SARATOGA BANCORP

                             1982 STOCK OPTION PLAN

                                      INDEX

ARTICLE                                                               COMMENCING
NO.        DESCRIPTION                                                   ON PAGE

1.         PURPOSE                                                             2
2.         ADMINISTRATION                                                      2
3.         PARTICIPANTS                                                        2
4.         THE SHARES                                                          3
5.         GRANT, TERMS AND CONDITIONS OF OPTIONS                              3
6.         ADJUSTMENT OF AND CHANGES IN THE SHARES                             7
7.         LISTING OR QUALIFICATION OF SHARES                                  8
8.         BINDING EFFECT OF CONDITIONS                                        8
9.         AMENDMENT AND TERMINATION OF THE PLAN                               9
10.        EFFECTIVENESS OF THE PLAN                                           9
11.        PRIVILEGES OF STOCK OWNERSHIP; SECURITIES LAW COMPLIANCE;           9
           NOTICE OF SALE
12.        INDEMNIFICATION                                                    10
13.        INFORMATION TO OPTIONEES                                           10



<PAGE>

                                SARATOGA BANCORP

                             1982 STOCK OPTION PLAN

1.   PURPOSE.

     The purpose of this 1982 Stock Option Plan (the "Plan") of Saratoga Bancorp
(hereinafter  referred  to  individually  as  the  "Holding  Company")  and  its
Affiliates  (Saratoga  Bancorp and its  Affiliates are  hereinafter  referred to
collectively as "Saratoga"),  is to secure for Saratoga and its stockholders the
benefits of the  incentive  inherent  in the  ownership  of Common  Stock of the
Holding  Company by those key  full-time  employees,  officers and  directors of
Saratoga  who will share  responsibility  with  management  of Saratoga  for its
future growth and success.

     The word  "Affiliate," as used in this Plan,  means any bank or corporation
in an  unbroken  chain of banks or  corporations  beginning  or ending  with the
Holding Company,  if at the time of the granting of an option, each such bank or
corporation  other  than the last in that  chain  owns  stock  possessing  fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other banks or corporations in the chain.

2.   ADMINISTRATION.

     The following provisions shall govern the administration of the Plan:

          (a) The Plan  shall be  administered  by a  committee  of the Board of
     Directors of the Holding Company appointed for this purpose by the Board of
     Directors (the "Committee")  composed of not less than three (3) directors.
     The Board of  Directors  may from time to time remove  members  from or add
     members to the  Committee.  Vacancies on the Committee,  howsoever  caused,
     shall be filled by the Board of  Directors.  The Board of  Directors  shall
     designate a Chairman  and  Vice-Chairman  of the  Committee  from among the
     Committee members.  Acts of the Committee (i) at a meeting,  held at a time
     and place and in accordance with rules adopted by the Committee, at which a
     quorum of the  Committee  is present  and  acting,  or (ii)  reduced to and
     approved in writing by a majority of the members of the Committee, shall be
     the valid acts of the Committee.

          (b) The Holding  Company  shall effect the grant of options  under the
     Plan by  execution  of  instruments  in writing in a form  approved  by the
     Committee.  Subject to the express terms and conditions of the Plan and the
     terms of any option  outstanding  under the Plan, the Committee  shall have
     full power to construe the Plan and the terms of any option  granted  under
     the Plan, to prescribe, amend and rescind rules and regulations relating to
     the Plan or such options and to make all other determinations  necessary or
     advisable for the Plan's administration, including, without limitation, the
     power to (i)  determine  which persons meet the  requirements  of Section 3
     hereof for  selection  as  participants  in the Plan and which  persons are
     considered to be "employees"  for purposes of the Internal  Revenue Code of
     1986, as amended (the "Code"), and therefore eligible to, receive incentive
     stock  options  under  the Plan;  (ii)  determine  to whom of the  eligible
     persons,  if any,  options shall be granted under the Plan; (iii) establish
     the terms and  conditions  required  or  permitted  to be included in every
     option  agreement  or any  amendments  thereto,  and except as set forth in
     Article  9,  include  terms  and  conditions  which  modify or amend or are
     inconsistent  with the  terms of this  Plan as  necessary  to carry out the
     purposes  of  this  Plan  and  determine  whether  options  to  be  granted
     thereunder  shall be "incentive  stock options," as defined in the Code, or
     "non-qualified  stock  options;"  (iv)  specify  the number of shares to be
     covered by each option;  (v) in the event a  particular  option is to be an
     incentive  stock  option,   determine  and   incorporate   such  terms  and
     provisions,  as well as  amendments  thereto,  as shall be  required in the
     judgment of the  Committee,  so as to provide for or conform such option to
     any  change in any law,  regulation,  ruling or  interpretation  applicable
     thereto; (vi) determine the fair market value of Holding Company stock used
     by a Participant to exercise options  pursuant to Section 5(b) hereof;  and
     (vi) to make all other  determinations  deemed  necessary or advisable  for
     administering  the Plan.  The  Committee's  determination  on the foregoing
     matters shall be conclusive.

          (c) No member of the Stock Option  Committee,  while  serving as such,
     shall be, or during the one-year  period  prior to such service  shall have
     been,  eligible  to  participate  in the Plan or in any  other  such  stock
     option,  stock  appreciation  right,  stock  bonus or other  stock  plan of
     Saratoga.

3.   PARTICIPANTS.

     Participants  in the  Plan  shall  be  those  directors,  officers  and key
full-time  salaried  employees  of Saratoga to whom  options may be granted from
time to time by the Committee.

4.   THE SHARES.

     The shares of stock initially  subject to options  authorized to be granted
under the Plan shall consist of three hundred  fifteen  thousand,  seven hundred
forty  (315,740)  shares of Common Stock,  no par value (the  "Shares"),  of the
Holding  Company,  or the number and kind of shares of stock or other securities
which shall be  substituted  for such  shares or to which such  shares  shall be
adjusted as provided  in Section 6. The Shares  subject to the,  Plan may be set
aside out of the authorized  but unissued  shares of Common Stock of the Holding
Company  not  reserved  for any other  purpose or out of shares of Common  Stock
subject to an option which,  for any reason,  terminates  unexercised  as to the
Shares.

5.   GRANT, TERMS AND CONDITIONS OF OPTIONS.

     Options may be granted at any time prior to the  termination of the Plan to
directors, officers and key full-time salaried employees of Saratoga who, in the
judgment  of  the  Committee,  contribute  to  the  successful  conduct  of  the
Saratoga's  operation  through  their  judgment,  interest,  ability and special
efforts; provided,  however, that: (i) an eligible director, officer or employee
shall  not  participate  in the  granting  of his or her own  option;  (ii)  the
aggregate fair market value  (determined as of the time an option is granted) of
the Common Stock for which any employee may be granted  incentive  stock options
in any calendar year prior to 1987 under this Plan and any other incentive stock
option  plans (which  qualify  under  section  422A of the Code,  as amended) of
Saratoga shall not exceed  $100,000 plus any unused limit carryover to such year
as such term is defined in section  422A(c)(4)  of the Code,  and the  aggregate
fair market  value of the Common  Stock with  respect to which  incentive  stock
options are  exercisable  for the first time by any employee during any calendar
year beginning  after 1986 under this Plan and any other  incentive stock option
plans  (which  qualify  under  section  422A of the Code) of Saratoga  shall not
exceed $100,000;  (iii) except in the case of termination by death or disability
and as set forth in Section 5(c) below,  the granted option must be exercised by
optionee no later than three (3) months after any termination of employment with
Saratoga and said employment must have been continuous since the granting of the
option.

     In addition,  options granted  pursuant to the Plan shall be subject to the
following terms and conditions:

     (a) Option  Price.  The purchase  price under each option shall be not less
than one hundred  percent  (100%) of the fair market value of the Shares subject
thereto on the date the option is granted,  as such value is  determined  by the
Committee. The fair market value of such stock shall be determined in accordance
with any reasonable valuation method. If, however, any eligible Participant owns
stock of the  Holding  Company  possessing  more than 10% of the total  combined
voting  power of all  classes of stock of the  Holding  Company or of any of its
Affiliates, the option price of any option granted to such optionee shall be not
less than 110% of such fair market value.

     (b) Duration and Exercise of Options.  Subject to all other  provisions  of
this Plan,  each option  shall be  exercisable  for the full number of shares of
Common Stock subject thereto,  or any part thereof,  in such installments and at
such  intervals as the Board or the  Committee  may  determine in granting  such
options.  No incentive  stock option  granted  prior to January 1, 1987 shall be
exercisable  while there is outstanding  any other option granted under the Plan
or any other  incentive  stock option plans (which qualify under Section 422A of
the Code) of the Holding  Company or any of its  Affiliates to the same employee
at an earlier date. Each option shall terminate and expire,  and shall no longer
be subject to exercise, as the Board or Committee may determine in granting such
option,  but in no  event  later  than ten (10)  years  after  the date of grant
thereof,  provided,  however,  that any option granted to a Participant who owns
more than 10% of the total combined  voting power of all classes of stock of the
Holding  Company or of its affiliates  shall  terminate and expire no later than
five (5) years after the date of grant thereof. In no event shall an option vest
at a rate of less than twenty  percent  (20%) per year during the first five (5)
years of the option term.  The Board or Committee  may, in its sole  discretion,
accelerate the time of exercise of any option. The termination of the Plan shall
not alter the maximum  duration,  the vesting  provisions,  or any other term or
condition of any option granted prior to the termination of the plan.

     To the extent the right to purchase Shares has vested under a Participant's
stock option agreement, options may be exercised from time to time by delivering
payment in full at the Option Price for the number of shares being  purchased by
either: (a) cash, certified check, official Bank check or the equivalent thereof
acceptable to the Holding  Company  equal to the Option Price;  or (b) shares of
Holding  Company stock with a fair market value as of the date of exercise equal
to the Option Price,  or (c) shares of Holding  Company stock with a fair market
value as of the date of exercise  less than the full amount of the Option  Price
plus  cash,  certified  check,  official  Bank check or the  equivalent  thereof
acceptable to the Holding  Company  equal to the remaining  amount of the Option
Price;  provided,  however,  that an optionee may only deliver shares of Holding
Company stock in full or partial payment of the Option Price under clause (b) or
(c) above if such  shares  have  been  owned by such  optionee  for at least six
months.  Such payment shall be accompanied by written notice to the Secretary of
the Holding  Company  identifying the option or part thereof being exercised and
specifying the number of Shares for which payment is being tendered. The Holding
Company  shall deliver to the optionee,  which  delivery  shall be not less than
fifteen  (15) days and not more than  thirty  (30) days after the giving of such
notice,  without transfer or issue tax to the optionee (or other person entitled
to exercise the option) at the principal office of the Holding Company,  or such
other place as shall be mutually  acceptable,  a certificate or certificates for
such  Shares  dated  the date the  options  were  validly  exercised;  provided,
however,  that the time of such delivery may be postponed by the Holding Company
for such period as may be required  for it with  reasonable  diligence to comply
with any  requirements of law. If an option covers  incentive and  non-qualified
stock options,  separate  stock  certificates  shall be issued;  one or more for
stock acquired upon exercise of the incentive  stock options and one or more for
the stock  acquired upon exercise of the  non-qualified  stock  options.  If the
option  price is  satisfied  in whole or in part by delivery of Holding  Company
stock,  separate stock  certificates shall be issued, one or more for the number
of shares of stock  received  equal to the number of shares of  Holding  Company
stock  delivered and one or more for the  remainder of the shares  received upon
the exercise.

     The Holding  Company shall have the right,  upon the exercise of an option,
to deduct any sums from the wages,  salary, bonus and other compensation paid by
the Holding  Company to the optionee  that are required to be withheld  upon the
taxable  income,  if any,  recognized  by the  optionee in  connection  with the
exercise in whole or in part of any option or the sale of Common Stock issued to
the optionee upon exercise of the option.  This withholding of tax shall be made
from the Holding Company's concurrent or next payment of wages, salary, bonus or
other  income to the  optionee  or by  payment  to the  Holding  Company  by the
optionee  of the  required  withholding  tax,  as the  Board  or  Committee  may
determine.  The payment of withholding  tax by the optionee shall be in the form
of cash or any other form of lawful  consideration  that the Board or  Committee
determines to be appropriate. Subject to the approval of the Board or Committee,
an optionee may make a withholding  election to pay such tax by the  withholding
of shares from the total number of shares  deliverable  pursuant to the exercise
of the option or by delivering a sufficient number of previously acquired shares
of Holding  Company  Common Stock,  which have been held by such optionee for at
least six months, to the Holding Company. In the case of election by a member of
the Board or an officer of the Holding  Company,  the  election  must be made at
least 6 months  after the grant of the  option  and  either (a) 6 months or more
prior to the date the option  exercise  becomes taxable or (b) during the window
period  beginning  on the  third  business  day  following  the  release  of the
quarterly  earnings  and  ending on the  earlier  of the  twelfth  business  day
following the date of such release or the date the exercise becomes taxable. The
value of shares  withheld or  delivered  shall be the fair market  value of such
shares on the date the exercise becomes taxable.

     (c)  Termination  of  Employment  or Officer or Director  Status.  Upon the
termination  of an  optionee's  status as an  employee,  officer or  director of
Saratoga,  his or her rights to  exercise  an option  then held shall be only as
follows:

     DEATH OR DISABILITY: If an optionee's employment or status as an officer or
     director  is  terminated  by death or  disability,  such  optionee  or such
     optionee's qualified  representative (in the event of the optionee's mental
     disability)  or the  optionee's  estate (in the event of optionee's  death)
     shall have the right for a period of twelve (12) months  following the date
     of such  death or  disability  to  exercise  the  option to the  extent the
     optionee was entitled to exercise such option on the date of the optionee's
     death or  disability,  provided  that the actual  date of exercise is in no
     event after the expiration of the term of the option.

     Disability, shall be determined under Section 422A of the Code in effect at
the date of such disability.

     An optionee's  "estate" shall mean the optionee's legal  representative  or
any  person  who  acquires  the  right to  exercise  an  option by reason of the
optionee's death.

     CAUSE:  If an employee,  officer or director is  determined by the Board of
     Directors to have  committed  an act of  embezzlement,  fraud,  dishonesty,
     breach of fiduciary duty to Saratoga,  or to have deliberately  disregarded
     the rules of Saratoga which resulted in loss, damage or injury to Saratoga,
     or if an optionee makes any unauthorized  disclosure of .any of the secrets
     or confidential information of Saratoga,  induces any client or customer of
     Saratoga to break any contract  with  Saratoga or induces any principal for
     whom Saratoga acts as agent to terminate such agency relations,  or engages
     in any conduct which constitutes unfair competition with Saratoga, or if an
     optionee is removed  from any office of  Saratoga  by the  Federal  Deposit
     Insurance  Corporation or any other bank regulatory agency, the optionee or
     the optionee's estate shall have the right for a period of thirty (30) days
     following the date of such termination to exercise the option to the extent
     the  optionee  was  entitled  to  exercise  such  option  on  the  date  of
     termination  of  employment  or officer or director  status,  provided  the
     actual date of exercise is in no event after the  expiration of the term of
     the option.  The option shall so terminate whether or not after termination
     of  employment  or officer or  director  status the  optionee  may  receive
     payment  from  Saratoga for vacation  pay, for services  rendered  prior to
     termination,  for services for the day on which termination  occurred,  for
     salary  in  lieu  of  notice,  or  for  other  benefits.   In  making  such
     determination,  the Board of Directors  shall act fairly and shall give the
     optionee an opportunity to appear and be heard at a hearing before the full
     Board of Directors and present evidence on the optionee's  behalf.  For the
     purpose of this paragraph, termination of employment or officer or director
     status shall be deemed to occur when Saratoga  dispatches  notice or advice
     to the optionee that the  optionee's  employment or status as an officer or
     director is terminated and not at the time of optionee's receipt thereof.

          OTHER REASONS: If an optionee's  employment or status as an officer or
     director is  terminated  for any reason  other than those  mentioned  above
     under "Death or Disability" and "Cause," the optionee may, within three (3)
     months following such  termination,  exercise the option to the extent such
     option was  exercisable  by the optionee on the date of  termination of the
     optionee"s  employment  or status as an officer or director,  provided that
     the date of exercise is in no event after the expiration of the term of the
     option.

     (d)  Transferability  of Option.  Each option shall be transferable only by
Will or the laws of descent and distribution and shall be exercisable during the
optionee's lifetime only by the optionee.

     (e)  Other  Terms and  Conditions.  Options  may also  contain  such  other
provisions as the Committee shall deem appropriate,  which except as provided in
Section 2(b),  shall not be  inconsistent  with any of the foregoing  terms.  No
option,  however,  nor  anything  contained  in the Plan,  shall confer upon any
optionee  any right to  continue in the employ or in the status as an officer or
director of Saratoga, nor limit in any way the right of Saratoga to terminate an
optionee's employment or status as an officer or director at any time.

     (f) Use of Proceeds from Stock.  Proceeds from the sale of Shares  pursuant
to the exercise of options granted under the Plan shall constitute general funds
of the Holding Company.

     (g)  Rights  as a  Shareholder.  The  optionee  shall  have no  rights as a
shareholder  with  respect to any Shares  until the date of  issuance of a stock
certificate for such Shares.  No adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such  issuance,  except
as provided in Section 6 hereof.

6.   ADJUSTMENT OF AND CHANGES IN THE SHARES.

     In the  event  the  shares  of  Common  Stock of the  Holding  Company,  as
presently constituted, shall be changed into or exchanged for a different number
or kind of shares of stock or other  securities  of the  Holding  Company  or of
another corporation (whether by reason of reorganization, merger, consolidation,
recapitalization,   reclassification,   split-up,   combination  of  shares,  or
otherwise),  or if the number of shares of Common  Stock of the Holding  Company
shall be  increased  through the payment of a stock  dividend or through a stock
split,  the Board of  Directors  shall  substitute  for or add to each  share of
Common  Stock of the Holding  Company  theretofore  appropriated  or  thereafter
subject or which may become  subject to an option under the Plan, the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock of the Holding Company shall be so changed, or for which each share
shall be exchanged,  or to which each such share shall be entitled,  as the case
may be. In addition,  the  Committee  shall make  appropriate  adjustment in the
number and kind of shares as to which outstanding  options,  or portions thereof
then  unexercised,  shall be exercisable,  so that any optionee's  proportionate
interest  in the  Holding  Company  by reason of his  rights  under  unexercised
portions of such options shall be  maintained  as before the  occurrence of such
event.  Such  adjustment in outstanding  options shall be made without change in
the  total  price  to  the  unexercised   portion  of  the  option  and  with  a
corresponding adjustment in the option price per share.

     In the event of sale,  dissolution or liquidation of the Holding Company or
upon any reorganization, merger or consolidation in which the Holding Company is
not the surviving or resulting corporation,  the Committee shall provide for the
assumption by the surviving or resulting corporation of every option outstanding
hereunder,  on such  terms as shall be  required  to  preserve  the  rights  and
benefits  of any option then  outstanding  under the Plan;  provided,  that each
optionee  shall have the right until five (5) days before the effective  date of
such  merger  or  consolidation  in  which  the  Company  is not  the  surviving
corporation  to  exercise  in whole or in part any  unexpired  option or options
issued to such optionee, without regard to the installment provisions of section
5(b) of the  Plan or any  option  agreement.  This  right of  exercise  shall be
conditioned   upon  the  exercise  of  a  definitive   agreement  of  merger  or
consolidation.

     To the extent the  foregoing  adjustments  relate to stock or securities of
the Holding  Company,  such  adjustments  shall be made by the Committee,  whose
determination in that respect shall be final, binding and conclusive.

     Except as expressly  provided in this Section 6, an optionee  shall have no
rights  by  reason  of  any  of  the  following   events:   (1)  subdivision  or
consolidation  of  shares  of stock  of any  class;  (2)  payment  of any  stock
dividend; (3) any other increase or decrease in the number of shares of stock of
any class; (4) any dissolution,  liquidation, merger, consolidation, spin-off of
assets or stock of  another  corporation.  Any issue by the  Holding  Company of
shares of stock of any  class,  or  securities  convertible  into  shares of any
class, shall not affect the number or price of shares of Common Stock subject to
the option, and no adjustment by reason thereof shall be made.

     The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Holding  Company to make  adjustments,  reclassifications,
reorganizations  or changes of its capital or business  structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

7.   LISTING OR QUALIFICATION OF SHARES.

     All options granted under the Plan are subject to the requirement  that, if
at any time the Board of  Directors  or the  Committee  shall  determine  in its
discretion  that the listing or  qualification  of the Shares subject thereto on
any securities  exchange or under any applicable law, or the consent or approval
of any  governmental  regulatory  body, is necessary or desirable as a condition
of, or in connection  with, the issuance of Shares under the option,  the option
may not be  exercised  in whole or in part unless such  listing,  qualification,
consent or approval  shall have been  effected or obtained free of any condition
not acceptable to the Board of Directors or the Committee.

8.   BINDING EFFECT OF CONDITIONS.

     The conditions and stipulations herein contained,  or in any option granted
pursuant to the Plan shall be, and  constitute,  a covenant  running with all of
the  Shares  acquired  by the  optionee  pursuant  to  this  Plan,  directly  or
indirectly,  whether the same have been issued or not, and those shares owned by
the optionee  shall not be sold,  assigned or transferred by any person save and
except in accordance  with the terms and  conditions  herein  provided,  and the
optionee shall agree to use the optionee's best efforts to cause the officers of
the Holding  Company to refuse to record on the books of the Holding Company any
assignment  or transfer  made or  attempted to be made except as provided in the
Plan and to cause said officers to refuse to cancel old certificates or to issue
or deliver  new  certificates  therefor  where the  purchaser  or  assignee  has
acquired  certificates  or the Shares  represented  thereby,  except strictly in
accordance with the provisions of the Plan.

9.   AMENDMENT AND TERMINATION OF THE PLAN.

     The Board of Directors shall have complete power and authority to terminate
or amend the Plan;  provided,  however,  that the Board of Directors  shall not,
without the approval of the  shareholders of the Holding  Company:  (i) increase
the maximum  number of shares for which  options may be granted  under the Plan;
(ii) change the  computation  as to minimum option prices set forth in Paragraph
5(a); (iii) extend beyond ten (10) years the period, during which options may be
granted  or  exercised;  or (iv)  amend  the  requirements  as to the  class  of
employees, officers or directors eligible to receive options. Except as provided
in Section 6, no termination, modification or amendment of the Plan may, without
the  consent of an  employee,  officer or  director  to whom such  option  shall
theretofore  have been granted,  adversely  effect the rights of such  employee,
officer  or  director  under  such  option.  Unless  the Plan  shall  have  been
terminated by action of the Board of Directors prior thereto, it shall terminate
ten years from its adoption by the Board of Directors unless earlier  terminated
by the Board of Directors.

10.  EFFECTIVENESS OF THE PLAN.

     The  Plan  shall  become  effective  only  upon  approval  by the  Board of
Directors.  The  exercise of any options  granted  pursuant to the Plan shall be
conditioned upon approval of the Plan by the shareholders of the Holding Company
and the  Registration  of the Shares subject to the Plan with the Securities and
Exchange Commission and Qualification of the Shares subject to the Plan with the
Commissioner of Corporations of the State of California unless in the opinion of
counsel  to the  Holding  Company  such  Registration  or  Qualification  is not
necessary.

11.  PRIVILEGES OF STOCK OWNERSHIP SECURITIES LAW COMPLIANCE; NOTICE OF SALE.

     No optionee  shall be entitled to the  privileges of stock  ownership as to
any Shares not actually issued and delivered to the optionee. No Shares shall be
purchased  upon the exercise of any option unless and until any then  applicable
requirements of any regulatory agencies having jurisdiction and of any exchanges
upon which the Common Stock of the Holding Company may be listed shall have been
fully  complied with. The Holding  Company shall  diligently  endeavor to comply
with all  applicable  securities  laws before any options are granted  under the
Plan and before any Shares are issued  pursuant to the exercise of such options.
The  optionee  shall  give  the  Holding  Company  notice  of any  sale or other
disposition  of any such  Shares  not more than five (5) days after such sale or
other disposition.

12.  INDEMNIFICATION.

     To the extent  permitted by applicable  law in effect from time to time, no
member of the Board of Directors or the Committee shall be liable for any action
or omission of any other member of the Board of  Directors or Committee  nor for
any act or omission on the  member's own part,  excepting  only the member's own
willful misconduct or gross negligence. Saratoga shall pay expenses incurred by,
and satisfy a judgment or fine rendered or levied  against,  a present or former
director or member of the Committee in any action  against such person  (whether
or not Saratoga is joined as a party defendant) to impose a liability or penalty
on such person for an act alleged to have been  committed by such person while a
director  or  member  of the  Committee  arising  with  respect  to the  Plan or
administration  thereof or out of membership on the Committee or by Saratoga, or
all or any  combination  of the  preceding  so long as the Director or Committee
member was acting in good faith,  within what such director or Committee  member
reasonably  believed to have been within the scope of his or her  employment  or
authority  and for a purpose  which he or she  reasonably  believed to be in the
best interests of Saratoga or its shareholders.  Payments  authorized  hereunder
include  amounts  paid and  expenses  incurred  in  settling  any such action or
threatened  action.  This  section  does not apply to any action  instituted  or
maintained in the right of Saratoga by a shareholder or holder of a voting trust
certificate  representing  shares of Saratoga.  The  provisions  of this section
shall apply to the estate, executor, administrator,  heirs, legatees or devisees
of a director or Committee member, and the term "person" as used in this section
shall include the estate, executor, administrator,  heirs, legatees, or devisees
of such person.

13.  INFORMATION TO OPTIONEES.

     The Company shall provide to each optionee,  during the period for which he
or she has one or more outstanding options, copies of all annual reports and all
other information which is provided to shareholders of the Company.  The Company
shall not be required to provide such  information to key employees whose duties
in connection with the Company assure their access to equivalent information.