SARATOGA BANCORP

                        INCENTIVE STOCK OPTION AGREEMENT


Saratoga  Bancorp,  a California  corporation  (the  "Company") , has granted to
______________ (the "Optionee"), an option (the "Option") to purchase a total of
______ shares of Common Stock, at the price determined as provided  herein,  and
in all respects subject to the terms, definitions and provisions of the Saratoga
Bancorp 1994 Stock Option Plan (the "Plan"). The terms defined in the Plan shall
have the same defined meanings herein.

1.  Nature of the Option.  This  Option is  intended to qualify as an  Incentive
Stock Option as defined in Section 422 of the Code.

2.  Exercise  Price.  The exercise  price is $ ________ for each share of Common
Stock,  which  price is not less  than the fair  market  value  per share of the
Common Stock on the date of grant.

3.  Exercise of Option.  This  Option  shall be  exercisable  during its term in
accordance with the provisions of Section 6 of the Plan as follows:

     (a)  Right to Exercise.

          (i) This Option shall vest  cumulatively from the date of grant of the
          Option,  exercisable  during a period of ____months  after the date of
          grant as  follows:____%  of the Shares  subject to the Option shall be
          vested  on  the  first  anniversary  of  the  date  of  grant,  and an
          additional  ____% of the Shares  subject  to the option  shall vest on
          each  anniversary  of the  date of  grant  thereafter.  [insert  other
          vesting  provisions as determined by the committee,  not less than 20%
          per year over a five year term.]

          (ii) This Option may not be exercised  for less than 10 shares nor for
          a fraction of a share.

          (iii)  In  the  event  of  Optionee's   death,   disability  or  other
          termination  of  employment,  the  exercisability  of  the  Option  is
          governed by Sections 5, 6, 7 and 8 below.

     (b) Method of Exercise.  This Option shall be exercisable by written notice
     which shall state the election to exercise the Option, the number of shares
     in  respect  of which  the  Option  is  being  exercised,  and  such  other
     representations  and agreements as may be required by the Company  pursuant
     to the  provisions of the Plan.  Such written notice shall be signed by the
     Optionee  and shall be  delivered  in person  or by  certified  mail to the
     Secretary of the Company accompanied by payment of the exercise price.

     No Shares will be issued  pursuant to the exercise of an Option unless such
     issuance and such exercise shall comply with all relevant provisions of law
     and the requirements of any stock exchange or inter-dealer quotation system
     upon which the shares of the  Company's  Common Stock may then be listed or
     quoted.   Assuming  such   compliance,   the  shares  shall  be  considered
     transferred  to the  Optionee on the date on which the Option is  exercised
     with  respect  to such  Shares.  An  Optionee  shall  have no  rights  as a
     shareholder of the Company with respect to any shares until the issuance of
     a stock certificate to the Optionee for such shares.

4. Method of Payment.  Payment of the exercise price shall be by cash, certified
check, official bank check, or the equivalent thereof acceptable to the Company,
or by the delivery of previously owned shares of the Company's Common Stock held
for the requisite period  necessary to avoid a charge to the Company's  reported
earnings  and with a fair  market  value on the date of  surrender  equal to the
exercise price.

5.  Termination  of Status as an Employee  For Any Reason  Other Than Cause.  If
Optionee  ceases to serve as an  Employee,  he may, but only within three months
after the date he ceases to be an Employee of the Company,  exercise this Option
to the extent  that the  Option  was vested as of the date of such  termination;
provided  that in no event  is the date of  exercise  beyond  expiration  of the
option.  To the  extent  that the  Option  was not vested as of the date of such
termination,  or if  Optionee  does not  exercise  this  Option  within the time
specified herein, the Option shall terminate.

6.  Termination of Status as an Employee For Cause.  If Optionee's  status as an
Employee is terminated for Cause,  as provided in Section 6(d) of the Plan, this
Option shall  terminate on the  thirtieth day after the date of  termination  of
employment.  "Cause" may consist of an act of embezzlement;  fraud;  dishonesty;
breach of fiduciary  duty to the Company;  deliberate  disregard of the rules of
the  Company  which  result  in loss,  damage  or  injury  to the  Company;  the
unauthorized disclosure of any of the secrets or confidential information of the
Company;  the  inducement  of any client or customer of the Company to break any
contract  with the  Company  or the  inducement  of any  principal  for whom the
Company  acts as agent to terminate  such agency  relations;  engagement  in any
conduct which constitutes unfair competition with the Company; or the removal of
Optionee from any office of the Company by any bank regulatory agency.

7. Disability of Optionee. Notwithstanding the provisions of Section 5 above, if
Optionee is unable to continue  his  employment  with the Company as a result of
his disability (as defined below), he may, within twelve months from the date of
termination  of  employment,  exercise  his  Option to the extent the Option was
vested as of the date of such termination; provided that in no event is the date
of exercise beyond expiration of the Option;  and,  provided  further,  that, in
certain  situations,  an exercise after three months  following such termination
may preclude  favorable tax treatment  normally accorded incentive stock options
(i.e., the option will be taxed as a non-qualified  stock option). To the extent
that the  Option was not vested as of the date of  termination,  or if  Optionee
does not exercise such Option within the time specified herein, the Option shall
terminate. For purposes of this provision, "disability" shall mean the inability
of  Optionee  to engage in any  substantial  gainful  activity  by reason of any
medically  determinable physical or mental impairment and shall be determined by
the Board of Directors or the Committee on the basis of such medical evidence as
the Board of Directors or Committee deems warranted under the circumstances.

8. Death of Optionee. In the event of the death of Optionee while Optionee is an
Employee of the Company, the Option may be exercised,  at any time within twelve
(12) months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent the  Option was vested as of the date of death;  provided  that in no
event is the date of exercise beyond expiration of the Option.

9.  Non-Transferability  of Option.  This Option may not be  transferred  in any
manner  otherwise than by will or by the laws of descent or distribution and may
be  exercised  during the  lifetime of Optionee  only by him.  The terms of this
Option shall be binding upon the executors,  administrators,  heirs,  successors
and assigns of the Optionee.

10. Term of Option. Subject to earlier termination as provided in the Plan, this
Option shall  terminate 10 years from the date of grant of this Option,  and may
be exercised  during such term only in accordance with the Plan and the terms of
this Option.

11. Early Disposition of Stock.  Optionee understands that if he disposes of any
shares  received  under this Option  within two (2) years after the date of this
Agreement or within one (1) year after such shares were  transferred  to him, he
will be treated for federal  income tax  purposes  as having  received  ordinary
income at the time of such  disposition in an amount  generally  measured by the
difference  between the exercise price and the lower of the fair market value of
the shares at the date of the exercise or the fair market value of the shares at
the date of disposition. Optionee agrees to notify the Company in writing within
5 days after the date of any such disposition.  Optionee  understands that if he
disposes of such shares at any time after the  expiration  of such  two-year and
one-year  holding  periods,  any gain on such  sale  will be taxed as  long-term
capital gain.

12.  Qualification as an Incentive Stock Option.  Optionee  understands that the
option is intended to qualify as an "incentive  stock option" within the meaning
of Section 422 of the Code. Optionee understands,  further,  that: (a) under the
Code , if an  optionee  is unable to  continue  his or her  employment  with the
Company as a result of a total and permanent  disability  (as defined in Section
22(e)(3) of the Code), and if the other  requirements for incentive stock option
treatment  contained in Section 422 of the Code are satisfied,  Optionee will be
entitled to exercise the Option  within  twelve (12) months of such  termination
without  defeating  incentive  stock  option  treatment;  but (b) if Optionee is
unable to continue his or her employment  with the Company as a result of his or
her disability,  and such disability is not a total and permanent disability (as
defined in Section  22(e)(3)  of the Code),  the Option  will not  qualify as an
incentive  stock option  unless it is  exercised  within three (3) months of the
date of  termination  (i.e.,  while the Option may be exercised  for a period of
twelve (12) months  after such  termination,  the  exercise  more than three (3)
months  following  termination  will  result  in the  Option  being  taxed  as a
non-qualified  stock  option).  Finally,  Optionee  understands  that:  (a)  the
exercise  price for the shares  subject to this  option has been  determined  in
accordance with the Plan at a price not less than 100% (or, if Optionee owned at
the time of grant more than 10% of the voting  securities of the Company,  110%)
of the fair  market  value of the shares at the time of grant;  (b) the  Company
believes that the  methodology  by which the fair market value was determined at
such time  represented  a good  faith  attempt,  as  defined in the Code and the
regulations  thereunder,  at reaching an accurate  appraisal  of the fair market
value of the  shares;  and (c) the  Company  shall  not be  responsible  for any
additional  tax  liability  incurred by Optionee in the event that the  Internal
Revenue  Service  were to  determine  that the  Option  does not  qualify  as an
incentive  stock  option,  for any reason,  including a  determination  that the
valuation did not represent a good faith attempt to value the shares.

DATE OF GRANT:

                                   Saratoga Bancorp

                                   By:

                                        Duly Authorized on Behalf
                                        of Saratoga Bancorp

Optionee hereby agrees to accept as binding,  conclusive and final all decisions
or  interpretations  of the  Board  of  Directors  and the  committee  upon  any
questions arising under the Plan.

Dated:

Optionee:

<PAGE>

                                SARATOGA BANCORP
                       NONSTATUTORY STOCK OPTION AGREEMENT

     Saratoga Bancorp, a California corporation (the "Company"),  has granted to
______________ (the "Optionee"), an option (the "Option") to purchase a total of
_______ shares of Common Stock, at the price determined as provided herein,  and
in all respects subject to the terms, definitions and provisions of the Saratoga
Bancorp 1994 Stock Option Plan,  as amended (the  "Plan").  The terms defined in
the Plan shall have the same defined meanings herein.

1.   NATURE OF THE OPTION.

     This  Option  is  intended  by  the  Company  and  the  Optionee  to  be  a
nonstatutory  stock  option and does not qualify for any special tax benefits to
the Optionee. This option is not an Incentive Stock Option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended.

2.   EXERCISE PRICE.

     The exercise  price is $______ for each share of Common Stock,  which price
is not less than the fair market value per share of the Common Stock on the date
of grant.

3.   EXERCISE OF OPTION.

     This Option shall be  exercisable  during its term in  accordance  with the
provisions of Section 5 of the Plan as follows:

     (a)  Right to Exercise.

          (i)  This Option shall be immediately exercisable.

          (ii) This Option may not be exercised for less than ten shares nor for
           a fraction of a share.

          (iii)  In  the  event  of  Optionee's   death,   disability  or  other
          termination  of  employment,  the  exercisability  of  the  option  is
          governed by Sections 5, 6, 7 and 8 below.

     (b)  Method of Exercise. This Option shall be exercisable by written notice
          which shall state the election to exercise  the Option,  the number of
          shares in  respect of which the  option is being  exercised,  and such
          other representations and agreements as may be required by the Company
          pursuant to the  provisions of the Plan.  Such written notice shall be
          signed  by the  Optionee  and  shall  be  delivered  in  person  or by
          certified mail to the Secretary of the Company.

     No shares will be issued  pursuant to the exercise of an option unless such
issuance and such exercise shall comply with all relevant  provisions of law and
the  requirements  of any stock exchange or inter-dealer  quotation  system upon
which the Shares may then be listed or quoted.  Assuming  such  compliance,  the
shares shall be considered  transferred to the Optionee on the date on which the
option is  exercised  with  respect to such  shares.  An Optionee  shall have no
rights as a  shareholder  of the Company with  respect to any shares,  until the
issuance of a stock certificate to the Optionee for such shares.

4.   METHOD OF PAYMENT.

     Payment of the exercise price shall be by cash,  certified check,  official
bank check,  or by the  delivery of  previously  owned  shares of the  Company's
Common Stock held for the  requisite  period to avoid a charge to the  Company's
reported earnings and with a fair market value on the date of surrender equal to
the  exercise  price.  In  addition,  the  Optionee  may  exercise the Option by
delivering  to the Company,  together  with the exercise  notice,  (i) a copy of
irrevocable  written  instructions  provided  by the  Optionee  to a  designated
brokerage firm to effect the immediate sale of the purchased Shares and remit to
the  Company,  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  Company by reason of such  purchase  and (ii)
written  instructions  to the  Company  to  deliver  the  certificates  for  the
purchased  Shares  directly to such brokerage firm in order to complete the sale
transaction.

5.   TERMINATION  OF STATUS AS AN EMPLOYEE OR DIRECTOR FOR ANY REASON OTHER THAN
     CAUSE.

     If an Optionee ceases to serve as an Employee or Director, he may, but only
within  three  months  after the date he ceases to be an Employee or Director of
the Company, exercise this Option to the extent that the Option was vested as of
the  date of such  termination;  provided  that in no  event  is the date of the
exercise beyond  expiration of the Option. To the extent that the option was not
vested as of the date of such termination, or if Optionee does not exercise this
option within the time specified herein, the Option shall terminate.

6.   TERMINATION OF STATUS AS AN EMPLOYEE FOR CAUSE.

     If an Optionee's status as an Employee is terminated for Cause, as provided
in Section 5(d) of the Plan,  this Option shall  terminate on the  thirtieth day
after the date of termination  of  employment.  "Cause" may consist of an act of
embezzlement;  fraud;  dishonesty;  breach  of  fiduciary  duty to the  Company;
deliberate disregard of the rules of the Company which result in loss, damage or
injury to the  Company;  the  unauthorized  disclosure  of any of the secrets or
confidential  information  of the  Company;  the  inducement  of any  client  or
customer of the Company to break any contract with the Company or the inducement
of any  principal  for whom the Company acts as agent to  terminate  such agency
relations;  engagement in any conduct which constitutes  unfair competition with
the  Company;  or the removal of Optionee  from any office of the Company by any
bank regulatory agency.

7.   DISABILITY OF OPTIONEE.

     Notwithstanding the provisions of Section 5 above, if Optionee is unable to
continue  his  employment  with the  Company as a result of his  disability  (as
defined  below),  he may,  within twelve months from the date of  termination of
employment,  exercise  his  option to the extent the Option was vested as of the
date of such  termination;  provided  that in no event  is the date of  exercise
beyond expiration of the Option. To the extent that the Option was not vested as
of the date of  termination,  or if he does not exercise  such Option within the
time  specified  herein,  the  option  shall  terminate.  For  purposes  of this
provision,  "disability"  shall mean the  inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental  impairment  and shall be  determined  by the Board of  Directors  or the
Committee  on the basis of such  medical  evidence as the Board of  Directors or
Committee deems warranted under the circumstances.

8.   DEATH OF OPTIONEE.

     In the event of the death of  Optionee  while  Optionee  is an  Employee or
Director or during the period  referred to in Section 5 above,  the option my be
exercised, at any time within twelve (12) months following the date of death (or
such longer period as the committee  determines),  by Optionee's  estate or by a
person who acquired the right to exercise the Option by bequest or  inheritance,
but only to the extent  the Option was vested as of the date of death;  provided
that in no event is the date of exercise beyond expiration of the option.

9.   NON-TRANSFERABILITY OF OPTION.

     This Option may not be transferred in any manner  otherwise than by will or
by the laws of descent or distribution  and may be exercised during the lifetime
of  Optionee  only by him.  The terms of this option  shall be binding  upon the
executors, administrators, heirs, successors and assigns of the Optionee.

10.  TERM OF OPTION.

     Subject to earlier  termination  as provided in the Plan,  the Option shall
terminate  ten (10)  years  from the  date of grant of this  Option,  any may be
exercised  during  such term only in  accordance  with the Plan and the terms of
this Option.

11.  TAXATION UPON EXERCISE OF OPTION.

     Optionee  understands that upon exercise of this Option,  he will generally
recognize  income for tax  purposes in an amount equal to the excess of the then
fair market  value of the Shares over the  exercise  price.  The Company will be
required to withhold tax from Optionee's  current  compensation  with respect to
such income; to the extent that Optionee's current  compensation is insufficient
to satisfy the withholding  tax liability,  the company may require the Optionee
to make a cash  payment to cover such  liability  as a condition  of exercise of
this  Option.  (The  Optionee  may elect to pay such tax by (i)  requesting  the
Company to withhold a sufficient  number of shares from the shares otherwise due
upon  exercise  or (ii) by  delivering  a  sufficient  number  of  shares of the
Company's  Common Stock which have been previously held by the Optionee for such
period of time as the Committee may require.  The aggregate  value of the shares
withheld or delivered,  as  determined  by the  Committee  must be sufficient to
satisfy  all  such  applicable  taxes,  except  as  otherwise  permitted  by the
Committee.  If the Optionee is subject to Section 16 of the Securities  Exchange
Act of 1934, as amended, the Optionee's election must be made in compliance with
rules and procedures established by the Committee.)


Date of Grant:                  SARATOGA BANCORP

                                By:
                                Name:
                                Duly authorized on behalf of
                                Saratoga Bancorp

     Optionee  hereby  agrees  to accept as  binding,  conclusive  and final all
decisions or interpretations of the Board of Directors or the Committee upon any
questions arising under the Plan.

                                Dated:


                                Optionee:

<PAGE>



                                SARATOGA BANCORP
                       NONSTATUTORY STOCK OPTION AGREEMENT
                              FOR OUTSIDE DIRECTORS


     Pursuant  to the  automatic  nondiscretionary  terms  of  Section  5 of the
Saratoga  Bancorp  1994 Stock  Option Plan (the  "Plan"),  Saratoga  Bancorp,  a
California corporation (the "Company"),  hereby grants to _________________ (the
"Optionee"),  an option (the "Option") to purchase a total of ________ shares of
Common Stock, at the price  determined as provided  herein,  and in all respects
subject to the terms,  definitions and provisions of the Plan. The terms defined
in the Plan shall have the same defined meanings herein.

     1.  Nature of the  Option.  This  Option is intended by the Company and the
Optionee to be a nonstatutory  stock option and does not qualify for any special
tax  benefits to the  Optionee.  This option is not an  Incentive  Stock  Option
within the  meaning of Section  422 of the  Internal  Revenue  Code of 1986,  as
amended.

     2. Exercise Price. The exercise price is $ _______ for each share of Common
Stock,  which  price is not less  than the fair  market  value  per share of the
Common Stock on the date of grant.

     3.  Exercise of Option.  This Option shall be  immediately  exercisable  in
accordance  with Section 5(c) of the Plan.  This Option may not be exercised for
less than ten shares nor for a fraction of a share.  In the event of  Optionee's
death, disability or other termination of his status as an Outside Director, the
exercisability of the Option is governed by Sections 6, 7 and 8 below.

     4. Method of Exercise.  This Option shall be  exercisable by written notice
which shall state the election to exercise  the Option,  the number of shares in
respect of which the Option is being exercised,  and such other  representations
and  agreements as may be required by the Company  pursuant to the provisions of
the Plan.  Such  written  notice  shall be signed by the  Optionee  and shall be
delivered in person or by certified mail to the Secretary of the Company.

     No shares will be issued  pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant  provisions of law and
the  requirements  of any stock exchange or inter-dealer  quotation  system upon
which the Shares may then be listed or quoted.  Assuming  such  compliance,  the
shares shall be considered  transferred to the Optionee on the date on which the
Option is  exercised  with  respect to such  shares.  An Optionee  shall have no
rights as a  shareholder  of the Company  with  respect to any shares  until the
issuance of a stock certificate to the Optionee for such shares.

     5.  Method of  Payment.  Payment of the  exercise  price  shall be by cash,
certified  check,  official bank check,  or by the delivery of previously  owned
shares of the Company's  Common Stock held for the  requisite  period to avoid a
charge to the  Company's  reported  earnings and with a fair market value on the
date of surrender  equal to the exercise  price.  In addition,  the Optionee may
exercise the Option by  delivering  to the Company,  together  with the exercise
notice, (i) a copy of irrevocable written instructions  provided by the Optionee
to a designated  brokerage  firm to effect the  immediate  sale of the purchased
Shares  and remit to the  Company,  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  Company  by reason of such
purchase  and  (ii)  written   instructions   to  the  Company  to  deliver  the
certificates  for the purchased  Shares directly to such brokerage firm in order
to complete the sale transaction.

     6.  Termination of Status as an outside  Director For Any Reason Other Than
Cause. If an Optionee ceases to serve as an outside  Director,  he may, but only
within three months after the date he ceases to be an outside Director, exercise
this Option; provided that in no event is the date of exercise beyond expiration
of the option.  To the extent that Optionee does not exercise this option within
the time specified herein, the Option shall terminate.

     7.  Disability  of Optionee.  Notwithstanding  the  provisions of section 6
above, if Optionee is unable to continue his service as an outside Director as a
result of his  disability,  he may,  within  twelve months from the date of such
disability  exercise  this  Option;  provided  that in no  event  is the date of
exercise beyond  expiration of the Option.  To the extent that Optionee does not
exercise  this  Option  within  the time  specified  herein,  the  option  shall
terminate.

     8. Death of Optionee.  In the event of the death of Optionee while Optionee
is an Outside Director,  the option may be exercised,  at any time within twelve
(12) months following the date of death by Optionee's  estate or by a person who
acquired  the right to exercise the Option by bequest or  inheritance;  provided
that in no event is the date of exercise beyond expiration of the Option. To the
extent that this Option is not exercised within the time specified  herein,  the
option shall terminate.

     9. Non-Transferability of Option. This Option may not be transferred in any
manner  otherwise than by will or by the laws of descent or distribution and may
be  exercised  during the  lifetime of Optionee  only by him.  The terms of this
Option shall be binding upon the executors,  administrators,  heirs,  successors
and assigns of the optionee.

     10. Term of Option. Subject to earlier termination as provided in the Plan,
this Option shall terminate ten years from the date of grant of this option, and
may be exercised during such term only in accordance with the Plan and the terms
of this Option.

DATE OF GRANT:
                                   Saratoga Bancorp
                                   By:
                                   Duly Authorized on Behalf of Saratoga Bancorp


     Optionee  hereby  agrees  to accept as  binding,  conclusive  and final all
decisions or interpretations of the Board of Directors or the Committee upon any
questions arising under the Plan.

Dated:                             By:
                                        -----------------------------
                                        Optionee