SARATOGA BANCORP
                             1994 STOCK OPTION PLAN

                             (Amended May 21, 1998)

                                TABLE OF CONTENTS

                                                                            Page

1.       PURPOSE.                                                              2


2.       ADMINISTRATION.                                                       2


3.       ELIGIBILITY.                                                          3


4.       THE SHARES.                                                           3


5.       OPTION GRANTS.                                                        4


6.       TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.                       6


7.       ADJUSTMENT OF, AND CHANGES IN, THE SHARES.                            7


8.       AMENDMENT, EFFECTIVENESS AND TERMINATION OF THE PLAN.                 9


9.       INFORMATION TO OPTIONEES.                                             9


10.      PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE
         AND NOTICE OF SALE.                                                   9


11.      NOTICE OF SALE.                                                       9


12.      INDEMNIFICATION.                                                     10

<PAGE>

                                SARATOGA BANCORP
                             1994 STOCK OPTION PLAN
                             (AMENDED MAY 21, 1998)


1.   PURPOSE.

     The purpose of this Saratoga Bancorp 1994 Stock Option Plan (the "Plan") is
to provide a method  whereby those key employees,  directors and  consultants of
Saratoga Bancorp and its affiliates (hereinafter collectively referred to as the
"Company"),  who are primarily  responsible for the management and growth of the
Company's  business  and who are  presently  making  and  are  expected  to make
substantial  contributions to the Company's future management and growth, may be
offered  incentives  in  addition  to  those  presently  available,  and  may be
stimulated by increased personal  involvement in the fortunes and success of the
Company to continue in its  service,  thereby  advancing  the  interests  of the
Company and its shareholders.

     The word "affiliate," as used in the Plan, means any bank or corporation in
any  unbroken  chain of banks  or  corporations  beginning  or  ending  with the
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) Subject to paragraphs (b) and (c) below, the Plan shall be administered
by the Board of Directors or a duly appointed  committee of the Board consisting
of Non-Employee Directors.  The term "Non-Employee Director" as used in the Plan
shall have the meaning set forth in Rule 16b-3 as  promulgated by the Securities
and Exchange  Commission ("SEC") under Section 16(b) of the Securities  Exchange
Act of 1934, as amended (the "Exchange  Act"),  as such rule may be amended from
time to time,  and as  interpreted  by the SEC  ("Rule  16b-3").  The  committee
required by this paragraph  shall consist of the minimum number of  Non-Employee
Directors from time to time required by Rule 16b-3.

     (b) The Board and any such  committee  is  referred to  hereinafter  as the
"Committee,"  except  where  otherwise  expressly  provided or where the context
requires otherwise.  The Board of Directors may from time to time remove members
from or add  members  to the  Committee.  Vacancies  on the  Committee,  however
caused,  shall be filled by the Board of  Directors.  The Board of Directors may
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
all members of the Committee, shall be the valid acts of the Committee.

     (c) Options  granted to employees  or  directors of the Company  subject to
Section 16(b) of the Exchange Act shall be approved by the Committee or shall be
approved or ratified,  in compliance with Section 14 of the Exchange Act, by the
affirmative  votes of the holders of a majority of the voting  securities of the
Company present or represented and entitled to vote at a meeting of shareholders
duly called and hold pursuant to law, provided that any such ratification  shall
occur  not  later  than the  date of the next  annual  meeting  of  shareholders
following the grant.

     (d) The grant of options  under the Plan shall be affected by  execution of
instruments  in  writing in a form  approved  by the  Committee.  Subject to the
express terms and conditions of 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;  (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,  including whether options to be granted thereunder shall be
"incentive  stock  options," as defined in Section 422 of the  Internal  Revenue
Code of 1986,  as  amended  (the  "Code")  or  nonstatutory  stock  options  not
described  in Section  422;  (iv)  specify the number of shares to be covered by
each option;  (v)  determine  the fair market  value of shares of the  Company's
common stock for any purpose under this Plan; (vi) grant options in exchange for
cancellation of options granted earlier at different exercise prices; (vii) take
appropriate  action to amend any option hereunder,  provided that no such action
may be taken without the written  consent of the affected  optionee;  and (viii)
make all other  determinations  deemed necessary or advisable for  administering
the Plan.  The  Committee's  determination  on the  foregoing  matters  shall be
conclusive.

3.   ELIGIBILITY.

     The persons who shall be  eligible  to receive the  discretionary  grant of
options under this Plan shall be those key employees and officers of the Company
(including  officers  who may also be  directors  of the  Company),  persons who
became  employees of the Company  within  thirty days of the date of grant of an
option,  consultants of the Company who render bona fide services to the Company
other  than in  connection  with the  offer or sale of  securities  in a capital
raising transaction  ("Consultants"),  and directors.  Notwithstanding any other
provision of this Plan no person shall be granted  options to purchase more than
an aggregate of 100,000 shares under this Plan.

4.   THE SHARES.

     The shares of stock  subject to options  authorized to be granted under the
Plan  shall  consist  of  three  hundred  twenty-eight   thousand  five  hundred
eighty-two  (328,582)  shares of the  Company's  no par value  common stock (the
"Shares"),  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 7 hereof,  provided that,  such number of Shares shall be
adjusted  downward to the extent  necessary  to conform to the  requirements  of
Section 260.140.45 of the Rules of the California  Commissioner of Corporations,
so that at no time shall the total number of shares  issuable  upon  exercise of
all  outstanding  options and the total number of shares  provided for under any
stock bonus or similar plan of the Company exceed the  applicable  percentage as
calculated in accordance with the conditions and exclusions of such Rule.

     Upon the expiration or termination for any reason of an outstanding  option
under the Plan (or under the  Company's  expired 1982 Amended Stock Option Plan)
which has not been exercised in full, all unissued Shares thereunder shall again
become  available  for the  grant of  options  under  the  Plan.  Shares  of the
Company's  common stock which are (i) delivered by an optionee in payment of the
exercise  price of an option  pursuant to Section 7(a), or (ii)  delivered by an
optionee, or withheld by the Company from the shares otherwise due upon exercise
of a nonstatutory stock option, in satisfaction of applicable  withholding taxes
as  permitted  by Section  7(c) shall again  become  available  for the grant of
options under the Plan only to those eligible  participants  who are not subject
to Section 16 of the Exchange Act.

     The  aggregate   amount  of  Shares  subject  to  options  granted  to  all
Non-Employee  Directors as a group (not including  such options which  terminate
unexercised)  shall not exceed fifty  percent  (50%) of the Shares,  as adjusted
pursuant to Section 7.

5.   OPTION GRANTS.

     Options,  in the  discretion of the  Committee,  may be granted at any time
prior  to the  termination  of the  Plan to  persons  who are  employees  of the
Company,  including  employees  who  are  also  directors  of  the  Company,  to
Consultants of the Company or to Non-Employee Directors.  Options granted by the
Committee shall be subject to the following terms and conditions:

     (a) Grant of Options. Options granted to employees pursuant to the Plan may
be  either  incentive  stock  options  or  nonstatutory  stock  options.  If the
aggregate  fair market value of the shares  issuable  upon exercise of incentive
stock options which are  exercisable  for the first time during any one calendar
year under all  incentive  stock  options held by an optionee  exceeds  $100,000
(determined  at the time of the grant of the  options),  such  options  shall be
treated as  nonstatutory  stock  options to the extent of such  excess.  Options
granted to Non-Employee Directors and to Consultants shall be nonstatutory stock
options.

     (b) Option  Price.  The purchase  price under each option shall not be less
than one hundred  percent of the fair market value of the Shares subject thereto
on the date the option is granted; provided, however, that the purchase price of
an option  granted  to an  individual  who owns stock  possessing  more than ten
percent  of the  total  combined  voting  power of all  classes  of stock of the
Company  shall not be less than one hundred ten percent of the fair market value
of the  Shares  subject  thereto  on the date the  option  is  granted.  For any
purposes under this Plan, fair market value per share shall mean, where there is
a public  market for the Company's  common stock,  the mean of the bid and asked
prices  (or the  closing  price if  listed  on a stock  exchange  or the  Nasdaq
National  Market)  of the  Company's  common  stock  for the date of  grant,  as
reported  in the Wall  Street  Journal  (or, if not so  reported,  as  otherwise
reported by the Nasdaq Stock Market or the National Quotation  Bureau).  If such
information is not available for the date of grant,  then such  information  for
the last  preceding  date for  which  such  information  is  available  shall be
considered as the fair market value.

     (c) Duration of Options.  Each option shall be for a term determined by the
Committee;  provided,  however,  that the term of any  option may not exceed ten
years and, provided further, that the term of any incentive stock option granted
to an individual  who owns stock  possessing  more than ten percent of the total
combined  voting  power of all classes of stock of the Company  shall not exceed
five  years.  Each  option  shall  vest in such  manner  and at such time as the
Committee  shall determine and the Committee may accelerate the time of exercise
of any option;  provided,  however,  that no option shall vest for exercise at a
rate of less than twenty percent per year during the five year period  following
the date of grant of an option.

     (d)  Termination  of Director,  Employment or Consultant  Status.  Upon the
termination  of an  optionee's  status as an employee or Consultant or member of
the Board of Directors  of the Company,  his or her rights to exercise an option
then held shall be only as follows:

     DEATH OR DISABILITY: If an optionee's employment or consulting relationship
     or tenure on the Board of Directors 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
     (or such longer  period as the Committee may determine at the date of grant
     or  during  the term of the  option)  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 the actual date of exercise is in no event after the expiration of
     the term of the option.  To the extent the option is not  exercised  within
     such period the option will  terminate.  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 optionee's employment or consulting relationship is terminated
     because such optionee is  determined by the Board to have  committed an act
     of  embezzlement,  fraud,  dishonesty,  breach  of  fiduciary  duty  to the
     Company, or to have deliberately disregarded the rules of the Company which
     resulted in loss, damage or injury to the Company,  or if an optionee makes
     any  unauthorized   disclosure  of  any  of  the  secrets  or  confidential
     information  of the Company,  induces any client or customer of the Company
     to break any contract  with the Company or induces any  principal  for whom
     the Company acts as agent to terminate such agency relations, or engages in
     any conduct which constitutes unfair competition with the Company, or if an
     optionee is removed  from any office of the Company by any bank  regulatory
     agency,  the  optionee  shall have the right for a period of thirty days to
     exercise the option to the extent the option was exercisable on the date of
     termination;  provided  that the date of  exercise is in no event after the
     expiration  of the term of the  option.  To the  extent  the  option is not
     exercised  within  such  period the option  will  terminate.  In making the
     determination  pursuant to this  paragraph,  the Board shall act fairly and
     shall give the optionee  whose  employment  or  Consultant  status has been
     terminated an  opportunity  to appear and be heard at a hearing  before the
     full Board and present evidence on the optionee's  behalf.  For the purpose
     of this paragraph,  termination of employment or Consultant status shall be
     deemed  to occur  when the  Company  dispatches  notice  or  advice  to the
     optionee  that the  optionee's  employment  or  status as a  Consultant  is
     terminated, and not at the time of optionee's receipt thereof.

     OTHER REASONS:  If an optionee's  employment or consulting  relationship or
     tenure on the Board of  Directors is  terminated  for any reason other than
     those mentioned above under "Death or Disability" and "Cause," the optionee
     may,  within  three  months (or such  longer  period as the  Committee  may
     determine at the date of grant or during the term of the option)  following
     such  termination,  exercise  the  option to the  extent  such  option  was
     exercisable  on the date of  termination  of the  optionee's  employment or
     status as a Consultant;  provided the date of exercise is in no event after
     the  expiration  of the term of the option and  provided  further  that any
     option which is  exercised  more than three  months  following  termination
     shall be treated as a nonstatutory  option whether or not it was designated
     as such  at the  time it was  granted.  To the  extent  the  option  is not
     exercised within such period the option will terminate.

6.   TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.

     The  following  terms and  conditions  shall apply to all  options  granted
pursuant to the Plan:

     (a)  Exercise  of Options.  To the extent the right to purchase  Shares has
vested under an optionee's stock option agreement, options may be exercised from
time to time by delivering payment therefor in cash,  certified check,  official
bank check, or the equivalent thereof  acceptable to the Company,  together with
written notice to the Secretary of the Company,  identifying  the option or part
thereof being exercised and specifying the number of Shares for which payment is
being  tendered.  An optionee  may also  exercise an option by the  delivery and
surrender  of shares of Company  Common  Stock  which (a) have been owned by the
optionee  for at least six  months or such  other  period as the  Committee  may
require;  and (b) have an  aggregate  fair market value on the date of surrender
equal to the  exercise  price.  In  addition,  an  option  may be  exercised  by
delivering  to the  Company (i) an exercise  notice  instructing  the Company to
deliver the certificates for the Shares purchased to a designated brokerage firm
and (ii) a copy of irrevocable  instructions  delivered to the brokerage firm to
sell the  Shares  acquired  upon  exercise  of the  option and to deliver to the
Company from the sale  proceeds  sufficient  cash to pay the exercise  price and
applicable withholding taxes arising as a result of the exercise.

     The 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 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 Company for such
period as may be required  for it with  reasonable  diligence to comply with any
requirements of law.

     (b) Transferability of Option and Shares. 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,  or in the  event  of
disability,  the optionee's qualified representative.  In addition, in order for
Shares  acquired  upon  exercise of incentive  stock  options to receive the tax
treatment  afforded  such  Shares,  the Shares may not be disposed of within two
years  from the date of the  option  grant nor within one year after the date of
transfer of such Shares to the optionee.

     (c) Withholding. The Company shall have the right to condition the issuance
of Shares  upon  exercise  of an option  upon  payment  by the  optionee  of any
applicable taxes required to be withheld under federal,  state or local tax laws
or  regulations in connection  with such exercise.  An optionee may elect to pay
such tax by (i) requesting the Company to withhold a sufficient number of Shares
from the total  number of Shares  issuable  upon  exercise of the option or (ii)
delivering a sufficient number of shares of Company common stock which have been
held by the  optionee  for at least  six  months  (or such  other  period as the
Committee may require) to the Company. The value of shares withheld or delivered
shall be the fair market value of such shares on the date the  exercise  becomes
taxable as determined by the Committee.  Such an election is subject to approval
or disapproval by the Committee, and if the optionee is subject to Section 16 of
the Exchange  Act, the timing of the election must satisfy the  requirements  of
Rule 16b-3.

     (d)  Other  Terms and  Conditions.  Options  may also  contain  such  other
provisions,  which shall not be inconsistent with any of the foregoing terms, as
the Committee shall deem appropriate. 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 a director or  Consultant  of the Company,  nor limit in any
way the right of the Company to terminate an optionee's  employment or status as
a Consultant at any time.

7.   ADJUSTMENT OF, AND CHANGES IN, THE SHARES.

     (a) Changes in  Capitalization.  In the event the shares of Common Stock of
the 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 Company
or  of  another  corporation  (whether  by  reason  of  reorganization,  merger,
consolidation,  recapitalization,  reclassification,  stock split, reverse stock
split,  combination  of  shares,  or  otherwise),  or if the number of Shares of
common stock of the Company  shall be  increased  through the payment of a stock
dividend,  there shall be substituted for or added to each Share of common stock
of the  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 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,
appropriate  adjustment  shall be made 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 Company by
reason of his or her 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.

     (b) Dissolution,  Liquidation,  Sale or Merger.  In the event of a proposed
dissolution or liquidation of the Company,  options  outstanding  under the Plan
shall terminate immediately before the consummation of such proposed action. The
Board will, in such  circumstances,  provide  written notice to the optionees of
the expected dates of termination of outstanding options and consummation of the
proposed dissolution or liquidation.

     In the event of a proposed sale of all or  substantially  all of the assets
of the Company, or the merger of the Company with or into another corporation in
a transaction in which the Company is not the surviving corporation, outstanding
options may be assumed or equivalent options may be substituted by the successor
corporation (or a parent or subsidiary of the successor corporation), unless the
successor  corporation  does not agree to assume the  options  or to  substitute
equivalent  options.  If  outstanding  options are not assumed or substituted by
equivalent options,  all outstanding options shall terminate  immediately before
the  consummation of such sale or merger (subject to the actual  consummation of
the  sale or  merger)  and the  Company  shall  provide  written  notice  to the
optionees of the expected dates of  termination of the options and  consummation
of such transaction. If the transaction is not consummated,  unexercised options
shall continue in accordance with their original terms.

     (c) Notice of Adjustments,  Fractional  Shares. To the extent the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Committee,  whose  determination  in that respect shall be final,
binding and conclusive. No right to purchase fractional shares shall result from
any  adjustment  in  options  pursuant  to this  Section  8. In case of any such
adjustment,  the  shares  subject to the  option  shall be  rounded  down to the
nearest whole share.  Notice of any adjustment  shall be given by the Company to
each  holder of an  option  which was in fact so  adjusted  and such  adjustment
(whether or not such  notice is given)  shall be  effective  and binding for all
purposes of the Plan.

     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 this
Section.

     Any issue by the  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  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.

8.   AMENDMENT, EFFECTIVENESS AND TERMINATION OF THE PLAN.

     The Board shall have complete power and authority to terminate or amend the
Plan; provided,  however,  that the Board shall not, without the approval of the
shareholders  of  the  Company,  amend  the  Plan  in  a  manner  that  requires
shareholder  approval for continued  compliance with the terms of Rule 16b-3, as
promulgated  under the  Exchange  Act,  Section 422 of the Code,  any  successor
rules,  or other  regulatory  authority.  Except as  provided  in  Section 8, no
termination,  modification or amendment of the Plan may,  without the consent of
the  optionee  to whom  such  option  was  previously  granted  under  the Plan,
adversely  affect the  rights of such  optionee.  Any  consent  required  by the
preceding  sentence  may be obtained  in any manner  deemed  appropriate  by the
Committee.

     The Plan  became  effective  upon  adoption by the Board of  Directors  and
approval by the shareholders of the Company at the Company's 1994 annual meeting
of shareholders.

     The Plan, unless sooner terminated,  shall terminate on March 18, 2004, ten
years from the date the Plan was originally  adopted by the Board. An option may
not be granted under the Plan after the Plan is terminated.

9.   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.

10.  PRIVILEGES OF STOCK OWNERSHIP, SECURITIES LAW COMPLIANCE AND 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.  The exercise of
any option  under the Plan shall be  conditioned  upon the  registration  of the
Shares with the SEC and qualification of the options and underlying Shares under
the California  securities laws, unless in the opinion of counsel to the Company
such  registration  or  qualification  is  not  necessary.   The  Company  shall
diligently endeavor to comply with all applicable  securities laws applicable to
the Plan.

11.  NOTICE OF SALE.

     The optionee shall give the Company notice of any sale or other disposition
of any Shares  acquired upon exercise of an incentive stock option not more than
five days after such sale or disposition.

12.  INDEMNIFICATION.

     To the extent  permitted by applicable  law in effect from time to time, no
member of the Board or the Committee  shall be liable for any action or omission
of any other member of the Board 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.  The Company 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 the Company is
joined as a party defendant) to impose liability or a 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 the Company,  or all or any combination
of the preceding;  provided 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 the Company
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 the Company by a  shareholder  or holder of a voting trust  certificate
representing shares of the Company.

     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.