receipts or other  appropriate  evidence of such
expenditures.  The parties  agree that any expense  advanced by Employee that is
not  reimbursed  by  Employer  for  budget or other  purposes  pursuant  to this
Paragraph,  but which  constitutes an ordinary and necessary  business  expense,
shall be subject to deduction on Employee's personal income tax return.

         15.  Termination of Agreement.

                  (a) Automatic  Termination.  This  Agreement  shall  terminate
automatically  without  further  act of the  parties  and  immediately  upon the
occurrence of any one of the following  events,  determined in good faith by the
Board of Directors of Employer,  subject to either  party's  right,  without any
obligation  whatsoever,  to waive an event reasonably susceptible of waiver, and
the  obligation of Employer to pay the amounts which would  otherwise be payable
to Employee under this Agreement through the date upon which the event occurs:

                  (1)   The occurrence of circumstances  that make it impossible
                        or  impractical  for  Employer  or  Bank to  conduct  or
                        continue its business.

                  (2)   The death of Employee.

                  (3)   The loss by Employee of legal capacity.

                  (4)   The loss by Employer of legal capacity to contract.

                  (5)   The willful,  intentional and material breach of duty by
                        Employee in the course of his employment.

                  (6)   The  habitual and  continued  neglect by Employee of his
                        employment duties and obligations under this Agreement.

                  (7)   The continuous mental or physical incapacity of Employee
                        which precludes Employee from performing  services under
                        this Agreement.

                  (8)   Employee's  willful  and  intentional  violation  of any
                        federal banking laws, or of the Bylaws,  rules, policies
                        or  resolutions  of Employer or Bank, or of the rules or
                        regulations  of the  Office  of the  Comptroller  of the
                        Currency,  Federal Deposit Insurance  Corporation or the
                        Board of Governors  of the Federal  Reserve  System,  or
                        other regulatory agency or governmental authority having
                        jurisdiction over Employer or Bank.

                                       26
<PAGE>

                  (9)   The written  determination by a state or federal banking
                        agency or  governmental  authority  having  jurisdiction
                        over  Employer or Bank that  Employee is not suitable to
                        act in the capacity for which he is employed by Employer
                        or Bank.

                  (10)  Employee is convicted of any felony or a crime involving
                        moral turpitude or wilfully and intentionally  commits a
                        fraudulent or dishonest act.

                  (11)  Employee's willful and intentional  disclosure,  without
                        authority,  of any  secret or  confidential  information
                        concerning Employer or Bank or Employee takes any action
                        which  the  Board  of  Directors  of  Employer  or  Bank
                        determines,  in its sole  discretion and subject to good
                        faith,  fair  dealing  and  reasonableness,  constitutes
                        unfair  competition  with or  induces  any  customer  to
                        breach any contract  with  Employer or Bank  contrary to
                        the best interests of Employer or Bank.

                  (12)  Either  party  breaches a material  term or provision of
                        this Agreement.

                  (b)  Termination  by Employer.  Employer,  acting  through its
Board of Directors,  may, at its election and in its sole discretion,  terminate
this Agreement for any reason,  or for no reason, by giving not less than thirty
(30) days' prior written notice of termination to Employee, without prejudice to
any other remedy to which  Employer may be entitled  either at law, in equity or
under this  Agreement.  Upon such  termination,  Employee  shall be  entitled to
receive  any  employment  benefits  which  shall  have  accrued  prior  to  such
termination and the severance pay specified in sub-paragraph 15(d) below.

                  (c) Termination by Employee.  This Agreement may be terminated
by Employee  for any reason,  or no reason,  by giving not less than thirty (30)
days' prior written notice of termination  to Employer.  Upon such  termination,
all rights and  obligations  accruing to  Employee  under this  Agreement  shall
cease,  except  that such  termination  shall not  prejudice  Employee's  rights
regarding employment benefits which shall have accrued prior to such termination
and any other  remedy  which  Employee  may have at law, in equity or under this
Agreement, which remedy accrued prior to such termination.

                  (d) Severance Pay - Termination  by Employer.  In the event of
termination  by Employer  pursuant to Paragraph  15(b) or automatic  termination
based  upon  Paragraph  15  (a)(1),15(a)(4)  or  15(a)(12)  (to  the  extent  of
Employer's  breach),  of this  Agreement,  Employee shall be entitled to receive
severance  pay  at  Employee's  rate  of  salary   immediately   preceding  such
termination  equal to twelve  (12)  months'  salary (in  addition  to  incentive
compensation  or bonus payments due Employee,  if any),  payable in installments
bi-monthly  on the first and  fifteenth  days of each month.  During such twelve
(12) month  period,  Employee  shall be  entitled to  continuation  of the group
insurance benefits  described in Paragraph 13(b) hereof,  with the premium costs
shared  and  borne  by  Employer/Bank  and  Employee  on the  basis  of the same
percentages applicable to all other participating employees. Notwithstanding the
foregoing:  Employee  shall not be entitled to  severance  pay  pursuant to this
sub-paragraph   (d)  unless  and  until   Employee  has  submitted  his  written
resignation from the Employer Board of Directors and the Bank Board of Directors
in compliance with Paragraph 2 above;  and in the event of a "change in control"
as  defined  in  subparagraph  (e)  below,  Employee  shall not be  entitled  to
severance pay pursuant to this  sub-paragraph  (d) and any rights of Employee to
severance pay shall be limited to such rights as are specified in  sub-paragraph
(e) below.  Employee acknowledges and agrees that severance pay pursuant to this
sub-paragraph (d) is in lieu of all damages, payments and liabilities on account
of the early termination of this Agreement and the sole and exclusive remedy for
Employee  terminated  at the will of  Employer  pursuant to  Paragraph  15(b) or
pursuant to certain provisions of Paragraph 15(a) as described herein.

                  (e)  Severance  Pay - Change in  Control.  Upon a  "change  in
control"  as  defined  herein,  and

                                       27
<PAGE>

within a period  of two (2)  years  following  consummation  of such a change in
control, if (i) Employee's employment is terminated;  or (ii) without Employee's
prior  written  consent  there  occurs (A) any adverse  change in the nature and
scope of Employee's  position,  responsibilities,  duties,  salary,  benefits or
location  of  employment,  or (B)  any  event  which  reasonably  constitutes  a
demotion,  significant diminution or constructive termination (by resignation or
otherwise) of Employee's  employment,  then,  in such event,  Employee  shall be
entitled  to  receive  severance  pay in  addition  to any  bonus  or  incentive
compensation  payments  otherwise  due  Employee.  Any  such  severance  pay due
Employee shall be in an amount equal to two (2) times Employee's  average annual
compensation for the two (2) years immediately  preceding the change in control.
Employee's  average  annual  compensation  shall be the average of the aggregate
compensation  paid by Employer to Employee  which was  includable  in Employee's
gross  income  for  federal  income tax  purposes  for such two (2) tax years of
Employee's  employment  by Employer  ending  immediately  prior to the change in
control,  divided by such number of years. During such two year period (assuming
Employee  elects  to  receive  the  payment  of  such  severance  in  bi-monthly
installments),  and until Employee becomes a full-time  employee with some other
company  or bank,  Employee  shall be  entitled  to  continuation  of the  group
insurance benefits  described in Paragraph 13(d) hereof,  with the premium costs
shared  and  borne  by  Employer/Bank  and  Employee  on the  basis  of the same
percentages applicable to all other participating employees.

         If all or any  portion of the amounts  payable to Employee  pursuant to
this Paragraph 15 (e) alone,  or together with other payments which Employee has
the right to receive  from  Employer,  constitute  "excess  parachute  payments"
within the meaning of Section  280G of the  Internal  Revenue  Code of 1986,  as
amended (the "Code"), that are subject to the excise tax imposed by Section 4999
of the Code (or similar tax and/or  assessment),  such amounts payable hereunder
shall be reduced to the extent  necessary,  after  first  applying  any  similar
reduction in payments to be received from any other plan or program sponsored by
Employer from which Employee has a right to receive payments subject to Sections
280G and 4999 of the Code, so as to cause a reduction of any excise tax pursuant
to Section 4999 of the Code to equal "zero".

         Any  such  severance  pay  shall  be  payable  in  a  lump  sum  or  in
substantially  equal installments  bi-monthly on the first and fifteenth days of
each month until paid in full,  at the  election  of  Employee.  Such  severance
payment,  if any, shall be in lieu of all damages,  payments and  liabilities on
account of the events described above for which such severance payment,  if any,
may be due Employee and any severance payment rights of Employee under Paragraph
15 (d) of this Agreement. This sub-paragraph (e) shall be binding upon and inure
to the benefit of the parties  hereto and any  successors or assigns or employer
or any "person" as defined herein.

         Notwithstanding  the  foregoing,  Employee  shall  not be  entitled  to
receive nor shall Employer,  its successors,  assigns or any "person" as defined
herein, be obligated to pay severance  payments  pursuant to this  sub-paragraph
(e) in the event of an occurrence described in Paragraph 15, sub-paragraphs (5),
(6), (8),  (10),  (11) or (12, to the extent of an Employee  breach),  or in the
event of a determination  pursuant to sub-paragraph (9) thereof, or in the event
Employee  terminates  employment  in  accordance  with  Paragraph 15 (c) and the
termination  is not a  result  of or  based  upon the  occurrence  of any  event
described in Paragraph 15 (e)(ii) above.

         A "change in control" of Employer  for purposes of this  Agreement  and
sub-paragraph  (e) shall mean the occurrence of any of the following events with
respect to Employer (with the term "Employer" being defined for such a change in
control to  include  Bank):  (i) a change in  control of a nature  that would be
required to be reported in response to Item 6(e) of Schedule  14A of  Regulation
14A  promulgated  under the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange  Act"),  or in response to any other form or report to the  regulatory
agencies or governmental  authorities  having  jurisdiction over Employer or any
stock  exchange  on which  Employer's  shares  are  listed  which  requires  the
reporting  of  a  change  in  control;   (ii)  any  merger,   consolidation   or
reorganization  of Employer in which Employer does not survive;  (iii) any sale,
lease,  exchange,  mortgage,  pledge,  transfer  or  other  disposition  (in one
transaction  or a series of  transactions)  of any assets of Employer  having an
aggregate  fair market  value of fifty  percent  (50%) of the total value of the
assets of Employer, reflected in the most recent balance sheet of Employer; (iv)
a transaction  whereby any "person" (as such term is used in the Exchange Act or
any  individual,

                                       28
<PAGE>

corporation,  partnership,  trust  or  any  other  entity)  is  or  becomes  the
beneficial owner, directly or indirectly, of securities of Employer representing
25% or  more  of the  combined  voting  power  of  Employer's  then  outstanding
securities;  (v) if in any one year period,  individuals who at the beginning of
such period  constitute  the Board of Directors of Employer cease for any reason
to  constitute  at  least  a  majority  thereof,  unless  the  election,  or the
nomination  for  election by  Employer's  shareholders,  of each new director is
approved  by a vote of a least  three-quarters  of the  directors  then still in
office who were directors at the beginning of the period; (iv) a majority of the
members of the Board of Directors  of Employer in office prior to the  happening
of any event  determines in its sole  discretion  that as a result of such event
there has been a change in control.  Notwithstanding  the  foregoing or anything
else contained herein to the contrary,  there shall not be a "change of control"
for purposes of this  Agreement if the event which would  otherwise  come within
the meaning of the term "change of control" involves an Employee Stock Ownership
Plan or  similar  plan  sponsored  by  Employer  or Bank which is the party that
acquires   "control"  or  is  the  principal   participant  in  the  transaction
constituting a "change in control," as described above.

         16.  Notices.  Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by U.S.
mail,  registered or certified,  postage prepaid with return receipt  requested.
Mailed  notices  shall be  addressed to the parties at the  addresses  listed as
follows:

         Employer:            701 South Ham Lane
                              Lodi, California 95242

         Employee:

         with a copy to:      Kevin W. Finck
                              Attorney at Law
                              Two Embarcadero Center, Suite 1670
                              San Francisco, California 94111

         Each  party may change the  address  for  receipt of notices by written
notice in accordance with this Paragraph 16. Notices delivered  personally shall
be deemed communicated as of the date of actual receipt; mailed notices shall be
deemed communicated as of three (3) days after the date of mailing.

         17.  Arbitration.  All claims,  disputes and other  matters in question
arising  out of or relating to this  Agreement  or the breach or  interpretation
thereof,  other than those matters which are to be determined by the Employer in
its sole and  absolute  discretion,  shall be  resolved  by binding  arbitration
before a representative member, selected by the mutual agreement of the parties,
of the  Judicial  Arbitration  and  Mediation  Services,  Inc.,  San  Francisco,
California ("JAMS"), in accordance with the rules and procedures of JAMS then in
effect. In the event JAMS is unable or unwilling to conduct such arbitration, or
has discontinued its business,  the parties agree that a representative  member,
selected by the mutual  agreement  of the parties,  of the American  Arbitration
Association,  San  Francisco,  California  ("AAA"),  shall  conduct such binding
arbitration  in  accordance  with the  rules and  procedures  of the AAA then in
effect.  Notice of the demand for arbitration shall be filed in writing with the
other party to this Agreement and with JAMS (or AAA, if necessary).  In no event
shall the demand for  arbitration  be made  after the date when  institution  of
legal or equitable  proceedings based on such claim,  dispute or other matter in
question would be barred by the  applicable  statute of  limitations.  Any award
rendered  by JAMS or AAA shall be final and  binding  upon the  parties,  and as
applicable,  their  respective  heirs,  beneficiaries,   legal  representatives,
agents,  successors  and  assigns,  and  may  be  entered  in any  court  having
jurisdiction  thereof.  The  obligation of the parties to arbitrate  pursuant to
this clause shall be specifically  enforceable in accordance  with, and shall be
conducted  consistently  with,  the  provisions  of  Title  9 of  Part  3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Lodi, California, unless otherwise agreed to by the parties.

         18. Attorneys' Fees and Costs. In the event of litigation,  arbitration
or any other  action or  proceeding

                                       29
<PAGE>

between the parties to interpret  or enforce this  Agreement or any part thereof
or otherwise arising out of or relating to this Agreement,  the prevailing party
shall be  entitled  to recover  his or its costs  related to any such  action or
proceeding and his or its reasonable  fees of attorneys,  accountants and expert
witnesses  incurred  by such  party  in  connection  with  any  such  action  or
proceeding.  The prevailing  party shall be deemed to be the party which obtains
substantially the relief sought by final  resolution,  compromise or settlement,
or as may otherwise be determined by order of a court of competent  jurisdiction
in the event of litigation,  an award or decision of one or more  arbitrators in
the event of arbitration, or a decision of a comparable official in the event of
any other  action or  proceeding.  Every  obligation  to  indemnify  under  this
Agreement   includes  the  obligation  to  pay  reasonable  fees  of  attorneys,
accountants and expert witnesses incurred by the indemnified party in connection
with matters subject to indemnification.

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

         20.  Modifications.   Any   modification  of  this  Agreement  will  be
effective only if it is in writing and signed by the parties or their authorized
representatives.

         21.  Waiver. The failure of either party to insist on strict compliance
with any of the terms, provisions, covenants, or conditions of this Agreement by
the other party shall not be deemed a waiver of any term,  provision,  covenant,
or  condition,  individually  or in the  aggregate,  unless  such  waiver  is in
writing, nor shall any waiver or relinquishment of any right or power at any one
time or times be deemed a waiver or  relinquishment  of that  right or power for
all or any other times.

         22.  Partial Invalidity.  If any provision in this Agreement is held by
a court of competent  jurisdiction to be invalid,  void, or  unenforceable,  the
remaining  provisions  shall  nevertheless  continue  in full  force and  effect
without being impaired or invalidated in any way.

         23.  Interpretation.  This Agreement shall be construed  without regard
to the party  responsible  for the  preparation  of the  Agreement  and shall be
deemed  to  have  been  prepared  jointly  by  the  parties.  Any  ambiguity  or
uncertainty  existing in this Agreement shall not be interpreted  against either
party,   but   according  to  the   application   of  other  rules  of  contract
interpretation, if an ambiguity or uncertainty exists.

         24.  Governing Law and Venue.  The laws of the United States of America
and the State of California,  and the rules and regulations of the Office of the
Comptroller of the Currency, Federal Deposit Insurance Corporation and the Board
of  Governors  of  the  Federal   Reserve  System  shall  govern  the  validity,
construction and effect of this Agreement.

         25.  Payments  Due  Deceased  Employee.  If Employee  dies prior to the
expiration of the term of his employment,  any payments that may be due Employee
from  Employer  under this  Agreement  as of the date of death  shall be paid to
Employee's   executors,   administrators,   heirs,   personal   representatives,
successors or assigns.

         26.  Opportunity  to  Consult  with  Independent   Advisors.   Employee
acknowledges  that  he  has  been  afforded  the  opportunity  to  consult  with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement  and the (i) terms  and  conditions  which  may  affect
Employee's  right to  these  benefits  and (ii)  personal  tax  effects  of such
benefits  including,  without  limitation,  the  effects of any federal or state
taxes,  Section  280G of the  Code,  and

                                       30
<PAGE>

any other  taxes,  costs,  expenses or  liabilities  whatsoever  related to such
benefits,  which in any of the foregoing  instances,  Employee  acknowledges and
agrees shall be the sole  responsibility of Employee  notwithstanding  any other
term or provision of this Agreement.  Employee  further  acknowledges and agrees
that  Employer and Bank shall have no liability  whatsoever  related to any such
personal  tax  effects  or  other  personal  costs,   expenses,  or  liabilities
applicable to Employee and further  specifically  waives any right for Employee,
his heirs, beneficiaries,  legal representatives,  agents successors and assigns
to claim or assert  liability  on the part of  Employer  related to the  matters
described in this Paragraph 26. Employee further acknowledges and agrees that he
has read,  understands  and consents to all of the terms and  conditions of this
Agreement,  and that he enters into this Agreement with a full  understanding of
its terms and conditions.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date set forth above, and, as to Employer, by an officer of Employer duly
authorized by appropriate resolution of its Board of Directors.

EMPLOYER:                                   EMPLOYEE:

FIRST FINANCIAL BANCORP

By: ___________________________________     ___________________________________
                                            Leon J. Zimmerman
Title: ________________________________


                                       31

<PAGE>

         Exhibit 10(i)     Employment  Agreement dated as of September 30, 1998,
                           between First Financial Bancorp and David M. Philipp.


                              EMPLOYMENT AGREEMENT

         This  Agreement is made and entered into as of September  30, 1998,  by
and among FIRST FINANCIAL  BANCORP,  a California  corporation  ("Employer") and
DAVID M. PHILIPP ("Employee").

         WHEREAS,  Employer is the sole  shareholder and holding company of Bank
of Lodi, N.A., a national banking association ("Bank"); and

         WHEREAS,  Employee is presently  serving as Executive  Vice  President,
Chief Financial Officer and Secretary of Employer and Bank; and

         WHEREAS,  Employer recognizes that the contributions of Employee to the
growth  and  success  of  Employer  and Bank have been and will  continue  to be
substantial and desires to assure Employer and Bank of the continued  service of
Employee,  and Employee  desires to continue in the  employment  of Employer and
Bank;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Employer and Employee agree as follows:

         1. Term of Employment.  Employer  employs  Employee and Employee hereby
accepts employment with Employer,  upon the terms and conditions hereinafter set
forth,  for a period of one (1) year  commencing  on May 1, 1998,  and ending on
April 30,  1999,  subject to the early  termination  provisions  of Paragraph 15
hereof.  Employee's  term of  employment  will  be  automatically  extended  for
additional  one-year  periods (without any action by either party) on completion
of each year of employment under this Agreement,  unless Employer gives Employee
at least sixty (60) days prior written notice that  Employee's  employment is to
terminate  at the end of the current  period,  subject at all times to the early
termination provisions of Paragraph 15 hereof.

         2.  Duties and  Obligations  of  Employee.  Employee  shall serve as an
executive  officer  of  Employer  and Bank  with the  titles of  Executive  Vice
President,  Chief Financial Officer and Secretary of Employer and Bank and shall
perform the  customary  duties of such office and such other  duties as may from
time to  time be  reasonably  requested  of him by the  Board  of  Directors  of
Employer and Bank, including, without limitation, the following:

             (a) Participating  in community  affairs  which are  beneficial  to
Employer and Bank;

             (b) Maintaining a cordial  relationship  with  Employer's  Board of
Directors and shareholders and with Bank's Board of Directors;

             (c) Maintaining  a  professional   relationship   with   regulatory
agencies and  governmental  authorities  having  jurisdiction  over Employer and
Bank;

             (d) Providing  leadership in planning and  implementing the conduct
of Employer's  and Bank's  business and in setting the  strategic  objectives of
Employer and Bank;

             (e) Hiring  and  firing  of all  employees  other  than  the  other
executive  officers of Employer  and Bank,  subject at all times to the policies
and directives set by the respective Boards of Directors of Employer and Bank.

                                       32
<PAGE>

         So long as Employee shall serve as an executive officer of Employer and
Bank,  he shall also serve on such  committees of each Board of Directors as the
Boards may from time to time designate.  The salary and other  compensation  and
benefits to which  Employee is entitled as an executive  officer of Employer and
Bank shall include his services a committee  member.  Employee shall be entitled
to coverage under any director and officer  liability  insurance policy obtained
by Employer or Bank for  directors and officers of Employer and Bank as a group.
Employee shall also be entitled to indemnification for actions taken by Employee
in good faith and in a manner  Employee  reasonably  believes  to be in the best
interests  of  Employer  and Bank in  accordance  with  Employer's  Articles  of
Incorporation  and Bylaws  and Bank's  Articles  of  Association  and Bylaws and
applicable laws and regulations.

         3.  Devotion to Employer's Business.

             (a) Employee shall devote his full time, ability,  and attention to
the  business of Employer and Bank during the term of this  Agreement  and shall
not during the term of this Agreement  engage in any other business  activities,
duties, or pursuits whatsoever, or directly or indirectly render any services of
a  business,   commercial,  or  professional  nature  to  any  other  person  or
organization,  whether for compensation or otherwise, without the prior approval
of Employer's Board of Directors. However, the expenditure of reasonable amounts
of time,  for which  Employee  shall not be compensated by Employer or Bank, for
educational, charitable, or professional activities shall not be deemed a breach
of this  Agreement if those  activities  do not  materially  interfere  with the
services required of Employee under this Agreement.

             (b) Employee agrees to conduct himself at all times with due regard
to public  conventions and morals.  Employee  further agrees not to do or commit
any act that will reasonably tend to shock or offend a reasonable  person, or to
prejudice Employer or Bank or the banking industry in general.


             (c) Employee  hereby  represents and agrees that the services to be
performed under the terms of this Agreement are of a special,  unique,  unusual,
extraordinary,  and intellectual character that gives them a peculiar value, the
loss of which cannot be reasonably or  adequately  compensated  in damages in an
action at law. Employee therefore expressly agrees that Employer, in addition to
any other rights or remedies  that  Employer  may possess,  shall be entitled to
injunctive  and other  equitable  relief to  prevent  or remedy a breach of this
Agreement by Employee.

         4.  Noncompetition  by  Employee.  Subject to  Paragraph 3 hereof,  and
absent the prior written  consent of Employer,  Employee  shall not,  during the
term of this Agreement, directly or indirectly, either as an employee, employer,
consultant,  agent, principal,  stockholder,  officer, director, or in any other
individual or representative capacity,  engage or participate in any competitive
banking  or  financial  services  business,  provided,  however,  that a passive
portfolio  investment  in shares of stock of a publicly  traded  company,  in an
amount  not  exceeding  five  percent  (5%) of the  outstanding  shares  of said
company, would not be prevented by this Paragraph 4.

         5.  Indemnification.

             (a) To the extent  required by law,  Employee  shall  indemnify and
hold Employer and Bank harmless from all liability for loss,  damage,  or injury
to  persons or  property  resulting  from the gross  negligence  or  intentional
misconduct of Employee.

             (b) To the  extent  permitted  by  law,  Employer  shall  indemnify
Employee  if he was or is a party  or is  threatened  to be made a party  in any
action  brought by a third party  against  Employee  (whether or not Employer or
Bank is  joined  as a  party  defendant)  against  expenses,  judgments,  fines,
settlements  and other amounts  actually and  reasonably  incurred in connection
with  said  action if  Employee  acted in good  faith  and in a manner

                                       33
<PAGE>

Employee  reasonably  believed to be in the best  interests of Employer and Bank
(and with respect to a criminal  proceeding if Employee had no reasonable  cause
to believe his  conduct  was  unlawful),  provided  that the alleged  conduct of
Employee  arose out of and was within the course and scope of his  employment as
an executive officer of Employer and Bank.

         6.  Disclosure of  Information.  Employee  shall not,  either before or
after termination of this Agreement, disclose to anyone any information relating
to Employer or any financial  information,  trade or business secrets,  customer
lists,  computer software or other information not otherwise  publicly available
concerning the business or operations of Employer or Bank.  Employee  recognizes
and acknowledges that any financial information  concerning any of Employer's or
Bank's  customers,  as it may exist from time to time, is strictly  confidential
and is a valuable,  special and unique asset of Employer's and Bank's  business.
Employee  shall  not,  either  before or after  termination  of this  Agreement,
disclose to anyone  said  financial  information  or any part  thereof,  for any
reason or purpose whatsoever, except as required by way of legal process, notice
of which  will be  provided  to  Employer  and Bank  prior to  disclosure.  This
Paragraph 6 shall survive the expiration or termination of this Agreement.

         7.  Written  or Printed  Material.  All  written or printed  materials,
notebooks  and records  used by Employee in  performing  duties for Employer and
Bank, other than Employee's personal notes,  personal files and diaries, are and
shall remain the sole  property of Employer.  Upon  termination  of  employment,
Employee  shall  promptly  return all such  material  (including  all copies) to
Employer.  This  Paragraph 7 shall  survive  expiration or  termination  of this
Agreement.

         8.  Surety Bond. Employee  agrees that he will furnish all  information
and take any other steps necessary from time to time to enable Employer and Bank
to obtain or maintain a fidelity  bond  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  his
employment.  The surety company issuing the bond and the amount of the bond must
be acceptable to Employer. All premiums on the bond shall be paid by Employer or
Bank. 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 without any further obligation to Employee other than to pay accrued
salary, benefits or reimbursements.

         9.  Base  Salary. In  consideration  for the  services to be  performed
hereunder,  Employee shall receive a salary at the rate of Ninety Seven Thousand
Eight Hundred Dollars ($97,800) per annum,  payable in equal installments during
the term of this  Agreement  on the  first  and  fifteenth  days of each  month,
subject to applicable  adjustments for withholding  taxes and prorations for any
partial  employment  period.  Such base salary shall be reviewed annually by the
Board of Directors of Employer at the same time as all other executive  officers
are reviewed.  Each annual review shall be conducted diligently and concluded as
expeditiously  as  practicable.  Any  increase  in such base  salary that may be
approved by the Board of Directors shall be considered effective on January 1 of
each succeeding calendar year, beginning January 1, 1999.

         10. Incentive  Compensation.  As further  consideration  for Employee's
services under this Agreement,  Employee shall be entitled to participate in any
officer bonus plan or employee  profit  sharing plan which may be established by
Employer or Bank for their officers and/or  employees  generally or for Employee
personally and Employer shall pay Employee  annually  incentive  compensation as
determined by the Board of Directors of Employer or Bank in accordance  with the
provisions of said plans.

         11. Salary Continuation  During Disability.  If Employee for any reason
(except as expressly provided below) becomes temporarily or permanently disabled
so that he is unable to perform the duties under this Agreement, Employer agrees
to pay  Employee  the base  salary  otherwise  payable to  Employee  pursuant to
Paragraph 9 of this Agreement,  reduced by the amounts received by Employee from
state disability insurance,  or worker's compensation or other similar insurance
benefits through policies  provided by Employer,  for a period of six (6

                                       34
<PAGE>

months  from the date of  disability  or the end of the term of this  Agreement,
whichever  shall first occur;  provided,  however,  that  payments from Employer
shall cease upon  qualification  of Employee for long-term  disability  benefits
under any Employer paid  insurance  program.  For purposes of this Paragraph 11,
"disability"  shall be defined as provided in  Employer's  disability  insurance
program. Notwithstanding anything herein to the contrary, Employer shall have no
obligation to make payments for a self-inflicted  disability  resulting from the
deliberate,  intentional  actions  of  Employee,  such as, but not  limited  to,
attempted suicide or chemical dependence of Employee.

         12. Stock Options. Employer acknowledges and agrees that Employee shall
be eligible  for the grant of stock  options  for the  purchase of shares of the
Common Stock of Employer under and pursuant to the terms of the First  Financial
Bancorp 1997 Stock Option Plan.  Any such grants,  the vesting  schedule of said
options  and  other  terms and  conditions  consistent  with such Plan  shall be
evidenced by stock option agreements entered into between Employer and Employee.
Employer hereby  acknowledges  and confirms the stock option  agreement  between
Employer and Employee  currently  outstanding  under the First Financial Bancorp
1991 Employee Stock Option Plan.

         13. Other  Benefits.  Employee  shall  be  entitled  to those  employee
benefits  adopted by Employer  and Bank for all  employees of Employer and Bank,
subject  to  applicable  qualification   requirements  and  regulatory  approval
requirements,  if any. This  includes  participation  in the Bank of Lodi,  N.A.
Employee  Stock  Ownership  Plan and the First  Financial  Bancorp 401(k) Profit
Sharing Plan.  Employee  shall be further  entitled to the following  additional
benefits  which shall  supplement or replace,  to the extent  duplicative of any
part or all of the general employee benefits, the benefits otherwise provided to
Employee:

             (a) Vacation.  Employee  shall be entitled to four (4) weeks annual
vacation  leave at his then  existing  rate of full  salary each year during the
term of this Agreement.  Employee may be absent from his employment for vacation
as long as such leave is reasonable and does not jeopardize his responsibilities
and duties  specified in this  Agreement.  Employee  shall take at least two (2)
consecutive weeks of vacation annually.

             (b) Group  Insurance.  Employer and Bank shall provide,  during the
term of this  Agreement,  group  life,  health  (including  medical,  dental and
hospitalization),  accident and disability  insurance  coverage for Employee and
his dependents  through the insurer(s)  selected by Employer and provided to all
employees generally.  The premium costs for such group insurance shall be shared
and borne by  Employer/Bank  and  Employee on the basis of the same  percentages
applicable to all other participating employees.

         14. Business  Expenses.  Employee shall  be reimbursed for ordinary and
necessary  expenses  incurred  by Employee in  connection  with his  employment,
subject to expense account  guidelines  established by the Board of Directors of
Employer.  Employee shall also be reimbursed for expenses incurred in activities
associated  with  promoting  the  business  of  Employer  that are  specifically
authorized  from time to time by the Board of Directors  of Employer,  including
expenses for entertainment,  travel and similar items. Travel and other expenses
for  attendance at  conventions  and  educational  programs that are approved in
advance by the Board of Directors of Employer shall also be reimbursed. Employer
will pay for or will reimburse  Employee for such expenses upon  presentation by
Employee  from time to time of  receipts or other  appropriate  evidence of such
expenditures.  The parties  agree that any expense  advanced by Employee that is
not  reimbursed  by  Employer  for  budget or other  purposes  pursuant  to this
Paragraph,  but which  constitutes an ordinary and necessary  business  expense,
shall be subject to deduction on Employee's personal income tax return.

         15. Termination of Agreement.

             (a) Automatic   Termination.   This   Agreement   shall   terminate
automatically  without  further  act of the  parties  and  immediately  upon the
occurrence of any one of the following  events,  determined in good faith by the
Board of Directors of Employer,  subject to either  party's  right,  without any
obligation  whatsoever,  to waive an event reasonably susceptible of waiver, and
the  obligation of Employer to pay the amounts which would  otherwise

                                       35
<PAGE>

be payable to  Employee  under this  Agreement  through  the date upon which the
event occurs:

                  (1)   The occurrence of circumstances  that make it impossible
                        or  impractical  for  Employer  or  Bank to  conduct  or
                        continue its business.

                  (2)   The death of Employee.

                  (3)   The loss by Employee of legal capacity.

                  (4)   The loss by Employer of legal capacity to contract.

                  (5)   The willful,  intentional and material breach of duty by
                        Employee in the course of his employment.

                  (6)   The  habitual and  continued  neglect by Employee of his
                        employment duties and obligations under this Agreement.

                  (7)   The continuous mental or physical incapacity of Employee
                        which precludes Employee from performing  services under
                        this Agreement.

                  (8)   Employee's  willful  and  intentional  violation  of any
                        federal  banking  laws,  or of  the  Bylaws,  rules,  or
                        policies or  resolutions  of Employer or Bank, or of the
                        rules or regulations of the Office of the Comptroller of
                        the Currency,  Federal Deposit Insurance  Corporation or
                        the Board of Governors of the Federal Reserve System, or
                        other regulatory agency or governmental authority having
                        jurisdiction over Employer or Bank.

                  (9)   The written  determination by a state or federal banking
                        agency or  governmental  authority  having  jurisdiction
                        over  Employer or Bank that  Employee is not suitable to
                        act in the capacity for which he is employed by Employer
                        or Bank.

                  (10)  Employee is convicted of any felony or a crime involving
                        moral turpitude or willfully and intentionally commits a
                        fraudulent or dishonest act.

                  (11)  Employee's willful and intentional  disclosure,  without
                        authority,  or any  secret or  confidential  information
                        concerning Employer or Bank or Employee takes any action
                        which  the  Board  of  Directors  of  Employer  or  Bank
                        determines,  in its sole  discretion and subject to good
                        faith,  fair  dealing  and  reasonableness,  constitutes
                        unfair  competition  with or  induces  any  customer  to
                        breach any contract  with  Employer or Bank  contrary to
                        the best interests of Employer or Bank.

                  (12)  Either  party  breaches a material  term or provision of
                        this Agreement.

                  (b)  Termination  by Employer.  Employer,  acting  through its
Board of Directors,  may, at its election and in its sole discretion,  terminate
this Agreement for any reason,  or for no reason, by giving not less than thirty
(30) days' prior written notice of termination to Employee, without prejudice to
any other remedy to which  Employer may be entitled  either at law, in equity or
under this  Agreement.  Upon such  termination,  Employee  shall be  entitled to
receive  any  employment  benefits  which  shall  have  accrued  prior  to  such
termination and the pay specified in sub-paragraph 15(d) below.

                                       36
<PAGE>

                  (c) Termination by Employee.  This Agreement may be terminated
by Employee  for any reason,  or no reason,  by giving not less than thirty (30)
days' prior written notice of termination  to Employer.  Upon such  termination,
all rights and  obligations  accruing to  Employee  under this  Agreement  shall
cease,  except  that such  termination  shall not  prejudice  Employee's  rights
regarding employment benefits which shall have accrued prior to such termination
and any other  remedy  which  Employee  may have at law, in equity or under this
Agreement, which remedy accrued prior to such termination.

                  (d) Severance Pay - Termination  by Employer.  In the event of
termination  by Employer  pursuant to Paragraph  15(b) or automatic  termination
based  upon  Paragraph  15  (a)(1), 15(a)(4) or  15(a)(12)  (to  the  extent  of
Employer's  breach),  of this  Agreement,  Employee shall be entitled to receive
severance  pay  at  Employee's  rate  of  salary   immediately   preceding  such
termination  equal to twelve  (12)  months'  salary (in  addition  to  incentive
compensation  or bonus payments due Employee,  if any),  payable in installments
bi-monthly  on the first and  fifteenth  days of each month.  During such twelve
(12) month  period,  Employee  shall be  entitled to  continuation  of the group
insurance benefits  described in Paragraph 13(b) hereof,  with the premium costs
shared  and  borne  by  Employer/Bank  and  Employee  on the  basis  of the same
percentages applicable to all other participating employees. Notwithstanding the
foregoing,  in the event of a "change in control" as defined in subparagraph (e)
below,  Employee  shall  not be  entitled  to  severance  pay  pursuant  to this
sub-paragraph  (d) and any rights of Employee to severance  pay shall be limited
to  such  rights  as  are  specified  in  sub-paragraph   (e)  below.   Employee
acknowledges and agrees that severance pay pursuant to this sub-paragraph (d) is
in lieu of all  damages,  payments  and  liabilities  on  account  of the  early
termination  of this  Agreement and the sole and  exclusive  remedy for Employee
terminated  at the will of Employer  pursuant to Paragraph  15(b) or pursuant to
certain provisions of Paragraph 15(a) as described herein.

                  (e)  Severance  Pay - Change in  Control.  Upon a  "change  in
control"  as  defined  herein,  and  within a period of two (2) years  following
consummation  of such a change  in  control,  if (i)  Employee's  employment  is
terminated;  or (ii) without  Employee's  prior written consent there occurs (A)
any   adverse   change  in  the  nature  and  scope  of   Employee's   position,
responsibilities, duties, salary, benefits or location of employment, or (B) any
event  which  reasonably  constitutes  a  demotion,  significant  diminution  or
constructive termination (by resignation or otherwise) of Employee's employment,
then,  in such event,  Employee  shall be entitled to receive  severance  pay in
addition to any bonus or incentive compensation payments otherwise due Employee.
Any such severance pay due Employee shall be in an amount equal to two (2) times
Employee's  average  annual  compensation  for  the two  (2)  years  immediately
preceding the change in control. Employee's average annual compensation shall be
the average of the aggregate compensation paid by Employer to Employee which was
includable in Employee's  gross income for federal  income tax purposes for such
two (2) tax years of Employee's  employment by Employer ending immediately prior
to the change in control,  divided by such number of years. During such two year
period  (assuming  Employee  elects to receive the payment of such  severance in
bi-monthly  installments),  and until Employee becomes a full-time employee with
some other company or bank,  Employee shall be entitled to  continuation  of the
group insurance benefits  described in Paragraph 13(d) hereof,  with the premium
costs  shared and borne by  Employer/Bank  and Employee on the basis of the same
percentages applicable to all other participating employees.

         If all or any  portion of the amounts  payable to Employee  pursuant to
this Paragraph 15 (e) alone,  or together with other payments which Employee has
the right to receive  from  Employer,  constitute  "excess  parachute  payments"
within the meaning of Section  280G of the  Internal  Revenue  Code of 1986,  as
amended (the "Code"), that are subject to the excise tax imposed by Section 4999
of the Code (or similar tax and/or  assessment),  such amounts payable hereunder
shall be reduced to the extent  necessary,  after  first  applying  any  similar
reduction in payments to be received from any other plan or program sponsored by
Employer from which Employee has a right to receive payments subject to Sections
280G and 4999 of the Code, so as to cause a reduction of any excise tax pursuant
to Section 4999 of the Code to equal "zero".

         Any  such  severance  pay  shall  be  payable  in  a  lump  sum  or  in
substantially  equal installments  bi-monthly on the first and fifteenth days of
each month until paid in full,  at the  election  of  Employee.  Such  severance
payment,  if

                                       37
<PAGE>

any, shall be in lieu of all damages, payments and liabilities on account of the
events  described  above for which such  severance  payment,  if any, may be due
Employee and any severance  payment rights of Employee under Paragraph 15 (d) of
this Agreement.  This  sub-paragraph  (e) shall be binding upon and inure to the
benefit of the parties  hereto and any  successors or assigns or employer or any
"person" as defined herein.

         Notwithstanding  the  foregoing,  Employee  shall  not be  entitled  to
receive nor shall Employer,  its successors,  assigns or any "person" as defined
herein, be obligated to pay severance  payments  pursuant to this  sub-paragraph
(e) in the event of an occurrence described in Paragraph 15, sub-paragraphs (5),
(6), (8),  (10),  (11) or (12, to the extent of an Employee  breach),  or in the
event of a determination  pursuant to sub-paragraph (9) thereof, or in the event
Employee  terminates  employment  in  accordance  with  Paragraph 15 (c) and the
termination  is not a  result  of or  based  upon the  occurrence  of any  event
described in Paragraph 15 (e)(ii) above.

         A "change in control" of Employer  for purposes of this  Agreement  and
sub-paragraph  (e) shall mean the occurrence of any of the following events with
respect to Employer (with the term "Employer" being defined for such a change in
control to  include  Bank):  (i) a change in  control of a nature  that would be
required to be reported in response to Item 6(e) of Schedule  14A of  Regulation
14A  promulgated  under the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange  Act"),  or in response to any other form or report to the  regulatory
agencies or governmental  authorities  having  jurisdiction over Employer or any
stock  exchange  on which  Employer's  shares  are  listed  which  requires  the
reporting  of  a  change  in  control;   (ii)  any  merger,   consolidation   or
reorganization  of Employer in which Employer does not survive;  (iii) any sale,
lease,  exchange,  mortgage,  pledge,  transfer  or  other  disposition  (in one
transaction  or a series of  transactions)  of any assets of Employer  having an
aggregate  fair market  value of fifty  percent  (50%) of the total value of the
assets of Employer, reflected in the most recent balance sheet of Employer; (iv)
a transaction  whereby any "person" (as such term is used in the Exchange Act or
any  individual,  corporation,  partnership,  trust or any other  entity)  is or
becomes the beneficial owner, directly or indirectly,  of securities of Employer
representing  25% or  more of the  combined  voting  power  of  Employer's  then
outstanding  securities;  (v) if in any one year period,  individuals who at the
beginning of such period constitute the Board of Directors of Employer cease for
any reason to constitute at least a majority  thereof,  unless the election,  or
the nomination for election by Employer's shareholders,  of each new director is
approved  by a vote of a least  three-quarters  of the  directors  then still in
office who were directors at the beginning of the period; (iv) a majority of the
members of the Board of Directors  of Employer in office prior to the  happening
of any event  determines in its sole  discretion  that as a result of such event
there has been a change in control.  Notwithstanding  the  foregoing or anything
else contained herein to the contrary,  there shall not be a "change of control"
for purposes of this  Agreement if the event which would  otherwise  come within
the meaning of the term "change of control" involves an Employee Stock Ownership
Plan or  similar  plan  sponsored  by  Employer  or Bank which is the party that
acquires   "control"  or  is  the  principal   participant  in  the  transaction
constituting a "change in control," as described above.

         16.  Notices.  Any notices to be given hereunder by either party to the
other shall be in writing and may be transmitted by personal delivery or by U.S.
mail,  registered or certified,  postage prepaid with return receipt  requested.
Mailed  notices  shall be  addressed to the parties at the  addresses  listed as
follows:


                  Employer:                 701 South Ham Lane
                                            Lodi, California 95242

                  Employee:

                  with a copy to:           Kevin W. Finck

                                       38
<PAGE>

                                            Attorney at Law
                                            Two Embarcadero Center, Suite 1670
                                            San Francisco, California 94111

         Each  party may change the  address  for  receipt of notices by written
notice in accordance with this Paragraph 15. Notices delivered  personally shall
be deemed communicated as of the date of actual receipt; mailed notices shall be
deemed communicated as of three (3) days after the date of mailing.

         17. Arbitration.  All claims,  disputes  and other  matters in question
arising  out of or relating to this  Agreement  or the breach or  interpretation
thereof,  other than those matters which are to be determined by the Employer in
its sole and  absolute  discretion,  shall be  resolved  by binding  arbitration
before a representative member, selected by the mutual agreement of the parties,
of the  Judicial  Arbitration  and  Mediation  Services,  Inc.,  San  Francisco,
California ("JAMS"), in accordance with the rules and procedures of JAMS then in
effect. In the event JAMS is unable or unwilling to conduct such arbitration, or
has discontinued its business,  the parties agree that a representative  member,
selected by the mutual  agreement  of the parties,  of the American  Arbitration
Association,  San  Francisco,  California  ("AAA"),  shall  conduct such binding
arbitration  in  accordance  with the  rules and  procedures  of the AAA then in
effect.  Notice of the demand for arbitration shall be filed in writing with the
other party to this Agreement and with JAMS (or AAA, if necessary).  In no event
shall the demand for  arbitration  be made  after the date when  institution  of
legal or equitable  proceedings based on such claim,  dispute or other matter in
question would be barred by the  applicable  statute of  limitations.  Any award
rendered  by JAMS or AAA shall be final and  binding  upon the  parties,  and as
applicable,  their  respective  heirs,  beneficiaries,   legal  representatives,
agents,  successors  and  assigns,  and  may  be  entered  in any  court  having
jurisdiction  thereof.  The  obligation of the parties to arbitrate  pursuant to
this clause shall be specifically  enforceable in accordance  with, and shall be
conducted  consistently  with,  the  provisions  of  Title  9 of  Part  3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Lodi, California, unless otherwise agreed to by the parties.

         18. Attorneys' Fees and Costs. In the event of litigation,  arbitration
or any other  action or  proceeding  between the parties to interpret or enforce
this  Agreement or any part  thereof or otherwise  arising out of or relating to
this  Agreement,  the  prevailing  party shall be entitled to recover his or its
costs related to any such action or proceeding and his or its reasonable fees of
attorneys, accountants and expert witnesses incurred by such party in connection
with any such action or proceeding.  The prevailing  party shall be deemed to be
the party which obtains  substantially  the relief  sought by final  resolution,
compromise or settlement,  or as may otherwise be determined by order of a court
of competent  jurisdiction  in the event of litigation,  an award or decision of
one or  more  arbitrators  in the  event  of  arbitration,  or a  decision  of a
comparable  official  in the event of any  other  action  or  proceeding.  Every
obligation  to indemnify  under this  Agreement  includes the  obligation to pay
reasonable fees of attorneys,  accountants and expert witnesses  incurred by the
indemnified party in connection with matters subject to indemnification.

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

         20. Modifications. Any modification of this Agreement will be effective
only  if it is in  writing  and  signed  by  the  parties  or  their  authorized
representatives.

         21. Waiver.  The failure of either party to insist on strict compliance
with any of the terms, provisions, covenants, or conditions of this Agreement by
the other party shall not be deemed a waiver of any term,  provision,

                                       39

<PAGE>

covenant, or condition,  individually or in the aggregate, unless such waiver is
in writing,  nor shall any waiver or relinquishment of any right or power at any
one time or times be deemed a waiver or  relinquishment  of that  right or power
for all or any other times.

         22. Partial Invalidity. If any provision in this Agreement is held by a
court of competent  jurisdiction  to be invalid,  void,  or  unenforceable,  the
remaining  provisions  shall  nevertheless  continue  in full  force and  effect
without being impaired or invalidated in any way.

         23. Interpretation. This Agreement shall be construed without regard to
the party  responsible  for the preparation of the Agreement and shall be deemed
to have been  prepared  jointly by the parties.  Any  ambiguity  or  uncertainty
existing in this Agreement  shall not be interpreted  against either party,  but
according to the  application of other rules of contract  interpretation,  if an
ambiguity or uncertainty exists.

         24. Governing  Law and Venue.  The laws of the United States of America
and the State of California,  and the rules and regulations of the Office of the
Comptroller of the Currency,

Federal Deposit Insurance  Corporation and the Board of Governors of the Federal
Reserve  System  shall  govern  the  validity,  construction  and effect of this
Agreement.

         25. Payments  Due  Deceased  Employee.  If  Employee  dies prior to the
expiration of the term of his employment,  any payments that may be due Employee
from  Employer  under this  Agreement  as of the date of death  shall be paid to
Employee's   executors,   administrators,   heirs,   personal   representatives,
successors or assigns.

         26. Opportunity  to  Consult  with   Independent   Advisors.   Employee
acknowledges  that  he  has  been  afforded  the  opportunity  to  consult  with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement  and the (i) terms  and  conditions  which  may  affect
Employee's  right to  these  benefits  and (ii)  personal  tax  effects  of such
benefits  including,  without  limitation,  the  effects of any federal or state
taxes,  Section  280G of the  Code,  and any other  taxes,  costs,  expenses  or
liabilities  whatsoever related to such benefits,  which in any of the foregoing
instances,  Employee acknowledges and agrees shall be the sole responsibility of
Employee notwithstanding any other term or provision of this Agreement. Employee
further  acknowledges  and agrees that Employer and Bank shall have no liability
whatsoever  related to any such  personal tax effects or other  personal  costs,
expenses, or liabilities  applicable to Employee and further specifically waives
any right for Employee, his heirs, beneficiaries, legal representatives,  agents
successors  and  assigns to claim or assert  liability  on the part of  Employer
related  to the  matters  described  in  this  Paragraph  26.  Employee  further
acknowledges and agrees that he has read, understands and consents to all of the
terms and conditions of this  Agreement,  and that he enters into this Agreement
with a full understanding of its terms and conditions.

         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the date set forth above, and, as to Employer, by an officer of Employer duly
authorized by appropriate resolution of its Board of Directors.

EMPLOYER:                                      EMPLOYEE:

FIRST FINANCIAL BANCORP


By:
                                               David M. Philipp

Title: ________________________________


                                       40
<PAGE>

        Exhibit 10(j)   Executive Supplemental  Compensation Agreement effective
                        as of April 3, 1998, between Bank of Lodi, N.A. and Leon
                        J. Zimmerman.


                  EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT


        This Agreement is made and entered into effective as of April 3, 1998 by
and between Bank of Lodi, N.A., a national banking  association  chartered under
the federal  laws of the United  States of America  with its  principal  offices
located in the City of Lodi, San Joaquin County,  California  (the  "Employer"),
and Leon J.  Zimmerman,  an individual  residing in the State of California (the
"Executive").

                                 R E C I T A L S

        WHEREAS,  the Executive has been an employee of the Employer since April
2, 1990, and is currently serving as its President and Chief Executive Officer;

        WHEREAS,  the  Employer  desires to  establish  a  compensation  benefit
program as a fringe  benefit for executive  officers of the Employer in order to
attract and retain  individuals  with  extensive and valuable  experience in the
banking industry;

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

        WHEREAS,  it is deemed to be in the best  interests  of the  Employer to
provide the Executive with certain fringe benefits,  on the terms and conditions
set forth herein,  in order to reasonably  induce the Executive to remain in the
Employer's  employment  and to  compensate  the Employee  for valuable  services
heretofore rendered to the Employer; and

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

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

                                A G R E E M E N T

         1.  Terms and Definitions.

             1.1. Administrator.  The Employer shall be the "Administrator" and,
solely  for the  purposes  of ERISA as defined in  subparagraph  1.9 below,  the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

             1.2. Applicable Percentage.  The term "Applicable Percentage" shall
mean that percentage listed on Schedule "A" attached hereto which is adjacent to
the number of  calendar  years  which  shall have  elapsed  from the date of the
Executive's  commencement  of  service  to the  Employer  and ending on the date

                                       41
<PAGE>

payments are to first begin under the terms of this  Agreement.  Notwithstanding
the foregoing or the  percentages  set forth on Schedule "A," but subject to all
other terms and conditions set forth herein,  the "Applicable  Percentage" shall
be: (i) provided  payments  have not yet begun  hereunder,  one hundred  percent
(100%) upon the  occurrence of a "Change in Control" as defined in  subparagraph
1.4 below, or the  Executive's  death, or Disability (as defined in subparagraph
1.6 below),  which death or Disability  occurs prior to the  termination  of the
Executive's employment by the Employer;  and (ii) notwithstanding  subclause (i)
of this subparagraph 1.2, zero percent (0%) in the event the Executive takes any
intentional  action which prevents the Employer from  collecting the proceeds of
any life  insurance  policy  which the Employer may happen to own at the time of
the Executive's  death and of which the Employer is the designated  beneficiary.
Furthermore,  notwithstanding  the  foregoing,  or  anything  contained  in this
Agreement to the  contrary,  in the event the  Executive  takes any  intentional
action  which  prevents the Employer  from  collecting  the proceeds of any life
insurance  policy  which  the  Employer  may  happen  to own at the  time of the
Executive's death and of which the Employer is the designated  beneficiary:  (1)
the Executive's estate or designated  beneficiary shall no longer be entitled to
receive any of the amounts  payable under the terms of this  Agreement,  and (2)
the Employer shall have the right to recover from Executive's  estate all of the
amounts paid to the  Executive's  estate (with  respect to amounts paid prior to
the  Executive's  death  or  paid  to  the  Executive's  estate)  or  designated
beneficiary  (with  respect  to  amounts  paid  to the  designated  beneficiary)
pursuant to the terms of this Agreement prior to and after Executive's death.

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

             1.4. Change in Control. The term "Change in Control" shall mean the
occurrence of any of the following events with respect to the Employer (with the
term "Employer"  being defined for purposes of determining  whether a "Change in
Control" has occurred to include any parent bank  holding  company  organized at
the direction of the Employer to own 100% of the Employer's  outstanding  common
stock):  (i) a change  in  control  of a nature  that  would be  required  to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A  promulgated
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), or
in  response  to any  other  form  or  report  to  the  regulatory  agencies  or
governmental  authorities  having  jurisdiction  over the  Employer or any stock
exchange on which the Employer's  shares are listed which requires the reporting
of a change in control; (ii) any merger,  consolidation or reorganization of the
Employer  in which  the  Employer  does not  survive;  (iii)  any  sale,  lease,
exchange, mortgage, pledge, transfer or other disposition (in one transaction or
a series of transactions) of any assets of the Employer having an aggregate fair
market  value of fifty  percent  (50%) of the total  value of the  assets of the
Employer,  reflected in the most recent  balance sheet of the  Employer;  (iv) a
transaction  whereby any "person" (as such term is used in the Exchange  Act) or
any individual, corporation,  partnership, trust or any other entity becomes the
beneficial  owner,  directly  or  indirectly,  of  securities  of  the  Employer
representing  twenty-five  percent (25%) or more of the combined voting power of
the Employer's then  outstanding  securities;  or (v) a situation  where, in any
one-year period,  individuals who at the beginning of such period constitute the
Board of Directors of the Employer cease for any reason to constitute at least a
majority  thereof,  unless the election,  or the  nomination for election by the
Employer's shareholders,  of each new director is approved by a vote of at least
three-quarters (3/4) of the directors then still in office who were directors at
the  beginning of the period.  Notwithstanding  the  foregoing or anything  else
contained  herein to the contrary,  there shall not be a "Change of Control" for
purposes of this  Agreement if the event which would  otherwise  come within the
meaning of the term  "Change of Control"  involves (i) a  reorganization  at the
direction of the Employer  solely to form a parent bank  holding  company  which
owns 100% of the Employer's common stock following the  reorganization,  or (ii)
an Employee Stock Ownership Plan sponsored by the Employer or its parent holding
company  which  is  the  party  that  acquires  "control"  or is  the  principal
participant in the transaction  constituting a "Change in Control," as described
above.

                                       42
<PAGE>

             1.5. The Code.  The "Code" shall mean the Internal  Revenue Code of
1986, as amended (the "Code").

             1.6. Disability/Disabled. The term "Disability" or "Disabled" shall
have the same  meaning  given such terms in any policy of  disability  insurance
maintained by the Employer for the benefit of employees including the Executive.
In the absence of such a policy which  extends  coverage to the Executive in the
event of  disability,  the terms shall mean bodily injury or disease  (mental or
physical) which wholly and continuously  prevents the performance of duty for at
least three months.

             1.7. Early Retirement Date. The term "Early  Retirement Date" shall
mean the  Retirement,  as defined below, of the Executive on a date which occurs
prior to the  Executive  attaining  sixty-two  (62) years of age,  but after the
Executive has attained fifty-five (55) years of age.

             1.8. Effective Date. The term "Effective  Date" shall mean the date
first written above.

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

             1.10. Executive Benefits. The term "Executive  Benefits" shall mean
the benefits determined in accordance with Schedule "B", and reduced or adjusted
to the  extent:  (i)  required  under the other  provisions  of this  Agreement,
including,  but not limited to,  Paragraphs 5, 6 and 7 hereof;  (ii) required by
reason of the lawful order of any regulatory agency or body having  jurisdiction
over the  Employer;  or (iii)  required  in order for the  Employer  to properly
comply with any and all applicable  state and federal laws,  including,  but not
limited to, income, employment and disability income tax laws (e.g., FICA, FUTA,
SDI).

             1.11. Plan Year.  The term "Plan  Year"  shall mean the  Employer's
fiscal year.

             1.12. Retirement. The term "Retirement" or "Retires" shall refer to
the date which the Executive  acknowledges in writing to Employer to be the last
day he will provide any significant personal services, whether as an employee or
independent  consultant or contractor,  to Employer or to, for, or on behalf of,
any other  business  entity  conducting,  performing or making  available to any
person or entity banking or other  financial  services of any kind. For purposes
of this Agreement,  the phrase  "significant  personal services" shall mean more
than ten (10) hours of personal  services rendered to one or more individuals or
entities in any thirty (30) day period.

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

             1.14. Termination for Cause. The term "Termination for Cause" shall
mean  termination  of the  employment  of the  Executive by reason of any of the
following determined in good faith by the Employer's Board of Directors:

                   (a)  The willful,  intentional and material breach of duty by
                        Executive in the course of his employment.

                   (b)  The habitual and  continued  neglect by Executive of his
                        employment duties and obligations under this Agreement.

                                       43
<PAGE>

                   (c)  The   continuous   mental  or  physical   incapacity  of
                        Executive,  subject  to  Executive's  disability  rights
                        under this Agreement.

                   (d)  Executive's  willful and  intentional  violation  of any
                        federal banking laws, or of the Bylaws,  rules, policies
                        or  resolutions   of  Employer,   or  of  the  rules  or
                        regulations  of the Board of  Governors  of the  Federal
                        Reserve System,  Federal Deposit Insurance  Corporation,
                        Office  of the  Comptroller  of the  Currency,  or other
                        regulatory  agency  or  governmental   authority  having
                        jurisdiction over Employer.

                   (e)  The written  determination by a state or federal banking
                        agency or  governmental  authority  having  jurisdiction
                        over Employer  that  Executive is not suitable to act in
                        the capacity for which he is employed by Employer.

                   (f)  Executive   is  convicted  of  any  felony  or  a  crime
                        involving moral turpitude or willfully and intentionally
                        commits a fraudulent or dishonest act.

                   (g)  Executive's willful and intentional disclosure,  without
                        authority,  of any  secret or  confidential  information
                        concerning  Employer or Executive takes any action which
                        Employer's  Board of Directors  determines,  in its sole
                        discretion  and subject to good faith,  fair dealing and
                        reasonableness,  constitutes  unfair competition with or
                        induces  any  customer  to  breach  any  contract   with
                        Employer.

             2.    Scope, Purpose and Effect.

                   2.1.  Contract of  Employment.  Although  this  Agreement  is
intended to provide the Executive with an additional  incentive to remain in the
employ of the  Employer,  this  Agreement  shall not be deemed to  constitute  a
contract of  employment  between the  Executive  and the  Employer nor shall any
provision  of this  Agreement  restrict  or expand the right of the  Employer to
terminate the  Executive's  employment.  This Agreement  shall have no impact or
effect upon any separate  written  Employment  Agreement which the Executive may
have with the  Employer,  it being the parties'  intention  and  agreement  that
unless this Agreement is specifically  referenced in said  Employment  Agreement
(or any modification  thereto),  this Agreement (and the Employer's  obligations
hereunder)  shall stand separate and apart and shall have no effect upon, nor be
affected by, the terms and provisions of said Employment Agreement.

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

             3.    Payments  Upon  Early  Retirement  or  Retirement  and  After
                   Retirement.

                   3.1. Payments Upon Early Retirement. The Executive shall have
the right to Retire on a date  which  constitutes  an Early  Retirement  Date as
defined in subparagraph  1.7 above. In the event the Executive  elects to Retire
on a date which  constitutes an Early  Retirement  Date, the Executive  shall be
entitled to be paid the  Applicable  Percentage  of the Executive  Benefits,  as
defined above, in substantially  equal monthly  installments on the first day of
each  month,  beginning  with the month  following  the month in which the Early

                                       44
<PAGE>

Retirement Date occurs or upon such later date as may be mutually agreed upon by
the Executive and the Employer in advance of said Early Retirement Date, payable
(i) for the period  designated in Schedule "D" in the case of the balance in the
Benefit  Account and (ii) until the  Executive's  death in the case of the Index
Benefit defined in Schedule "B".

                   3.2. Payments Upon Retirement.  If the Executive shall remain
in the  continuous  employment of the Employer  until  attaining  sixty-two (62)
years  of age,  the  Executive  shall  be  entitled  to be paid  the  Applicable
Percentage of the Executive  Benefits,  as defined above, in substantially equal
monthly  installments  on the first day of each month,  beginning with the month
following  the month in which the  Executive  Retires or upon such later date as
may be mutually agreed upon by the Executive and the Employer in advance of said
Retirement  date,  payable (i) for the period  designated in Schedule "D" in the
case of the balance in the Benefit Account and (ii) until the Executive's  death
in the case of the Index Benefit defined in Schedule "B". At the Employer's sole
and absolute discretion, the Employer may increase the Executive Benefits as and
when the Employer determines the same to be appropriate.

                   3.3.  Payments  in the Event of Death After  Retirement.  The
Employer agrees that if the Executive  Retires,  but shall die before  receiving
all of the Executive  Benefits Payments  specified in Schedule "B", the Employer
agrees  to pay  the  Applicable  Percentage  of the  Executive  Benefits  to the
Executive's   designated  beneficiary  in  lump  sum.  If  a  valid  Beneficiary
Designation  is not in effect,  then the remaining  amounts due to the Executive
under the terms of this  Agreement  shall be paid to the  Executive's  Surviving
Spouse. If the Executive leaves no Surviving  Spouse,  the remaining amounts due
to the  Executive  under the terms of this  Agreement  shall be paid to the duly
qualified personal representative,  executor or administrator of the Executive's
estate.

             4.    Payments  in  the  Event  Death or Disability Occurs Prior to
                   Retirement.

                   4.1.  Payments in the Event of Death Prior to Retirement.  If
the Executive dies while actively employed by the Employer at any time after the
Effective Date of this Agreement,  but prior to Retirement,  the Employer agrees
to pay the Applicable  Percentage of the Executive  Benefits to the  Executive's
designated beneficiary in lump sum. If a valid Beneficiary Designation is not in
effect,  then the remaining amounts due to the Executive under the terms of this
Agreement shall be paid to the Executive's  Surviving  Spouse.  If the Executive
leaves no Surviving Spouse, the remaining amounts due to the Executive under the
terms  of  this  Agreement  shall  be  paid  to  the  duly  qualified   personal
representative, executor or administrator of the Executive's estate.

                   4.2. Payments in the Event of Disability Prior to Retirement.
In the event the  Executive  becomes  Disabled  while  actively  employed by the
Employer at any time after the  Effective  Date of this  Agreement  but prior to
Retirement, the Executive shall be entitled to be paid the Applicable Percentage
of the Executive  Benefits,  as defined above,  in  substantially  equal monthly
installments on the first day of each month,  beginning with the month following
the month in which the Executive  becomes  Disabled,  payable (i) for the period
designated in Schedule "D" in the case of the balance in the Benefit Account and
(ii) until the  Executive's  death in the case of the Index  Benefit  defined in
Schedule "B".

             5.    Payments  in the  Event  Employment  Is  Terminated  Prior to
Retirement.  As indicated in subparagraph 2.1 above,  the Employer  reserves the
right to terminate the Executive's employment, with or without cause but subject
to any written  employment  agreement which may then exist, at any time prior to
the  Executive's  Retirement.  In the event that the employment of the Executive
shall be  terminated,  other than by reason of death,  Disability or Retirement,
prior to the  Executive's  attaining  sixty-two  (62)  years of age,  then  this
Agreement  shall  terminate  upon the date of such  termination  of  employment;
provided,  however,  that the  Executive  shall  be  entitled  to the  following
benefits as may be applicable  depending upon the circumstances  surrounding the
Executive's termination:

                   5.1. Termination Without Cause. If the Executive's employment
is terminated by the Employer without cause, and such termination is not subject
to the provisions of subparagraph  5.4 below, the

                                       45
<PAGE>

Executive  shall  be  entitled  to be  paid  the  Applicable  Percentage  of the
Executive   Benefits,   as  defined  above,  in   substantially   equal  monthly
installments on the first day of each month,  beginning with the month following
the month in which the  Executive  attains  fifty-five  (55) years of age or any
month thereafter,  as requested in writing by the Executive and delivered to the
Employer  or its  successor  thirty  (30)  days  prior  to the  commencement  of
installment  payments;  provided,  however, that in the event the Executive does
not request a commencement date as specified, such installments shall be paid on
the first day of each month,  beginning  with the month  following  the month in
which the Executive attains sixty-two (62) years of age. The installments  shall
be payable  (i) for the period  designated  in  Schedule  "D" in the case of the
balance in the Benefit Account and (ii) until the Executive's  death in the case
of the Index Benefit defined in Schedule "B".

                   5.2.   Voluntary   Termination  by  the  Executive.   If  the
Executive's  employment is terminated by voluntary resignation prior to the date
specified in Schedule A which  corresponds to an Applicable  Percentage equal to
one  hundred  percent  (100%),  and  such  resignation  is  not  subject  to the
provisions of  subparagraph  5.4 below,  the Executive shall forfeit any and all
rights and benefits he may have under the terms of this Agreement and shall have
no right to be paid any of the amounts  which would  otherwise be due or paid to
the Executive by the Employer pursuant to the terms of this Agreement.

                   5.3.  Termination for Cause. The Executive agrees that if his
employment   with  the  Employer  is  terminated  "for  cause,"  as  defined  in
subparagraph  1.14 of this  Agreement,  he shall  forfeit any and all rights and
benefits he may have under the terms of this  Agreement  and shall have no right
to be  paid  any of the  amounts  which  would  otherwise  be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.

                   5.4.  Termination  by the  Employer  on Account of or After a
Change  in  Control.  In the  event:  (i) the  Executive's  employment  with the
Employer is terminated by the Employer in  conjunction  with, or by reason of, a
"Change in Control" (as defined in subparagraph 1.4 above); or (ii) by reason of
the  Employer's  actions any adverse and material  change occurs in the scope of
the  Executive's  position,  responsibilities,   duties,  salary,  benefits,  or
location of employment  after a Change in Control occurs;  or (iii) the Employer
causes an event to occur which reasonably  constitutes or results in a demotion,
a significant  diminution of  responsibilities  or authority,  or a constructive
termination   (by  forcing  a  resignation  or  otherwise)  of  the  Executive's
employment  after a  Change  in  Control  occurs,  then the  Executive  shall be
entitled to be paid the  Applicable  Percentage  of the Executive  Benefits,  as
defined above, in substantially  equal monthly  installments on the first day of
each month,  beginning with the month following the month in which the Executive
attains  fifty-five (55) years of age or any month  thereafter,  as requested in
writing by the Executive  and delivered to the Employer or its successor  thirty
(30) days prior to the commencement of installment payments;  provided, however,
that in the  event  the  Executive  does  not  request  a  commencement  date as
specified,  such  installments  shall be paid on the  first  day of each  month,
beginning  with the month  following  the month in which the  Executive  attains
sixty-two  (62) years of age.  The  installments  shall be  payable  (i) for the
period  designated  in  Schedule  "D" in the case of the  balance in the Benefit
Account and (ii) until the  Executive's  death in the case of the Index  Benefit
defined in Schedule "B".

                   5.5. Payments in the Event of Death Following Termination. If
the Executive dies prior to receiving all of the Executive Benefits described in
this Paragraph 5 to which the Executive is entitled, then the Employer will make
such payments to the Executive's  designated beneficiary in lump sum. If a valid
Beneficiary  Designation is not in effect, then the remaining amounts due to the
Executive  under the terms of this  Agreement  shall be paid to the  Executive's
Surviving  Spouse.  If the Executive leaves no Surviving  Spouse,  the remaining
amounts due to the Executive  under the terms of this Agreement shall be paid to
the duly qualified  personal  representative,  executor or  administrator of the
Executive's estate.

             6.    Section  280G  Adjustment.  The  Executive  acknowledges  and
agrees that the parties  have  entered  into this  Agreement  based upon certain
financial and tax accounting  assumptions.  Accordingly,  with full

                                       46
<PAGE>

knowledge   of  the   potential   consequences   the   Executive   agrees  that,
notwithstanding anything contained herein to the contrary, in the event that any
payment or benefit received or to be received by the Executive,  whether payable
pursuant  to the terms of this  Agreement  or any  other  plan,  arrangement  or
agreement with the Employer  (together with the Executive  Benefits,  the "Total
Payments"),  will not be  deductible  (in  whole or in part) as a result of Code
Section 280G or other  applicable  provisions  of the Code,  the Total  Payments
shall be reduced until no portion of the Total  Payments is  nondeductible  as a
result of Section  280G or such other  applicable  provisions  of the Code.  For
purposes of this limitation:

                   (a)  No  portion  of  the  Total  Payments,  the  receipt  or
enjoyment of which the Executive shall have effectively  waived in writing prior
to the date of payment of any future Executive Benefits payments, shall be taken
into account;

                   (b)  No  portion  of the Total  Payments  shall be taken into
account,  which in the opinion of the tax counsel  selected by the  Employer and
acceptable to the Executive,  does not constitute a "parachute  payment"  within
the meaning of Section 280G of the Code;

                   (c)  Any reduction of the Total  Payments shall be applied to
reduce any  payment or  benefit  received  or to be  received  by the  Executive
pursuant  to the terms of this  Agreement  and any other  plan,  arrangement  or
agreement with the Employer in the order  determined by mutual  agreement of the
Employer and the Executive;

                   (d)  Future  payments  shall be  reduced  only to the  extent
necessary so that the Total  Payments  (other than those  referred to in clauses
(a) or (b)  above in their  entirety)  constitute  reasonable  compensation  for
services  actually  rendered  within the meaning of Section 280G of the Code, in
the opinion of tax counsel referred to in clause (b) above; and

                   (e)  The  value  of any  non-cash  benefit  or  any  deferred
payment  or  benefit  included  in the Total  Payments  shall be  determined  by
independent auditors selected by the Employer and acceptable to the Executive in
accordance with the principles of Section 280G of the Code.

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

             8.    Claims Procedure.  The Employer shall, but only to the extent
necessary to comply with ERISA,  be designated as the named fiduciary under this
Agreement  and shall have  authority  to control  and manage the

                                       47
<PAGE>

operation  and  administration  of this  Agreement.  Consistent  therewith,  the
Employer shall make all  determinations  as to the rights to benefits under this
Agreement.  Any decision by the Employer  denying a claim by the Executive,  the
Executive's  spouse,  or the  Executive's  beneficiary  for benefits  under this
Agreement shall be stated in writing and delivered or mailed,  via registered or
certified  mail, to the Executive,  the  Executive's  spouse or the  Executive's
beneficiary,  as the case may be.  Such  decision  shall set forth the  specific
reasons for the denial of a claim.  In addition,  the Employer shall provide the
Executive,  the  Executive's  spouse  or  the  Executive's  beneficiary  with  a
reasonable  opportunity for a full and fair review of the decision  denying such
claim.

             9.    Status  as an  Unsecured  General  Creditor.  Notwithstanding
anything  contained  herein to the  contrary:  (i)  neither the  Executive,  the
Executive's spouse or the Executive's  designated  beneficiaries  shall have any
legal or equitable rights, interests or claims in or to any specific property or
assets  of the  Employer  as a  result  of  this  Agreement;  (ii)  none  of the
Employer's  assets  shall be held in or under any trust for the  benefit  of the
Executive, the Executive's spouse or the Executive's designated beneficiaries or
held in any  way as  security  for the  fulfillment  of the  obligations  of the
Employer under this Agreement;  (iii) all of the Employer's  assets shall be and
remain the general unpledged and unrestricted  assets of the Employer;  (iv) the
Employer's  obligation  under this  Agreement  shall be that of an unfunded  and
unsecured  promise  by the  Employer  to pay  money in the  future;  and (v) the
Executive,  the Executive's spouse and the Executive's designated  beneficiaries
shall be unsecured  general  creditors with respect to any benefits which may be
payable under the terms of this Agreement.

                   Notwithstanding  subparagraphs  (i)  through  (v) above,  the
Employer and the Executive  acknowledge and agree that, in the event of a Change
in Control,  upon request of the Executive,  or in the Employer's  discretion if
the  Executive  does  not so  request  and the  Employer  nonetheless  deems  it
appropriate,  the Employer shall establish, not later than the effective date of
the Change in Control,  a Rabbi Trust or multiple  Rabbi  Trusts (the "Trust" or
"Trusts")  upon  such  terms  and  conditions  as  the  Employer,  in  its  sole
discretion,  deems  appropriate and in compliance with applicable  provisions of
the Code, in order to permit the Employer to make contributions  and/or transfer
assets to the Trust or Trusts to  discharge  its  obligations  pursuant  to this
Agreement.  The principal of the Trust or Trusts and any earnings  thereon shall
be  held  separate  and  apart  from  other  funds  of the  Employer  to be used
exclusively  for  discharge  of the  Employer's  obligations  pursuant  to  this
Agreement  and shall  continue  to be subject  to the  claims of the  Employer's
general  creditors  until paid to the  Executive  or its  beneficiaries  in such
manner and at such times as specified in this Agreement.

             10.   Discretion of Board to Accelerate Payout. Notwithstanding any
of the  other  provisions  of this  Agreement,  the  Board of  Directors  of the
Employer  may,  if  determined  in  its  sole  and  absolute  discretion  to  be
appropriate,  accelerate  the payment of the amounts due under the terms of this
Agreement,   provided  that  Executive  (or  Executive's  spouse  or  designated
beneficiaries):  (i) consents to the revised payout terms determined appropriate
by the Employer's  Board of Directors;  and (ii) does not negotiate or in anyway
influence the terms of proposed  altered/accelerated payout (said decision to be
made solely by the  Employer's  Board of Directors  and offered to the Executive
[or Executive's  spouse or designated  beneficiaries]  on a "take it or leave it
basis").

             11.   Miscellaneous.

                   11.1.  Opportunity To Consult With Independent Advisors.  The
Executive acknowledges that he has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement and the (i) terms and  conditions  which may affect the
Executive's  right to these  benefits  and (ii)  personal  tax  effects  of such
benefits  including,  without  limitation,  the  effects of any federal or state
taxes,  Section  280G of the  Code,  and any other  taxes,  costs,  expenses  or
liabilities  whatsoever related to such benefits,  which in any of the foregoing
instances the Executive acknowledges and agrees shall be the sole responsibility
of the Executive  notwithstanding any other term or provision of this Agreement.
The Executive  further  acknowledges  and agrees that the Employer shall have no
liability  whatsoever related to any such personal

                                       48
<PAGE>

tax effects or other personal costs,  expenses, or liabilities applicable to the
Executive and further specifically waives any right for the Executive,  himself,
and his heirs,  beneficiaries,  legal representatives,  agents,  successors, and
assigns to claim or assert  liability on the part of the Employer related to the
matters  described  above  in this  subparagraph  11.1.  The  Executive  further
acknowledges and agrees that he has read, understands and consents to all of the
terms and conditions of this  Agreement,  and that he enters into this Agreement
with a full understanding of its terms and conditions.

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

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

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

                   If to the Employer:   Bank of Lodi, N.A.
                                              701 S. Ham Lane
                                              Lodi, California  95242-3537

                                              Attn: Chairman of the Board

                   If to the Executive:  Leon J. Zimmerman

                                       49
<PAGE>

                   with a copy to:            Kevin W. Finck
                                              Attorney at Law
                                              Two Embarcadero Center, Suite 1670
                                              San Francisco, CA 94111

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

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

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

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

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

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

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

                                       50
<PAGE>

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

                   11.13.  Governing  Law. The laws of the State of  California,
other than those laws denominated  choice of law rules,  and, where  applicable,
the rules and  regulations  of the Board of  Governors  of the  Federal  Reserve
System, Federal Deposit Insurance Corporation,  Office of the Comptroller of the
Currency,   or  other  regulatory   agency  or  governmental   authority  having
jurisdiction   over  Employer,   shall  govern  the  validity,   interpretation,
construction and effect of this Agreement.

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

THE EMPLOYER                                        THE EXECUTIVE

Bank of Lodi, N.A.



By:  /s/ Benjamin R. Goehring                       /s/ Leon J. Zimmerman
     ------------------------                       ---------------------
     Benjamin R. Goehring,                          Leon J. Zimmerman
     Chairman of the Board
     of Directors

                                       51

<PAGE>
                                   SCHEDULE A



CALENDAR YEAR                                              APPLICABLE PERCENTAGE
-------------                                              ---------------------


April 2, 1990 to April 1, 1998................................   60.00%

April 2, 1999.................................................   80.00%

April 2, 2000.................................................  100.00%




                                       52
<PAGE>




                                   SCHEDULE B


                               EXECUTIVE BENEFITS


1.      Executive Benefits Determination.

        The Executive Benefits shall be determined based upon the following:

        a.         Benefit Account:

                   A Benefit Account shall be established as a liability reserve
                   account on the books of the  Employer  for the benefit of the
                   Executive.  Prior  to the  Executive's  Retirement  or  other
                   termination  of service  under the  Agreement,  such  Benefit
                   Account shall be increased each Plan Year (including the Plan
                   Year in which  the  Executive  ceases to be  employed  by the
                   Employer)  by an amount as may equal any annual  earnings for
                   that  Plan  Year  determined  by  the  Index   (described  in
                   subparagraph c below),  less the Opportunity  Cost (described
                   in subparagraph d below) for that Plan Year.
<TABLE>
        b.         Index Benefit:

                   After the  Executive's  Retirement  or other  termination  of
                   service  under  the  Agreement,  the  Index  Benefit  for the
                   Executive   for  any  Plan  Year  shall  be   determined   by
                   subtracting the Opportunity  Cost for that Plan Year from the
                   earnings (if any) established by the Index.
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                     EXAMPLE
                                             INDEX BENEFIT CALCULATION
--------------------------------------------------------------------------------------------------------------------
                                      Assume Initial Insurance = $1,000,000
--------------------------------------------------------------------------------------------------------------------
End of Year  Cash Surrender Value of Life           Index              Opportunity Cost               Benefit
             Insurance Policy                   [Annual Policy     [After Tax One Year U.S.           Account
                                                   Income]          Treasury Yield (5.00%)]         [cumulative]
------------ --------------------------------- ----------------- ----------------------------- ---------------------
<S>  <C>                <C>                        <C>                    <C>                        <C>    
     1                  $1,050,000                 $50,000                $(30,000)                  $20,000
------------ --------------------------------- ----------------- ----------------------------- ---------------------
     2                  $1,102,500                 $52,500                $(31,500)                  $41,000
------------ --------------------------------- ----------------- ----------------------------- ---------------------
     3                  $1,157,625                 $55,125                $(33,075)                  $63,050
------------ --------------------------------- ----------------- ----------------------------- ---------------------
</TABLE>
        c.         Index:

                   The  Index for any Plan Year  shall be the  aggregate  annual
                   after-tax income from the life insurance  contracts described
                   hereinafter as defined by FASB Technical  Bulletin 85-4. This
                   Index shall be applied as if such  insurance  contracts  were
                   purchased on the Effective Date.

                   Insurance Company: TransAmerica Assurance Company



                                       53
<PAGE>



                   Option: A                         Face Amount: $309,000
                   Policy Form: Flex Premium         Premiums Paid: $300,000
                                Adjustable Life      Number of Premium Payments:
                   Policy Name: Tac Saver                   One
                   Insured's Age and Sex: 55/Male    Assumed Purchase Date:
                   Riders:    None                          04/03/98
                   Ratings:   According to the
                              health of the insured

                   Insurance Company: The Canada Life Assurance Company
                   Option: A                        Face Amount: $2,748,259
                   Policy Form: Whole Life          Premiums Paid: $1,200,000
                   Policy Name: CL/1                Number of Premium Payments:
                   Insured's Age and Sex: 55/Male           One
                   Riders:    None                  Assumed Purchase Date:
                   Ratings:   According to the              04/03/98
                              health of the insured

                   If such contracts of life insurance are actually purchased by
                   the  Employer,  then  the  actual  policies  as of the  dates
                   purchased  shall be used in  calculations  to  determine  the
                   Index  and  Opportunity  Cost.  If  such  contracts  of  life
                   insurance are not purchased or are  subsequently  surrendered
                   or lapsed,  then the  Employer  shall  receive and use annual
                   policy illustrations that assume the above described policies
                   were purchased from the above named insurance company(ies) on
                   the  Effective  Date to calculate the amount of the Index and
                   Opportunity Cost.

        d.         Opportunity Cost:

                   The Opportunity Cost for any Plan Year shall be calculated by
                   multiplying  (a) the sum of (i) the total  amount of premiums
                   set forth in the insurance policies described above, (ii) the
                   amount of any Index  Benefits  (described at  subparagraph  b
                   above),  and (iii) the amount of all previous years after-tax
                   Opportunity  Costs; by (b) the average  annualized  after-tax
                   cost of funds  calculated  using the average monthly one-year
                   CMT  (Constant  Maturity  Treasury)  for  the  Plan  Year  as
                   published by the Board of  Governors  of the Federal  Reserve
                   System,  Publication H.15(519).  The applicable tax rate used
                   to calculate  the  Opportunity  Cost shall be the  Employer's
                   average  marginal  tax rate  based  upon  Employer's  average
                   taxable  income  for each  Plan Year  until  the  Executive's
                   Retirement,  or other  termination  of service  (including  a
                   Change in Control). Thereafter, the Opportunity Cost shall be
                   calculated  with  the  assumption  of  a  marginal  forty-two
                   percent  (42%)  corporate  tax rate each year  regardless  of
                   whether  the  actual  marginal  tax rate of the  Employer  is
                   higher or lower.

2.      Executive Benefits Payments.

        The Executive shall be entitled to payment of the Applicable  Percentage
        of (i) the balance in the Benefit Account in installments upon the terms
        as specified in the Agreement,  and (ii) the Index Benefit for each Plan
        Year payable in installments until the Executive's death.



                                       54
<PAGE>




                                   SCHEDULE C


                             BENEFICIARY DESIGNATION


         To the Administrator of the Bank of Lodi, N.A.  Executive  Supplemental
Compensation Agreement:

         Pursuant to the  Provisions of my Executive  Supplemental  Compensation
Agreement with Bank of Lodi,  N.A.,  permitting the designation of a beneficiary
or beneficiaries by a participant,  I hereby designate the following persons and
entities  as primary  and  secondary  beneficiaries  of any  benefit  under said
Agreement payable by reason of my death:

Primary Beneficiary:



----------------------   --------------------   -----------------------------
Name                          Address                    Relationship


Secondary (Contingent) Beneficiary:



----------------------   ---------------------   ----------------------------
Name                          Address                    Relationship


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


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




Dated:  _______, 1998         _____________________________________________
                                                    Leon J. Zimmerman


                                       55
<PAGE>

CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:


        I,  ______________,  being the spouse of Leon J. Zimmerman,  after being
afforded the opportunity to consult with independent counsel of my choosing,  do
hereby  acknowledge  that  I have  read,  agree  and  consent  to the  foregoing
Beneficiary Designation which relates to the Executive Supplemental Compensation
Agreement entered into by my spouse effective as of _______,  1998. I understand
that the above  Beneficiary  Designation  may affect  certain rights which I may
have in the benefits provided for under the terms of the Executive  Supplemental
Compensation Agreement and in which I may have a marital property interest.

Dated:  ________, 1998



                   ------------------------------------------




                                       56
<PAGE>



                                   SCHEDULE D


                              DISTRIBUTION ELECTION

Pursuant to the Provisions of my Executive  Supplemental  Compensation Agreement
with Bank of Lodi,  N.A., I hereby elect to have any distribution of the balance
in my Benefit Account paid to me in installments as designated below:


                        thirty-six (36) monthly  installments with the amount of
         ----           each installment  determined as of each installment date
                        by dividing the entire  amount in my Benefit  Account by
                        the number of  installments  then  remaining to be paid,
                        with the final  installment  to be the entire  remaining
                        balance in the Benefit Account.

                        sixty (60) monthly  installments with the amount of each
         ----           installment  determined as of each  installment  date by
                        dividing the entire amount in my Benefit  Account by the
                        number of  installments  then remaining to be paid, with
                        the final installment to be the entire remaining balance
                        in the Benefit Account.

                        one hundred twenty (120) monthly  installments  with the
         ----           amount  of  each  installment   determined  as  of  each
                        installment  date by  dividing  the entire  amount in my
                        Benefit  Account  by the  number  of  installments  then
                        remaining to be paid,  with the final  installment to be
                        the entire remaining balance in the Benefit Account.

                        one hundred eighty (180) monthly  installments  with the
         ----           amount  of  each  installment   determined  as  of  each
                        installment  date by  dividing  the entire  amount in my
                        Benefit  Account  by the  number  of  installments  then
                        remaining to be paid,  with the final  installment to be
                        the entire remaining balance in the Benefit Account.
 
        Dated:  _______, 1998


        Signed:
                       Leon J. Zimmerman




                                       57
<PAGE>





        Exhibit 10(k)   Executive Supplemental  Compensation Agreement effective
                        as of April 3,  1998,  between  Bank of Lodi,  N.A.  and
                        David M. Philipp.

                  EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT


        This Agreement is made and entered into effective as of April 3, 1998 by
and between Bank of Lodi, N.A., a national banking  association  chartered under
the federal  laws of the United  States of America  with its  principal  offices
located in the City of Lodi, San Joaquin County,  California  (the  "Employer"),
and David M.  Philipp,  an individual  residing in the State of California  (the
"Executive").

                                 R E C I T A L S

        WHEREAS,  the Executive has been an employee of the Employer since April
6,  1992,  and is  currently  serving as its  Executive  Vice  President,  Chief
Financial Officer and Secretary;

        WHEREAS,  the  Employer  desires to  establish  a  compensation  benefit
program as a fringe  benefit for executive  officers of the Employer in order to
attract and retain  individuals  with  extensive and valuable  experience in the
banking industry;

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

        WHEREAS,  it is deemed to be in the best  interests  of the  Employer to
provide the Executive with certain fringe benefits,  on the terms and conditions
set forth herein,  in order to reasonably  induce the Executive to remain in the
Employer's  employment  and to  compensate  the Employee  for valuable  services
heretofore rendered to the Employer; and

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

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

                                A G R E E M E N T

         1.        Terms and Definitions.

                   1.1. Administrator. The Employer shall be the "Administrator"
and, solely for the purposes of ERISA as defined in subparagraph  1.9 below, the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

                   1.2. Applicable Percentage.  The term "Applicable Percentage"
shall mean that  percentage  listed on Schedule  "A"  attached  hereto  which is
adjacent to the number of calendar  years which shall have elapsed from the date
of the Executive's commencement of service to the Employer.  Notwithstanding the
foregoing or the percentages set forth on Schedule "A," but subject to all other
terms and conditions set forth herein, the "Applicable Percentage" shall be: (i)
provided payments have not yet begun hereunder,  one hundred percent (100%) upon
the occurrence of a "Change in Control" as defined in subparagraph 1.4 below, or
the Executive's



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death,  or Disability  (as defined in  subparagraph  1.6 below),  which death or
Disability occurs prior to the termination of the Executive's  employment by the
Employer; and (ii) notwithstanding  subclause (i) of this subparagraph 1.2, zero
percent  (0%) in the event the  Executive  takes any  intentional  action  which
prevents the Employer from collecting the proceeds of any life insurance  policy
which the Employer may happen to own at the time of the Executive's death and of
which the Employer is the designated beneficiary.  Furthermore,  notwithstanding
the foregoing,  or anything contained in this Agreement to the contrary,  in the
event the Executive  takes any  intentional  action which  prevents the Employer
from collecting the proceeds of any life insurance policy which the Employer may
happen to own at the time of the Executive's  death and of which the Employer is
the designated beneficiary: (1) the Executive's estate or designated beneficiary
shall no longer be  entitled to receive  any of the  amounts  payable  under the
terms of this  Agreement,  and (2) the Employer  shall have the right to recover
from Executive's  estate all of the amounts paid to the Executive's estate (with
respect  to  amounts  paid  prior  to  the  Executive's  death  or  paid  to the
Executive's  estate) or designated  beneficiary (with respect to amounts paid to
the designated beneficiary) pursuant to the terms of this Agreement prior to and
after Executive's death.

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

                   1.4.  Change in Control.  The term "Change in Control"  shall
mean the occurrence of any of the following  events with respect to the Employer
(with the term  "Employer"  being defined for purposes of determining  whether a
"Change in Control"  has  occurred to include  any parent bank  holding  company
organized  at the  direction  of the  Employer  to own  100%  of the  Employer's
outstanding  common  stock):  (i) a change in control of a nature  that would be
required to be reported in response to Item 6(e) of Schedule  14A of  Regulation
14A  promulgated  under the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange  Act"),  or in response to any other form or report to the  regulatory
agencies or governmental  authorities  having  jurisdiction over the Employer or
any stock exchange on which the Employer's  shares are listed which requires the
reporting  of  a  change  in  control;   (ii)  any  merger,   consolidation   or
reorganization of the Employer in which the Employer does not survive; (iii) any
sale, lease, exchange,  mortgage,  pledge, transfer or other disposition (in one
transaction or a series of transactions) of any assets of the Employer having an
aggregate  fair market  value of fifty  percent  (50%) of the total value of the
assets  of the  Employer,  reflected  in the most  recent  balance  sheet of the
Employer;  (iv) a transaction  whereby any "person" (as such term is used in the
Exchange Act) or any individual,  corporation,  partnership,  trust or any other
entity becomes the beneficial  owner,  directly or indirectly,  of securities of
the  Employer  representing  twenty-five  percent  (25%) or more of the combined
voting power of the Employer's then outstanding  securities;  or (v) a situation
where, in any one-year  period,  individuals who at the beginning of such period
constitute  the Board of  Directors  of the  Employer  cease  for any  reason to
constitute at least a majority thereof,  unless the election,  or the nomination
for election by the Employer's shareholders, of each new director is approved by
a vote of at least  three-quarters  (3/4) of the directors  then still in office
who were directors at the beginning of the period. Notwithstanding the foregoing
or anything else contained herein to the contrary,  there shall not be a "Change
of Control"  for purposes of this  Agreement if the event which would  otherwise
come  within  the  meaning  of the  term  "Change  of  Control"  involves  (i) a
reorganization  at the  direction of the  Employer  solely to form a parent bank
holding  company which owns 100% of the  Employer's  common stock  following the
reorganization,  or (ii) an  Employee  Stock  Ownership  Plan  sponsored  by the
Employer  or its  parent  holding  company  which  is the  party  that  acquires
"control" or is the principal  participant  in the  transaction  constituting  a
"Change in Control," as described above.

                   1.5. The Code.  The "Code"  shall mean the  Internal  Revenue
Code of 1986, as amended (the "Code").


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                   1.6. Disability/Disabled. The term "Disability" or "Disabled"
shall  have the same  meaning  given  such  terms in any  policy  of  disability
insurance  maintained by the Employer for the benefit of employees including the
Executive.  In the  absence  of such a  policy  which  extends  coverage  to the
Executive  in the event of  disability,  the terms shall mean  bodily  injury or
disease  (mental  or  physical)  which  wholly  and  continuously  prevents  the
performance of duty for at least three months.

                   1.7. Early Retirement Date. The term "Early  Retirement Date"
shall mean the  Retirement,  as defined below,  of the Executive on a date which
occurs prior to the Executive  attaining  sixty-two (62) years of age, but after
the Executive has attained fifty-five (55) years of age.

                   1.8. Effective Date. The term "Effective Date" shall mean the
date first written above.

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

                   1.10. Executive Benefits. The term "Executive Benefits" shall
mean the benefits  determined  in  accordance  with Schedule "B", and reduced or
adjusted  to the  extent:  (i)  required  under  the  other  provisions  of this
Agreement,  including,  but not limited to,  Paragraphs 5, 6 and 7 hereof;  (ii)
required by reason of the lawful order of any  regulatory  agency or body having
jurisdiction  over the Employer;  or (iii) required in order for the Employer to
properly comply with any and all applicable  state and federal laws,  including,
but not limited to, income,  employment  and  disability  income tax laws (e.g.,
FICA, FUTA, SDI).

                   1.11. Plan  Year.   The  term  "Plan  Year"  shall  mean  the
Employer's fiscal year.

                   1.12.  Retirement.  The term  "Retirement" or "Retires" shall
refer to the date which the Executive  acknowledges in writing to Employer to be
the last day he will provide any significant  personal  services,  whether as an
employee or independent consultant or contractor,  to Employer or to, for, or on
behalf of, any other business entity conducting,  performing or making available
to any person or entity  banking or other  financial  services of any kind.  For
purposes of this Agreement,  the phrase  "significant  personal  services" shall
mean more  than ten (10)  hours of  personal  services  rendered  to one or more
individuals or entities in any thirty (30) day period.

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

                   1.14. Termination for Cause. The term "Termination for Cause"
shall mean  termination  of the  employment of the Executive by reason of any of
the following determined in good faith by the Employer's Board of Directors:

                        (a)   The willful,  intentional  and material  breach of
                              duty by Executive in the course of his employment.

                        (b)   The habitual and continued neglect by Executive of
                              his employment  duties and obligations  under this
                              Agreement.

 
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                        (c)   The  continuous  mental or physical  incapacity of
                              Executive,   subject  to  Executive's   disability
                              rights under this Agreement.

                        (d)   Executive's  willful and intentional  violation of
                              any federal banking laws, or of the Bylaws, rules,
                              policies or  resolutions  of  Employer,  or of the
                              rules or  regulations of the Board of Governors of
                              the  Federal  Reserve   System,   Federal  Deposit
                              Insurance  Corporation,  Office of the Comptroller
                              of the  Currency,  or other  regulatory  agency or
                              governmental  authority having  jurisdiction  over
                              Employer.

                        (e)   The  written  determination  by a state or federal
                              banking agency or  governmental  authority  having
                              jurisdiction  over Employer that  Executive is not
                              suitable  to act in the  capacity  for which he is
                              employed by Employer.

                        (f)   Executive  is  convicted  of any felony or a crime
                              involving   moral   turpitude  or  willfully   and
                              intentionally  commits a  fraudulent  or dishonest
                              act.

                        (g)   Executive's  willful and  intentional  disclosure,
                              without  authority,  of any secret or confidential
                              information concerning Employer or Executive takes
                              any action  which  Employer's  Board of  Directors
                              determines,  in its sole discretion and subject to
                              good  faith,  fair  dealing  and   reasonableness,
                              constitutes unfair competition with or induces any
                              customer to breach any contract with Employer.

        2.         Scope, Purpose and Effect.

                   2.1.  Contract of  Employment.  Although  this  Agreement  is
intended to provide the Executive with an additional  incentive to remain in the
employ of the  Employer,  this  Agreement  shall not be deemed to  constitute  a
contract of  employment  between the  Executive  and the  Employer nor shall any
provision  of this  Agreement  restrict  or expand the right of the  Employer to
terminate the  Executive's  employment.  This Agreement  shall have no impact or
effect upon any separate  written  Employment  Agreement which the Executive may
have with the  Employer,  it being the parties'  intention  and  agreement  that
unless this Agreement is specifically  referenced in said  Employment  Agreement
(or any modification  thereto),  this Agreement (and the Employer's  obligations
hereunder)  shall stand separate and apart and shall have no effect upon, nor be
affected by, the terms and provisions of said Employment Agreement.

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



        3.         Payments  Upon  Early  Retirement  or  Retirement  and  After
                   Retirement.

                   3.1. Payments Upon Early Retirement. The Executive shall have
the right to Retire on a date  which  constitutes  an Early  Retirement  Date as
defined in subparagraph  1.7 above. In the event the Executive  elects to Retire
on a date which  constitutes an Early  Retirement  Date, the Executive  shall be
entitled to be paid the  Applicable  Percentage  of the Executive  Benefits,  as
defined above, in substantially  equal monthly  installments on the first day of
each  month,  beginning  with the month  following  the month in which the Early
Retirement Date occurs or



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upon such later date as may be  mutually  agreed upon by the  Executive  and the
Employer in advance of said Early  Retirement  Date,  payable (i) for the period
designated in Schedule "D" in the case of the balance in the Benefit Account and
(ii) until the  Executive's  death in the case of the Index  Benefit  defined in
Schedule "B".

                   3.2. Payments Upon Retirement.  If the Executive shall remain
in the  continuous  employment of the Employer  until  attaining  sixty-two (62)
years  of age,  the  Executive  shall  be  entitled  to be paid  the  Applicable
Percentage of the Executive  Benefits,  as defined above, in substantially equal
monthly  installments  on the first day of each month,  beginning with the month
following  the month in which the  Executive  Retires or upon such later date as
may be mutually agreed upon by the Executive and the Employer in advance of said
Retirement  date,  payable (i) for the period  designated in Schedule "D" in the
case of the balance in the Benefit Account and (ii) until the Executive's  death
in the case of the Index Benefit defined in Schedule "B". At the Employer's sole
and absolute discretion, the Employer may increase the Executive Benefits as and
when the Employer determines the same to be appropriate.

                   3.3.  Payments  in the Event of Death After  Retirement.  The
Employer agrees that if the Executive  Retires,  but shall die before  receiving
all of the Executive  Benefits Payments  specified in Schedule "B", the Employer
agrees  to pay  the  Applicable  Percentage  of the  Executive  Benefits  to the
Executive's   designated  beneficiary  in  lump  sum.  If  a  valid  Beneficiary
Designation  is not in effect,  then the remaining  amounts due to the Executive
under the terms of this  Agreement  shall be paid to the  Executive's  Surviving
Spouse. If the Executive leaves no Surviving  Spouse,  the remaining amounts due
to the  Executive  under the terms of this  Agreement  shall be paid to the duly
qualified personal representative,  executor or administrator of the Executive's
estate.

        4.         Payments in the Event  Death or  Disability  Occurs  Prior to
                   Retirement.

                   4.1.  Payments in the Event of Death Prior to Retirement.  If
the Executive dies while actively employed by the Employer at any time after the
Effective Date of this Agreement,  but prior to Retirement,  the Employer agrees
to pay the Applicable  Percentage of the Executive  Benefits to the  Executive's
designated beneficiary in lump sum. If a valid Beneficiary Designation is not in
effect,  then the remaining amounts due to the Executive under the terms of this
Agreement shall be paid to the Executive's  Surviving  Spouse.  If the Executive
leaves no Surviving Spouse, the remaining amounts due to the Executive under the
terms  of  this  Agreement  shall  be  paid  to  the  duly  qualified   personal
representative, executor or administrator of the Executive's estate.

                   4.2. Payments in the Event of Disability Prior to Retirement.
In the event the  Executive  becomes  Disabled  while  actively  employed by the
Employer at any time after the  Effective  Date of this  Agreement  but prior to
Retirement, the Executive shall be entitled to be paid the Applicable Percentage
of the Executive  Benefits,  as defined above,  in  substantially  equal monthly
installments on the first day of each month,  beginning with the month following
the month in which the Executive  becomes  Disabled,  payable (i) for the period
designated in Schedule "D" in the case of the balance in the Benefit Account and
(ii) until the  Executive's  death in the case of the Index  Benefit  defined in
Schedule "B".

        5.         Payments  in the  Event  Employment  Is  Terminated  Prior to
Retirement.  As indicated in subparagraph 2.1 above,  the Employer  reserves the
right to terminate the Executive's employment, with or without cause but subject
to any written  employment  agreement which may then exist, at any time prior to
the  Executive's  Retirement.  In the event that the employment of the Executive
shall be  terminated,  other than by reason of death,  Disability or Retirement,
prior to the  Executive's  attaining  sixty-two  (62)  years of age,  then  this
Agreement  shall  terminate  upon the date of such  termination  of  employment;
provided,  however,  that the  Executive  shall  be  entitled  to the  following
benefits as may be applicable  depending upon the circumstances  surrounding the
Executive's termination:



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                   5.1. Termination Without Cause. If the Executive's employment
is terminated by the Employer without cause, and such termination is not subject
to the provisions of subparagraph  5.4 below, the Executive shall be entitled to
be paid the Applicable  Percentage of the Executive Benefits,  as defined above,
in  substantially  equal  monthly  installments  on the first day of each month,
beginning  with the month  following  the month in which the  Executive  attains
fifty-five (55) years of age or any month thereafter, as requested in writing by
the Executive  and  delivered to the Employer or its successor  thirty (30) days
prior to the commencement of installment  payments;  provided,  however, that in
the event the Executive does not request a commencement date as specified,  such
installments  shall be paid on the first day of each month,  beginning  with the
month following the month in which the Executive attains sixty-two (62) years of
age. The installments shall be payable (i) for the period designated in Schedule
"D" in the  case of the  balance  in the  Benefit  Account  and (ii)  until  the
Executive's death in the case of the Index Benefit defined in Schedule "B".

                   5.2.   Voluntary   Termination  by  the  Executive.   If  the
Executive's  employment is terminated by voluntary resignation prior to the date
specified in Schedule A which  corresponds to an Applicable  Percentage equal to
one  hundred  percent  (100%),  and  such  resignation  is  not  subject  to the
provisions of  subparagraph  5.4 below,  the Executive shall forfeit any and all
rights and benefits he may have under the terms of this Agreement and shall have
no right to be paid any of the amounts  which would  otherwise be due or paid to
the Executive by the Employer pursuant to the terms of this Agreement.

                   5.3.  Termination for Cause. The Executive agrees that if his
employment   with  the  Employer  is  terminated  "for  cause,"  as  defined  in
subparagraph  1.14 of this  Agreement,  he shall  forfeit any and all rights and
benefits he may have under the terms of this  Agreement  and shall have no right
to be  paid  any of the  amounts  which  would  otherwise  be due or paid to the
Executive by the Employer pursuant to the terms of this Agreement.

                   5.4.  Termination  by the  Employer  on Account of or After a
Change  in  Control.  In the  event:  (i) the  Executive's  employment  with the
Employer is terminated by the Employer in  conjunction  with, or by reason of, a
"Change in Control" (as defined in subparagraph 1.4 above); or (ii) by reason of
the  Employer's  actions any adverse and material  change occurs in the scope of
the  Executive's  position,  responsibilities,   duties,  salary,  benefits,  or
location of employment  after a Change in Control occurs;  or (iii) the Employer
causes an event to occur which reasonably  constitutes or results in a demotion,
a significant  diminution of  responsibilities  or authority,  or a constructive
termination   (by  forcing  a  resignation  or  otherwise)  of  the  Executive's
employment  after a  Change  in  Control  occurs,  then the  Executive  shall be
entitled to be paid the  Applicable  Percentage  of the Executive  Benefits,  as
defined above, in substantially  equal monthly  installments on the first day of
each month,  beginning with the month following the month in which the Executive
attains  fifty-five (55) years of age or any month  thereafter,  as requested in
writing by the Executive  and delivered to the Employer or its successor  thirty
(30) days prior to the commencement of installment payments;  provided, however,
that in the  event  the  Executive  does  not  request  a  commencement  date as
specified,  such  installments  shall be paid on the  first  day of each  month,
beginning  with the month  following  the month in which the  Executive  attains
sixty-two  (62) years of age.  The  installments  shall be  payable  (i) for the
period  designated  in  Schedule  "D" in the case of the  balance in the Benefit
Account and (ii) until the  Executive's  death in the case of the Index  Benefit
defined in Schedule "B".

                   5.5. Payments in the Event of Death Following Termination. If
the Executive dies prior to receiving all of the Executive Benefits described in
this Paragraph 5 to which the Executive is entitled, then the Employer will make
such payments to the Executive's  designated beneficiary in lump sum. If a valid
Beneficiary  Designation is not in effect, then the remaining amounts due to the
Executive  under the terms of this  Agreement  shall be paid to the  Executive's
Surviving  Spouse.  If the Executive leaves no Surviving  Spouse,  the remaining
amounts due to the Executive  under the terms of this Agreement shall be paid to
the duly qualified  personal  representative,  executor or  administrator of the
Executive's estate.



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        6.         Section  280G  Adjustment.  The  Executive  acknowledges  and
agrees that the parties  have  entered  into this  Agreement  based upon certain
financial and tax accounting  assumptions.  Accordingly,  with full knowledge of
the potential consequences the Executive agrees that,  notwithstanding  anything
contained  herein to the  contrary,  in the event  that any  payment  or benefit
received or to be received by the  Executive,  whether  payable  pursuant to the
terms of this  Agreement or any other plan,  arrangement  or agreement  with the
Employer (together with the Executive Benefits, the "Total Payments"),  will not
be  deductible  (in whole or in part) as a result of Code  Section 280G or other
applicable  provisions of the Code, the Total Payments shall be reduced until no
portion of the Total  Payments is  nondeductible  as a result of Section 280G or
such other applicable provisions of the Code. For purposes of this limitation:

                   (a)  No  portion  of  the  Total  Payments,  the  receipt  or
enjoyment of which the Executive shall have effectively  waived in writing prior
to the date of payment of any future Executive Benefits payments, shall be taken
into account;

                   (b)  No  portion  of the Total  Payments  shall be taken into
account,  which in the opinion of the tax counsel  selected by the  Employer and
acceptable to the Executive,  does not constitute a "parachute  payment"  within
the meaning of Section 280G of the Code;

                   (c)  Any reduction of the Total  Payments shall be applied to
reduce any  payment or  benefit  received  or to be  received  by the  Executive
pursuant  to the terms of this  Agreement  and any other  plan,  arrangement  or
agreement with the Employer in the order  determined by mutual  agreement of the
Employer and the Executive;

                   (d)  Future  payments  shall be  reduced  only to the  extent
necessary so that the Total  Payments  (other than those  referred to in clauses
(a) or (b)  above in their  entirety)  constitute  reasonable  compensation  for
services  actually  rendered  within the meaning of Section 280G of the Code, in
the opinion of tax counsel referred to in clause (b) above; and

                   (e)  The  value  of any  non-cash  benefit  or  any  deferred
payment  or  benefit  included  in the Total  Payments  shall be  determined  by
independent auditors selected by the Employer and acceptable to the Executive in
accordance with the principles of Section 280G of the Code.

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



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

        9.         Status  as an  Unsecured  General  Creditor.  Notwithstanding
anything  contained  herein to the  contrary:  (i)  neither the  Executive,  the
Executive's spouse or the Executive's  designated  beneficiaries  shall have any
legal or equitable rights, interests or claims in or to any specific property or
assets  of the  Employer  as a  result  of  this  Agreement;  (ii)  none  of the
Employer's  assets  shall be held in or under any trust for the  benefit  of the
Executive, the Executive's spouse or the Executive's designated beneficiaries or
held in any  way as  security  for the  fulfillment  of the  obligations  of the
Employer under this Agreement;  (iii) all of the Employer's  assets shall be and
remain the general unpledged and unrestricted  assets of the Employer;  (iv) the
Employer's  obligation  under this  Agreement  shall be that of an unfunded  and
unsecured  promise  by the  Employer  to pay  money in the  future;  and (v) the
Executive,  the Executive's spouse and the Executive's designated  beneficiaries
shall be unsecured  general  creditors with respect to any benefits which may be
payable under the terms of this Agreement.

                   Notwithstanding  subparagraphs  (i)  through  (v) above,  the
Employer and the Executive  acknowledge and agree that, in the event of a Change
in Control,  upon request of the Executive,  or in the Employer's  discretion if
the  Executive  does  not so  request  and the  Employer  nonetheless  deems  it
appropriate,  the Employer shall establish, not later than the effective date of
the Change in Control,  a Rabbi Trust or multiple  Rabbi  Trusts (the "Trust" or
"Trusts")  upon  such  terms  and  conditions  as  the  Employer,  in  its  sole
discretion,  deems  appropriate and in compliance with applicable  provisions of
the Code, in order to permit the Employer to make contributions  and/or transfer
assets to the Trust or Trusts to  discharge  its  obligations  pursuant  to this
Agreement.  The principal of the Trust or Trusts and any earnings  thereon shall
be  held  separate  and  apart  from  other  funds  of the  Employer  to be used
exclusively  for  discharge  of the  Employer's  obligations  pursuant  to  this
Agreement  and shall  continue  to be subject  to the  claims of the  Employer's
general  creditors  until paid to the  Executive  or its  beneficiaries  in such
manner and at such times as specified in this Agreement.

        10.        Discretion of Board to Accelerate Payout. Notwithstanding any
of the  other  provisions  of this  Agreement,  the  Board of  Directors  of the
Employer  may,  if  determined  in  its  sole  and  absolute  discretion  to  be
appropriate,  accelerate  the payment of the amounts due under the terms of this
Agreement,   provided  that  Executive  (or  Executive's  spouse  or  designated
beneficiaries):  (i) consents to the revised payout terms determined appropriate
by the Employer's  Board of Directors;  and (ii) does not negotiate or in anyway
influence the terms of proposed  altered/accelerated payout (said decision to be
made solely by the  Employer's  Board of Directors  and offered to the Executive
[or Executive's  spouse or designated  beneficiaries]  on a "take it or leave it
basis").

        11.        Miscellaneous.

                   11.1.  Opportunity To Consult With Independent Advisors.  The
Executive acknowledges that he has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement and the (i) terms and  conditions  which may affect the
Executive's  right to these  benefits  and (ii)  personal  tax  effects  of such
benefits  including,  without  limitation,  the  effects of any federal or state
taxes,  Section  280G of the  Code,  and any other  taxes,  costs,  expenses  or
liabilities  whatsoever related to such benefits,  which in any of the foregoing
instances the Executive acknowledges and agrees shall be the sole



                                       65
<PAGE>



responsibility of the Executive  notwithstanding  any other term or provision of
this Agreement.  The Executive further acknowledges and agrees that the Employer
shall have no liability  whatsoever  related to any such personal tax effects or
other personal costs,  expenses, or liabilities  applicable to the Executive and
further specifically waives any right for the Executive, himself, and his heirs,
beneficiaries,  legal representatives,  agents, successors, and assigns to claim
or assert liability on the part of the Employer related to the matters described
above in this subparagraph  11.1. The Executive further  acknowledges and agrees
that he has read, understands and consents to all of the terms and conditions of
this Agreement, and that he enters into this Agreement with a full understanding
of its terms and conditions.

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

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

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



                                       66
<PAGE>




                   If to the Employer:   Bank of Lodi, N.A.
                                              701 S. Ham Lane
                                              Lodi, California  95242-3537

                                              Attn: Chairman of the Board

                   If to the Executive:  David M. Philipp


                   with a copy to:            Kevin W. Finck
                                              Attorney at Law
                                              Two Embarcadero Center, Suite 1670
                                              San Francisco, CA 94111

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

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

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

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

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



                                       67
<PAGE>



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

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

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

                   11.13.  Governing  Law. The laws of the State of  California,
other than those laws denominated  choice of law rules,  and, where  applicable,
the rules and  regulations  of the Board of  Governors  of the  Federal  Reserve
System, Federal Deposit Insurance Corporation,  Office of the Comptroller of the
Currency,   or  other  regulatory   agency  or  governmental   authority  having
jurisdiction   over  Employer,   shall  govern  the  validity,   interpretation,
construction and effect of this Agreement.

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

THE EMPLOYER                                        THE EXECUTIVE

Bank of Lodi, N.A.



By:  /s/ Benjamin R. Goehring                       /s/ David M. Philipp
     ------------------------                       --------------------
     Benjamin R. Goehring,                          David M. Philipp
     Chairman of the Board
     of Directors


                                       68
<PAGE>

                                   SCHEDULE A



CALENDAR YEAR                                              APPLICABLE PERCENTAGE
-------------                                              ---------------------


April 6, 1992 to April 5, 1998...................................  20.00%

April 6, 1999....................................................  40.00%

April 6, 2000....................................................  60.00%

April 6, 2001....................................................  80.00%

April 6, 2002.................................................... 100.00%




                                       69
<PAGE>




                                   SCHEDULE B


                               EXECUTIVE BENEFITS


1.      Executive Benefits Determination.

        The Executive Benefits shall be determined based upon the following:

        a.   Benefit Account:

             A Benefit  Account  shall be  established  as a  liability  reserve
             account  on the  books  of the  Employer  for  the  benefit  of the
             Executive. Prior to the Executive's Retirement or other termination
             of service  under the  Agreement,  such  Benefit  Account  shall be
             increased  each  Plan  Year  (including  the Plan Year in which the
             Executive  ceases to be employed by the  Employer)  by an amount as
             may equal any annual  earnings for that Plan Year determined by the
             Index  (described in  subparagraph c below),  less the  Opportunity
             Cost (described in subparagraph d below) for that Plan Year.
<TABLE>
        b.   Index Benefit:

             After the  Executive's  Retirement or other  termination of service
             under the  Agreement,  the Index  Benefit for the Executive for any
             Plan Year shall be determined by subtracting the  Opportunity  Cost
             for that Plan Year from the  earnings (if any)  established  by the
             Index.
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
                                                     EXAMPLE
                                             INDEX BENEFIT CALCULATION
--------------------------------------------------------------------------------------------------------------------
                                      Assume Initial Insurance = $1,000,000
--------------------------------------------------------------------------------------------------------------------
End of Year  Cash Surrender Value of Life           Index              Opportunity Cost              Benefit
             Insurance Policy                   [Annual Policy     [After Tax One Year U.S.          Account
                                                   Income]         Treasury Yield (5.00%)]         [cumulative]
------------ --------------------------------- ----------------- ----------------------------- ---------------------
<S>  <C>                <C>                        <C>                    <C>                        <C>    
     1                  $1,050,000                 $50,000                $(30,000)                  $20,000
------------ --------------------------------- ----------------- ----------------------------- ---------------------
     2                  $1,102,500                 $52,500                $(31,500)                  $41,000
------------ --------------------------------- ----------------- ----------------------------- ---------------------
     3                  $1,157,625                 $55,125                $(33,075)                  $63,050
------------ --------------------------------- ----------------- ----------------------------- ---------------------
</TABLE>

        c.   Index:

             The Index for any Plan Year shall be the aggregate annual after-tax
             income from the life insurance contracts  described  hereinafter as
             defined  by FASB  Technical  Bulletin  85-4.  This  Index  shall be
             applied  as if  such  insurance  contracts  were  purchased  on the
             Effective Date.

             Insurance Company: TransAmerica Assurance Company

 

                                       70
<PAGE>



             Option: A                           Face Amount: $143,611
             Policy Form: Flex Premium Adjustable Life Premiums Paid: $ 50,000
             Policy Name: Tac-Saver              Number of Premium Payments:
             Insured's Age and Sex: 35/Male      One
             Riders:  None                       Assumed Purchase Date:
             Ratings: According to the health    04/03/98
                         of the insured

             Insurance Company: The Canada Life Assurance Company
             Option: A                           Face Amount: $711,107
             Policy Form: Whole Life             Premiums Paid: $150,000
             Policy Name: CL/1                   Number of Premium Payments:
             Insured's Age and Sex: 35/Male      One
             Riders:  None                       Assumed Purchase Date:
             Ratings: According to the health    04/03/98
                      of the insured

             If such contracts of life  insurance are actually  purchased by the
             Employer,  then the actual policies as of the dates purchased shall
             be used in  calculations  to  determine  the Index and  Opportunity
             Cost. If such  contracts of life insurance are not purchased or are
             subsequently surrendered or lapsed, then the Employer shall receive
             and use annual policy illustrations that assume the above described
             policies were purchased from the above named insurance company(ies)
             on the  Effective  Date to  calculate  the  amount of the Index and
             Opportunity Cost.


        d.   Opportunity Cost:

             The  Opportunity  Cost for any Plan  Year  shall be  calculated  by
             multiplying  (a) the sum of (i) the total  amount of  premiums  set
             forth in the insurance policies described above, (ii) the amount of
             any Index Benefits  (described at subparagraph b above),  and (iii)
             the amount of all previous years  after-tax  Opportunity  Costs; by
             (b) the average annualized after-tax cost of funds calculated using
             the average monthly one-year CMT (Constant  Maturity  Treasury) for
             the Plan Year as published by the Board of Governors of the Federal
             Reserve System, Publication H.15(519). The applicable tax rate used
             to calculate the Opportunity  Cost shall be the Employer's  average
             marginal tax rate based upon Employer's  average taxable income for
             each  Plan  Year  until  the  Executive's   Retirement,   or  other
             termination of service (including a Change in Control). Thereafter,
             the  Opportunity  Cost shall be calculated with the assumption of a
             marginal  forty-two  percent  (42%)  corporate  tax rate  each year
             regardless of whether the actual  marginal tax rate of the Employer
             is higher or lower.

2.      Executive Benefits Payments.

        The Executive shall be entitled to payment of the Applicable  Percentage
        of (i) the balance in the Benefit Account in installments upon the terms
        as specified in the Agreement,  and (ii) the Index Benefit for each Plan
        Year payable in installments until the Executive's death.



                                       71
<PAGE>




                                   SCHEDULE C


                             BENEFICIARY DESIGNATION


         To the Administrator of the Bank of Lodi, N.A.  Executive  Supplemental
Compensation Agreement:

        Pursuant to the  Provisions  of my Executive  Supplemental  Compensation
Agreement with Bank of Lodi,  N.A.,  permitting the designation of a beneficiary
or beneficiaries by a participant,  I hereby designate the following persons and
entities  as primary  and  secondary  beneficiaries  of any  benefit  under said
Agreement payable by reason of my death:

Primary Beneficiary:



----------------------   --------------------   -----------------------------
Name                           Address                   Relationship


Secondary (Contingent) Beneficiary:



----------------------   ---------------------   ----------------------------
Name                           Address                   Relationship


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


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




Dated:  ________, 1998        _____________________________________________
                                                    David M. Philipp


                                       72
<PAGE>

CONSENT OF THE EXECUTIVE'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:


        I,  ______________,  being the spouse of David M.  Philipp,  after being
afforded the opportunity to consult with independent counsel of my choosing,  do
hereby  acknowledge  that  I have  read,  agree  and  consent  to the  foregoing
Beneficiary Designation which relates to the Executive Supplemental Compensation
Agreement entered into by my spouse effective as of ________, 1998. I understand
that the above  Beneficiary  Designation  may affect  certain rights which I may
have in the benefits provided for under the terms of the Executive  Supplemental
Compensation Agreement and in which I may have a marital property interest.

Dated:  ________, 1998



                   ------------------------------------------



                                       73
<PAGE>



                                   SCHEDULE D


                              DISTRIBUTION ELECTION

Pursuant to the Provisions of my Executive  Supplemental  Compensation Agreement
with Bank of Lodi,  N.A., I hereby elect to have any distribution of the balance
in my Benefit Account paid to me in installments as designated below:


                        thirty-six (36) monthly  installments with the amount of
         ----           each installment  determined as of each installment date
                        by dividing the entire  amount in my Benefit  Account by
                        the number of  installments  then  remaining to be paid,
                        with the final  installment  to be the entire  remaining
                        balance in the Benefit Account.

                        sixty (60) monthly  installments with the amount of each
         ----           installment  determined as of each  installment  date by
                        dividing the entire amount in my Benefit  Account by the
                        number of  installments  then remaining to be paid, with
                        the final installment to be the entire remaining balance
                        in the Benefit Account.

                        one hundred twenty (120) monthly  installments  with the
         ----           amount  of  each  installment   determined  as  of  each
                        installment  date by  dividing  the entire  amount in my
                        Benefit  Account  by the  number  of  installments  then
                        remaining to be paid,  with the final  installment to be
                        the entire remaining balance in the Benefit Account.

                        one hundred eighty (180) monthly  installments  with the
         ----           amount  of  each  installment   determined  as  of  each
                        installment  date by  dividing  the entire  amount in my
                        Benefit  Account  by the  number  of  installments  then
                        remaining to be paid,  with the final  installment to be
                        the entire remaining balance in the Benefit Account.

         Dated:  ________, 1998


         Signed:                                     
                       David M. Philipp


 

                                       74
<PAGE>






         Exhibit 10(l)  Life  Insurance  Endorsement  Method  Split  Dollar Plan
                        Agreement effective as of April 3, 1998, between Bank of
                        Lodi, N.A. and Leon J. Zimmerman.


                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT


Insurer/Policy Number:     TransAmerica Assurance Company
                                    Canada Life Assurance Company

Bank:    Bank of Lodi, N.A.

Insured:  Leon J. Zimmerman

Relationship of Insured to Bank:  President and Chief Executive Officer

The respective rights and duties of the Bank and the Insured in the above policy
(the "Policy") shall be as follows:

I.       DEFINITIONS

         Refer to the Policy  provisions for the definition of all terms in this
         Agreement.

II.      POLICY TITLE AND OWNERSHIP

         Title and  ownership  shall  reside in the Bank for its use and for the
         use of the  Insured all in  accordance  with this  Agreement.  The Bank
         alone may, to the extent of its interest,  exercise the right to borrow
         or withdraw the Policy cash values.  Where the Bank and the Insured (or
         beneficiary[ies]  or  assignee[s],  with the  consent  of the  Insured)
         mutually agree to exercise the right to increase the coverage under the
         subject split dollar Policy,  then, in such event,  the rights,  duties
         and benefits of the parties to such  increased  coverage shall continue
         to be subject to the terms of this Agreement.

III.     BENEFICIARY DESIGNATION RIGHTS

         The Insured (or  beneficiary[ies]  or assignee[s]) shall have the right
         and power to designate a beneficiary  or  beneficiaries  to receive his
         share of the proceeds  payable  upon the death of the  Insured,  and to
         elect and change a payment option for such beneficiary,  subject to any
         right or interest  the Bank may have in such  proceeds,  as provided in
         this Agreement.

IV.      PREMIUM PAYMENT METHOD

         The Bank  shall pay an amount  equal to the  planned  premiums  and any
         other  premium  payments  that might  become  necessary to maintain the
         Policy in force.

 

                                       75
<PAGE>




V.       TAXABLE BENEFIT

         Annually  the  Insured  will  receive  a taxable  benefit  equal to the
         assumed cost of insurance as required by the Internal  Revenue Service.
         The Bank (or its administrator)  will report to the Employee the amount
         of imputed income received each year on Form W-2 or its equivalent.

VI.      DIVISION OF DEATH PROCEEDS

         Subject to Paragraph VII herein,  the division of the death proceeds of
         the Policy is as follows:

         A.       The Insured's beneficiary(ies),  designated in accordance with
                  Paragraph  III,  shall be  entitled  to the  lesser  of (i) an
                  amount  equal  to  eighty  percent  (80%)  of the  net at risk
                  insurance  portion of the  proceeds,  or (ii) One Million Five
                  Hundred  Thousand  Dollars  ($1,500,000).   The  net  at  risk
                  insurance portion is the total proceeds less the cash value of
                  the Policy.

         B.       The Bank shall be entitled to the remainder of such proceeds.

         C.       The Bank and the Insured (or  beneficiary[ies] or assignee[s])
                  shall share in any interest due on the death proceeds on a pro
                  rata basis in the ratio that the proceeds due the Bank and the
                  Insured, respectively,  bears to the total proceeds, excluding
                  any such interest.

VII.     DIVISION OF CASH SURRENDER VALUE

         The Bank  shall at all  times be  entitled  to an  amount  equal to the
         Policy's  cash value,  as that term is defined in the Policy,  less any
         Policy  loans  and  unpaid  interest  or  cash  withdrawals  previously
         incurred by the Bank and any applicable Policy surrender charges.  Such
         cash  value  shall be  determined  as of the date of  surrender  of the
         Policy or death of the Insured as the case may be.

VIII.    PREMIUM WAIVER

         If the Policy  contains a premium  waiver  provision,  any such  waived
         amounts  shall be  considered  for all  purposes of this  Agreement  as
         having been paid by the Bank.

IX.      RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY  ELECTION EXISTS

         In the event the Policy involves an endowment or annuity  element,  the
         Bank's right and interest in any endowment proceeds or annuity benefits
         shall be determined under the provisions of this Agreement by regarding
         such endowment  proceeds or the commuted value of such annuity benefits
         as the Policy's cash value. Such endowment proceeds or annuity benefits
         shall be treated like death proceeds for the purposes of division under
         this Agreement.

X.       TERMINATION OF AGREEMENT

         This  Agreement  shall  terminate  at the option of the Bank  following
         thirty (30) days written  notice to the Insured  upon the  happening of
         any one of the following:

         1.       The Insured shall be in violation of the terms and  conditions
                  of that certain Executive Supplemental  Compensation Agreement
                  effective as of April 3, 1998, or



                                       76
<PAGE>



         2.       The Insured shall be discharged from service with the Bank for
                  cause.  The term "for cause" shall have the meaning given that
                  term  in the  Insured's  Executive  Supplemental  Compensation
                  Agreement effective as of April 3, 1998.

         Upon such termination, the Insured (or beneficiary[ies] or assignee[s])
         shall  have a  ninety  (90)  day  option  to  receive  from the Bank an
         absolute assignment of the Policy in consideration of a cash payment to
         the Bank,  whereupon this Agreement shall terminate.  Such cash payment
         shall be the greater of:

         1.       The  Bank's  share of the cash value of the Policy on the date
                  of such assignment, as defined in this Agreement.

         2.       The  amount of the  premiums  which have been paid by the Bank
                  prior to the date of such assignment.

         Should  the  Insured  (or  beneficiary[ies]  or  assignee[s])  fail  to
         exercise this option within the prescribed ninety (90) day period,  the
         Insured (or  beneficiary[ies] or assignee[s]) agrees that all of his or
         her rights, interest and claims in the Policy shall terminate as of the
         date of the termination of this Agreement.

         Except  as  provided   above,   this  Agreement  shall  terminate  upon
         distribution of the death benefit proceeds in accordance with Paragraph
         VI above.

XI.      INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

         The Insured may not,  without  the prior  written  consent of the Bank,
         which shall not be  unreasonably  withheld,  assign to any  individual,
         trust or other organization, any right, title or interest in the Policy
         nor any  rights,  options,  privileges  or duties  created  under  this
         Agreement.

XII.     AGREEMENT BINDING UPON THE PARTIES

         This  Agreement  shall be binding  upon the Insured  and the Bank,  and
         their  respective  heirs,  successors,   personal  representatives  and
         assigns, as applicable.

XIII.    NAMED FIDUCIARY AND PLAN ADMINISTRATOR

         The Bank is hereby  designated the "Named  Fiduciary" until resignation
         or  removal by its Board of  Directors.  As Named  Fiduciary,  the Bank
         shall be responsible for the management, control, and administration of
         this Agreement as established  herein. The Named Fiduciary may allocate
         to  others   certain   aspects  of  the   management   and   operations
         responsibilities  of  this  Agreement,   including  the  employment  of
         advisors  and the  delegation  of any  ministerial  duties to qualified
         individuals.

XIV.     FUNDING POLICY

         The funding Policy for this  Agreement  shall be to maintain the Policy
         in force by paying, when due, all premiums required.

XV.      CLAIM PROCEDURES

         Claim  forms or  claim  information  as to the  subject  Policy  can be
         obtained   by   contacting   The   Benefit    Marketing   Group,   Inc.
         (770-952-1529).  When the  Named  Fiduciary  has a claim  which  may be
         covered under the provisions described in the Policy, it should contact
         the office named above,  and they will either complete a claim form and
         forward it to an authorized representative of the Insurer or advise the
         named Fiduciary what



                                       77
<PAGE>



         further requirements are necessary.  The Insurer will evaluate and make
         a decision as to payment. If the claim is payable, a benefit check will
         be issued to the Named Fiduciary.

         In the event that a claim is not eligible under the Policy, the Insurer
         will  notify  the  Named  Fiduciary  of  the  denial  pursuant  to  the
         requirements  under the terms of the Policy.  If the Named Fiduciary is
         dissatisfied  with the denial of the claim and  wishes to contest  such
         claim  denial,  it should  contact the office named above and they will
         assist  in  making  inquiry  to  the  Insurer.  All  objections  to the
         Insurer's  actions  should be in writing  and  submitted  to the office
         named above for transmittal to the Insurer.

XVI.     GENDER

         Whenever in this  Agreement  words are used in the  masculine or neuter
         gender, they shall be read and construed as in the masculine,  feminine
         or neuter gender, whenever they should so apply.


XVII.    INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

         The  Insurer  shall not be deemed a party to this  Agreement,  but will
         respect the rights of the parties as set forth herein upon receiving an
         executed  copy of this  Agreement.  Payment  or  other  performance  in
         accordance with the Policy provisions shall fully discharge the Insurer
         from any and all liability.


         IN WITNESS WHEREOF, the Insured and a duly authorized Bank officer have
signed this Agreement as of Third day of April, 1998.


BANK OF LODI, N.A.                                   INSURED

/s/ Benjamin R. Goehring                             /s/ Leon J. Zimmerman
------------------------                             ---------------------
Benjamin R. Goehring                                 Leon J. Zimmerman
Chairman of the Board
of Directors



                                       78
<PAGE>



                          BENEFICIARY DESIGNATION FORM



Primary Designation:

         Name                                          Relationship

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



Contingent Designation:

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



_____________________________                        _________, 1998
Leon J. Zimmerman



                                       79
<PAGE>





        Exhibit 10(m)   Life  Insurance  Endorsement  Method  Split  Dollar Plan
                        Agreement effective as of April 3, 1998, between Bank of
                        Lodi, N.A. and David M. Philipp.


                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT


Insurer/Policy Number:     TransAmerica Assurance Company
                                    Canada Life Assurance Company

Bank:  Bank of Lodi, N.A.

Insured:  David M. Philipp

Relationship  of Insured to Bank:  Executive  Vice  President,  Chief  Financial
Officer and Secretary

The respective rights and duties of the Bank and the Insured in the above policy
(the "Policy") shall be as follows:

I.       DEFINITIONS

         Refer to the Policy  provisions for the definition of all terms in this
         Agreement.

II.      POLICY TITLE AND OWNERSHIP

         Title and  ownership  shall  reside in the Bank for its use and for the
         use of the  Insured all in  accordance  with this  Agreement.  The Bank
         alone may, to the extent of its interest,  exercise the right to borrow
         or withdraw the Policy cash values.  Where the Bank and the Insured (or
         beneficiary[ies]  or  assignee[s],  with the  consent  of the  Insured)
         mutually agree to exercise the right to increase the coverage under the
         subject split dollar Policy,  then, in such event,  the rights,  duties
         and benefits of the parties to such  increased  coverage shall continue
         to be subject to the terms of this Agreement.

III.     BENEFICIARY DESIGNATION RIGHTS

         The Insured (or  beneficiary[ies]  or assignee[s]) shall have the right
         and power to designate a beneficiary  or  beneficiaries  to receive his
         share of the proceeds  payable  upon the death of the  Insured,  and to
         elect and change a payment option for such beneficiary,  subject to any
         right or interest  the Bank may have in such  proceeds,  as provided in
         this Agreement.

IV.      PREMIUM PAYMENT METHOD

         The Bank  shall pay an amount  equal to the  planned  premiums  and any
         other  premium  payments  that might  become  necessary to maintain the
         Policy in force.



                                       80
<PAGE>




V.       TAXABLE BENEFIT

         Annually  the  Insured  will  receive  a taxable  benefit  equal to the
         assumed cost of insurance as required by the Internal  Revenue Service.
         The Bank (or its administrator)  will report to the Employee the amount
         of imputed income received each year on Form W-2 or its equivalent.

VI.      DIVISION OF DEATH PROCEEDS

         Subject to Paragraph VII herein,  the division of the death proceeds of
         the Policy is as follows:

         A.       The Insured's beneficiary(ies),  designated in accordance with
                  Paragraph  III, shall be entitled to an amount equal to eighty
                  percent  (80%)  of the net at risk  insurance  portion  of the
                  proceeds.  The  net at risk  insurance  portion  is the  total
                  proceeds less the cash value of the Policy.

         B.       The Bank shall be entitled to the remainder of such proceeds.

         C.       The Bank and the Insured (or  beneficiary[ies] or assignee[s])
                  shall share in any interest due on the death proceeds on a pro
                  rata basis in the ratio that the proceeds due the Bank and the
                  Insured, respectively,  bears to the total proceeds, excluding
                  any such interest.

VII.     DIVISION OF CASH SURRENDER VALUE

         The Bank  shall at all  times be  entitled  to an  amount  equal to the
         Policy's  cash value,  as that term is defined in the Policy,  less any
         Policy  loans  and  unpaid  interest  or  cash  withdrawals  previously
         incurred by the Bank and any applicable Policy surrender charges.  Such
         cash  value  shall be  determined  as of the date of  surrender  of the
         Policy or death of the Insured as the case may be.

VIII.    PREMIUM WAIVER

         If the Policy  contains a premium  waiver  provision,  any such  waived
         amounts  shall be  considered  for all  purposes of this  Agreement  as
         having been paid by the Bank.

IX.      RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY  ELECTION EXISTS

         In the event the Policy involves an endowment or annuity  element,  the
         Bank's right and interest in any endowment proceeds or annuity benefits
         shall be determined under the provisions of this Agreement by regarding
         such endowment  proceeds or the commuted value of such annuity benefits
         as the Policy's cash value. Such endowment proceeds or annuity benefits
         shall be treated like death proceeds for the purposes of division under
         this Agreement.

X.       TERMINATION OF AGREEMENT

         This  Agreement  shall  terminate  at the option of the Bank  following
         thirty (30) days written  notice to the Insured  upon the  happening of
         any one of the following:

         1.       The Insured shall be in violation of the terms and  conditions
                  of that certain Executive Supplemental  Compensation Agreement
                  effective as of April 3, 1998, or

 

                                       81
<PAGE>



         2.       The Insured shall be discharged from service with the Bank for
                  cause.  The term "for cause" shall have the meaning given that
                  term  in the  Insured's  Executive  Supplemental  Compensation
                  Agreement effective as of April 3, 1998.

         Upon such termination, the Insured (or beneficiary[ies] or assignee[s])
         shall  have a  ninety  (90)  day  option  to  receive  from the Bank an
         absolute assignment of the Policy in consideration of a cash payment to
         the Bank,  whereupon this Agreement shall terminate.  Such cash payment
         shall be the greater of:

         1.       The  Bank's  share of the cash value of the Policy on the date
                  of such assignment, as defined in this Agreement.

         2.       The  amount of the  premiums  which have been paid by the Bank
                  prior to the date of such assignment.

         Should  the  Insured  (or  beneficiary[ies]  or  assignee[s])  fail  to
         exercise this option within the prescribed ninety (90) day period,  the
         Insured (or  beneficiary[ies] or assignee[s]) agrees that all of his or
         her rights, interest and claims in the Policy shall terminate as of the
         date of the termination of this Agreement.

         Except  as  provided   above,   this  Agreement  shall  terminate  upon
         distribution of the death benefit proceeds in accordance with Paragraph
         VI above.

XI.      INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

         The Insured may not,  without  the prior  written  consent of the Bank,
         which shall not be  unreasonably  withheld,  assign to any  individual,
         trust or other organization, any right, title or interest in the Policy
         nor any  rights,  options,  privileges  or duties  created  under  this
         Agreement.


XII.     AGREEMENT BINDING UPON THE PARTIES

         This  Agreement  shall be binding  upon the Insured  and the Bank,  and
         their  respective  heirs,  successors,   personal  representatives  and
         assigns, as applicable.

XIII.    NAMED FIDUCIARY AND PLAN ADMINISTRATOR

         The Bank is hereby  designated the "Named  Fiduciary" until resignation
         or  removal by its Board of  Directors.  As Named  Fiduciary,  the Bank
         shall be responsible for the management, control, and administration of
         this Agreement as established  herein. The Named Fiduciary may allocate
         to  others   certain   aspects  of  the   management   and   operations
         responsibilities  of  this  Agreement,   including  the  employment  of
         advisors  and the  delegation  of any  ministerial  duties to qualified
         individuals.

XIV.     FUNDING POLICY

         The funding Policy for this  Agreement  shall be to maintain the Policy
         in force by paying, when due, all premiums required.

XV.      CLAIM PROCEDURES

         Claim  forms or  claim  information  as to the  subject  Policy  can be
         obtained   by   contacting   The   Benefit    Marketing   Group,   Inc.
         (770-952-1529).  When the  Named  Fiduciary  has a claim  which  may be
         covered under the provisions described in the Policy, it should contact
         the office named above,  and they will either complete a

 

                                       82
<PAGE>



         claim  form  and  forward  it to an  authorized  representative  of the
         Insurer or advise the named  Fiduciary  what further  requirements  are
         necessary. The Insurer will evaluate and make a decision as to payment.
         If the claim is  payable,  a benefit  check will be issued to the Named
         Fiduciary.

         In the event that a claim is not eligible under the Policy, the Insurer
         will  notify  the  Named  Fiduciary  of  the  denial  pursuant  to  the
         requirements  under the terms of the Policy.  If the Named Fiduciary is
         dissatisfied  with the denial of the claim and  wishes to contest  such
         claim  denial,  it should  contact the office named above and they will
         assist  in  making  inquiry  to  the  Insurer.  All  objections  to the
         Insurer's  actions  should be in writing  and  submitted  to the office
         named above for transmittal to the Insurer.

XVI.     GENDER

         Whenever in this  Agreement  words are used in the  masculine or neuter
         gender, they shall be read and construed as in the masculine,  feminine
         or neuter gender, whenever they should so apply.


XVII.    INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

         The  Insurer  shall not be deemed a party to this  Agreement,  but will
         respect the rights of the parties as set forth herein upon receiving an
         executed  copy of this  Agreement.  Payment  or  other  performance  in
         accordance with the Policy provisions shall fully discharge the Insurer
         from any and all liability.


         IN WITNESS WHEREOF, the Insured and a duly authorized Bank officer have
signed this Agreement as of the Third day of April, 1998.


BANK OF LODI, N.A.                                   INSURED

/s/ Benjamin R. Goehring                             /s/ David M. Philipp
------------------------                             --------------------
Benjamin R. Goehring                                 David M. Philipp
Chairman of the Board
of Directors



                                       83
<PAGE>




                          BENEFICIARY DESIGNATION FORM



Primary Designation:

         Name                                        Relationship


_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



Contingent Designation:

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



_____________________________           _________, 1998
David M. Philipp




                                       84
<PAGE>



         Exhibit 10(n)  Form of Director  Supplemental  Compensation  Agreement,
                        effective as of April 3, 1998, as executed  between Bank
                        of Lodi, N.A. and each of Benjamin R. Goehring,  Michael
                        D. Ramsey, Weldon D. Schumacher and Dennis R. Swanson.


                  DIRECTOR SUPPLEMENTAL COMPENSATION AGREEMENT


        This Agreement is made and entered into effective as of April 3, 1998 by
and between Bank of Lodi, N.A., a national banking  association  chartered under
the federal  laws of the United  States of America  with its  principal  offices
located in the City of Lodi, San Joaquin County,  California  (the  "Employer"),
and_________________,  an individual  residing in the State of  California  (the
"Director").

                                 R E C I T A L S

        WHEREAS,  the Director is a member of the Board of Directors of the Bank
and has  served  in such  capacity  since  the Bank was  authorized  to  conduct
business on July 18, 1983;

        WHEREAS,  the Bank  desires to  establish  a  compensation  benefit  for
directors who are not also officers or employees of the Bank in order to attract
and retain  individuals with extensive and valuable  experience as directors and
to establish a director emeritus succession plan; and

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

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

                                A G R E E M E N T

        1.         Terms and Definitions.

                   1.1.  Administrator.  The Bank  shall be the  "Administrator"
and, solely for the purposes of ERISA as defined in subparagraph  1.9 below, the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

                   1.2. Applicable Percentage.  The term "Applicable Percentage"
shall mean that  percentage  listed on Schedule  "A"  attached  hereto  which is
adjacent to the number of calendar  years which shall have elapsed from the date
of the Director's  commencement of service as a member of the Board of Directors
of the Bank and ending on the date  payments  are to first begin under the terms
of this Agreement. Notwithstanding the foregoing or the percentages set forth on
Schedule  "A," but subject to all other terms and  conditions  set forth herein,
the "Applicable  Percentage"  shall be: (i) provided payments have not yet begun
hereunder,  one  hundred  percent  (100%)  upon the  occurrence  of a "Change in
Control" as defined in subparagraph 1.4 below, or the Director's  Disability (as
defined in subparagraph 1.6 below);  and (ii)  notwithstanding  subclause (i) of
this  subparagraph  1.2,  zero percent (0%) in the event the Director  takes any
intentional  action which prevents the Bank from  collecting the proceeds of any
life  insurance  policy  which  the  Bank may  happen  to own at the time of the
Director's  death  and  of  which  the  Bank  is  the  designated   beneficiary.
Furthermore,  notwithstanding  the  foregoing,  or  anything  contained  in



                                       85
<PAGE>



this Agreement to the contrary,  in the event the Director takes any intentional
action  which  prevents  the  Bank  from  collecting  the  proceeds  of any life
insurance  policy which the Bank may happen to own at the time of the Director's
death and of which the Bank is the  designated  beneficiary:  (1) the Director's
estate or  designated  beneficiary  shall no longer be  entitled  to receive the
amounts,  if any,  payable under the terms of this  Agreement,  and (2) the Bank
shall have the right to recover  from the  Director's  estate all of the amounts
paid to the  Director's  estate (with respect to amounts,  if any, paid prior to
the Director's death or paid to the Director's estate) or designated beneficiary
(with respect to amounts, if any, paid to the designated  beneficiary)  pursuant
to the terms of this Agreement prior to and after Director's death.

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

                   1.4.  Change in Control.  The term "Change in Control"  shall
mean the  occurrence  of any of the  following  events with  respect to the Bank
(with the term "Bank"  being  defined  for  purposes  of  determining  whether a
"Change in Control"  has  occurred to include  any parent bank  holding  company
organized  at the  direction  of the Bank to own 100% of the Bank's  outstanding
common stock):  (i) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A  promulgated
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), or
in  response  to any  other  form  or  report  to  the  regulatory  agencies  or
governmental authorities having jurisdiction over the Bank or any stock exchange
on which the Bank's  shares are listed which  requires the reporting of a change
in control;  (ii) any merger,  consolidation  or  reorganization  of the Bank in
which the Bank does not  survive;  (iii) any sale,  lease,  exchange,  mortgage,
pledge,  transfer  or other  disposition  (in one  transaction  or a  series  of
transactions) of any assets of the Bank having an aggregate fair market value of
fifty percent  (50%) of the total value of the assets of the Bank,  reflected in
the most  recent  balance  sheet of the Bank;  (iv) a  transaction  whereby  any
"person"  (as  such  term  is  used  in the  Exchange  Act)  or any  individual,
corporation,  partnership,  trust or any other  entity  becomes  the  beneficial
owner,   directly  or  indirectly,   of  securities  of  the  Bank  representing
twenty-five  percent  (25%) or more of the  combined  voting power of the Bank's
then outstanding  securities;  or (v) a situation where, in any one-year period,
individuals  who at the  beginning  of  such  period  constitute  the  Board  of
Directors  of the Bank  cease for any reason to  constitute  at least a majority
thereof,  unless the  election,  or the  nomination  for  election by the Bank's
shareholders,  of  each  new  director  is  approved  by  a  vote  of  at  least
three-quarters (3/4) of the directors then still in office who were directors at
the  beginning of the period.  Notwithstanding  the  foregoing or anything  else
contained  herein to the contrary,  there shall not be a "Change of Control" for
purposes of this  Agreement if the event which would  otherwise  come within the
meaning of the term  "Change of Control"  involves (i) a  reorganization  at the
direction  of the Bank solely to form a parent bank holding  company  which owns
100%  of the  Bank's  common  stock  following  the  reorganization,  or (ii) an
Employee  Stock  Ownership  Plan  sponsored  by the Bank or its  parent  holding
company  which  is  the  party  that  acquires  "control"  or is  the  principal
participant in the transaction  constituting a "Change in Control," as described
above.

                   1.5. The Code.  The "Code"  shall mean the  Internal  Revenue
Code of 1986, as amended (the "Code").

                   1.6. Disability/Disabled. The term "Disability" or "Disabled"
shall  have the same  meaning  given  such  terms in any  policy  of  disability
insurance  maintained by the Employer for the benefit of directors including the
Director. In the absence of such a policy which extends coverage to the Director
in the event of  disability,  the terms  shall  mean  bodily  injury or  disease
(mental or physical) which wholly and  continuously  prevents the performance of
duty for at least three months.



                                       86
<PAGE>



                   1.7. Effective Date. The term "Effective Date" shall mean the
date first written above.

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

                   1.9. Director  Benefits.  The term "Director  Benefits" shall
mean the benefits  determined  in  accordance  with Schedule "B", and reduced or
adjusted  to the  extent:  (i)  required  under  the  other  provisions  of this
Agreement,  including,  but not limited to,  Paragraphs 5, 6 and 7 hereof;  (ii)
required by reason of the lawful order of any  regulatory  agency or body having
jurisdiction  over the Bank; or (iii) required in order for the Bank to properly
comply with any and all applicable  state and federal laws,  including,  but not
limited to, income, employment and disability income tax laws (e.g., FICA, FUTA,
SDI).

                   1.10.  Normal  Retirement  Date. The term "Normal  Retirement
Date"  shall  mean the  Retirement,  as  defined  below,  of the  Director  upon
attainment of age sixty-five (65).



                                       87
<PAGE>




                   1.11.  Plan Year.  The term "Plan Year" shall mean the Bank's
fiscal year.

                   1.12.  Retirement.  The term  "Retirement" or "Retires" shall
refer to the date which the Director  acknowledges  in writing to the Bank to be
the last day of service as a member of the Board of Directors of the Bank.

                   1.13.  Removal for Cause.  The term "removal for cause" shall
mean the  termination of the Director's  service as a member of the Bank's Board
of  Directors  by reason of any of the  following  determined  in good  faith by
disinterested members of the Bank's Board of Directors:

                          (a) The willful,  intentional  and material  breach or
habitual  and  continued  neglect by the  Director of his  responsibilities  and
duties;

                          (b) The  continuous  mental or physical  incapacity of
the Director, subject to disability rights under this Agreement;

                          (c) The Director's  willful and intentional  violation
of any federal banking or securities laws, or of the Bylaws,  rules, policies or
resolutions  of the Bank, or the rules or  regulations of the Board of Governors
of the Federal Reserve System, Federal Deposit Insurance Corporation,  Office of
the Comptroller of the Currency,  or any other regulatory agency or governmental
authority having jurisdiction over the Bank, which has a material adverse effect
upon the Bank;

                          (d) The  written  determination  by a state or federal
court,  banking agency or other governmental  authority having jurisdiction over
the Bank,  that the Director  (i) is of unsound  mind,  or (ii) has  committed a
gross abuse of  authority or  discretion  with  reference to the Bank,  or (iii)
otherwise  is not  suitable  to  continue  to serve as a member  of the Board of
Directors of the Bank;

                          (e) The Director is convicted of any felony or a crime
involving moral turpitude or willfully and intentionally commits a fraudulent or
dishonest act; or

                          (f) The Director's willful and intentional disclosure,
without  authority,  of any secret or  confidential  information  not  otherwise
publicly  available  concerning  the Bank or taking any action  which the Bank's
Board of Directors determines, in its sole discretion and subject to good faith,
fair  dealing  and  reasonableness,   constitutes  unfair  competition  with  or
inducement of any customer to breach any contract with the Bank.

        2.         Scope, Purpose and Effect.

                   2.1.  Contract of  Employment.  Although  this  Agreement  is
intended to provide the  Director  with an  additional  incentive to continue to
serve as a member of the Board of Directors of the Bank,  this  Agreement  shall
not be deemed to  constitute a contract of  employment  between the Director and
the Bank nor shall any  provision  of this  Agreement  restrict the right of the
Bank  to  remove  or  cause  the  removal  of the  Director  including,  without
limitation,  by (i)  refusal to  nominate  the  Director  for  election  for any
successive  term of office as a member of the Board of Directors of the Bank, or
(ii)  complying  with an  order  or other  directive  from a court of  competent
jurisdiction or any regulatory authority having jurisdiction over the Bank which
requires the Bank to take action to remove the Director.



                                       88
<PAGE>



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

        3.         Director Benefits Payments.

                   3.1.  Payments  for  Service  as  Director  Emeritus.  If the
Director shall continue to serve as a member of the Board of Directors until the
Normal  Retirement  Date,  the Director shall be entitled to serve the Bank as a
Director Emeritus in accordance with the procedures and policies  established by
the Bank's Board of Directors  applicable to service as a Director Emeritus.  If
the Director elects to serve as a Director Emeritus,  the Director shall be paid
the  Applicable  Percentage  of the  Director  Emeritus  Payments  specified  in
Schedule  B for a three  (3)  year  period,  payable  annually  in  twelve  (12)
substantially equal installments, commencing with the Retirement Date and ending
on the third anniversary thereof. If the Director declines or is unable to serve
as a Director  Emeritus,  the  Director  shall  forfeit any  entitlement  to the
Director Emeritus Benefits.

                   3.2.  Payments  After  Expiration  of the  Director  Emeritus
Period.  After the  expiration of the three (3) year period  described  above in
Paragraph 3.1, the Bank shall pay to the Director the  Applicable  Percentage of
the Retirement  Benefit Payments specified in Schedule B. The Retirement Benefit
Payments shall commence on the third  anniversary of the Director's  Retirement,
payable annually in twelve (12)  substantially  equal  installments and continue
until the Director's death.

        4.         Payments in the Event of Disability  Prior to Retirement.  In
the event the Director  becomes  Disabled while serving as a member of the Board
of Directors of the Bank at any time after the Effective Date of this Agreement,
but prior to  Retirement,  the  Director  shall be  entitled  to the  Applicable
Percentage  of the  Retirement  Benefit  Payments  specified  in Schedule B. The
Retirement  Benefit  Payments  shall  commence  on the  first  day of the  month
following the month in which the Director becomes Disabled,  payable annually in
twelve (12)  substantially  equal installments and continue until the Director's
death.

        5.         Payments  in  the  Event  Director  Is  Terminated  Prior  to
Retirement.  As indicated in subparagraph 2.1 above, the Bank reserves the right
to remove or cause the removal of the Director under certain  circumstances,  at
any time prior to the  Director's  Retirement.  In the event that the service of
the Director shall be terminated,  other than by reason of death,  Disability or
Retirement,  prior to the Director's Normal Retirement Date, then this Agreement
shall terminate upon the date of such termination;  provided,  however, that the
Director  shall be  entitled  to the  following  benefits  as may be  applicable
depending upon the circumstances surrounding the Director's termination:

                   5.1.  Termination Without Cause. If the Director's service as
a member of the Board of Directors of the Bank is  terminated  for reasons other
than as specified in paragraph 5.3 below, and such termination is not subject to
the provisions of subparagraph  5.4 below,  the Director shall be entitled to be
paid  the  Applicable  Percentage  of  the  Retirement  Benefit  Payments.   The
Retirement  Benefit  Payments  shall  commence  on the  first  day of the  month
following  the month in which the Director is  terminated,  payable  annually in
twelve (12)  substantially  equal installments and continue until the Director's
death.

 

                                       89
<PAGE>



                   5.2. Voluntary Termination by the Director. If the Director's
service on the Board of Directors is  terminated by voluntary  resignation  on a
date when the Applicable Percentage is less than one hundred percent (100%), and
such resignation is not subject to the provisions of subparagraph 5.4 below, the
Director  shall  forfeit  any and all rights and  benefits he may have under the
terms of this  Agreement  and shall have no right to be paid any of the  amounts
which would otherwise be due or paid to the Director by the Employer pursuant to
the terms of this Agreement. If the Applicable Percentage is one hundred percent
(100%) on the date of such voluntary resignation, the Director shall be paid the
Applicable Percentage of the Retirement Benefit Payments. The Retirement Benefit
Payments  shall  commence on the first day of the month  following  the month in
which the Director  terminated  services as a member of the Board of  Directors,
payable annually in twelve (12)  substantially  equal  installments and continue
until the Director's death.

                   5.3.  Termination by Removal for Cause.  The Director  agrees
that if his  service  as a  member  of the  Board  of  Directors  of the Bank is
terminated  by  "removal  for  cause," as defined in  subparagraph  1.13 of this
Agreement,  he shall  forfeit any and all rights and  benefits he may have under
the  terms  of this  Agreement  and  shall  have no  right to be paid any of the
amounts  which  would  otherwise  be due or paid  to the  Director  by the  Bank
pursuant to the terms of this Agreement.

                   5.4.  Termination by the Bank on Account of or After a Change
in Control. In the event that the Director's service as a member of the Board of
Directors of the Bank is  terminated  in  conjunction  with,  or by reason of, a
"Change in Control" (as defined in subparagraph  1.4 above),  the Director shall
be entitled  to be paid the  Applicable  Percentage  of the  Retirement  Benefit
Payments. The Retirement Benefit Payments shall commence on the first day of the
month following the month in which the Director  terminated services as a member
of the Board of Directors,  payable annually in twelve (12) substantially  equal
installments and continue until the Director's death.

        6.         Section 280G Adjustment. The Director acknowledges and agrees
that the parties have entered into this Agreement  based upon certain  financial
and  tax  accounting  assumptions.  Accordingly,  with  full  knowledge  of  the
potential  consequences  the  Director  agrees  that,  notwithstanding  anything
contained  herein to the  contrary,  in the event  that any  payment  or benefit
received or to be  received by the  Director,  whether  payable  pursuant to the
terms of this  Agreement or any other plan,  arrangement  or agreement  with the
Employer (together with the Director Benefits,  the "Total Payments"),  will not
be  deductible  (in whole or in part) as a result of Code  Section 280G or other
applicable  provisions of the Code, the Total Payments shall be reduced until no
portion of the Total  Payments is  nondeductible  as a result of Section 280G or
such other applicable provisions of the Code. For purposes of this limitation:

                   (a)        No portion of the Total  Payments,  the receipt or
enjoyment of which the Director shall have  effectively  waived in writing prior
to the date of payment of any future Director Benefits payments,  shall be taken
into account;

                   (b)        No  portion of the Total  Payments  shall be taken
into account,  which in the opinion of the tax counsel  selected by the Employer
and acceptable to the Director, does not constitute a "parachute payment" within
the meaning of Section 280G of the Code;

                   (c)        Any  reduction  of the  Total  Payments  shall  be
applied to reduce  any  payment or benefit  received  or to be  received  by the
Director pursuant to the terms of this Agreement and any other plan, arrangement
or agreement  with the Employer in the order  determined by mutual  agreement of
the Employer and the Director;

 

                                       90
<PAGE>



                   (d)        Future  payments  shall  be  reduced  only  to the
extent  necessary so that the Total  Payments  (other than those  referred to in
clauses (a) or (b) above in their entirety) constitute  reasonable  compensation
for services  actually  rendered within the meaning of Section 280G of the Code,
in the opinion of tax counsel referred to in clause (b) above; and

                   (e)        The value of any non-cash  benefit or any deferred
payment  or  benefit  included  in the Total  Payments  shall be  determined  by
independent  auditors selected by the Employer and acceptable to the Director in
accordance with the principles of Section 280G of the Code.

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

        8.         Claims  Procedure.  The Bank  shall,  but only to the  extent
necessary to comply with ERISA,  be designated as the named fiduciary under this
Agreement  and shall have  authority  to control  and manage the  operation  and
administration of this Agreement.  Consistent therewith, the Bank shall make all
determinations  as to the rights to benefits under this Agreement.  Any decision
by the Bank denying a claim by the Director,  or as  applicable,  the Director's
spouse or  beneficiaries,  for benefits under this Agreement  shall be stated in
writing and  delivered  or mailed,  via  registered  or certified  mail,  to the
Director, the Director's

 

                                       91
<PAGE>




spouse or the Director's beneficiaries,  as the case may be. Such decision shall
set forth the specific reasons for the denial of a claim. In addition,  the Bank
shall  provide  the  Director,  or  as  applicable,  the  Director's  spouse  or
beneficiaries,  with a reasonable  opportunity for a full and fair review of the
decision denying such claim.

        9.         Status  as an  Unsecured  General  Creditor.  Notwithstanding
anything  contained  herein to the  contrary:  (i)  neither  the  Director,  the
Director's  spouse or  beneficiaries  shall have any legal or equitable  rights,
interests  or claims in or to any  specific  property or assets of the Bank as a
result of this  Agreement;  (ii) none of the Bank's  assets  shall be held in or
under  any trust for the  benefit  of the  Director,  the  Director's  spouse or
beneficiaries  or  held  in any  way as  security  for  the  fulfillment  of the
obligations  of the Bank under this  Agreement;  (iii) all of the Bank's  assets
shall be and remain the general  unpledged and unrestricted  assets of the Bank;
(iv) the Bank's obligation under this Agreement shall be that of an unfunded and
unsecured promise by the Bank to pay money in the future;  and (v) the Director,
the Director's  spouse and  beneficiaries  shall be unsecured  general creditors
with  respect  to any  benefits  which  may be  payable  under the terms of this
Agreement.

                   Notwithstanding  subparagraphs  (i)  through  (v) above,  the
Employer and the Director  acknowledge  and agree that, in the event of a Change
in Control, upon request of the Director, or in the Employer's discretion if the
Director does not so request and the Employer  nonetheless deems it appropriate,
the Employer shall establish, not later than the effective date of the Change in
Control,  a Rabbi Trust or multiple  Rabbi Trusts (the "Trust" or "Trusts") upon
such  terms  and  conditions  as the  Employer,  in its sole  discretion,  deems
appropriate and in compliance  with applicable  provisions of the Code, in order
to permit the Employer to make contributions and/or transfer assets to the Trust
or Trusts to discharge its obligations pursuant to this Agreement. The principal
of the Trust or Trusts and any earnings thereon shall be held separate and apart
from other funds of the  Employer to be used  exclusively  for  discharge of the
Employer's  obligations  pursuant  to this  Agreement  and shall  continue to be
subject  to the claims of the  Employer's  general  creditors  until paid to the
Director,  or as applicable,  the Director's  spouse or  beneficiaries,  in such
manner and at such times as specified in this Agreement.

        10.        Discretion of Board to Accelerate Payout. Notwithstanding any
of the other  provisions of this  Agreement,  the Board of Directors of the Bank
may,  if  determined  in its sole and  absolute  discretion  to be  appropriate,
accelerate  the payment of the  amounts  due under the terms of this  Agreement,
provided  that  the  Director  (or  as  applicable,  the  Director's  spouse  or
beneficiaries):  (i) consents to the revised payout terms determined appropriate
by the  Bank's  Board of  Directors;  and (ii) does not  negotiate  or in anyway
influence the terms of proposed  altered/accelerated payout (said decision to be
made solely by the Bank's Board of Directors and offered to the Director [or the
Director's spouse or beneficiaries] on a "take it or leave it basis").



                                       92
<PAGE>




        11.        Miscellaneous.

                   11.1.  Opportunity To Consult With Independent Advisors.  The
Director  acknowledges that he has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement and the (i) terms and  conditions  which may affect the
Director's  right to  these  benefits  and (ii)  personal  tax  effects  of such
benefits  including,  without  limitation,  the  effects of any federal or state
taxes,  Section  280G of the  Code,  and any other  taxes,  costs,  expenses  or
liabilities  whatsoever related to such benefits,  which in any of the foregoing
instances the Director  acknowledges and agrees shall be the sole responsibility
of the Director  notwithstanding  any other term or provision of this Agreement.
The  Director  further  acknowledges  and  agrees  that the Bank  shall  have no
liability  whatsoever related to any such personal tax effects or other personal
costs,   expenses,  or  liabilities  applicable  to  the  Director  and  further
specifically  waives  any right for  himself or  herself,  and his or her heirs,
beneficiaries, legal representatives, agents, successors and assigns to claim or
assert liability on the part of the Bank related to the matters  described above
in this subparagraph  11.1. The Director further  acknowledges that he has read,
understands  and consents to all of the terms and conditions of this  Agreement,
and that he enters into this  Agreement with a full  understanding  of its terms
and conditions.

                   11.2. Arbitration of Disputes. All claims, disputes and other
matters in question  arising out of or relating to this  Agreement or the breach
or interpretation  thereof,  other than those matters which are to be determined
by the Bank in its sole and  absolute  discretion,  shall be resolved by binding
arbitration before a representative member,  selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services,  Inc. ("JAMS"),
located in San Francisco,  California.  In the event JAMS is unable or unwilling
to conduct the arbitration  provided for under the terms of this  Paragraph,  or
has discontinued its business,  the parties agree that a representative  member,
selected by the mutual  agreement  of the parties,  of the American  Arbitration
Association  ("AAA"),  located in San Francisco,  California,  shall conduct the
binding  arbitration  referred  to in this  Paragraph.  Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement and
with JAMS (or AAA, if necessary).  In no event shall the demand for  arbitration
be made after the date when institution of legal or equitable  proceedings based
on such  claim,  dispute  or other  matter  in  question  would be barred by the
applicable  statute of  limitations.  The  arbitration  shall be subject to such
rules of procedure  used or established by JAMS, or if there are none, the rules
of procedure used or established by AAA. Any award rendered by JAMS or AAA shall
be final and binding  upon the  parties,  and as  applicable,  their  respective
heirs, beneficiaries, legal representatives, agents, successors and assigns, and
may be entered in any court having jurisdiction  thereof.  The obligation of the
parties to arbitrate pursuant to this

 

                                       93
<PAGE>




clause  shall be  specifically  enforceable  in  accordance  with,  and shall be
conducted  consistently  with,  the  provisions  of  Title  9 of  Part  3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Lodi, California, unless otherwise agreed to by the parties.

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

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

                   If to the Bank:                  Bank of Lodi, N.A.
                                                    701 S. Ham Lane
                                                    Lodi, California  95242-3537

                                                    Attn: President

                   If to the Director:              ______________________
                                                    ______________________
                                                    ______________________



                                       94
<PAGE>


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

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

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

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

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



                                       95
<PAGE>




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

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

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

                   11.13.  Governing  Law. The laws of the State of  California,
other than those laws denominated  choice of law rules,  and, where  applicable,
the rules and  regulations  of the Board of  Governors  of the  Federal  Reserve
System, Federal Deposit Insurance Corporation,  Office of the Comptroller of the
Currency,  or any other  regulatory  agency  or  governmental  authority  having
jurisdiction   over  the  Bank,  shall  govern  the  validity,   interpretation,
construction and effect of this Agreement.

        IN  WITNESS  WHEREOF,  the  Bank and the  Director  have  executed  this
Agreement  on the date  first  above-written  in the City of Lodi,  San  Jaoquin
County, California.

BANK                                                DIRECTOR

Bank of Lodi, N.A.



By:  /s/ Leon J. Zimmerman                          /s/_________________
    ----------------------
         Leon J. Zimmerman,
         President and Chief
         Executive Officer

 

                                       96
<PAGE>



                                   SCHEDULE A



CALENDAR YEAR                                              APPLICABLE PERCENTAGE
-------------                                              ---------------------

July 18, 1983 to July 17, 1988 ................................      0.00%

July 18, 1989 .................................................     20.00%

July 18, 1990 .................................................     40.00%

July 18, 1991 .................................................     60.00%

July 18, 1992 .................................................     80.00%

July 18, 1993 .................................................    100.00%




                                       97
<PAGE>



                                   SCHEDULE B


                                DIRECTOR BENEFITS


1.      Director Emeritus Payments.

        Upon the Director's Retirement,  the Director shall be entitled to serve
        as a Director  Emeritus in accordance  with the  procedures and policies
        adopted by the Board of Directors of the Bank applicable to service as a
        Director  Emeritus.  If the  Director  elects  to  serve  as a  Director
        Emeritus,  the Bank shall pay to the Director the Applicable  Percentage
        of seven  thousand  five  hundred  dollars  ($7,500)  commencing  on the
        Director's  Retirement,  payable  annually in twelve (12)  substantially
        equal  installments  and continuing  until the third  anniversary of the
        Director's Retirement.

2.      Retirement Benefit Payments.

        The Bank shall pay to the Director the  Applicable  Percentage  of seven
        thousand  five  hundred  dollars   ($7,500)   commencing  on  the  third
        anniversary of the  Director's  Retirement,  payable  annually in twelve
        (12)   substantially   equal   installments  and  continuing  until  the
        Director's death.



                                       98
<PAGE>




                                   SCHEDULE C


                             BENEFICIARY DESIGNATION


         To the  Administrator of the Bank of Lodi, N.A.  Director  Supplemental
Compensation Agreement:

        Pursuant  to the  Provisions  of my Director  Supplemental  Compensation
Agreement with Bank of Lodi,  N.A.,  permitting the designation of a beneficiary
or beneficiaries by a participant,  I hereby designate the following persons and
entities  as primary  and  secondary  beneficiaries  of any  benefit  under said
Agreement payable by reason of my death:

Primary Beneficiary:



----------------------   --------------------   -----------------------------
Name                            Address                 Relationship


Secondary (Contingent) Beneficiary:



----------------------   ---------------------   ----------------------------
Name                            Address                 Relationship


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


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




Dated:  _______, 1998                  _________________________________________




                                       99
<PAGE>



CONSENT OF THE DIRECTOR'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:


        I,  _____________,  being the  spouse of  _______________,  after  being
afforded the opportunity to consult with independent counsel of my choosing,  do
hereby  acknowledge  that  I have  read,  agree  and  consent  to the  foregoing
Beneficiary Designation which relates to the Director Supplemental  Compensation
Agreement  entered  into  by my  spouse  effective  as  of  _________,  1998.  I
understand  that the above  Beneficiary  Designation  may affect  certain rights
which I may have in the  benefits  provided  for under the terms of the Director
Supplemental  Compensation  Agreement and in which I may have a marital property
interest.

Dated:  ________, 1998



                   ------------------------------------------




                                      100
<PAGE>





         Exhibit 10(o)  Form of Life Insurance  Endorsement  Method Split Dollar
                        Plan  Agreement,  effective  as of  April  3,  1998,  as
                        executed between Bank of Lodi, N.A. and each of Benjamin
                        R. Goehring, Michael D. Ramsey, Weldon D. Schumacher and
                        Dennis R. Swanson.


LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT


Insurer:  ___________________

Policy Number: _____________

Bank:  Bank of Lodi, N.A.

Insured:  __________________

Relationship of Insured to Bank:  Director

Date:  ____________, 1998

The respective rights and duties of the Bank and the Insured in the above policy
(the "Policy") shall be as follows:

I.       DEFINITIONS

         Refer to the Policy  provisions for the definition of all terms in this
         Agreement.

II.      POLICY TITLE AND OWNERSHIP

         Title and  ownership  shall  reside in the Bank for its use and for the
         use of the  Insured all in  accordance  with this  Agreement.  The Bank
         alone may, to the extent of its interest,  exercise the right to borrow
         or withdraw the Policy cash values.  Where the Bank and the Insured (or
         beneficiary[ies]  or  assignee[s],  with the  consent  of the  Insured)
         mutually agree to exercise the right to increase the coverage under the
         subject split dollar Policy,  then, in such event,  the rights,  duties
         and benefits of the parties to such  increased  coverage shall continue
         to be subject to the terms of this Agreement.

III.     BENEFICIARY DESIGNATION RIGHTS

         The Insured (or  beneficiary[ies]  or assignee[s]) shall have the right
         and power to designate a beneficiary  or  beneficiaries  to receive his
         share of the proceeds  payable  upon the death of the  Insured,  and to
         elect and change a payment option for such beneficiary,  subject to any
         right or interest  the Bank may have in such  proceeds,  as provided in
         this Agreement.



                                      101
<PAGE>



IV.      PREMIUM PAYMENT METHOD

         The Bank  shall pay an amount  equal to the  planned  premiums  and any
         other  premium  payments  that might  become  necessary to maintain the
         Policy in force.

V.       TAXABLE BENEFIT

         Annually  the  Insured  will  receive  a taxable  benefit  equal to the
         assumed cost of insurance as required by the Internal  Revenue Service.
         The Bank (or its  administrator)  will report to the Insured the amount
         of imputed income received each year on Form W-2 or its equivalent.

VI.      DIVISION OF DEATH PROCEEDS

         Subject to Paragraph VII herein,  the division of the death proceeds of
         the Policy is as follows:

         A.       The Insured's beneficiary(ies),  designated in accordance with
                  Paragraph  III,  shall be entitled  to an amount  equal to the
                  lesser  of one  hundred  thousand  dollars  ($100,000)  or one
                  hundred percent (100%) of the net at risk insurance portion of
                  the proceeds.  The net at risk insurance  portion is the total
                  proceeds less the cash value of the Policy.

         B.       The Bank shall be entitled to the remainder of such proceeds.

         C.       The Bank and the Insured (or  beneficiary[ies] or assignee[s])
                  shall share in any interest due on the death proceeds on a pro
                  rata basis in the ratio that the proceeds due the Bank and the
                  Insured, respectively,  bears to the total proceeds, excluding
                  any such interest.

VII.     DIVISION OF CASH SURRENDER VALUE

         The Bank  shall at all  times be  entitled  to an  amount  equal to the
         Policy's  cash value,  as that term is defined in the Policy,  less any
         Policy  loans  and  unpaid  interest  or  cash  withdrawals  previously
         incurred by the Bank and any applicable Policy surrender charges.  Such
         cash  value  shall be  determined  as of the date of  surrender  of the
         Policy or death of the Insured as the case may be.

VIII.    PREMIUM WAIVER

         If the Policy  contains a premium  waiver  provision,  any such  waived
         amounts  shall be  considered  for all  purposes of this  Agreement  as
         having been paid by the Bank.

IX.      RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY  ELECTION EXISTS

         In the event the Policy involves an endowment or annuity  element,  the
         Bank's right and interest in any endowment proceeds or annuity benefits
         shall be determined under the provisions of this Agreement by regarding
         such endowment  proceeds or the commuted value of such annuity benefits
         as the Policy's cash value. Such endowment proceeds or annuity benefits
         shall be treated like death proceeds for the purposes of division under
         this Agreement.

X.       TERMINATION OF AGREEMENT

         This  Agreement  shall  terminate  at the option of the Bank  following
         thirty (30) days written  notice to the Insured  upon the  happening of
         any one of the following:




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<PAGE>



         1.       The Insured shall be in violation of the terms and  conditions
                  of that certain Director Supplemental  Compensation  Agreement
                  effective as of _______, 1998, or

         2.       The Insured shall be discharged  from service with the Bank by
                  removal for cause. The term "removal for cause" shall have the
                  meaning given that term in the Insured's Director Supplemental
                  Compensation Agreement effective as of _________, 1998.

         Upon such termination, the Insured (or beneficiary[ies] or assignee[s])
         shall  have a  ninety  (90)  day  option  to  receive  from the Bank an
         absolute assignment of the Policy in consideration of a cash payment to
         the Bank,  whereupon this Agreement shall terminate.  Such cash payment
         shall be the greater of:

         1.       The  Bank's  share of the cash value of the Policy on the date
                  of such assignment, as defined in this Agreement.

         2.       The  amount of the  premiums  which have been paid by the Bank
                  prior to the date of such assignment.

         Should  the  Insured  (or  beneficiary[ies]  or  assignee[s])  fail  to
         exercise this option within the prescribed ninety (90) day period,  the
         Insured (or  beneficiary[ies] or assignee[s]) agrees that all of his or
         her rights, interest and claims in the Policy shall terminate as of the
         date of the termination of this Agreement.

         Except  as  provided   above,   this  Agreement  shall  terminate  upon
         distribution of the death benefit proceeds in accordance with Paragraph
         VI above.

XI.      INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

         The Insured may not,  without  the prior  written  consent of the Bank,
         assign to any individual, trust or other organization, any right, title
         or interest in the Policy nor any rights, options, privileges or duties
         created under this Agreement.

XII.     AGREEMENT BINDING UPON THE PARTIES

         This  Agreement  shall be binding  upon the Insured  and the Bank,  and
         their  respective  heirs,  successors,   personal  representatives  and
         assigns, as applicable.

XIII.    NAMED FIDUCIARY AND PLAN ADMINISTRATOR

         The Bank is hereby  designated the "Named  Fiduciary" until resignation
         or  removal by its Board of  Directors.  As Named  Fiduciary,  the Bank
         shall be responsible for the management, control, and administration of
         this Agreement as established  herein. The Named Fiduciary may allocate
         to  others   certain   aspects  of  the   management   and   operations
         responsibilities  of  this  Agreement,   including  the  employment  of
         advisors  and the  delegation  of any  ministerial  duties to qualified
         individuals.

XIV.     FUNDING POLICY

         The funding Policy for this  Agreement  shall be to maintain the Policy
         in force by paying, when due, all premiums required.



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<PAGE>



XV.      CLAIM PROCEDURES

         Claim  forms or  claim  information  as to the  subject  Policy  can be
         obtained   by   contacting   The   Benefit    Marketing   Group,   Inc.
         (770-952-1529).  When the  Named  Fiduciary  has a claim  which  may be
         covered under the provisions described in the Policy, it should contact
         the office named above,  and they will either complete a claim form and
         forward it to an authorized representative of the Insurer or advise the
         named Fiduciary what further  requirements  are necessary.  The Insurer
         will  evaluate  and make a  decision  as to  payment.  If the  claim is
         payable, a benefit check will be issued to the Named Fiduciary.

         In the event that a claim is not eligible under the Policy, the Insurer
         will  notify  the  Named  Fiduciary  of  the  denial  pursuant  to  the
         requirements  under the terms of the Policy.  If the Named Fiduciary is
         dissatisfied  with the denial of the claim and  wishes to contest  such
         claim  denial,  it should  contact the office named above and they will
         assist  in  making  inquiry  to  the  Insurer.  All  objections  to the
         Insurer's  actions  should be in writing  and  submitted  to the office
         named above for transmittal to the Insurer.

XVI.     GENDER

         Whenever in this  Agreement  words are used in the  masculine or neuter
         gender, they shall be read and construed as in the masculine,  feminine
         or neuter gender, whenever they should so apply.


XVII.    INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

         The  Insurer  shall not be deemed a party to this  Agreement,  but will
         respect the rights of the parties as set forth herein upon receiving an
         executed  copy of this  Agreement.  Payment  or  other  performance  in
         accordance with the Policy provisions shall fully discharge the Insurer
         from any and all liability.


         IN WITNESS WHEREOF, the Insured and a duly authorized Bank officer have
signed this Agreement as of the above written date.



BANK OF LODI, N.A.                          INSURED



--------------------------                  --------------------------------
Leon J. Zimmerman
President and Chief
Executive Officer



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<PAGE>




                          BENEFICIARY DESIGNATION FORM



Primary Designation:

         Name                                          Relationship

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



Contingent Designation:

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



_____________________________            __________, 1998




                                      105
<PAGE>




        Exhibit 10(p)   Form of Director  Supplemental  Compensation  Agreement,
                        effective as of April 3, 1998, as executed  between Bank
                        of Lodi, N.A. and each of Angelo J. Anagnos,  Raymond H.
                        Coldani, Bozant Katzakian and Frank M. Sasaki.

DIRECTOR SUPPLEMENTAL COMPENSATION AGREEMENT


        This Agreement is made and entered into effective as of April 3, 1998 by
and between Bank of Lodi, N.A., a national banking  association  chartered under
the federal  laws of the United  States of America  with its  principal  offices
located in the City of Lodi, San Joaquin County,  California  (the  "Employer"),
and  ______________  , an individual  residing in the State of  California  (the
"Director").

                                 R E C I T A L S

        WHEREAS,  the Director is a member of the Board of Directors of the Bank
and has  served  in such  capacity  since  the Bank was  authorized  to  conduct
business on July 18, 1983;

        WHEREAS,  the Bank  desires to  establish  a  compensation  benefit  for
directors who are not also officers or employees of the Bank in order to attract
and retain  individuals with extensive and valuable  experience as directors and
to establish a director emeritus succession plan; and

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

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

                                A G R E E M E N T

        1.         Terms and Definitions.

                   1.1.  Administrator.  The Bank  shall be the  "Administrator"
and, solely for the purposes of ERISA as defined in subparagraph  1.9 below, the
"fiduciary" of this Agreement where a fiduciary is required by ERISA.

                   1.2. Applicable Percentage.  The term "Applicable Percentage"
shall mean that  percentage  listed on Schedule  "A"  attached  hereto  which is
adjacent to the number of calendar  years which shall have elapsed from the date
of the Director's  commencement of service as a member of the Board of Directors
of the Bank and ending on the date  payments  are to first begin under the terms
of this Agreement. Notwithstanding the foregoing or the percentages set forth on
Schedule  "A," but subject to all other terms and  conditions  set forth herein,
the "Applicable  Percentage"  shall be: (i) provided payments have not yet begun
hereunder,  one  hundred  percent  (100%)  upon the  occurrence  of a "Change in
Control" as defined in subparagraph 1.4 below, or the Director's  Disability (as
defined in subparagraph 1.6 below);  and (ii)  notwithstanding  subclause (i) of
this  subparagraph  1.2,  zero percent (0%) in the event the Director  takes any
intentional  action which prevents the Bank from  collecting the proceeds of any
life  insurance  policy  which  the  Bank may  happen  to own at the time of the
Surrogate's  death  and  of  which  the  Bank  is  the  designated  beneficiary.
Furthermore,  notwithstanding  the  foregoing,  or  anything  contained  in this
Agreement  to the  contrary,  in the event the  Director  takes any  intentional
action  which  prevents  the  Bank  from



                                      106
<PAGE>



collecting the proceeds of any life  insurance  policy which the Bank may happen
to own at the  time  of the  Surrogate's  death  and of  which  the  Bank is the
designated  beneficiary:  (1) the  Director's  estate or designated  beneficiary
shall no longer be entitled to receive the amounts,  if any,  payable  under the
terms of this  Agreement,  and (2) the Bank shall have the right to recover from
the  Director's  estate all of the amounts paid to the  Director's  estate (with
respect to amounts,  if any, paid prior to the Surrogate's  death or paid to the
Director's estate) or designated  beneficiary (with respect to amounts,  if any,
paid to the  designated  beneficiary)  pursuant  to the terms of this  Agreement
prior to and after Surrogate's death.

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

                   1.4.  Change in Control.  The term "Change in Control"  shall
mean the  occurrence  of any of the  following  events with  respect to the Bank
(with the term "Bank"  being  defined  for  purposes  of  determining  whether a
"Change in Control"  has  occurred to include  any parent bank  holding  company
organized  at the  direction  of the Bank to own 100% of the Bank's  outstanding
common stock):  (i) a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A  promulgated
under the Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), or
in  response  to any  other  form  or  report  to  the  regulatory  agencies  or
governmental authorities having jurisdiction over the Bank or any stock exchange
on which the Bank's  shares are listed which  requires the reporting of a change
in control;  (ii) any merger,  consolidation  or  reorganization  of the Bank in
which the Bank does not  survive;  (iii) any sale,  lease,  exchange,  mortgage,
pledge,  transfer  or other  disposition  (in one  transaction  or a  series  of
transactions) of any assets of the Bank having an aggregate fair market value of
fifty percent  (50%) of the total value of the assets of the Bank,  reflected in
the most  recent  balance  sheet of the Bank;  (iv) a  transaction  whereby  any
"person"  (as  such  term  is  used  in the  Exchange  Act)  or any  individual,
corporation,  partnership,  trust or any other  entity  becomes  the  beneficial
owner,   directly  or  indirectly,   of  securities  of  the  Bank  representing
twenty-five  percent  (25%) or more of the  combined  voting power of the Bank's
then outstanding  securities;  or (v) a situation where, in any one-year period,
individuals  who at the  beginning  of  such  period  constitute  the  Board  of
Directors  of the Bank  cease for any reason to  constitute  at least a majority
thereof,  unless the  election,  or the  nomination  for  election by the Bank's
shareholders,  of  each  new  director  is  approved  by  a  vote  of  at  least
three-quarters (3/4) of the directors then still in office who were directors at
the  beginning of the period.  Notwithstanding  the  foregoing or anything  else
contained  herein to the contrary,  there shall not be a "Change of Control" for
purposes of this  Agreement if the event which would  otherwise  come within the
meaning of the term  "Change of Control"  involves (i) a  reorganization  at the
direction  of the Bank solely to form a parent bank holding  company  which owns
100%  of the  Bank's  common  stock  following  the  reorganization,  or (ii) an
Employee  Stock  Ownership  Plan  sponsored  by the Bank or its  parent  holding
company  which  is  the  party  that  acquires  "control"  or is  the  principal
participant in the transaction  constituting a "Change in Control," as described
above.

                   1.5. The Code.  The "Code"  shall mean the  Internal  Revenue
Code of 1986, as amended (the "Code").

                   1.6. Disability/Disabled. The term "Disability" or "Disabled"
shall  have the same  meaning  given  such  terms in any  policy  of  disability
insurance  maintained by the Employer for the benefit of directors including the
Director. In the absence of such a policy which extends coverage to the Director
in the event of  disability,  the terms  shall  mean  bodily  injury or  disease
(mental or physical) which wholly and  continuously  prevents the performance of
duty for at least three months.

                   1.7. Effective Date. The term "Effective Date" shall mean the
date first written above.



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<PAGE>



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

                   1.9. Director  Benefits.  The term "Director  Benefits" shall
mean the benefits  determined  in  accordance  with Schedule "B", and reduced or
adjusted  to the  extent:  (i)  required  under  the  other  provisions  of this
Agreement,  including,  but not limited to,  Paragraphs 5, 6 and 7 hereof;  (ii)
required by reason of the lawful order of any  regulatory  agency or body having
jurisdiction  over the Bank; or (iii) required in order for the Bank to properly
comply with any and all applicable  state and federal laws,  including,  but not
limited to, income, employment and disability income tax laws (e.g., FICA, FUTA,
SDI).

                   1.10.  Normal  Retirement  Date. The term "Normal  Retirement
Date"  shall  mean the  Retirement,  as  defined  below,  of the  Director  upon
attainment of age sixty-five (65).



                                      108
<PAGE>




                   1.11.  Plan Year.  The term "Plan Year" shall mean the Bank's
fiscal year.

                   1.12.  Retirement.  The term  "Retirement" or "Retires" shall
refer to the date which the Director  acknowledges  in writing to the Bank to be
the last day of service as a member of the Board of Directors of the Bank.

                   1.13.   Surrogate.   The  term  "Surrogate"  shall  mean  the
individual  selected as a substitute  insured in  connection  with any insurance
policy owned by the Bank as may be referenced in this Agreement.

                   1.14.  Removal for Cause.  The term "removal for cause" shall
mean the  termination of the Director's  service as a member of the Bank's Board
of  Directors  by reason of any of the  following  determined  in good  faith by
disinterested members of the Bank's Board of Directors:

                          (a)  The willful,  intentional  and material breach or
habitual  and  continued  neglect by the  Director of his  responsibilities  and
duties;

                          (b)  The continuous  mental or physical  incapacity of
the Director, subject to disability rights under this Agreement;

                          (c)  The Director's willful and intentional  violation
of any federal banking or securities laws, or of the Bylaws,  rules, policies or
resolutions  of the Bank, or the rules or  regulations of the Board of Governors
of the Federal Reserve System, Federal Deposit Insurance Corporation,  Office of
the Comptroller of the Currency,  or any other regulatory agency or governmental
authority having jurisdiction over the Bank, which has a material adverse effect
upon the Bank;

                          (d)  The written  determination  by a state or federal
court,  banking agency or other governmental  authority having jurisdiction over
the Bank,  that the Director  (i) is of unsound  mind,  or (ii) has  committed a
gross abuse of  authority or  discretion  with  reference to the Bank,  or (iii)
otherwise  is not  suitable  to  continue  to serve as a member  of the Board of
Directors of the Bank;

                          (e)  The  Director  is  convicted  of any  felony or a
crime  involving  moral  turpitude  or  willfully  and  intentionally  commits a
fraudulent or dishonest act; or



                                      109
<PAGE>



                          (f)  The    Director's    willful   and    intentional
disclosure,  without  authority,  of any secret or confidential  information not
otherwise publicly available  concerning the Bank or taking any action which the
Bank's Board of Directors determines, in its sole discretion and subject to good
faith, fair dealing and  reasonableness,  constitutes unfair competition with or
inducement of any customer to breach any contract with the Bank.

        2.         Scope, Purpose and Effect.

                   2.1.  Contract of  Employment.  Although  this  Agreement  is
intended to provide the  Director  with an  additional  incentive to continue to
serve as a member of the Board of Directors of the Bank,  this  Agreement  shall
not be deemed to  constitute a contract of  employment  between the Director and
the Bank nor shall any  provision  of this  Agreement  restrict the right of the
Bank  to  remove  or  cause  the  removal  of the  Director  including,  without
limitation,  by (i)  refusal to  nominate  the  Director  for  election  for any
successive  term of office as a member of the Board of Directors of the Bank, or
(ii)  complying  with an  order  or other  directive  from a court of  competent
jurisdiction or any regulatory authority having jurisdiction over the Bank which
requires the Bank to take action to remove the Director.

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

        3.         Director Benefits Payments.

                   3.1.  Payments  for  Service  as  Director  Emeritus.  If the
Director shall continue to serve as a member of the Board of Directors until the
Normal  Retirement  Date,  the Director shall be entitled to serve the Bank as a
Director Emeritus in accordance with the procedures and policies  established by
the Bank's Board of Directors  applicable to service as a Director Emeritus.  If
the Director elects to serve as a Director Emeritus,  the Director shall be paid
the  Applicable  Percentage  of the  Director  Emeritus  Payments  specified  in
Schedule  B for a three  (3)  year  period,  payable  annually  in  twelve  (12)
substantially  equal  installments,  commencing  with  the  Retirement  Date and
continuing for the period  specified in Schedule B. If the Director  declines or
is unable to serve as a  Director  Emeritus,  the  Director  shall  forfeit  any
entitlement to the Director Emeritus Benefits.

                   3.2.  Payments  After  Expiration  of the  Director  Emeritus
Period.  After the  expiration of the three (3) year period  described  above in
Paragraph  3.1, the Bank shall pay the  Applicable  Percentage of the Retirement
Benefit Payments specified in Schedule B to the Director commencing on the third
anniversary  of the  Director's  Retirement,  payable  annually  in twelve  (12)
substantially equal installments for the period specified in Schedule B.



                                      110
<PAGE>




        4.         Payments in the Event of Disability  Prior to Retirement.  In
the event the Director  becomes  Disabled while serving as a member of the Board
of Directors of the Bank at any time after the Effective Date of this Agreement,
but prior to  Retirement,  the Bank shall pay the  Applicable  Percentage of the
Retirement Benefit Payments  specified in Schedule B to the Director  commencing
on the first day of the month following the month in which the Director  becomes
Disabled,  payable annually in twelve (12) substantially  equal installments for
the period specified in Schedule B.

        5.         Payments  in  the  Event  Director  Is  Terminated  Prior  to
Retirement.  As indicated in subparagraph 2.1 above, the Bank reserves the right
to remove or cause the removal of the Director under certain  circumstances,  at
any time prior to the  Director's  Retirement.  In the event that the service of
the Director shall be terminated,  other than by reason of death,  Disability or
Retirement,  prior to the Director's Normal Retirement Date, then this Agreement
shall terminate upon the date of such termination;  provided,  however, that the
Director  shall be  entitled  to the  following  benefits  as may be  applicable
depending upon the circumstances surrounding the Director's termination:

                   5.1.  Termination Without Cause. If the Director's service as
a member of the Board of Directors of the Bank is  terminated  for reasons other
than as specified in paragraph 5.3 below, and such termination is not subject to
the  provisions of  subparagraph  5.4 below;  the Bank shall pay the  Applicable
Percentage of the  Retirement  Benefit  Payments  specified in Schedule B to the
Director  commencing on the first day of the month  following the month in which
the Director is terminated,  payable annually in twelve (12) substantially equal
installments for the period specified in Schedule B.

                   5.2. Voluntary Termination by the Director. If the Director's
service on the Board of Directors is  terminated by voluntary  resignation  on a
date when the Applicable Percentage is less than one hundred percent (100%), and
such resignation is not subject to the provisions of subparagraph 5.4 below, the
Director  shall  forfeit  any and all rights and  benefits he may have under the
terms of this  Agreement  and shall have no right to be paid any of the  amounts
which would otherwise be due or paid to the Director by the Employer pursuant to
the terms of this Agreement. If the Applicable Percentage is one hundred percent
(100%)  on the  date of such  voluntary  resignation,  the  Bank  shall  pay the
Applicable Percentage of the Retirement Benefit Payments specified in Schedule B
to the Director  commencing on the first day of the month following the month in
which the  Director  terminated  service as a member of the Board of  Directors,
payable annually in twelve (12) substantially  equal installments for the period
specified in Schedule B.


                   5.3.  Termination by Removal for Cause.  The Director  agrees
that if his  service  as a  member  of the  Board  of  Directors  of the Bank is
terminated  by  "removal  for  cause," as defined in  subparagraph  1.14 of this
Agreement,  he shall  forfeit any and all rights and  benefits he may have under
the  terms  of this  Agreement  and  shall  have no  right to be paid any of the
amounts  which  would  otherwise  be due or paid  to the  Director  by the  Bank
pursuant to the terms of this Agreement.

                   5.4.  Termination by the Bank on Account of or After a Change
in Control. In the event that the Director's service as a member of the Board of
Directors of the Bank is  terminated  in  conjunction  with,  or by reason of, a
"Change in Control" (as defined in subparagraph  1.4 above),  the Bank shall pay
the  Applicable  Percentage  of the  Retirement  Benefit  Payments  specified in
Schedule B to the Director  commencing  on the first day of the month  following
the month in which the Director  terminated  service as a member of the Board of
Directors,  payable annually in twelve (12) substantially equal installments for
the period specified in Schedule B.

        6.         Section 280G Adjustment. The Director acknowledges and agrees
that the parties have entered into this Agreement  based upon certain  financial
and  tax  accounting  assumptions.  Accordingly,  with  full  knowledge



                                      111
<PAGE>



of the potential consequences the Director agrees that, notwithstanding anything
contained  herein to the  contrary,  in the event  that any  payment  or benefit
received or to be  received by the  Director,  whether  payable  pursuant to the
terms of this  Agreement or any other plan,  arrangement  or agreement  with the
Employer (together with the Director Benefits,  the "Total Payments"),  will not
be  deductible  (in whole or in part) as a result of Code  Section 280G or other
applicable  provisions of the Code, the Total Payments shall be reduced until no
portion of the Total  Payments is  nondeductible  as a result of Section 280G or
such other applicable provisions of the Code. For purposes of this limitation:

                         (a)   No portion of the Total Payments,  the receipt or
enjoyment of which the Director shall have  effectively  waived in writing prior
to the date of payment of any future Director Benefits payments,  shall be taken
into account;

                         (b)   No portion of the Total  Payments  shall be taken
into account,  which in the opinion of the tax counsel  selected by the Employer
and acceptable to the Director, does not constitute a "parachute payment" within
the meaning of Section 280G of the Code;

                         (c)   Any  reduction  of the  Total  Payments  shall be
applied to reduce  any  payment or benefit  received  or to be  received  by the
Director pursuant to the terms of this Agreement and any other plan, arrangement
or agreement  with the Employer in the order  determined by mutual  agreement of
the Employer and the Director;

                         (d)   Future  payments  shall  be  reduced  only to the
extent  necessary so that the Total  Payments  (other than those  referred to in
clauses (a) or (b) above in their entirety) constitute  reasonable  compensation
for services  actually  rendered within the meaning of Section 280G of the Code,
in the opinion of tax counsel referred to in clause (b) above; and

                         (e)   The value of any non-cash benefit or any deferred
payment  or  benefit  included  in the Total  Payments  shall be  determined  by
independent  auditors selected by the Employer and acceptable to the Director in
accordance with the principles of Section 280G of the Code.

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

        8.              Claims Procedure. The Bank shall, but only to the extent
necessary to comply with ERISA,  be designated as the named fiduciary under this
Agreement  and shall have  authority  to control  and manage the  operation



                                      112
<PAGE>



and administration of this Agreement.  Consistent therewith, the Bank shall make
all  determinations  as to the  rights to  benefits  under this  Agreement.  Any
decision by the Bank  denying a claim by the  Director,  or as  applicable,  the
Director's spouse or  beneficiaries,  for benefits under this Agreement shall be
stated in writing and delivered or mailed,  via registered or certified mail, to
the Director,  the Director's spouse or beneficiaries,  as the case may be. Such
decision  shall set forth the  specific  reasons  for the denial of a claim.  In
addition, the Bank shall provide the Director, or as applicable,  the Director's
spouse  or  beneficiaries,  with a  reasonable  opportunity  for a full and fair
review of the decision denying such claim.

        9.              Status as an Unsecured General Creditor. Notwithstanding
anything  contained  herein to the  contrary:  (i)  neither  the  Director,  the
Director's  spouse or  beneficiaries  shall have any legal or equitable  rights,
interests  or claims in or to any  specific  property or assets of the Bank as a
result of this  Agreement;  (ii) none of the Bank's  assets  shall be held in or
under  any trust for the  benefit  of the  Director,  the  Director's  spouse or
beneficiaries  or  held  in any  way as  security  for  the  fulfillment  of the
obligations  of the Bank under this  Agreement;  (iii) all of the Bank's  assets
shall be and remain the general  unpledged and unrestricted  assets of the Bank;
(iv) the Bank's obligation under this Agreement shall be that of an unfunded and
unsecured promise by the Bank to pay money in the future;  and (v) the Director,
the Director's  spouse and  beneficiaries,  shall be unsecured general creditors
with  respect  to any  benefits  which  may be  payable  under the terms of this
Agreement.

                   Notwithstanding  subparagraphs  (i)  through  (v) above,  the
Employer and the Director  acknowledge  and agree that, in the event of a Change
in Control, upon request of the Director, or in the Employer's discretion if the
Director does not so request and the Employer  nonetheless deems it appropriate,
the Employer shall establish, not later than the effective date of the Change in
Control,  a Rabbi Trust or multiple  Rabbi Trusts (the "Trust" or "Trusts") upon
such  terms  and  conditions  as the  Employer,  in its sole  discretion,  deems
appropriate and in compliance  with applicable  provisions of the Code, in order
to permit the Employer to make contributions and/or transfer assets to the Trust
or Trusts to discharge its obligations pursuant to this Agreement. The principal
of the Trust or Trusts and any earnings thereon shall be held separate and apart
from other funds of the  Employer to be used  exclusively  for  discharge of the
Employer's  obligations  pursuant  to this  Agreement  and shall  continue to be
subject  to the claims of the  Employer's  general  creditors  until paid to the
Director,  or as applicable,  the Director's  spouse or  beneficiaries,  in such
manner and at such times as specified in this Agreement.

        10.             Discretion    of    Board    to    Accelerate    Payout.
Notwithstanding  any of the other  provisions  of this  Agreement,  the Board of
Directors of the Bank may, if determined in its sole and absolute  discretion to
be  appropriate,  accelerate  the  payment of the amounts due under the terms of
this  Agreement,  provided that the Director (or as  applicable,  the Director's
spouse or  beneficiaries):  (i) consents to the revised payout terms  determined
appropriate by the Bank's Board of Directors;  and (ii) does not negotiate or in
anyway influence the terms of proposed altered/accelerated payout (said decision
to be made solely by the Bank's Board of  Directors  and offered to the Director
[or as applicable,  the  Director's  spouse or  beneficiaries]  on a "take it or
leave it basis").



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<PAGE>




        11.        Miscellaneous.

                   11.1.  Opportunity To Consult With Independent Advisors.  The
Director  acknowledges that he has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation,  accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this  Agreement and the (i) terms and  conditions  which may affect the
Director's  right to  these  benefits  and (ii)  personal  tax  effects  of such
benefits  including,  without  limitation,  the  effects of any federal or state
taxes,  Section  280G of the  Code,  and any other  taxes,  costs,  expenses  or
liabilities  whatsoever related to such benefits,  which in any of the foregoing
instances the Director  acknowledges and agrees shall be the sole responsibility
of the Director  notwithstanding  any other term or provision of this Agreement.
The  Director  further  acknowledges  and  agrees  that the Bank  shall  have no
liability  whatsoever related to any such personal tax effects or other personal
costs,   expenses,  or  liabilities  applicable  to  the  Director  and  further
specifically  waives  any right for  himself or  herself,  and his or her heirs,
beneficiaries, legal representatives, agents, successors and assigns to claim or
assert liability on the part of the Bank related to the matters  described above
in this subparagraph  11.1. The Director further  acknowledges that he has read,
understands  and consents to all of the terms and conditions of this  Agreement,
and that he enters into this  Agreement with a full  understanding  of its terms
and conditions.

                   11.2. Arbitration of Disputes. All claims, disputes and other
matters in question  arising out of or relating to this  Agreement or the breach
or interpretation  thereof,  other than those matters which are to be determined
by the Bank in its sole and  absolute  discretion,  shall be resolved by binding
arbitration before a representative member,  selected by the mutual agreement of
the parties, of the Judicial Arbitration and Mediation Services,  Inc. ("JAMS"),
located in San Francisco,  California.  In the event JAMS is unable or unwilling
to conduct the arbitration  provided for under the terms of this  Paragraph,  or
has discontinued its business,  the parties agree that a representative  member,
selected by the mutual  agreement  of the parties,  of the American  Arbitration
Association  ("AAA"),  located in San Francisco,  California,  shall conduct the
binding  arbitration  referred  to in this  Paragraph.  Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement and
with JAMS (or AAA, if necessary).  In no event shall the demand for  arbitration
be made after the date when institution of legal or equitable  proceedings based
on such  claim,  dispute  or other  matter  in  question  would be barred by the
applicable  statute of  limitations.  The  arbitration  shall be subject to such
rules of procedure  used or established by JAMS, or if there are none, the rules
of procedure used or established by AAA. Any award rendered by JAMS or AAA shall
be final and binding  upon the  parties,  and as  applicable,  their  respective
heirs, beneficiaries, legal representatives, agents, successors and assigns, and
may be entered in any court having jurisdiction  thereof.  The obligation of the
parties to arbitrate pursuant to this



                                      114
<PAGE>



clause  shall be  specifically  enforceable  in  accordance  with,  and shall be
conducted  consistently  with,  the  provisions  of  Title  9 of  Part  3 of the
California Code of Civil Procedure. Any arbitration hereunder shall be conducted
in Lodi, California, unless otherwise agreed to by the parties.

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

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

                 If to the Bank:                  Bank of Lodi, N.A.
                                                  701 S. Ham Lane
                                                  Lodi, California  95242-3537

                                                  Attn: President

                 If to the Director:              __________________
                                                  __________________
                                                  __________________



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<PAGE>




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

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

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

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



                                      116
<PAGE>




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

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

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

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

                   11.13.  Governing  Law. The laws of the State of  California,
other than those laws denominated  choice of law rules,  and, where  applicable,
the rules and  regulations  of the Board of  Governors  of the  Federal  Reserve
System, Federal Deposit Insurance Corporation,  Office of the Comptroller of the
Currency,  or any other  regulatory  agency  or  governmental  authority  having
jurisdiction   over  the  Bank,  shall  govern  the  validity,   interpretation,
construction and effect of this Agreement.



                                      117
<PAGE>




        IN  WITNESS  WHEREOF,  the  Bank and the  Director  have  executed  this
Agreement  on the date  first  above-written  in the City of Lodi,  San  Jaoquin
County, California.

BANK                                             DIRECTOR

Bank of Lodi, N.A.



By:  /s/ Leon J. Zimmerman                       /s/___________________________
     ---------------------
         Leon J. Zimmerman,
         President and Chief
         Executive Officer



                                      118
<PAGE>



                                   SCHEDULE A




CALENDAR YEAR                                              APPLICABLE PERCENTAGE
-------------                                              ---------------------

July 18, 1983 to July 17, 1988 .................................     0.00%

July 18, 1989 ..................................................    20.00%

July 18, 1990 ..................................................    40.00%

July 18, 1991 ..................................................    60.00%

July 18, 1992 ..................................................    80.00%

July 18, 1993 ..................................................   100.00%




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<PAGE>



                                   SCHEDULE B


                                DIRECTOR BENEFITS


1.      Director Emeritus Payments.

        Upon the Director's Retirement,  the Director shall be entitled to serve
        as a Director  Emeritus in accordance  with the  procedures and policies
        adopted by the Board of Directors of the Bank applicable to service as a
        Director  Emeritus.  If the  Director  elects  to  serve  as a  Director
        Emeritus,  the Bank shall pay to the Director the Applicable  Percentage
        of seven  thousand  five  hundred  dollars  ($7,500)  commencing  on the
        Director's  Retirement,  payable  annually in twelve (12)  substantially
        equal  installments  and  continuing  until  the  earlier  of the  third
        anniversary  of the  Director's  Retirement,  or the death of either the
        Director or a Surrogate under any insurance policy owned by the Bank.

2.      Retirement Benefit Payments.

        The Bank shall pay to the Director the  Applicable  Percentage  of seven
        thousand  five  hundred  dollars   ($7,500)   commencing  on  the  third
        anniversary of the  Director's  Retirement,  payable  annually in twelve
        (12)  substantially  equal installments and continuing until the earlier
        of the death of either the Director or a Surrogate  under any  insurance
        policy owned by the Bank.




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<PAGE>



                                   SCHEDULE C


                             BENEFICIARY DESIGNATION


         To the  Administrator of the Bank of Lodi, N.A.  Director  Supplemental
Compensation Agreement:

        Pursuant  to the  Provisions  of my Director  Supplemental  Compensation
Agreement with Bank of Lodi,  N.A.,  permitting the designation of a beneficiary
or beneficiaries by a participant,  I hereby designate the following persons and
entities  as primary  and  secondary  beneficiaries  of any  benefit  under said
Agreement payable by reason of my death:

Primary Beneficiary:



______________________   _____________________   ____________________________
Name                            Address                  Relationship


Secondary (Contingent) Beneficiary:



______________________   _____________________   ____________________________
Name                            Address                  Relationship


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


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




Dated:  _______, 1998                  _________________________________________



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<PAGE>



CONSENT OF THE DIRECTOR'S SPOUSE
TO THE ABOVE BENEFICIARY DESIGNATION:


        I, _________________, being the spouse of_________________,  after being
afforded the opportunity to consult with independent counsel of my choosing,  do
hereby  acknowledge  that  I have  read,  agree  and  consent  to the  foregoing
Beneficiary Designation which relates to the Director Supplemental  Compensation
Agreement  entered  into  by my  spouse  effective  as  of  _________,  1998.  I
understand  that the above  Beneficiary  Designation  may affect  certain rights
which I may have in the  benefits  provided  for under the terms of the Director
Supplemental  Compensation  Agreement and in which I may have a marital property
interest.

Dated:  ________, 1998


_____________________________



                                      122
<PAGE>



         Exhibit 10(q)  Form of Life Insurance  Endorsement  Method Split Dollar
                        Plan  Agreement,  effective  as of  April  3,  1998,  as
                        executed  between Bank of Lodi,  N.A. and each of Angelo
                        J.  Anagnos,  Raymond H. Coldani,  Bozant  Katzakian and
                        Frank M. Sasaki.


                                 LIFE INSURANCE

                      ENDORSEMENT METHOD SPLIT DOLLAR PLAN

                                    AGREEMENT


Insurer:  Canada Life Assurance Company

Policy Number:

Bank:  Bank of Lodi, N.A.

Participant:  _________________________

Insured: __________________________________________________________________

Relationship of Participant to Bank:  Director

Date:  ____________, 1998

The  respective  rights and duties of the Bank and the  Participant in the above
policy (the "Policy") shall be as follows:

I.       DEFINITIONS

         Refer to the Policy  provisions for the definition of all terms in this
         Agreement.   Notwithstanding   the   foregoing,   whenever   the   term
         "Participant" is used in this Agreement,  unless the Policy  provisions
         or the context otherwise  require,  it shall mean  _________________for
         purposes  of any  beneficial  interest  or right to  proceeds  from any
         insurance Policy to which this Agreement refers.

II.      POLICY TITLE AND OWNERSHIP

         Title and  ownership  shall  reside in the Bank for its use and for the
         use of the Participant all in accordance with this Agreement.  The Bank
         alone may, to the extent of its interest,  exercise the right to borrow
         or withdraw the Policy cash values.  Where the Bank and the Participant
         (or   beneficiary[ies]   or  assignee[s],   with  the  consent  of  the
         Participant)  mutually  agree to  exercise  the right to  increase  the
         coverage  under the subject split dollar  Policy,  then, in such event,
         the  rights,  duties and  benefits  of the  parties  to such  increased
         coverage shall continue to be subject to the terms of this Agreement.

III.     BENEFICIARY DESIGNATION RIGHTS

         The Participant  (or  beneficiary[ies]  or assignee[s])  shall have the
         right and power to designate a beneficiary or  beneficiaries to receive
         his share of the proceeds payable upon the death of the Insured, and to
         elect and change a payment option for such beneficiary,  subject to any
         right or interest  the Bank may have in such  proceeds,  as provided in
         this Agreement.



                                      123
<PAGE>



IV.      PREMIUM PAYMENT METHOD

         The Bank  shall pay an amount  equal to the  planned  premiums  and any
         other  premium  payments  that might  become  necessary to maintain the
         Policy in force.

V.       TAXABLE BENEFIT

         Annually the  Participant  will receive a taxable  benefit equal to the
         assumed cost of insurance as required by the Internal  Revenue Service.
         The Bank (or its  administrator)  will  report to the  Participant  the
         amount  of  imputed  income  received  each  year  on  Form  W-2 or its
         equivalent.

VI.      DIVISION OF DEATH PROCEEDS

         Subject to Paragraph VII herein, upon the Insured's death, the division
         of the death proceeds of the Policy is as follows:

         A.       The Participant,  if alive, or if the Participant  predeceased
                  the Insured, the Participant's  beneficiary(ies) designated in
                  accordance  with Paragraph III, shall be entitled to an amount
                  equal to the lesser of one hundred thousand dollars ($100,000)
                  or one  hundred  percent  (100%) of the net at risk  insurance
                  portion of the proceeds.  The net at risk insurance portion is
                  the total proceeds less the cash value of the Policy.

         B.       The Bank shall be entitled to the remainder of such proceeds.

         C.       The  Bank  and  the   Participant  (or   beneficiary[ies]   or
                  assignee[s])  shall  share in any  interest  due on the  death
                  proceeds  on a pro rata basis in the ratio  that the  proceeds
                  due the Bank and the Participant,  respectively,  bears to the
                  total proceeds, excluding any such interest.

VII.     DIVISION OF CASH SURRENDER VALUE

         The Bank  shall at all  times be  entitled  to an  amount  equal to the
         Policy's  cash value,  as that term is defined in the Policy,  less any
         Policy  loans  and  unpaid  interest  or  cash  withdrawals  previously
         incurred by the Bank and any applicable Policy surrender charges.  Such
         cash  value  shall be  determined  as of the date of  surrender  of the
         Policy or death of the Insured as the case may be.




                                      124
<PAGE>




VIII.    PREMIUM WAIVER

         If the Policy  contains a premium  waiver  provision,  any such  waived
         amounts  shall be  considered  for all  purposes of this  Agreement  as
         having been paid by the Bank.

IX.      RIGHTS OF PARTIES WHERE POLICY ENDOWMENT OR ANNUITY ELECTION EXISTS

         In the event the Policy involves an endowment or annuity  element,  the
         Bank's right and interest in any endowment proceeds or annuity benefits
         shall be determined under the provisions of this Agreement by regarding
         such endowment  proceeds or the commuted value of such annuity benefits
         as the Policy's cash value. Such endowment proceeds or annuity benefits
         shall be treated like death proceeds for the purposes of division under
         this Agreement.

X.       TERMINATION OF AGREEMENT

         This  Agreement  shall  terminate  at the option of the Bank  following
         thirty (30) days written notice to the  Participant  upon the happening
         of any one of the following:

         1.       The  Participant  shall  be in  violation  of  the  terms  and
                  conditions   of  the   Participant's   Director   Supplemental
                  Compensation Agreement effective as of _______, 1998, or

         2.       The Participant shall be discharged from service with the Bank
                  by removal for cause.  The term "removal for cause" shall have
                  the  meaning  given  that term in the  Participant's  Director
                  Supplemental Compensation Agreement effective as of _________,
                  1998.

         Upon  such  termination,   the  Participant  (or   beneficiary[ies]  or
         assignee[s])  shall have a ninety  (90) day option to receive  from the
         Bank an absolute  assignment of the Policy in  consideration  of a cash
         payment to the Bank,  whereupon this Agreement  shall  terminate.  Such
         cash payment shall be the greater of:

         1.       The  Bank's  share of the cash value of the Policy on the date
                  of such assignment, as defined in this Agreement.

         2.       The  amount of the  premiums  which have been paid by the Bank
                  prior to the date of such assignment.

         Should the Participant  (or  beneficiary[ies]  or assignee[s])  fail to
         exercise this option within the prescribed ninety (90) day period,  the
         Participant (or beneficiary[ies] or assignee[s]) agrees that all of his
         or her rights,  interest and claims in the Policy shall terminate as of
         the date of the termination of this Agreement.

         Except  as  provided   above,   this  Agreement  shall  terminate  upon
         distribution of the death benefit proceeds in accordance with Paragraph
         VI above.

XI.      PARTICIPANT'S OR ASSIGNEE'S ASSIGNMENT RIGHTS

         The Participant may not, without the prior written consent of the Bank,
         assign to any individual, trust or other organization, any right, title
         or interest in the Policy nor any rights, options, privileges or duties
         created under this Agreement.

XII.     AGREEMENT BINDING UPON THE PARTIES

         This Agreement  shall be binding upon the Participant and the Bank, and
         their  respective  heirs,  successors,   personal  representatives  and
         assigns, as applicable.



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XIII.    NAMED FIDUCIARY AND PLAN ADMINISTRATOR

         The Bank is hereby  designated the "Named  Fiduciary" until resignation
         or  removal by its Board of  Directors.  As Named  Fiduciary,  the Bank
         shall be responsible for the management, control, and administration of
         this Agreement as established  herein. The Named Fiduciary may allocate
         to  others   certain   aspects  of  the   management   and   operations
         responsibilities  of  this  Agreement,   including  the  employment  of
         advisors  and the  delegation  of any  ministerial  duties to qualified
         individuals.

XIV.     FUNDING POLICY

         The funding Policy for this  Agreement  shall be to maintain the Policy
         in force by paying, when due, all premiums required.

XV.      CLAIM PROCEDURES

         Claim  forms or  claim  information  as to the  subject  Policy  can be
         obtained   by   contacting   The   Benefit    Marketing   Group,   Inc.
         (770-952-1529).  When the  Named  Fiduciary  has a claim  which  may be
         covered under the provisions described in the Policy, it should contact
         the office named above,  and they will either complete a claim form and
         forward it to an authorized representative of the Insurer or advise the
         named Fiduciary what further  requirements  are necessary.  The Insurer
         will  evaluate  and make a  decision  as to  payment.  If the  claim is
         payable, a benefit check will be issued to the Named Fiduciary.

         In the event that a claim is not eligible under the Policy, the Insurer
         will  notify  the  Named  Fiduciary  of  the  denial  pursuant  to  the
         requirements  under the terms of the Policy.  If the Named Fiduciary is
         dissatisfied  with the denial of the claim and  wishes to contest  such
         claim  denial,  it should  contact the office named above and they will
         assist  in  making  inquiry  to  the  Insurer.  All  objections  to the
         Insurer's  actions  should be in writing  and  submitted  to the office
         named above for transmittal to the Insurer.

XVI.     GENDER

         Whenever in this  Agreement  words are used in the  masculine or neuter
         gender, they shall be read and construed as in the masculine,  feminine
         or neuter gender, whenever they should so apply.


XVII.    INSURANCE COMPANY NOT A PARTY TO THIS AGREEMENT

         The  Insurer  shall not be deemed a party to this  Agreement,  but will
         respect the rights of the parties as set forth herein upon receiving an
         executed  copy of this  Agreement.  Payment  or  other  performance  in
         accordance with the Policy provisions shall fully discharge the Insurer
         from any and all liability.


         IN WITNESS WHEREOF,  the Participant and a duly authorized Bank officer
have signed this Agreement as of the above written date.



BANK OF LODI, N.A.

__________________________                  ________________________________
Leon J. Zimmerman
President and Chief
Executive Officer



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                          BENEFICIARY DESIGNATION FORM



Primary Designation:

         Name                                             Relationship

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________



Contingent Designation:

_____________________________            _______________________________________

_____________________________            _______________________________________

_____________________________            _______________________________________




_____________________________           __________, 1998

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