EXHIBIT 4.1


                                BANK OF LOS ALTOS
                             1995 STOCK OPTION PLAN


1.       PURPOSES OF THE PLAN

         The 1995  Stock  Option  Plan  ("Plan")  is  intended  to  promote  the
interests of Bank of Los Altos  ("Corporation")  by  providing a method  whereby
eligible individuals who are responsible for the management, growth or financial
success of the  Corporation  or its  parent or  subsidiary  corporations  may be
offered   incentives  and  rewards  which  will  encourage  them  to  acquire  a
proprietary  interest,  or otherwise increase their proprietary interest, in the
Corporation  and continue to render services to the Corporation or its parent or
subsidiary corporations.

         Options granted  hereunder may be either  "incentive stock options," as
defined in Section 422 of the  Internal  Revenue  Code of 1986,  as amended,  or
"nonstatutory stock options," at the discretion of the Board and as reflected is
the terms of the written option agreement.

2.       ADMINISTRATION OF THE PLAN

         (a)     The Board of Directors  of  the  Corporation   ("Board")  shall
administer  the Plan.  The Board may,  however,  at any time appoint a committee
("Committee")  consisting  of not fewer than three  members and delegate to such
Committee one or more of the administrative  powers allocated to the Board under
the provisions of the Plan,  including  (without  limitation) the power to grant
options under the Plan,  the power to accelerate the  exercisability  of options
granted  under  the  Plan and the  power  to  administer  the  option  surrender
provisions of the Plan.  Members of the  Committee  shall serve for such term as
the Board may  determine  and shall be  subject  to  removal by the Board at any
time.  The Board may also at any time  terminate  the functions of the Committee
and reassume all powers and authority previously delegated to the Committee.  No
person serving as a member of the Board or the Committee shall act on any matter
relating  solely to such  person's  own  interests  under the Plan or any option
thereunder.

         (b)     Any  reference to the Board in one  or more  provisions of  the
Plan shall,  except for the references in Sections 7, 8, 10 and 11(c),  mean the
Committee, if the Committee is at the time responsible for the administration of
either the Plan or those  particular  provisions  of the Plan.  The Board or the
Committee,  as the case may be, is authorized  (subject to the provisions of the
Plan) to establish such rules and regulations as it may deem appropriate for the
proper  administration  of the Plan and to make such  determinations  under, and
issue such  interpretations  of, the Plan and any  outstanding  option as it may
deem  necessary or advisable.  Decisions of the Board or the  Committee,  as the
case may be,  shall be final and  binding on all parties who have an interest in
the Plan or any outstanding options.

3.       ELIGIBILITY FOR OPTION GRANTS

         (a)     The  individuals  who  shall  be eligible  to  receive  options
pursuant  to  the  Plan  shall  be  key  full-time  salaried  employees  of  the
Corporation  or its parent or subsidiary  corporations

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(whether  or not they are  officers  or members of the Board) and members of the
Board (whether or not they are employees).

         (b)     Subject to subsection  (a) above  and to  Section  7 below,  if
applicable, the Board shall have full authority to determine the individuals who
are to be granted  options under the Plan, the number of shares to be covered by
each granted option, whether each such option is to be an incentive stock option
("Incentive  Stock  Option")  under Section 422 of the Internal  Revenue Code of
1986,  as amended  ("Internal  Revenue  Code"),  or a  non-statutory  option not
intended  to meet the  requirements  of Section  422A,  and the time or times at
which  each  such  option is to  become  exercisable.  In no event may the total
number of shares  subject to options  granted to an  optionee  exceed 10% of the
total  outstanding  shares  of the same  class  or  series  of the  Corporation,
determined with application of the ownership attribution rules of Section 424(d)
of the Internal Revenue Code.

         (c)     For the purposes of the Plan,  the terms  "parent  corporation"
and  "subsidiary  corporation"  shall have the  meanings  specified  in Sections
424(e) and (f) of the Internal Revenue Code.

4.       STOCK SUBJECT TO THE PLAN

         (a)     The stock issuable under  the  Plan  shall  be  shares  of  the
Corporation's  authorized  but  unissued or  reacquired  common  stock  ("Common
Stock").  The  aggregate  number of  issuable  shares  shall not exceed  300,000
shares. Should an option be terminated for any reason without being exercised in
whole or in part,  the  shares  subject  to the  portion  of the  option  not so
exercised shall be available for subsequent option grants under the Plan.

         (b)     In the event any change as  made to the Common  Stock  issuable
under the Plan  (whether  by reason of  merger,  consolidation,  reorganization,
recapitalization,  stock dividend,  stock split, combination of shares, exchange
of shares,  or other change in corporate or capital  structure  effected without
receipt of  consideration),  then, unless such change results in the termination
of all outstanding  options pursuant to the provisions of Section 8, the maximum
number  and/or class of shares  issuable  under the Plan shall be  automatically
adjusted to reflect the effect of such  change  upon the  Corporation's  capital
structure, and the Board shall make appropriate adjustments to the number and/or
class of shares  and the  option  price per share of the stock  subject  to each
outstanding  option in order to prevent the dilution or  enlargement of benefits
thereunder.  The adjustments determined by the Board shall be final, binding and
conclusive.

5.       TERMS AND CONDITIONS OF OPTIONS

         (a)     Options granted  pursuant to  the  Plan shall be  authorized by
action of the Board and may be either  Incentive Stock Options or  non-statutory
options.  Individuals  who are not employees of the Corporation or its parent or
subsidiary  corporations may be granted only non-statutory  options. Each option
granted  shall be evidenced by an  instrument  in such form as the Board and the
State Banking  Department  (the  "Department")  shall from time to time approve;
provided,  however,  that each such instrument shall comply with and incorporate
the terms and conditions  specified by the Plan and shall specify  whether it is
intended to be an Incentive Stock

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Option or a non-statutory  option. In the event Section 7 below is applicable as
set forth  therein,  then  options  granted  to  non-employee  directors  of the
Corporation  shall  only be granted  in  accordance  with the terms of Section 7
below.

         (b)     OPTION PRICE.

                 (1)    The option price per shall be fixed by the Board, but in
         no event shall the option price per share be less than 100% of the fair
         market  value of a share  of  Common  Stock  on the date of the  option
         grant.

                 (2)    The  option  price  shall  become  immediately  due upon
         exercise of the option and shall be payable in cash or cash equivalents
         in a form  acceptable to the Board.  In addition,  full payment for the
         purchased  shares  may be  effected  through a  broker-dealer  sale and
         remittance  procedure  pursuant to which the optionee (i) shall provide
         irrevocable  written  instructions  to a designated  brokerage  firm to
         effect  the  immediate  sale of the  purchased  shares and remit to the
         bank,  out of the  sale  proceeds  available  on the  settlement  date,
         sufficient funds to cover the aggregate  exercise price payable for the
         purchased  shares plus all applicable  federal,  state and local income
         and  employment  taxes required to be withheld by the bank by reason of
         such purchase and (ii) shall provide written  directives to the bank to
         deliver the  certificates  for the  purchased  shares  directly to such
         brokerage firm in order to complete the sale transaction.

                 (3)    The fair market  value of a share of Common Stock on any
         relevant date under the Plan shall be determined in accordance with the
         following provisions:

                        (i)    If  Common  Stock  is  not  at the time listed or
                 admitted to trading on any stock  exchange but is traded in the
                 over the counter market (but not on the Nasdaq  National Market
                 System),  the  fair  market  value  shall be the  average  mean
                 between the reported bid price and reported  asked price of one
                 share of Common  Stock for the 10  business  days  prior to the
                 date of grant in the  over-the-counter  market,  as such prices
                 are reported by the National  Association of Securities Dealers
                 through its Nasdaq system or any successor system. If there are
                 no  reported  bid and asked  prices  during such 10 day period,
                 then the mean between the reported bid price and reported asked
                 price on the last  preceding  date for  which  such  quotations
                 exist shall be  determinative  of fair market value.  If Common
                 Stock is traded over the counter on the Nasdaq  National Market
                 System, the fair market value shall be the average mean between
                 the highest and lowest reported sale prices of shares of Common
                 Stock for the five  business days prior to the date of grant as
                 such  prices  are  reported  by  the  National  Association  of
                 Securities Dealers through such system or any successor system.
                 If there is no reported  sale of Common  Stock during such five
                 day  period,  then the mean  between  the  highest  and  lowest
                 reported sale prices on the last  preceding date for which such
                 quotations exist shall be determinative of fair market value.

                        (ii)   If Common Stock is at the time listed or admitted
                 to trading on any stock  exchange,  then the fair market  value
                 shall be the mean between the highest and lowest  reported sale
                 prices of shares of Common Stock on the date in

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                 question on the stock  exchange  determined  by the Board to be
                 the  primary  market  for  Common  Stock,   as  such  price  is
                 officially quoted on the composite tape of transactions on such
                 exchange.  If there is no reported sale of Common Stock on such
                 exchange on the date in  question,  then the fair market  value
                 shall be the mean between the highest and lowest  reported sale
                 prices on the  exchange  on the last  preceding  date for which
                 such quotations exist.

                        (iii)  If Common Stock is at the time neither listed nor
                 admitted  to  trading on any stock  exchange  nor traded in the
                 over-the  counter  market,  then the fair market value shall be
                 determined  by the Board after taking into account such factors
                 as the Board shall deem appropriate.

         (c)     TERM AND  EXERCISE OF OPTIONS.  Each  option granted  under the
Plan shall be  exercisable  at such time or times,  during such period,  and for
such number of shares as shall be  determined  by the Board and set forth in the
instrument  evidencing such option;  provided,  however,  that no option granted
under the Plan  shall  have a term in excess of ten years  from the grant  date.
During the lifetime of the optionee,  each option shall be  exercisable  only by
the optionee and shall not be assignable or  transferable  by the optionee other
than by will or by the laws of descent and distribution.

         (d)     EFFECT OF TERMINATION OF EMPLOYMENT OR DIRECTOR STATUS.

                 (1)    Except as otherwise  provided  in  this  subsection (d),
         should an optionee  cease to be an employee of the  Corporation  or its
         parent or subsidiary  corporations  for any reason (other than death or
         disability) while the holder of one or more outstanding options granted
         to such  optionee  under the Plan,  then such  option or options  shall
         remain  exercisable  for a period of not to exceed ninety (90) days, or
         such shorter  period as is determined by the Board and set forth in the
         option  agreement,  following the date of cessation of employee  status
         (provided  that  under  no  circumstances  shall  any  such  option  be
         exercisable  after the specified  expiration  date of the option term),
         and each such option shall,  during such period, be exercisable only to
         the extent of the number of shares for which the option is  exercisable
         on the date of such cessation of employee  status.  Upon the expiration
         of such period or (if earlier) upon the  expiration of the option term,
         the option shall terminate and cease to be exercisable. In the event of
         the  termination of a non-employee  director  optionee as a director of
         the  Corporation  for any reason prior to the  expiration of the option
         term, then any options granted shall remain exercisable for a period of
         90 days after  termination  (but not later than the  expiration  of the
         term), but only to the extent such options had vested as of the date of
         termination.

                 (2)    In  the  event  such  termination  is  due  to  death or
         disability  of the  optionee,  then the option may be  exercised at any
         time within 12 months following the date of death by optionee's estate,
         heir or legatee or following disability by optionee,  to the extent the
         right to exercise had accrued as of the date of death or disability and
         provided the date of exercise is prior to the date of expiration of the
         option.

                 (3)    If the  optionee's  employment  is  terminated for cause
         (including,  but not limited  to, any  substantial  act of  dishonesty,
         willful   misconduct,   fraud  or  embezzlement

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         or any  unauthorized  disclosure of  confidential  information or trade
         secrets),  then any  outstanding  option granted the optionee under the
         Plan shall terminate and cease to be exercisable  immediately upon such
         termination  of  employment.  In  the  event  of the  termination  of a
         non-employee director optionee as director of the Corporation for cause
         pursuant to  applicable  law because  such  director  has been found of
         unsound  mind by an order of court or convicted of a felony or has been
         found by a court to have  committed  fraudulent  or  dishonest  acts or
         gross  abuse  of  authority  or  discretion   with   reference  to  the
         Corporation,  then any  outstanding  options granted the optionee under
         the Plan shall terminate and cease to be exercisable  immediately  upon
         such termination.

                 (4)    The Board  shall have discretion, exercisable  either at
         the time the option is granted or at the time the optionee's employment
         or  position as director is  terminated,  to  establish  as a provision
         applicable  to the  exercise of one or more options  granted  under the
         Plan  that  during  the  limited  period  of  exercisability  following
         termination of such status as provided in paragraph (1), the option may
         be exercised not only with respect to the number of shares for which it
         is exercisable at the time of the optionee's  termination but also with
         respect to one or more installments of purchasable shares for which the
         option otherwise would have become exercisable had such termination not
         occurred.

         (e)     STOCKHOLDER  RIGHTS.  An option  holder shall  have none of the
rights of a stockholder  with respect to any shares  covered by the option until
such individual shall have exercised the option,  paid the option price and been
issued a stock certificate for the purchased shares.

         (f)     MODIFICATION OF OPTIONS.  The  Board  shall have full power and
authority to modify or waive any or all of the terms, conditions or restrictions
applicable to any outstanding  option,  to the extent not inconsistent  with the
Plan; provided,  however, that no such modification or waiver shall, without the
consent of the option holder, adversely affect the holder's rights thereunder.

6.       INCENTIVE STOCK OPTIONS

         (a)     GENERAL CONDITIONS.  The terms and conditions see forth in this
Section  shall apply to all  Incentive  Stock  Options  granted  under the Plan.
Options that are specifically  designated as  non-statutory  options when issued
under the Plan shall not be subject to such terms and conditions.

         (b)     OPTION PRICE.   The  option  price  per  share  of Common Stock
subject to an Incentive  Stock Option shall in no event be less than 100% of the
fair market value of a share of Common Stock on the date of grant.

         (c)     DOLLAR LIMITATION. To the extent that the aggregate fair market
value  (determined as of the  respective  date or dates of grant) of shares with
respect to which  options that would  otherwise be Incentive  Stock  Options are
exercisable for the first time by any individual  during any calendar year under
the  Plan  (or any  other  plan  of the  Corporation,  a  parent  or  subsidiary
corporation or predecessor  thereof exceeds the sum of $100,000 (or such greater
amount as may be permitted under the Internal  Revenue Code),  whether by reason
of acceleration or otherwise,

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such options shall be treated as options which are not Incentive  Stock Options.
Such  options  shall be taken  unto  account  in the  order in which  they  were
granted.

         (d)     10% SHAREHOLDER. If  an  employee  to  whom an  Incentive Stock
Option is to be granted pursuant to the provisions of the Plan is on the date of
grant the owner of stock (as  determined  under  Section  424(d) of the Internal
Revenue Code) possessing more than 10% of the total combined voting power of all
classes  of stock of the  Corporation  or any one of its  parent  or  subsidiary
corporations,  then the following special  provisions shall be applicable to the
Incentive Stock Option granted to such employee:

                 (1)    The option price per share  of the  Common Stock subject
         to such Incentive  Stock Option shall not be Less than 110% of the fair
         market value of one share of Common Stock on the date of grant.

                 (2)    The option shall not have a term in excess of five years
         from the date of grant.

7.       OPTION TO NON-EMPLOYEE DIRECTORS - SECTION L2G

         In the event,  and at the time,  the  Corporation  or any parent of the
Corporation,  becomes  subject to the  applicable  rules and  regulations of the
Securities and Exchange Act of 1934 and Section 12(g) thereof,  or is subject to
such similar rules and regulations as adopted by the Federal  Deposit  Insurance
Corporation,  then, and only then,  shall the following  provisions of Section 7
apply.

         Notwithstanding  any other term or provision  in this Plan,  members of
the  Board  who are not also  employees  of the  Corporation  or its  parent  or
subsidiary  corporations  shall be eligible to receive  option  grants under the
Plan but any such  options may be granted  only upon the terms set forth in this
Section 7, and other terms of the Plan not  inconsistent  with the terms of this
paragraph. To the extent that any other terms or provisions in the Plan conflict
with the terms of this  Section 7 for such  non-employee  options,  the terms of
this Section 7 shall apply.

         (a)     ELIGIBILITY.   All non-employee directors shall receive options
pursuant to the terms of this Section 7 as of the date of their next election to
the Board of Directors after they have served as a director for not less than 24
months and after  approval of this Plan by the State Banking  Department and the
shareholders of the Corporation.

         (b)     STOCK SUBJECT TO THIS SECTION. The aggregate number of issuable
shares for  non-employee  directors shall not exceed thirty percent (30%) of the
total number of shares authorized for the Plan as set forth in Section 4 subject
to adjustment from time to time in accordance with Section 4(b).

         (c)     TERMS AND CONDITIONS.

                 (1)    NON-STATUTORY.    Non-employee  directors  may  only  be
         granted  non-statutory  options.  Each  option  shall be granted on the
         terms and conditions set forth herein.

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                 (2)    NUMBER OF SHARES.  As of the date of  first  eligibility
         as described in Section 7(a) each such  non-employee  director shall be
         granted  options to acquire  5,000 shares of the  Corporation's  Common
         Stock,  subject to  adjustment  as provided in Section  4(6).  No other
         options shall be granted to any non-employee director.

                 (3)    OPTION  PRICE.  The option price per share shall be l00%
         of the fair market  value of a share of Common  Stock as of the date of
         the option grants.

         (d)     TERM  AND  EXERCISE.    Each  option  granted  to  non-employee
directors  shall vest as to 1,000  shares as of the date of grant,  1,000 shares
one year after date of grant and the final 3,000  shares two years after date of
grant.  Such options may be exercised as to vested  options at any time provided
that all such options  shall have a term of ten years from the date of grant and
any options not  exercised on or before the  expiration  of the term shall lapse
and be of no further  force or effect.  During the lifetime of the  non-employee
director each option granted shall be exercisable  only by such person and shall
not be assignable or transferable other than by will or by intestate succession.

         (e)     TERMINATION OF STATUS AS DIRECTOR.

                 (1)    Except as  otherwise provided  in subsection 7(e)(2), in
         the event of the termination of a non-employee  director  optionee as a
         director of the  Corporation  for any reason prior to the expiration of
         the option term, then any options granted shall remain  exercisable for
         a  period  of 90  days  after  termination  (but  not  later  than  the
         expiration  of the term),  but only to the extent that such options had
         vested as of the date of termination.

                 (2)    In  the  event of  the  termination  of  a  non-employee
         director  optionee  as  a  director  of  the  Corporation  pursuant  to
         applicable  law because such director has been declared of unsound mind
         by an order of court or  convicted  of a felony or has been  found by a
         court to have committed  fraudulent or dishonest acts or gross abuse of
         authority or discretion  with  reference to the  Corporation,  then any
         outstanding options granted the optionee under the Plan shall terminate
         and cease to be exercisable immediately upon such termination.

         (f)     MODIFICATION OF OPTIONS,  AMENDMENT OF THE PLAN.  The Board has
no power or  authority  to  modify  or waive  any of the  terns,  conditions  or
restrictions  applicable to any options  outstanding to non-employee  directors,
nor has it any power or authority  to amend,  modify,  suspend of terminate  any
terms of this  Section 7,  except to the extent  that any such  modification  or
amendment is for the purpose of complying  with changes in the Internal  Revenue
Code of 1986 or changes in ERISA.

         (g)     ACCELERATION.  In the event the Corporation or its stockholders
enter into an agreement to dispose of all or substantially  all of the assets or
outstanding  capital  stock  of  the  Corporation  by  means  of  sale,  merger,
reorganization  or  liquidation,  then each option  outstanding to  non-employee
directors shall become exercisable immediately prior to the consummation of such
sale,  merger,  reorganization or liquidation with respect to the full number of
shares of Common Stock under such option.

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8.       SALE, MERGER, REORGANIZATION OR LIQUIDATTON

         In the event that the  Corporation  or its  stockholders  enter into an
agreement to dispose of all or  substantially  all of the assets or  outstanding
capital stock of the  Corporation by means of sale,  merger,  reorganization  or
liquidation,   then  each  option   outstanding  under  the  Plan  shall  become
exercisable,  immediately  prior  to the  consummation  of  such  sale,  merger,
reorganization  or  liquidation,  with  respect to the full  number of shares of
Common Stock purchasable under such option.  Except as provided in Section 7, no
such acceleration of the exercise date, however, shall occur if the terms of the
agreement  require  as a  prerequisite  for the  consummation  of any such sale,
merger,  reorganization  or liquidation that each such outstanding  option shall
either be assumed by the successor  corporation  or parent thereof or options of
the successor  corporation  comparable to the options granted under the Plan and
to be granted under the Plan are to be granted to each optionee  hereunder.  The
determination  of  such  comparability  shall  be  made  by the  Board,  and its
determination shall be final,  binding and conclusive.  Upon consummation of the
sale, merger,  reorganization or liquidation  contemplated by the agreement, all
outstanding options, whether or not accelerated, shall terminate and cease to be
exercisable,  unless  assumed  pursuant to a written  agreement by the successor
corporation or parent thereof.

9. AMENDMENT OF THE PLAN

         (a)     Except as  provided  in  Section 7,  the Board,  subject to the
approval of the Department shall have complete and exclusive power and authority
to  amend,  modify,  suspend  or  terminate  the  Plan  in any  or all  respects
whatsoever  at  any  time;  provided,   however,   that  no  such  amendment  or
modification  shall,  without the consent of option  holders,  adversely  affect
rights and obligations with respect to options at the time outstanding under the
Plan; and provided,  further,  that the Board shall not, without the approval of
the  Corporation's  stockholders,  (i)  increase  the  maximum  number of shares
issuable under the Plan, except for permissible  adjustments under Section 4(b),
(ii) materially increase the benefits accruing to individuals who participate in
the Plan, or (iii) modify the eligibility  requirements for the grant of options
under the Plan.

         (b)     Notwithstanding the provisions of subsection  (a)  (other  than
those  provisions   which  require   approval  of  certain   amendments  by  the
Corporation's  stockholders),   the  Board,  subject  to  the  approval  of  the
Department,  shall have the right to amend or modify the terms and provisions of
the Plan and of any outstanding  options under the Plan,  except for any options
granted  pursuant  to Section 7, to the extent  necessary  to qualify any or all
options under the Plan for such favorable federal income tax treatment as may be
afforded  incentive stock options under Section 422 of the Internal Revenue Code
and regulations promulgated thereunder.

10. EFFECTIVE DATE AND TERM OF PLAN

         (a)     The Plan shall  become  effective  the day  after the day as of
which  the Plan is  approved  by the  Superintendent  of  Banks of the  State of
California, but no option granted under the Plan shall become exercisable unless
the Plan shall have been approved by the stockholders of the Corporation holding
not less  than a  majority  of the  voting  power of the  Corporation,  and by a
majority of the disinterested  shares,  within twelve (l2) months after the date
the Plan is  adopted by the Board.  Subject  to such  limitation,  the Board may
grant  options  under  the Plan at

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any time on or after the  effective  date and before  the date fixed  herein for
termination of the Plan.

         (b)     Unless  the  Plan  is  sooner  terminated  in  accordance  with
Section  8, no  options  shall be  granted  after the  earlier  of (i) the tenth
anniversary  of the date of the  adoption  of the Plan by the  Board or (ii) the
date on which all shares  available for issuance  under the Plan shall have been
issued pursuant to the exercise of options granted hereunder.

         (c)     Options may be granted  under  this  Plan to purchase shares of
Common Stock in excess of the number of shares then available for issuance under
the Plan,  provided (i) an  amendment  to increase the maximum  number of shares
issuable  under the Plan is adopted by the Board prior to the  initial  grant of
any such option and is thereafter  submitted to the  Corporation's  stockholders
for  approval and (ii) each option so granted is not to become  exercisable,  in
whole  or in part,  at any  time  prior  to the  obtaining  of such  stockholder
approval.

11. USE OF PROCEEDS

         The cash proceeds  received by the Corporation  from the sale of shares
pursuant to options  granted under the Plan shall be used for general  corporate
purposes.

12. WITHHOLDING

         (a)     In the event  that an  optionee  is  required  to  pay  to  the
Corporation  an amount  with  respect  to  federal,  state or local  income  and
employment tax  withholding  obligations  in connection  with the exercise of an
option,  the Board may,  in its  discretion  and subject to such rules as it may
adopt,  permit the optionee to satisfy the obligations,  in whole or in part, by
either (i) making an  irrevocable  election that a portion of the total value of
the shares of Common Stock  subject to the option be paid in the form of cash in
lieu of the  issuance of Common  Stock and that such cash  payment be applied to
the  satisfaction  of the  withholding  obligations  or  (ii)  tendering  shares
previously  held  by  the  optionee  in a  number  sufficient  to  satisfy  such
obligations.

         (b)     If  the  optionee  is  subject to the trading  restrictions  of
Section 16(b) of the Securities Exchange Act of 1934, as amended ("1934 Act") at
the time of exercise of an option,  any election under this  subparagraph (b) by
such optionee shall be made only in accordance with the applicable  requirements
of FDIC Regulation 335.411.

         (c)     The  Corporation's  obligation  to  deliver  shares  upon   the
exercise or surrender of any option  granted  under the Plan shall be subject to
the option  holder's  satisfaction  of all applicable  federal,  state and local
income and employment tax withholding requirements.

13. NO EMPLOYMENT OR SERVICE OBLIGATION

         Neither the action of the Corporation in establishing the Plan, nor any
action taken by the Board or the Committee  hereunder,  nor any provision of the
Plan itself shall be construed so as to grant any individual the right to remain
in the employ or service of the Corporation or its parent  corporation or any of
its  subsidiaries for any period of specific  duration,  and the

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Corporation (or its parent corporation or any subsidiary  retaining the services
of such individual) may terminate such individual's  service at any time and for
any reason, with or without cause.

14.      REGULATORY AND SHAREHOLDER APPROVALS

         The  implementation  of the Plan, the granting of any option hereunder,
and the  issuance  of stock upon the  exercise or  surrender  of any such option
shall be subject to the  Corporation's  procurement of all approvals and permits
required  by  regulatory  authorities  having  jurisdiction  over the Plan,  the
options granted under it and the stock issued pursuant to it.

         Continuance   of  the  Plan  shall  be  subject  to   approval  by  the
shareholders  of the Bank within  twelve (12) months  after the date the Plan is
adopted.  Such shareholder approval shall consist of approval by the affirmative
votes of the holders of a majority of the  securities  of the Bank  present,  or
represented,  and  entitled to vote at a meeting  duly held in  accordance  with
applicable law and by a majority of the  disinterested  shares  represented  and
voting at the meeting, or by the written consent of the holders of a majority of
the outstanding securities of the Bank entitled to vote and by a majority of the
disinterested shares.

15.      GOVERNING LAW

         To the extent not  otherwise  governed by federal law, the Plan and its
implementation shall be governed by and construed in accordance with the laws of
the State of California.




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