AMENDMENT NO. 1

                             TO EMPLOYMENT AGREEMENT

THIS AMENDMENT to the Employment  Agreement (the "Agreement") entered into as of
March 27, 1996 by and between SJNB Financial Corp. and San Jose National Bank, a
national banking  association  ("Employer"),  and James R. Kenny ("Employee") is
made and entered into effective October 6, 2000.

                                 RECITALS

WHEREAS,  Employer and Employee  have entered into the  Agreement  governing the
employment of Employee and now wish to amend the Agreement;

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

1.        Paragraph 13(c) shall be amended in its entirety to read as follows:

          "Personal  Insurance.  Employer  shall provide during the term of this
          Agreement,  at Employer's sole cost, a policy or policies of term life
          insurance coverage in the amount of Two Hundred Fifty Thousand Dollars
          ($250,000)  and group  life,  health  (including  medical,  dental and
          hospitalization),  accident  and  disability  insurance  coverage  for
          Employee  and his  dependents  either  through a policy or policies of
          standard  coverage  provided  by an insurer or  insurers  selected  by
          Employer  in its sole  discretion.  In the event of a  termination  of
          Employee's  employment  pursuant  to  paragraph  16(b)  or  16(e),  or
          automatic  termination  based upon  paragraph  16(a)(1),  (4), (7), or
          (12)(to the extent of Employer's  breach),  Employer shall continue to
          provide for a period of thirty-six  (36) months,  at  Employer's  sole
          cost,  the  above-described  policy or policies of term life insurance
          coverage and group life,  health,  accident and  disability  insurance
          coverage for Employee and his dependents, to the extent such insurance
          coverage is available at a cost to Employer  comparable to the cost to
          provide  such  coverage  to an  active  employee.  If  such  insurance
          coverage is not  available  at a  comparable  cost to  Employer,  then
          Employer  shall pay to  Employee  a  lump-sum  amount in cash equal to
          three times the total annual premiums paid by Employer to provide such
          insurance  coverage  to  Employee  in the  final  year  of  Employee's
          employment by Employer."

2.        Subparagraph (d) of Paragraph 13 shall be added to read as follows:

          "(d)  Outplacement   Services.  In  the  event  of  a  termination  of
          Employee's  employment  pursuant  to  paragraph  16(b)  or  16(e),  or
          automatic  termination  based upon  paragraph  16(a)(1),  (4), (7), or
          (12)(to the extent of Employer's breach), Employer shall provide for a
          period  of  thirty-six   (36)  months,   at   Employer's   sole  cost,
          outplacement  services  to  the  Employee  to  the  extent  reasonably
          required   for  the  Employee  to  obtain   substantially   comparable
          employment;  provided,  however, that such outplacement services shall
          not involve an  expenditure by Employer in excess of $5,000 per annum;
          and  provided,   further,   however,   that  after  the  date  of  his
          termination,   Employee   shall  use  his  best   efforts   to  obtain
          substantially comparable employment."

3.        The   first   sentence  of  subparagraph 16(d) shall be amended in its
          entirety to read as follows:

          "In the event of termination by Employer  pursuant to paragraph  16(b)
          or automatic  termination based upon paragraph  16(a)(1),  (4), (7) or
          (12)(to the extent of Employer's  breach) of this Agreement,  Employee
          or his designated  beneficiary  shall be entitled to receive severance
          pay  at  Employee's   rate  of  salary   immediately   preceding  such
          termination  equal to (i) twenty-four  (24) months' salary,  plus (ii)
          two (2) times the average  annual bonus paid to Employee for the three
          (3)  years  prior  to the date of such  termination  (in  addition  to
          incentive  compensation  or  bonus  payments  due  Employee,  if any),
          payable in lump sum."

4.        The  first two paragraphs of Paragraph 16(e) shall be amended in their
          entirety to read as follows:

          "In the event of a "change in control" as defined  herein and within a
          period of two (2)  years  following  consummation  of such a change in
          control (i)  Employee's  employment  is  terminated;  or (ii)  without
          Employee's  consent there occurs (A) any adverse  change in the nature
          and scope of Employee's position, responsibilities,  duties, salary or
          benefits,  or (B) any change in Employee's location of employment from
          within  Santa  Clara  County,  California,  or  (C)  any  event  which
          reasonably   constitutes   a  demotion,   significant   diminution  or
          constructive  termination  (by resignation or otherwise) of Employee's
          employment,  then  Employee  shall be  entitled to the  following  (in
          addition to any bonus or incentive  compensation payments due Employee
          or any benefits which Employee is otherwise entitled to hereunder):

          (x)  Severance  pay   in   an  amount  equal  to (I)  three  (3) times
               Employee's  annual salary  immediately  preceding  such change in
               control,  plus (II) three (3) times the average annual bonus paid
               to  Employee  for the three  (3) years  prior to the date of such
               termination  as a result  of a change  in  control,  such  amount
               payable in a lump sum in cash;

          (y)  An  amount  equal  to   the  product  of  (I)   a  fraction,  the
               numerator  of which is the number of days in the  fiscal  year in
               which  the  date  of  termination  occurs  through  such  date of
               termination,  and the  denominator  of which is 365, and (II) the
               targeted  amount of the  Employee's  annual bonus for the year in
               which the  termination  as a result of a change in control occurs
               (or, if such target  bonus has not been  established,  Employee's
               bonus for the prior year),  such amount  payable in a lump sum in
               cash; and

          (z)  All    unvested    and  unexercised  stock   options  granted  to
               Employee  pursuant  to  Employer's  stock  option  plan(s)  shall
               immediately vest and become exercisable.

          Notwithstanding  anything in this  Agreement to the  contrary,  and in
          particular  this Section 16(e) hereof,  if any payment made under this
          Agreement is a "golden parachute  payment" as defined in Section 28(k)
          of the Federal Deposit  Insurance Act (12 U.S.C.  section 1828(k)) and
          Part 359 of the Rules and Regulations of the Federal Deposit Insurance
          Corporation   (collectively,   the  "FDIC   Rules")  or  is  otherwise
          prohibited,  restricted or subject to the prior  approval 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 Employer,  no payment shall be made  hereunder  without  complying
          with said FDIC Rules."

5.        A new Paragraph 27 shall be added to read as follows:

              "27.     Certain Additional Payments by Employer.
                       ---------------------------------------

              (a)   In  the  event it  shall  be determined  that any payment or
                    distribution  by  Employer to or for the benefit of Employee
                    (whether  paid or payable or  distributed  or  distributable
                    pursuant to the terms of this  Agreement or  otherwise,  but
                    determined   without  regard  to  any  additional   payments
                    required  under  this  Section  27) (a  "Payment")  would be
                    subject  to the excise  tax  imposed by Section  4999 of the
                    Internal  Revenue  Code of 1986,  as amended (the "Code") or
                    any  interest or  penalties  are  incurred by Employee  with
                    respect to such excise tax (such excise tax,  together  with
                    any   such   interest   and   penalties,   are   hereinafter
                    collectively referred to as the "Excise Tax"), then Employee
                    shall be  entitled  to  receive  an  additional  payment  (a
                    "Gross-Up  Payment") in an amount such that after payment by
                    Employee of all taxes  (including  any interest or penalties
                    imposed  with  respect to such  taxes),  including,  without
                    limitation, any income taxes (and any interest and penalties
                    imposed  with  respect  thereto) and Excise Tax imposed upon
                    the  Gross-Up  Payment,  Employee  retains  an amount of the
                    Gross-Up  Payment  equal to the Excise Tax imposed  upon the
                    Payments.

               (b)  Subject    to    the   provisions  of  Section  27(c),   all
                    determinations  required  to be made under this  Section 27,
                    including  whether  and when a Gross-Up  Payment is required
                    and the amount of such Gross-Up  Payment and the assumptions
                    to be utilized in arriving at such  determination,  shall be
                    made by KPMG LLP, or such other certified public  accounting
                    firm reasonably  acceptable to Employer as may be designated
                    by Employee  (the  "Accounting  Firm")  which shall  provide
                    detailed  supporting   calculations  both  to  Employer  and
                    Employee  within 15  business  days of the receipt of notice
                    from Employee that there has been a Payment, or such earlier
                    time as is requested  by Employer.  All fees and expenses of
                    the Accounting  Firm shall be borne solely by Employer.  Any
                    Gross-Up Payment, as determined pursuant to this Section 27,
                    shall be paid by Employer  to  Employee  within five days of
                    the later of (i) the due date for the  payment of any Excise
                    Tax,  and  (ii)  the  receipt  of  the   Accounting   Firm's
                    determination.  Any  determination  by the  Accounting  Firm
                    shall be binding upon Employer and Employee.  As a result of
                    the  uncertainty  in the  application of Section 4999 of the
                    Code  at  the  time  of  the  initial  determination  by the
                    Accounting  Firm  hereunder,  it is possible  that  Gross-Up
                    Payments  which will not have been made by  Employer  should
                    have  been  made   ("Underpayment"),   consistent  with  the
                    calculations  required  to be made  hereunder.  In the event
                    that  Employer  exhausts  its  remedies  pursuant to Section
                    27(c) and Employee  thereafter is required to make a payment
                    of any Excise Tax, the Accounting  Firm shall  determine the
                    amount of the  Underpayment  that has  occurred and any such
                    Underpayment  shall be  promptly  paid by Employer to or for
                    the benefit of Employee.

               (c)  Employee  shall   notify  Employer  in writing  of any claim
                    by the Internal Revenue Service ("IRS") that, if successful,
                    would  require  the  payment  by  Employer  of the  Gross-Up
                    Payment.  Such  notification  shall  be  given  as  soon  as
                    practicable  but no  later  than  ten  business  days  after
                    Employee  is  informed  in  writing  of such claim and shall
                    apprise Employer of the nature of such claim and the date on
                    which such claim is requested to be paid. Employee shall not
                    pay such claim prior to the  expiration of the 30-day period
                    following the date on which it gives such notice to Employer
                    (or such shorter  period ending on the date that any payment
                    of taxes with  respect to such  claim is due).  If  Employer
                    notifies Employee in writing prior to the expiration of such
                    period  that it  desires  to contest  such  claim,  Employee
                    shall:   (i)  give  Employer  any   information   reasonably
                    requested by Employer relating to such claim, (ii) take such
                    action in connection  with contesting such claim as Employer
                    shall  reasonably  request  in  writing  from  time to time,
                    including,     without    limitation,     accepting    legal
                    representation  with  respect to such  claim by an  attorney
                    reasonably  selected  by  Employer,   (iii)  cooperate  with
                    Employer in good faith in order  effectively to contest such
                    claim,  and  (iv)  permit  Employer  to  participate  in any
                    proceedings relating to such claim; provided,  however, that
                    Employer  shall bear and pay directly all costs and expenses
                    (including  additional  interest and penalties)  incurred in
                    connection  with such contest and shall  indemnify  and hold
                    Employee harmless, on an after-tax basis, for any Excise Tax
                    or income tax (including interest and penalties with respect
                    thereto)  imposed  as a result  of such  representation  and
                    payment of costs and  expenses.  Without  limitation  on the
                    foregoing  provisions of this Section 27(c),  Employer shall
                    control  all  proceedings  taken  in  connection  with  such
                    contest and, at its sole option, may pursue or forgo any and
                    all  administrative  appeals,   proceedings,   hearings  and
                    conferences  with the  taxing  authority  in respect of such
                    claim and may, at its sole option, either direct Employee to
                    pay the tax  claimed  and sue for a refund  or  contest  the
                    claim in any  permissible  manner,  and  Employee  agrees to
                    prosecute  such  contest  to  a  determination   before  any
                    administrative  tribunal, in a court of initial jurisdiction
                    and in one or  more  appellate  courts,  as  Employer  shall
                    determine;  provided,  however,  that  if  Employer  directs
                    Employee  to pay such  claim and sue for a refund,  Employer
                    shall advance the amount of such payment to Employee,  on an
                    interest-free  basis and shall  indemnify  and hold Employee
                    harmless,  on an  after-tax  basis,  from any  Excise Tax or
                    income tax  (including  interest or  penalties  with respect
                    thereto)  imposed  with  respect  to  such  advance  or with
                    respect to any imputed  income with respect to such advance;
                    and further  provided  that any  extension of the statute of
                    limitations  relating  to payment  of taxes for the  taxable
                    year of Employee with respect to which such contested amount
                    is  claimed to be due is  limited  solely to such  contested
                    amount. Furthermore, Employer's control of the contest shall
                    be  limited  to  issues  with  respect  to which a  Gross-Up
                    Payment  would be payable  hereunder  and Employee  shall be
                    entitled to settle or contest, as the case may be, any other
                    issue raised by the IRS or any other taxing authority.

                (d) If,  after  the  receipt  by Employee of an amount  advanced
                    by Employer  pursuant  to Section  27(c),  Employee  becomes
                    entitled to receive  any refund with  respect to such claim,
                    Employee  shall  (subject to Employer's  complying  with the
                    requirements  of Section 27(c)) promptly pay to Employer the
                    amount of such refund  (together  with any interest  paid or
                    credited thereon after taxes applicable thereto).  If, after
                    the receipt by  Employee  of an amount  advanced by Employer
                    pursuant  to Section  27(c),  a  determination  is made that
                    Employee shall not be entitled to any refund with respect to
                    such claim and Employer does not notify  Employee in writing
                    of its intent to contest  such denial of refund prior to the
                    expiration  of 30 days after such  determination,  then such
                    advance  shall be  forgiven  and shall not be required to be
                    repaid and the amount of such advance shall  offset,  to the
                    extent thereof,  the amount of Gross-Up  Payment required to
                    be paid."

6.       Except as  set  forth  herein, the Agreement shall remain in full force
         and effect.

IN WITNESS WHEREOF,  the parties have executed this Amendment as of the date set
forth above.

EMPLOYER                                     EMPLOYEE

SAN JOSE NATIONAL BANK



By s/Robert A. Archer                        By  s/James R. Kenny
   ------------------                            ----------------
                                                  James R. Kenny