<PAGE>
                                   WESTERN BANCORP 
                            4100 NEWPORT PLACE, SUITE 900
                           NEWPORT BEACH, CALIFORNIA 92660

                                           

March 19, 1998

To:  Executives of Western Bancorp and Subsidiaries

From:  Matthew P. Wagner

Subject:  Western Bancorp Executive Severance Plan

     Western Bancorp has adopted the Western Bancorp Executive Severance Plan
(the "Plan"), as follows:

                                     ARTICLE I
                                    DEFINITIONS 

1.1  DEFINITIONS

     Whenever used in this Plan, the following capitalized terms shall have the
     meanings set forth in this Section 1.1, certain other capitalized terms
     being defined elsewhere in this Plan:

     (a)  "Board" means the Board of Directors of the Company.

     (b)  "Change in Control" shall mean the occurrence of any of the 
          following:

                    (i)   Any "Person" or "Group" (as such terms are defined in
               Section 13(d) of the Securities Exchange Act of 1934 (the
               "Exchange Act") and the rules and regulations promulgated
               thereunder) is or becomes the "Beneficial Owner" (within the
               meaning of Rule 13d-3 under the Exchange Act), directly or
               indirectly, of securities of the Company, or of any entity
               resulting from a merger or consolidation involving the Company,
               representing more than fifty percent (50%) of the combined voting
               power of the then outstanding securities of the Company or such
               entity.

                    (ii)  The individuals who, as of the date hereof, are
               members of the Board (the "Existing Directors"), cease, for any
               reason, to constitute more than fifty percent (50%) of the number
               of authorized directors of the Company as determined in the
               manner prescribed in the 

<PAGE>

               Company's Articles of Incorporation and Bylaws; PROVIDED, 
               HOWEVER, that if the election, or nomination for election, by 
               the Company's stockholders of any new director was approved 
               by a vote of at least fifty percent (50%) of the Existing 
               Directors, such new director shall be considered an Existing 
               Director; PROVIDED FURTHER, HOWEVER, that no individual shall 
               be considered an Existing Director if such individual 
               initially assumed office as a result of either an actual or 
               threatened "Election Contest" (as described in Rule 14a-11 
               promulgated under the Exchange Act) or other actual or 
               threatened solicitation of proxies by or on behalf of anyone 
               other than the Board (a "Proxy Contest"), including by reason 
               of any agreement intended to avoid or settle any Election 
               Contest or Proxy Contest.
               
                       (iii) The consummation of (x) a merger, consolidation or
               reorganization to which the Company is a party, whether or not
               the Company is the Person surviving or resulting therefrom, or
               (y) a sale, assignment, lease, conveyance or other disposition of
               all or substantially all of the assets of the Company, in one
               transaction or a series of related transactions, to any Person
               other than the Company, where any such transaction or series of
               related transactions as is referred to in clause (x) or clause
               (y) above in this subparagraph (iii) (a "Transaction") does not
               otherwise result in a "Change in Control" pursuant to
               subparagraph (i) of this definition of "Change in Control";
               PROVIDED, HOWEVER, that no such Transaction shall constitute a
               "Change in Control" under this subparagraph (iii) if the Persons
               who were the shareholders of the Company immediately before the
               consummation of such Transaction are the Beneficial Owners,
               immediately following the consummation of such Transaction, of
               fifty percent (50%) or more of the combined voting power of the
               then outstanding voting securities of the Person surviving or
               resulting from any merger, consolidation or reorganization
               referred to in clause (x) above in this subparagraph (iii) or the
               Person to whom the assets of the Company are sold, assigned,
               leased, conveyed or disposed of in any transaction or series of
               related transactions referred in clause (y) above in this
               subparagraph (iii).

                                      -2-

<PAGE>

     (c)  "Code" means the Internal Revenue Code of 1986, as amended.  

     (d)  "Company" means Western Bancorp, a California corporation, and any
          successor or assignee as provided in Article V.

     (e)  "Compensation" means your highest annual compensation for any calendar
          year in the three calendar years ending with the calendar year which
          includes the date of your termination of employment with the Company
          and its Subsidiaries, with your compensation for any such calendar
          year in which you do not complete twelve (12) months of service being
          annualized on the basis of a twelve (12) month year.  For purposes of
          determining your "Compensation," your annual compensation for any
          calendar year or portion thereof shall be limited to your base salary,
          your nonaccountable automobile and other expense allowances, and your
          bonus attributable to such calendar year regardless of when paid (or,
          if you did not receive a bonus for a calendar year, your target
          bonus), before reductions for any amounts excludable from your gross
          income for federal income tax purposes pursuant to Section 125 or
          Section 401(k) of the Code or under any nonqualified deferred
          compensation plan.  "Compensation" shall NOT include your income from
          the grant or vesting of restricted stock, or from the grant, vesting,
          or exercise of stock options.

     (f)  "Disability" means a physical or mental infirmity which substantially
          impairs your ability to perform your material duties for a period of
          at least one hundred eighty (180) consecutive calendar days, and, as a
          result of such Disability, you have not returned to your full-time
          regular employment prior to termination.

     (g)  "Employee Grade" means the grade within the compensation system to
          which you are assigned by the Company.

     (h)  "Executive" means a regular full-time salaried or hourly employee of
          the Company or its Subsidiaries in Employee Grades 1, 2, 3, A or B who
          does not have an individual agreement with the Company or its
          Subsidiaries regarding severance payments. 

     (i)  "ERISA" means the Employee Retirement Income Security Act of 1974, as
          amended.

     (j)  "Good Reason" means any of the following events, provided that you
          give the Company or its Subsidiary 

                                      -3-
<PAGE>

          at least thirty (30) days prior written notice of your termination
          with the Company or its Subsidiary: 

          (i)  a reduction by the Employer in the your base salary as in effect
          immediately before such reduction; or

          (ii) a diminution in your duties and responsibilities, as in effect
          immediately before the Change in Control, or an adverse change, after
          the occurrence of a Change in Control, in your place in the Company's
          organization chart or in the seniority of the individual to whom you
          report; or

          (iii) a material reduction in the your annual target bonus opportunity
          (if any) (for this purpose, a reduction for any year of over ten
          percent (10%) of your annual target bonus opportunity (if any)
          measured by the preceding year shall be considered "material"); or

          (iv) a material reduction in your Welfare Benefits (for this purpose,
          a reduction for any one year of over ten percent (10%) of aggregate
          Welfare Benefits shall be considered "material"); or

          (v)  the failure by the Company or its Subsidiaries to provide and
          credit you with the number of accrued annual leave days to which you
          are then entitled in accordance with the Company's normal annual leave
          policy as in effect immediately before the Change in Control; or

          (vi) the Employer's requiring you to be based more than twenty five
          (25) miles from the location  of your place of employment immediately
          before the Change in Control, except for normal business travel in
          connection with your duties with the Company or its Subsidiaries.
     
     (k)  "Just Cause" means:

          (i)  the willful and continued failure by you to perform
          substantially your duties with the Company and its Subsidiaries, and
          such willful and continued failure continues after a demand for
          substantial performance is delivered to you by the Company or its
          Subsidiaries which specifically identifies the manner in which you
          have not substantially performed your duties; or

          (ii) the willful engaging by you in conduct which is materially and 
          demonstrably injurious to the 

                                      -4-
<PAGE>

          business or reputation of the Company or its Subsidiaries.

     For purposes of determining whether "Just Cause" exists, no act or failure
     to act on your part shall be considered "willful" unless done, or omitted
     to be done, by you in bad faith and without reasonable belief that the
     action or omission was in, or not opposed to, the best interests of the
     Company and its Subsidiaries.

     (l)  "Multiplier" for each Employee Grade shall be the number set forth
          opposite such Employee Grade below:

<TABLE>
<CAPTION>
          Employee Grade                Multiplier
          --------------                ----------

          <S>                               <C>
          Grade One                          3
          Grade Two                          2
          Grade Three                        2
          Grade A                            2
          Grade B                            1
</TABLE>
          
     (m)  "Person" shall have the meaning set forth in the  definition of
     "Change in Control."

     (n)  "Release" means the Separation and General Release Agreement in the
          form attached hereto as Exhibit "A".

     (o)  "Severance Payment" means the payment of severance compensation as
          provided in Article III.

     (p)  "Severance Period" means the number of whole months equal to the
          product of 12 multiplied by the Multiplier for your Employee Grade,
          beginning on the date of your termination of employment with the
          Company and its Subsidiaries.

     (q)  "Subsidiary" means any corporation or other Person, a majority of the
          voting power, equity securities or equity interest of which is owned
          directly or indirectly by the Company.

     (r)  "WARN" means the Worker Adjustment and Retraining Notification
          Act, 29 U.S.C. Section 2101 ET SEQ.

     (s)  "Welfare Benefits" means the medical, dental, disability and life
          insurance coverages (including coverage under self-insured
          arrangements or plans) which the Company or its Subsidiaries provide
          to you or your dependents immediately before a Change in Control.

                                      -5-
<PAGE>

                                           
                                      ARTICLE II
                    INDEMNIFICATION AND GROSS-UP FOR EXCISE TAXES

2.1  INDEMNIFICATION AND GROSS-UP

     The Company hereby indemnifies you and holds you harmless from and 
against any and all liabilities, costs and expenses (including, without 
limitation, attorney's fees and costs) you may incur as a result of the 
excise tax imposed by Section 4999 of the Code or any similar provision of 
state or local income tax law (the "Excise Tax"), to the end that you shall 
be placed in the same tax position with respect to the Severance Payment 
under this Plan and all other payments from the Company to you in the nature 
of compensation as you would have been in if the Excise Tax had never been 
enacted.  In furtherance of such indemnification, the Company shall pay to 
you a payment (the "Gross-Up Payment") in an amount such that, after payment 
by you of all taxes, including income taxes and the Excise Tax imposed on the 
Gross-Up Payment and any interest or penalties (other than interest and 
penalties imposed by reason of your failure to file timely tax returns or to 
pay taxes shown due on such returns and any tax liability, including interest 
and penalties, unrelated to the Excise Tax or the Gross-Up Amount), you shall 
be placed in the same tax position with respect to the Severance Payment 
under this Plan and all other payments from the Company to you in the nature 
of compensation as you would have been in if the Excise Tax had never been 
enacted.  At such time or times necessary to carry out the purposes of this 
Article II in view of the withholding requirement of Section 4999(c)(1) of 
the Code, the Company shall pay to you one or more Gross-Up Payments for the 
Severance Payment and any other payments in the nature of compensation which 
the Company determines are "excess parachute payments" under Section 
280G(b)(1) of the Code ("Excess Parachute Payments").  If, through a 
determination of the Internal Revenue Service or any state or local taxing 
authority (a "Taxing Authority"), or a judgement of any court, you become 
liable for an amount of Excise Tax not covered by the Gross-Up Payment 
payable pursuant to the preceding sentence, the Company shall pay you an 
additional Gross-Up Payment to make you whole for such additional Excise Tax; 
PROVIDED, HOWEVER, that, pursuant to Section 2.3, the Company shall have the 
right to require you to protest, contest, or appeal any such determination or 
judgement.  For purposes of this Article II, any amount which the Company is 
required to withhold under Sections 3402 or 4999 of the Code or under any 
other provision of law shall be deemed to have been paid to you.

                                      -6-
<PAGE>

2.2  REPORTING

     Upon payment to you of a Gross-Up Payment, the Company shall provide you
with a written statement showing the Company's computation of such Gross-Up
Payment and the Excess Parachute Payments and Excise Tax to which it relates,
and setting forth the Company's determination of the amount of gross income you
are required to recognize as a result of such payments and your liability for
the Excise Tax.  You shall cause your federal, state, and local income tax
returns for the period in which you receive such Gross-Up Payment to be prepared
and filed in accordance with such statement, and, upon such filing, you shall
certify in writing to the Company that such returns have been so prepared and
filed.  At your request, the Company shall furnish to you, at no cost to you,
assistance in preparing your federal, state, and local income tax returns for
the period in which you receive such Gross-Up Payment in accordance with such
statement.  Notwithstanding the provisions of Section 2.1, the Company shall not
be obligated to indemnify you from and against any tax liability, cost or
expense (including, without limitation, any liability for the Excise Tax or
attorney's fees or costs) to the extent such tax liability, cost or expense is
attributable to your failure to comply with the provisions of this Section 2.2.
 

2.3  CONTROVERSIES

     If any controversy arises between you and a Taxing Authority with respect
to the treatment on any return of the Gross-Up Amount, or of any payment you
receive from the Company as an Excess Parachute Payment, or with respect to any
return which a Taxing Authority asserts should show an Excess Parachute Payment,
including, without limitation, any audit, protest to an appeals authority of a
Taxing Authority or litigation (a "Controversy"), the Company shall have the
right to participate with you in the handling of such Controversy.  The Company
shall have the right, solely with respect to a Controversy, to direct you to
protest or contest any proposed adjustment or deficiency, initiate an appeals
procedure within any Taxing Authority, commence any judicial proceeding, make
any settlement agreement, or file a claim for refund of tax, and you shall not
take any of such steps without the prior written approval of the Company, which
the Company shall not unreasonably withhold.  If the Company elects, you shall
be represented in any Controversy by attorneys, accountants, and other advisors
selected by the Company, and the Company shall pay the fees, costs and expenses
of such attorneys, accountants, or advisors, and any tax liability you may incur
as a result of such payment.  You shall promptly notify the Company of any
communication with a 

                                      -7-

<PAGE>

Taxing Authority, and you shall promptly furnish to the Company copies of any 
written correspondence, notices, or documents received from a Taxing 
Authority relating to a Controversy. You shall cooperate fully with the 
Company in the handling of any Controversy by furnishing to the Company any 
information or documentation relating to or bearing upon the Controversy; 
PROVIDED, HOWEVER, that you shall not be obligated to furnish to the Company 
copies of any portion of your tax returns which do not bear upon, and are not 
affected by, the Controversy.  

2.4  REFUNDS

     You shall pay over to the Company, within ten (10) days after your receipt
thereof, any refund you receive from any Taxing Authority of all or any portion
of the Gross-Up Payment or the Excise Tax, together with any interest you
receive from such Taxing Authority on such refund.  For purposes of this Section
2.4, a reduction in your tax liability attributable to the previous payment of
the Gross-Up Amount or the Excise Tax shall be deemed to be a refund.  If you
would have received a refund of all or any portion of the Gross-Up Payment or
the Excise Tax, except that a Taxing Authority offset the amount of such refund
against other tax liabilities, interest, or penalties, you shall pay the amount
of such offset over to the Company, together with the amount of interest you
would have received from the Taxing Authority if such offset had been an actual
refund, within ten (10) days after receipt of notice from the Taxing Authority
of such offset.  

                                    ARTICLE III
                                 SEVERANCE PAYMENTS

3.1  RIGHT TO SEVERANCE PAYMENT; RELEASE

     Conditioned on the execution and delivery by you (or your beneficiary or
personal representative, if applicable) of the Release, you shall be entitled to
receive a Severance Payment from the Company in the amount provided in Section
3.2 if (a) you are an Executive, and (b) within twenty four (24) months after
the occurrence of a Change in Control, your employment with the Company and its
Subsidiaries terminates for any reason other than:

     (a)  Death,

     (b)  Disability, 

     (c)  Termination by the Company or its Subsidiaries for Just Cause,

                                      -8-

<PAGE>

     (d)  Retirement in accordance with the normal retirement policy of the
          Company,

     (e)  Voluntary termination by you for other than Good Reason, or

     (f)  The sale by the Company of the Subsidiary which employed you before
          such sale, if you have been offered employment with the purchaser of
          such Subsidiary on substantially the same terms and conditions under
          which such you worked for the Subsidiary before the sale.

If your employment with the Company or its Subsidiaries terminates before the
occurrence of a Change in Control for any reason other than one of those
enumerated immediately above, your employment will be deemed to have terminated
on the day after the occurrence of the Change in Control if (i) your employment
terminates within ninety (90) days before a Change in Control actually occurs,
or (ii) you reasonably demonstrate that the Company or its Subsidiaries
involuntarily terminated your employment, or gave you Good Reason, at the
request of a Person (other than the Company or its Subsidiaries) who has
indicated an intention or taken steps reasonably calculated to effect a Change
in Control, or otherwise in connection with, or in anticipation of, a Change in
Control which actually occurs.  

3.2  AMOUNT OF SEVERANCE PAYMENT

     If you become entitled to a Severance Payment under this Plan, the amount
of your Severance Payment, when added to any payments which the Company or its
Subsidiaries are required to make to you under WARN, shall equal the product of
your Compensation multiplied by the Multiplier for your Employee Grade.
 
3.3  NO MITIGATION

     The Company acknowledges and agrees that you shall be entitled to receive
your entire Severance Payment regardless of any income which you may receive
from other sources following your termination on or after the Effective Time.

                                      -9-

<PAGE>

3.4  PAYMENT OF SEVERANCE PAYMENT

     The Severance Payment to which you are entitled shall be paid to you, in
cash and in full, not later than eight (8) calendar days after execution and
delivery by you (or your beneficiary or personal representative, if applicable)
of the Release Agreement, but in no event before the date on which such Release
becomes effective.  If you should die before all amounts payable to you have
been paid, such unpaid amounts shall be paid to your beneficiary under this Plan
or, if you have not designated such a beneficiary in writing to the Company, to
the personal representative(s) of your estate.

3.5  WELFARE BENEFITS

     If you are entitled to receive a Severance Payment under Section 3.1, 
you will also be entitled to receive continued Welfare Benefits on the same 
basis, including required employee contributions, if any, as in effect for 
similarly-situated Executives in the employ of the Company or its 
Subsidiaries, for your Severance Period.  Notwithstanding the foregoing, your 
right to any particular type of Welfare Benefit shall be subject to 
cancellation by the Company if you or your dependents obtain alternative 
coverage of a similar type during the Severance Period; provided, however, 
that if any such alternative group health coverage excludes any pre-existing 
condition that you or your dependents may have when coverage under such group 
health plan would otherwise begin, coverage under this Section 3.5 shall 
continue (but not beyond the Severance Period) with respect to such 
pre-existing condition until such exclusion under such other group health 
plan lapses or expires.  You shall be obligated to notify the Company's Human 
Resources Department of any such alternative coverage within thirty (30) days 
of its first becoming applicable to you or your dependents.  In the event you 
are required to make an election under Sections 601 through 607 of ERISA 
(commonly known as COBRA) to qualify for continuing health benefits coverage 
described in this Section 3.5, the obligations of the Company and its 
Subsidiaries under this Section 3.5 to continue your health benefits coverage 
shall be conditioned upon your timely making such an election.   

3.6  AUTOMOBILE

     If you become entitled to receive a Severance Payment under Section 3.1,
and you then have the use of an automobile that is provided to you at the
expense of the Company or any Subsidiary, you shall have the right, for ninety
(90) days following your termination of employment, (a) to continue your use of
the automobile on the same basis on which you used it immediately before your
termination of employment, or (b) to purchase the automobile from the Company or
Subsidiary

                                     -10-
<PAGE>

for its low wholesale bluebook value, or, if the Company or Subsidiary has 
leased the automobile, to assume the lease, or (c) to take the actions 
described in clauses (a) and (b) of this sentence.

3.7  OUTPLACEMENT SERVICES

     If you become entitled to receive a Severance Payment under Section 3.1,
you will also become entitled to receive outplacement services in accordance
with the Company's usual practice.

3.8  WITHHOLDING OF TAXES

     The Company may withhold from any amounts payable under this Plan all
federal, state, city or other taxes required by applicable law to be withheld by
the Company.


                                     ARTICLE IV
                       OTHER RIGHTS AND BENEFITS NOT AFFECTED

4.1  OTHER BENEFITS

     This Plan does not provide a pension for you, nor shall any payment
hereunder be characterized as deferred compensation.  Except as set forth in
Section 4.2, neither the provisions of this Plan nor the Severance Payment
provided for hereunder shall reduce any amounts otherwise payable, or in any way
diminish your rights as an employee, whether existing now or hereafter, under
any written benefit, incentive, retirement, stock option, stock bonus or stock
purchase plan or any written employment agreement or other written plan or
arrangement not related to severance.  

4.2  OTHER SEVERANCE PLANS SUPERSEDED

     As of the Effective Time, this Plan will supersede any and all other
severance plans of the Company or its Subsidiaries to the extent they apply to
Executives (except for any individual severance agreement between you and the
Company and its Subsidiaries), and your participation in any other severance
plan of the Company and its Subsidiaries will be hereby terminated.

4.3  EMPLOYMENT STATUS

     This Plan does not constitute a contract of employment or impose on you any
obligation to remain in the employ of the Company, nor does it impose on the
Company or any of its Subsidiaries any obligation to retain you in your present
or any other position, nor does it change the status of your

                                     -11-
<PAGE>

employment as an employee at will.  Nothing in this Plan shall in any way 
affect the right of the Company or any of its Subsidiaries in its absolute 
discretion to change or reduce your compensation at any time, or to change at 
any time one or more benefit plans, including but not limited to pension 
plans, dental plans, health care plans, savings plans, bonus plans, vacation 
pay plans, disability plans, and the like.

                                     ARTICLE V
                                SUCCESSOR TO COMPANY

     The Company shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Company, expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Plan, in the same manner and to the same extent that the Company would be
required to perform if no such succession or assignment had taken place.  In
such event, the term "Company," as used in this Plan, shall mean (from and
after, but not before, the occurrence of such event) the Company as herein
before defined and any successor or assignee to the business or assets which by
reason hereof becomes bound by the terms and provisions of this Plan.

                                     ARTICLE VI
                                  CONFIDENTIALITY

6.1  NONDISCLOSURE OF CONFIDENTIAL MATERIAL

     In the performance of your duties, you have previously had, and may in 
the future have, access to confidential records and information, including, 
but not limited to, development, marketing, purchasing, organizational, 
strategic, financial, managerial, administrative, manufacturing, production, 
distribution and sales information, data, specifications and processes 
presently owned or at any time hereafter developed by the Company or its 
agents or consultants or used presently or at any time hereafter in the 
course of its business, that are not otherwise part of the public domain 
(collectively, the "Confidential Material"). All such Confidential Material 
is considered secret and has been and/or will be disclosed to you in 
confidence.  By your acceptance of your Severance Payment under this Plan, 
you shall be deemed to have acknowledged that the Confidential Material 
constitutes proprietary information of the Company which draws independent 
economic value, actual or potential, from not being generally known to the 
public or to other persons who could obtain economic value from its 
disclosure or use, and that the Company has taken efforts reasonable under 
the circumstances, of which this Section 6.1 is an 

                                     -12-

<PAGE>

example, to maintain its secrecy. Except in the performance of your duties to 
the Company, you shall not, directly or indirectly for any reason whatsoever, 
disclose or use any such Confidential Material, except that the foregoing 
disclosure prohibition shall not apply as to Confidential Material that (i) 
has been publicly disclosed or was within your possession prior to its being 
furnished to you by the Company or becomes available to you on a 
nonconfidential basis from a third party (in any of such cases, not due to a 
breach by you of your obligations to the Company or by breach of any other 
person of a confidential, fiduciary or confidential obligation, the breach of 
which you know or reasonably should know), (ii) is required to be disclosed 
by you pursuant to applicable law, and you provide notice to the Company of 
such requirement as promptly as possible, or (iii) was independently acquired 
or developed by you without violating any of the obligations under this Plan 
and without relying on Confidential Material of the Company.  All records, 
files, drawings, documents, equipment and other tangible items, wherever 
located, relating in any way to the Confidential Material or otherwise to the 
Company's business, which you have prepared, used or encountered or shall in 
the future prepare, use or encounter, shall be and remain the Company's sole 
and exclusive property and shall be included in the Confidential Material.  
Upon your termination of employment with the Company, or whenever requested 
by the Company, you shall promptly deliver to the Company any and all of the 
Confidential Material and copies thereof, not previously delivered to the 
Company, that may be, or at any previous time has been, in your possession or 
under your control.  

6.2  NONSOLICITATION OF EMPLOYEES

     By your acceptance of your Severance Payment under this Plan, you agree
that, for a period of two (2) years following your termination of employment
with the Company or its Subsidiaries, neither you nor any Person or entity in
which you have an interest shall solicit any person who was employed on the date
of your termination of employment by the Company or any of its Subsidiaries to
leave the employ of the Company or any of its Subsidiaries.  Nothing in this
Section 6.2, however, shall prohibit you or any Person or entity in which you
have an interest from placing advertisements in periodicals of general
circulation soliciting applications for employment, or from employing any person
who answers any such advertisement.  For purposes of this Section 6.2, you shall
not be deemed to have an interest in any corporation whose stock is publicly
traded merely because you are the owner of not more than two percent (2%) of the
outstanding shares of any class of stock of such corporation, provided you have
no active participation in the business of such corporation (other than voting
your stock) and you do not 

                                     -13-
<PAGE>

provide services to such corporation in any capacity (whether as an employee, 
an independent contractor or consultant, a board member, or otherwise).  

6.3  EQUITABLE RELIEF

     By your acceptance of your Severance Payment under this Plan, you shall be
deemed to have acknowledged that violation of Sections 6.1 or 6.2 would cause
the Company irreparable damage for which the Company cannot be reasonably
compensated in damages in an action at law, and that therefore in the event of
any breach by you of Sections 6.1 or 6.2, the Company shall be entitled to make
application to a court of competent jurisdiction for equitable relief by way of
injunction or otherwise (without being required to post a bond).  This provision
shall not, however, be construed as a waiver of any of the rights which the
Company may have for damages under this Plan or otherwise, and, except as
limited in Article VII, all of the Company's rights and remedies shall be
unrestricted.



                                    ARTICLE VII
                                    ARBITRATION

     Except for equitable relief as provided in Section 6.3, arbitration in
accordance with the then most applicable rules of the American Arbitration
Association shall be the exclusive remedy for resolving any dispute or
controversy between you and the Company or any of its Subsidiaries, including,
but not limited to, any dispute regarding your employment or the termination of
your employment or any dispute regarding the application, interpretation or
validity of this Plan not otherwise resolved through the claims procedure set
forth in Section 8.10.  The arbitrator shall be empowered to grant only such
relief as would be available in a court of law.  In the event of any conflict
between this Plan and the rules of the American Arbitration Association, the
provisions of this Plan shall be determinative.  If the parties are unable to
agree upon an arbitrator, they shall select a single arbitrator from a list
designated by the office of the American Arbitration Association having
responsibility for the city in which you primarily performed services for the
Company or its Subsidiaries immediately before your termination of employment of
seven arbitrators, all of whom shall be retired judges who are actively involved
in hearing private cases or members of the National Academy of Arbitrators, and
who, in either event, are residents of the area in which you primarily performed
services for the Company or its Subsidiaries immediately before your termination
of employment.  If the parties are unable to agree upon an arbitrator from such
list, they shall each 

                                     -14-
<PAGE>

strike names alternatively from the list, with the first to strike being 
determined by lot.  After each party has used three strikes, the remaining 
name on the list shall be the arbitrator.  The fees and expenses of the 
arbitrator shall initially be borne equally by the parties; PROVIDED, 
HOWEVER, that each party shall initially be responsible for the fees and 
expenses of its own representatives and witnesses.  Unless mutually agreed 
otherwise by the parties, any arbitration shall be conducted at a location 
within fifty (50) miles from the location in which you primarily performed 
services for the Company or any of its Subsidiaries immediately before your 
termination of employment.  If the parties cannot agree upon a location for 
the arbitration, the arbitrator shall determine the location within such 
fifty (50) mile radius.  Judgment may be entered on the award of the 
arbitrator in any court having jurisdiction.  The prevailing party in the 
arbitration proceeding, as determined by the arbitrator, and in any 
enforcement or other court proceedings, shall be entitled to the extent 
provided by law to reimbursement from the other party for all of the 
prevailing party's costs (including but not limited to the arbitrator's 
compensation), expenses and reasonable attorney's fees.

                                    ARTICLE VIII
                                   MISCELLANEOUS

8.1  APPLICABLE LAW

     To the extent not preempted by the laws of the United States, the laws of
the State of California shall be the controlling law in all matters relating to
this Plan, regardless of the choice-of-law rules of the State of California or
any other jurisdiction.

8.2  CONSTRUCTION

     No term or provision of this Plan shall be construed so as to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this Plan and any present or future statute, law,
ordinance, or regulation, the latter shall prevail, but in such event the
affected provision of this Plan shall be curtailed and limited only to the
extent necessary to bring such provision within the requirements of the law.

8.3  SEVERABILITY

     If a provision of this Plan shall be held illegal or invalid, the
illegality or invalidity shall not affect the remaining parts of this Plan and
this Plan shall be construed 

                                     -15-
<PAGE>

and enforced as if the illegal or invalid provision had not been included.

8.4  HEADINGS

     The Section headings in this Plan are inserted only as a matter of
convenience, and in no way define, limit, or extend or interpret the scope of
this Plan or of any particular Section.


8.5  ASSIGNABILITY 

     Your rights or interests under this Plan shall not be assignable or
transferrable (whether by pledge, grant of a security interest, or otherwise) by
you, your beneficiaries or legal representatives, except by will or by the laws
of descent and distribution.  

8.6  TERM 

     This Plan shall continue in full force and effect until its terms and
provisions are completely carried out, unless terminated by the Board with at
least a two-thirds majority before the occurrence of a Change in Control;
provided, however, that no termination of this Plan shall be effective if made
while the Company (or any Person acting on the Company's behalf) is conducting
negotiations to effect a Change in Control, or within ninety (90) days before
the Company (or any Person acting on its behalf) executes a letter of intent
(whether or not binding) or a definitive agreement to effect a Change in
Control.

8.7  AMENDMENT  

     This Plan may be amended in any respect by resolution adopted by the Board
with at least a two-thirds majority until Change in Control occurs; provided,
however, that this Section 8.7 shall not be amended, and no amendment shall be
effective if made while the Company (or any Person acting on the Company's
behalf) is conducting negotiations to effect a Change in Control, or within
ninety (90) days before the Company (or any Person acting on its behalf)
executes a letter of intent (whether or not binding) or a definitive agreement
to effect a Change in Control.  After a Change in Control occurs, this Plan
shall no longer be subject to amendment, change, substitution, deletion,
revocation or termination in any respect whatsoever.  No agreement or
representations, written or oral, express or implied, with respect to the
subject matter hereof, have been made by the Company which are not expressly set
forth in this Plan.

                                     -16-
<PAGE>

8.8  NOTICES 

     For purposes of this Plan, notices and all other communications provided
for herein shall be in writing and shall be deemed to have been duly given when
personally delivered, telecopied, or sent by certified or overnight mail, return
receipt requested, postage prepaid, addressed to the respective addresses, or
sent to the respective telecopier numbers, last given by each party to the
other, provided that all notices to the Company shall be directed to the
attention of the Board of Directors with a copy to the General Counsel.  All
notices and communications shall be deemed to have been received on the date of
delivery thereof if personally delivered, upon return confirmation if
telecopied, on the third business day after the mailing thereof, or on the date
after sending by overnight mail, except that notice of change of address shall
be effective only upon actual receipt.  No objection to the method of delivery
may be made if the written notice or other communication is actually received.

8.9  ADMINISTRATION

     This Plan constitutes a welfare benefit plan within the meaning of
Section 3(1) of ERISA.  This letter constitutes the governing document of the
Plan and the Summary Plan Description under ERISA.  The Administrator of the
Plan, within the meaning of Section 3(16) of ERISA, and the Named Fiduciary
thereof, within the meaning of Section 402 of ERISA, is the Company.  Attached
hereto as Exhibit "B" is a statement of your rights under ERISA.  

8.10 CLAIMS

     If you believe you are entitled to a benefit under this Plan, you may make
a claim for such benefit by filing with the Company a written statement setting
forth the amount and type of payment so claimed.  The statement shall also set
forth the facts supporting the claim.  The claim may be filed by mailing or
delivering it to the Secretary of the Company. 

     Within sixty (60) calendar days after receipt of such a claim, the Company
shall notify you in writing of its action on such claim and if such claim is not
allowed in full, shall state the following in a manner calculated to be
understood by you: 

          (a)  The specific reason or reasons for the denial;

          (b)  Specific reference to pertinent provisions of this Plan on
               which the denial is based;

                                     -17-
<PAGE>
     
          (c)  A description of any additional material or information
               necessary for you to be entitled to the benefits that have been
               denied and an explanation of why such material or information is
               necessary; and

          (d)  An explanation of this Plan's claim review procedure.
 
     If you disagree with the action taken by the Company, you or your duly
authorized representative may apply to the Company for a review of such action. 
Such application shall be made within one hundred twenty (120) calendar days
after receipt by you of the notice of the Company's action on your claim.  The
application for review shall be filed in the same manner as the claim for
benefits.  In connection with such review, you may inspect any documents or
records pertinent to the matter and may submit issues and comments in writing to
the Company.  A decision by the Company shall be communicated to you within
sixty (60) calendar days after receipt of the application.  The decision on
review shall be in writing and shall include specific reasons for the decision,
written in a manner calculated to be understood by you, and specific references
to the pertinent provisions of this Plan on which the decision is based.   

                                   Sincerely,

                                   WESTERN BANCORP



By:
   ---------------------           Matthew P. Wagner
                                   President and Chief
                                   Executive Officer

                                     -18-