<PAGE> 1


                            SGV BANCORP, INC. AMENDED
                         1997 STOCK-BASED INCENTIVE PLAN
                          (AS AMENDED ON JULY 24, 1998)

1.    DEFINITIONS.
      -----------

      (a) "Affiliate" means any "subsidiary corporation" of the Holding Company,
as such term is defined in Section 424(f) of the Code.

      (b) "Association"  means First Federal Savings and Loan Association of San
Gabriel Valley.

      (c) "Award" means, individually or collectively, a grant under the Plan of
Non-Statutory Stock Options,  Incentive Stock Options,  Limited Rights and Stock
Awards.

      (d) "Award Agreement" means an agreement  evidencing and setting forth the
terms of an Award granted under the Plan.

      (e)  "Board of  Directors"  means the board of  directors  of the  Holding
Company.

      (f) "Change in Control"  means a change in control of the  Association  or
Holding  Company  of a nature  that (i)  would be  required  to be  reported  in
response to Item 1 of the  current  report on Form 8-K, as in effect on the date
hereof,  pursuant to Sections 13 or 15(d) of the Exchange Act; (ii) results in a
"change of  control"  or  "acquisition  of  control"  within the  meaning of the
regulations  promulgated  by the Office of Thrift  Supervision  ("OTS")  (or its
predecessor  agency)  found at 12  C.F.R.  Part  574,  as in  effect on the date
hereof; PROVIDED,  HOWEVER, that in applying the definition of change in control
as set forth under such  regulations the Board of Directors shall substitute its
judgment  for that of the OTS;  or (iii)  without  limitation  Change in Control
shall be deemed to have  occurred at such time as (A) any  "person" (as the term
is used in  Sections  13(d) and 14(d) of the  Exchange  Act) is or  becomes  the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly
or  indirectly,  of  securities  of  the  Association  or  the  Holding  Company
representing  20%  or  more  of  the  Association's  or  the  Holding  Company's
outstanding securities except for any securities of the Association purchased by
the Holding Company and any securities  purchased by any tax-qualified  employee
benefit plan of the Association;  or (B) individuals who constitute the Board of
Directors  on the date hereof (the  "Incumbent  Board")  cease for any reason to
constitute  at least a majority  thereof,  provided  that any person  becoming a
director  subsequent to the date hereof whose election was approved by a vote of
at least  three-quarters  of the directors  comprising the Incumbent  Board,  or
whose nomination for election by the Holding Company's stockholders was approved
by a nominating  committee  serving  under the  Incumbent  Board,  shall be, for
purposes  of this  clause  (B),  considered  as  though  he were a member of the
Incumbent Board; or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Association or the Holding Company or
similar  transaction  occurs in which the  Association or Holding Company is not
the resulting  entity;  or (D) a  solicitation  of  shareholders  of the Holding
Company,  by someone other than the current  management of the Holding  Company,
seeking   stockholder   approval  of  a  plan  of   reorganization,   merger  or
consolidation of the Holding Company or Association or similar



<PAGE> 2



transaction with one or more corporations,  as a result of which the outstanding
shares of the class of securities  then subject to the plan are exchanged for or
converted into cash or property or securities  not issued by the  Association or
the Holding Company;  or (E) a tender offer is made and accepted for 20% or more
of the voting securities of the Association or the Holding Company.

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

      (h) "Committee"  means the committee  designated by the Board of Directors
pursuant to Section 2 to administer the Plan.

      (i) "Common  Stock"  means the Common  Stock of the Holding  Company,  par
value, $.01 per share.

      (j) "Date of Grant" means the effective date of an Award.

      (k)  "Disability"  means any mental or physical  condition with respect to
which the Participant  qualifies for and receives benefits for under a long-term
disability plan of the Holding Company or an Affiliate.

      (l) "Effective Date" means July 24, 1998. The original  effective date for
the Plan was July 21, 1997.

      (m)  "Employee"  means any person  employed by the  Holding  Company or an
Affiliate.  Directors  who are  employed by the Holding  Company or an Affiliate
shall be considered Employees under the Plan.

      (n) "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      (o) "Exercise Price" means the price at which a Participant may purchase a
share of Common Stock pursuant to an Option.

      (p) "Fair Market Value" means the market price of Common Stock, determined
by the Committee as follows:

           (i)    If the Common  Stock was traded on the date in question on The
                  Nasdaq  Stock Market then the Fair Market Value shall be equal
                  to the last  transaction  price  quoted  for such  date by The
                  Nasdaq Stock Market;

           (ii)   If the Common Stock was traded on a stock exchange on the date
                  in question,  then the Fair Market Value shall be equal to the
                  closing   price   reported   by   the   applicable   composite
                  transactions report for such date; and


                                      2

<PAGE> 3



           (iii)  If neither of the foregoing provisions is applicable, then the
                  Fair Market Value shall be determined by the Committee in good
                  faith on such basis as it deems appropriate.

      Whenever possible, the determination of Fair Market Value by the Committee
shall  be  based  on  the  prices  reported  in The  Wall  Street  Journal.  The
Committee's  determination  of Fair Market Value shall be conclusive and binding
on all persons.

      (q) "Holding Company" means SGV BANCORP, INC.

      (r) "Incentive Stock Option" means a stock option granted to a Participant
pursuant to Section 7 of the Plan that is intended to meet the  requirements  of
Section 422 of the Code.

      (s) "Limited  Right" means an Award granted to a  Participant  pursuant to
Section 8 of the Plan.

      (t)  "Non-Statutory  Stock  Option"  means a  stock  option  granted  to a
Participant  pursuant  to the terms of the Plan but which is not  intended to be
and is not  identified  as an Incentive  Stock Option or a stock option  granted
under the Plan which is intended to be and is identified  as an Incentive  Stock
Option but which does not meet the requirements of Section 422 of the Code.

      (u)  "Option"  means  an  Incentive Stock Option  or  Non-Statutory  Stock
Option.

      (v)  "Outside  Director"  means a member of the Board of  Directors of the
Holding  Company or an  Affiliate  who is not also an  Employee  of the  Holding
Company or an Affiliate.

      (w) "Participant" means any person who holds an outstanding Award.

      (x) "Performance  Award" means an Award granted to a Participant  pursuant
to Section 10 of the Plan.

      (y) "Plan" means the SGV BANCORP,  INC. Amended 1997 Stock-Based Incentive
Plan.

      (z) "Retirement" means retirement from employment with the Holding Company
or  an  Affiliate  in  accordance  with  the  First  Federal  Savings  and  Loan
Association of San Gabriel Valley Employees'  Savings and Profit Sharing Plan if
the  individual  were a participant  in such Profit  Sharing Plan or (ii) if the
individual  was  not  a  participant   in  such  Profit   Sharing  Plan,   under
circumstances  designated as a Retirement by the  Committee.  "Retirement"  with
respect to an Outside  Director means the  termination of service from the Board
of Directors of the Holding Company and any Affiliate  following  written notice
to the Board of Directors of such Outside Director's intention to retire.



                                      3

<PAGE> 4



      (aa) "Stock  Award" means an Award  granted to a  Participant  pursuant to
Section 9 of the Plan.

      (bb)  "Termination  for  Cause"  shall  mean,  in the  case of an  Outside
Director,  removal  from the Board of  Directors  by a vote of the  Directors in
accordance with the Holding Company's Bylaws and Delaware law or, in the case of
an Employee,  unless defined differently under any employment  agreement between
the Employee and the Holding Company or an Affiliate,  termination of employment
caused by the  Participant's  intentional  failure  to  perform  stated  duties,
personal dishonesty,  willful violation of any law, rule, regulation (other than
traffic  violations  or similar  offenses) or final cease and desist  order,  as
determined  by  the  Board  of  Directors.   No  act,  or  failure  to  act,  on
Participant's part shall be "willful" unless done, or omitted to be done, not in
good faith and without  reasonable belief that the action or omission was in the
best interest of the Holding Company or an Affiliate.

      (cc)  "Trust"  means a trust  established  by the  Board of  Directors  in
connection with this Plan to hold Plan assets for the purposes set forth herein.

      (dd)  "Trustee"  means  any  person  or  entity  approved  by the Board of
Directors  to hold legal title to any of the Trust  assets for the  purposes set
forth under the Plan.

2.    ADMINISTRATION.
      --------------

      (a) The Committee  shall  administer the Plan. The Committee shall consist
of two or more  disinterested  directors  of the Holding  Company,  who shall be
appointed by the Board of Directors. A member of the Board of Directors shall be
deemed to be  "disinterested"  only if he satisfies (i) such requirements as the
Securities  and Exchange  Commission  may establish for  non-employee  directors
administering  plans intended to qualify for exemption  under Rule 16b-3 (or its
successor)  under the  Exchange Act and (ii) such  requirements  as the Internal
Revenue Service may establish for outside  directors acting under plans intended
to qualify for exemption  under Section  162(m)(4)(C)  of the Code. The Board of
Directors  may also  appoint  one or more  separate  committees  of the Board of
Directors,  each composed of one or more directors of the Holding  Company or an
Affiliate who need not be disinterested  and who may grant Awards and administer
the Plan with respect to Employees and Outside  Directors who are not considered
officers or directors of the Holding  Company  under  Section 16 of the Exchange
Act or for whom Awards are not  intended to satisfy  the  provisions  of Section
162(m) of the Code.

      (b) The Committee shall (i) select the Employees and Outside Directors who
are to receive Awards under the Plan, (ii) determine the type,  number,  vesting
requirements  and other features and conditions of such Awards,  (iii) interpret
the Plan and (iv) make all other  decisions  relating  to the  operation  of the
Plan.  The Committee may adopt such rules or guidelines as it deems  appropriate
to implement the Plan. The  Committee's  determinations  under the Plan shall be
final and binding on all persons.


                                      4

<PAGE> 5



      (c)  Each  Award  shall  be  evidenced  by  a  written  agreement  ("Award
Agreement") containing such provisions as may be approved by the Committee. Each
Award Agreement shall  constitute a binding contract between the Holding Company
or an Affiliate and the Participant,  and every Participant,  upon acceptance of
the Award  Agreement,  shall be bound by the terms and  restrictions of the Plan
and  the  Award  Agreement.  The  terms  of each  Award  Agreement  shall  be in
accordance  with the Plan, but each Award  Agreement may include such additional
provisions  and  restrictions  determined by the Committee,  in its  discretion,
provided that such additional  provisions and  restrictions are not inconsistent
with the terms of the Plan. In particular, the Committee shall set forth in each
Award  Agreement  (i) the type of Award  granted (ii) the  Exercise  Price of an
Option,  (iii) the number of shares  subject to the Award;  (iv) the  expiration
date of the Award,  (v) the manner,  time, and rate (cumulative or otherwise) of
exercise or vesting of such Award,  and (vi) the  restrictions,  if any,  placed
upon such Award, or upon shares which may be issued upon exercise of such Award.
The Chairman of the Committee and such other  directors and officers as shall be
designated by the Committee is hereby  authorized to execute Award Agreements on
behalf of the Company or an  Affiliate  and to cause them to be delivered to the
recipients of Awards.

      (d) The Committee may delegate all authority for: (i) the determination of
forms of payment to be made by or received by the Plan and (ii) the execution of
any   Award   Agreement.   The   Committee   may   rely  on  the   descriptions,
representations,  reports and estimates  provided to it by the management of the
Holding  Company or an Affiliate for  determinations  to be made pursuant to the
Plan,  including the  satisfaction  of any  conditions  of a Performance  Award.
However,  only the  Committee  or a portion of the  Committee  may  certify  the
attainment  of  conditions  of a  Performance  Award  intended  to  satisfy  the
requirements of Section 162(m) of the Code.

3.    TYPES OF AWARDS AND RELATED RIGHTS.
      -----------------------------------

      The following Awards may be granted under the Plan:

      (a)  Non-Statutory Stock Options
      (b)  Incentive Stock Options
      (c)  Limited Rights
      (d)  Stock Awards

4.    STOCK SUBJECT TO THE PLAN.
      -------------------------

      Subject to adjustment as provided in Section 15 hereof,  for each calendar
year from and  including  1997  through the year 2006,  Common Stock equal to an
amount  of up to  one  percent  (1%)  of  the  adjusted  average  common  shares
outstanding of the Holding Company used to calculate fully diluted  earnings per
share as reported in the annual report to  shareholders  for the preceding year,
shall become  available for issuance under the Plan. In addition,  (a) shares of
Common Stock  available  for issuance  under the Plan in previous  years but not
actually  issued,  shall be added to the  aggregate  number  of shares of Common
Stock  available for issuance in that calendar year under the Plan;  and (b) any
shares of Common Stock which are exchanged by a Participant as full or partial


                                      5

<PAGE> 6



payment to the Holding Company in connection with the exercise of a stock option
awarded  under  the Plan  shall be added to the  aggregate  number  of shares of
Common Stock available for issuance in the following calendar year.

      However,  for each calendar year from and including  1997 through the year
2006,  in no event,  except as subject to  adjustment as provided in Section 15,
shall more than 230,000  shares of Common Stock be  cumulatively  available  for
issuance  pursuant to the exercise of Incentive  Stock Options awarded under the
Plan.

      Any  shares  issued  under  the  Plan may  consist  in whole or in part of
authorized and unissued shares or of treasury shares,  and no fractional  shares
may be issued under the Plan.

5.    ELIGIBILITY.
      -----------

      Subject to the terms of the Plan, the Committee,  in its sole  discretion,
may grant Awards to any or all  Employees and Outside  Directors,  as well as to
consultants and advisors of the Holding Company or an Affiliate.

6.    NON-STATUTORY STOCK OPTIONS.
      ---------------------------

      The  Committee  may,  subject  to the  limitations  of this  Plan  and the
availability of shares of Common Stock reserved but not previously awarded under
the Plan, grant Non-statutory Stock Options upon such terms and conditions as it
may determine, consistent with the following provisions.

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Nonstatutory  Stock Option.  However,  the Exercise Price shall not be less
than 100% of the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Terms of  Non-statutory  Stock Options.  The Committee shall determine
          --------------------------------------
the term during which a Participant may exercise a  Non-statutory  Stock Option,
but in no event may a Participant  exercise a  Non-statutory  Stock  Option,  in
whole or in part, more than ten (10) years from the Date of Grant. The Committee
shall also determine the date on which each  Non-statutory  Stock Option, or any
part  thereof,   first  becomes  exercisable  and  any  terms  or  conditions  a
Participant  must satisfy in order to exercise each  Non-statutory  Stock Option
prior to each  Non-statutory  Stock Option becoming  exercisable.  The shares of
Common Stock underlying each  Non-statutory  Stock Option or any portion thereof
which  has  become  exercisable  may be  purchased  in  whole  or in part by the
Participant at any time during the term of such Non-statutory Stock Option.

      (c)  Non-Transferability.  Unless otherwise determined by the Committee in
           -------------------
accordance  with this Section  6(c), a  Participant  may not  transfer,  assign,
hypothecate,  or  dispose  of in any  manner,  other than by will or the laws of
intestate succession,  a Non-


                                       6

<PAGE> 7

statutory  Stock Option.  The Committee may,  however,  in its sole  discretion,
permit  transferability  or  assignment of a  Nonstatutory  Stock Option if such
transfer or assignment is, in its sole determination,  for valid estate planning
purposes and such transfer or  assignment  is permitted  under the Code and Rule
16b-3 under the Exchange  Act. For purposes of this Section 6(c), a transfer for
valid estate planning purposes  includes,  but is not limited to: (a) a transfer
to a revocable  intervivos trust as to which the Participant is both the settlor
and  trustee,  (b) a  transfer  for no  consideration  to: (i) any member of the
Participant's Immediate Family, (ii) any trust solely for the benefit of members
of the Participant's Immediate Family, (iii) any partnership whose only partners
are  members  of the  Participant's  Immediate  Family,  and  (iv)  any  limited
liability  corporation  or corporate  entity whose only members or equity owners
are members of the Participant's  Immediate Family. For purposes of this Section
6(c),  "Immediate  Family"  includes,  but  is not  necessarily  limited  to,  a
Participant's parents, grandparents,  spouse, children, grandchildren,  siblings
(including half bothers and sisters),  and individuals who are family members by
adoption.  Nothing  contained in this Section 6(c) shall be construed to require
the  Committee  to give  its  approval  to any  transfer  or  assignment  of any
Nonstatutory Stock Option or portion thereof, and approval to transfer or assign
any  Non-statutory  Stock  Option  or  portion  thereof  does not mean that such
approval will be given with respect to any other  Non-statutory  Stock Option or
portion thereof.  The transferee or assignee of any  Non-statutory  Stock Option
shall  be  subject  to  all of the  terms  and  conditions  applicable  to  such
Non-statutory  Stock Option  immediately prior to the transfer or assignment and
shall be  subject  to any other  conditions  proscribed  by the  Committee  with
respect to such Non-statutory Stock Option.

      (d)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee and except as otherwise  provided in the Plan,  upon
the  termination of a  Participant's  employment or service for any reason other
than  Retirement,  Disability or death,  Change in Control,  or Termination  for
Cause, the Participant's  Non-statutory  Stock Options shall be exercisable only
as to those shares that were  immediately  exercisable by the Participant at the
date of termination and only for a period of three (3) months following the date
of such termination.

      (e) Termination of Employment or Service  (Retirement).  Unless  otherwise
          --------------------------------------------------
determined by the Committee,  in the event of a  Participant's  Retirement,  the
Participant's  Non-statutory Stock Options shall be exercisable only as to those
shares  that were  immediately  exercisable  by the  Participant  at the date of
Retirement and shall remain  exercisable  for a period of one (1) year following
the  date  of  Retirement;   provided  however,   that  upon  the  Participant's
Retirement,   the  Committee,   in  its  discretion,   may  determine  that  all
unexercisable  Non-statutory  Stock  Options  that were not  exercisable  by the
Participant as of such date shall  continue to become  exercisable in accordance
with the Award  Agreement  if the  Participant  is  immediately  engaged  by the
Holding Company or an Affiliate as a consultant or advisor or continues to serve
the Holding Company or an Affiliate as a director or advisory director.

      (f)  Termination of Employment or Service  (Disability  or death).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of the  termination  of a
Participant's  employment or service due to  Disability  or death,  all unvested
Non-statutory  Stock Options held by such Participant shall  immediately  become
exercisable and remain  exercisable for a period one (1) year following the date
of such termination.

                                      7

<PAGE> 8



      (g) Termination of Employment or Service (Change in Control). In the event
          ---------------------------------------------------------
of a Change in Control,  all unvested  Non-statutory  Stock Options held by such
Participant shall immediately  become  exercisable and remain  exercisable for a
period one (1) year following the Change in Control.

      (h)  Termination  of  Employment  or  Service  (Cause).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  in the event of a  Participant's  Termination  for
Cause, all rights with respect to the Participant's  Non-statutory Stock Options
shall expire immediately upon the effective date of such Termination for Cause.

      (i)  Payment.  Payment  due  to  a  Participant  upon  the  exercise  of a
           --------
Non-statutory Stock Option shall be made in the form of shares of Common Stock.

7.    INCENTIVE STOCK OPTIONS.
      -----------------------

      The  Committee  may,  subject  to the  limitations  of the  Plan  and  the
availability  of shares of Common Stock  reserved but unawarded  under the Plan,
grant  Incentive  Stock Options to an Employee upon such terms and conditions as
it may determine consistent with the following provisions:

      (a) Exercise  Price.  The Committee  shall determine the Exercise Price of
          ---------------
each Incentive Stock Option.  However, the Exercise Price shall not be less than
100% of the Fair Market Value of the Common Stock on the Date of Grant. However,
if at the time an  Incentive  Stock Option is granted,  the Employee  owns or is
treated  as  owning,  for  purposes  of Section  422 of the Code,  Common  Stock
representing  more  than 10% of the  total  combined  voting  securities  of the
Holding Company ("10% Owner"), the Exercise Price shall not be less than 110% of
the Fair Market Value of the Common Stock on the Date of Grant.

      (b) Amounts of Incentive  Stock Options.  To the extent the aggregate Fair
          -----------------------------------
Market  Value of shares of Common Stock with  respect to which  Incentive  Stock
Options  that are  exercisable  for the first  time by an  Employee  during  any
calendar  year under the Plan and any other  stock  option  plan of the  Holding
Company  or an  Affiliate  exceeds  $100,000,  or such  higher  value  as may be
permitted  under  Section 422 of the Code,  such Options in excess of such limit
shall be treated as  Non-statutory  Stock  Options.  Fair Market  Value shall be
determined  as of the Date of Grant with  respect to each such  Incentive  Stock
Option.

      (c) Terms of Incentive  Stock Options.  The Committee  shall determine the
          ---------------------------------
term during which a Participant may exercise an Incentive  Stock Option,  but in
no event may a Participant  exercise an Incentive  Stock Option,  in whole or in
part, more than ten (10) years from the Date of Grant;  provided,  however, that
if at the time an Incentive Stock Option is granted to an Employee, the Employee
is a 10% Owner, the Incentive Stock Option granted to such Employee shall not be
exercisable  after the expiration of five (5) years from the Date of Grant.  The
Committee shall also determine the date on which each Incentive Stock Option, or
any part thereof, first becomes


                                      8

<PAGE> 9



exercisable and any terms or conditions a Participant  must satisfy prior to the
Incentive  Stock  Option  becoming  exercisable.  The  shares  of  Common  Stock
underlying  each Incentive  Stock Option may be purchased in whole or in part at
any time  during the term of such  Incentive  Stock  Option  after  such  Option
becomes exercisable.

      (d)  Non-Transferability.  No Incentive Stock Option shall be transferable
           -------------------
except  by will or the laws of  descent  and  distribution  and is  exercisable,
during his  lifetime,  only by the  Employee  to whom the  Committee  grants the
Incentive Stock Option.  The designation of a beneficiary  does not constitute a
transfer.

      (e) Termination of Employment  (General).  Unless otherwise  determined by
          ------------------------------------
the Committee and except as otherwise provided in the Plan, upon the termination
of an Employee's employment for any reason other than Retirement,  Disability or
death,  Change in Control or Termination  for Cause,  the  Employee's  Incentive
Stock Options shall be exercisable only as to those Incentive Stock Options that
were immediately exercisable by the Employee at the date of termination and only
for a period of three (3) months following such termination.

      (f) Termination of Employment (Retirement). Unless otherwise determined by
          --------------------------------------
the  Committee,  in  the  event  of an  Employee's  Retirement,  the  Employee's
Incentive  Stock Options shall be exercisable  only as to those shares that were
immediately  exercisable  by the Employee at the date of  Retirement  and remain
exercisable  for a period  of one (1)  year  following  the date of  Retirement;
provided however,  that upon the Employee's  Retirement,  the Committee,  in its
discretion,  may determine that all unexercisable  Incentive Stock Options shall
continue to become  exercisable  in accordance  with the Award  Agreement if the
Employee is  immediately  engaged by the Holding  Company or an  Affiliate  as a
consultant or advisor or continues to serve the Holding  Company or an Affiliate
as a director or  advisory  director.  Any Option  originally  designated  as an
Incentive Stock Option shall be treated as a  Non-statutory  Stock Option to the
extent  the  Participant  exercises  such  Option  more than  three  (3)  months
following the Participant's date of Retirement.

      (g)  Termination  of Employment  (Disability or death).  Unless  otherwise
           -------------------------------------------------
determined by the  Committee,  in the event of the  termination of an Employee's
service for Disability or death,  all unvested  Incentive  Stock Options held by
such Employee shall immediately  become exercisable and shall remain exercisable
for one (1) year after such termination.

      (h)  Termination  of  Employment  (Change in  Control).  In the event of a
           -------------------------------------------------
Change in Control,  all unvested  Incentive  Stock Options held by such Employee
shall immediately  become  exercisable and shall remain  exercisable for one (1)
year  after  such  Change  in  Control,  provided  that  any  option  originally
designated  as an Incentive  Stock  Option  shall be treated as a  Non-statutory
Stock Option to the extent the Participant exercises such Option more than three
(3) months following the Change in Control.

      (i) Termination of Employment (Cause).  Unless otherwise determined by the
          ---------------------------------
Committee, in the event of an Employee's Termination for Cause, all rights under
such Employee's


                                      9

<PAGE> 10



Incentive Stock Options shall expire immediately upon the effective date of such
Termination for Cause.

      (j)  Payment.  Payment  due  to a  Participant  upon  the  exercise  of an
           -------
Incentive Stock Option shall be made in the form of shares of Common Stock.

      (k)  Disqualifying  Dispositions.  Each Award Agreement with respect to an
           ---------------------------
Incentive  Stock Option shall require the Participant to notify the Committee of
any  disposition  of shares of Common Stock  issued  pursuant to the exercise of
such Option  under the  circumstances  described  in Section  421(b) of the Code
(relating  to  certain  disqualifying  dispositions),  within  10  days  of such
disposition.  As of the Effective Date of this Plan, a disqualifying disposition
means any  disposition  of the shares of Common  Stock within two years from the
date of the grant of the  Incentive  Stock Option to which such shares relate or
within  one year of the date such  shares  are  transferred  to the  Participant
pursuant to his exercise of the Incentive Stock Option.

8.     LIMITED RIGHTS.
       --------------

      Simultaneously  with the grant of any Option,  the  Committee  may grant a
Limited  Right with respect to all or some of the shares of Common Stock covered
by such Option, subject to the following terms and conditions:

      (a) Terms of Rights.  In no event shall a Limited Right be  exercisable in
          ---------------
whole or in part before the  expiration of six (6) months from the Date of Grant
of the Limited  Right.  A Limited Right may be exercised  only in the event of a
Change in Control of the Holding  Company that is not to be  accounted  for as a
pooling of interests or in the event the Holding Company's  independent auditors
opine that the exercise of such Limited  Rights would not  adversely  affect the
accounting  treatment intended for the Change in Control.  The Limited Right may
be exercised  only when the underlying  Option is eligible to be exercised,  and
only when the Fair Market Value of the underlying  shares on the day of exercise
is greater than the Exercise Price of the underlying Option.  Upon exercise of a
Limited Right, the underlying  Option shall cease to be exercisable and shall be
terminated.  Upon  exercise or  termination  of an Option,  any related  Limited
Rights  shall  terminate.  The  Limited  Right  is  transferable  only  when the
underlying Option is transferable and under the same conditions.

      (b) Payment.  Upon exercise of a Limited Right,  the holder shall promptly
          -------
receive from the Holding  Company or an Affiliate an amount of cash equal to the
difference  between the  Exercise  Price of the  underlying  Option and the Fair
Market Value of the Common Stock  subject to such Option on the date the Limited
Right is  exercised,  multiplied  by the number of shares with  respect to which
such Limited Right is being exercised.




                                       10

<PAGE> 11



9.     STOCK AWARDS.
       ------------

      The Committee  may,  subject to the  limitations  of the Plan,  make Stock
Awards which shall consist of the grant of some number of shares of Common Stock
to a Participant subject to the following terms and conditions:

      (a)  Grants of the Stock  Awards.  Stock  Awards may only be made in whole
           ---------------------------
shares of Common  Stock.  Stock Awards may only be granted from shares  reserved
under the Plan and  available  for award at the time the Stock  Award is made to
the Participant.

      (b) Terms of the Stock Awards.  The Committee shall determine the dates on
          -------------------------
which  Stock  Awards  granted  to a  Participant  shall  vest  and any  terms or
conditions  which must be  satisfied  prior to the vesting of any Stock Award or
portion  thereof.  Any such  terms or  conditions  shall  be  determined  by the
Committee as of the Date of Grant.

      (c)  Termination  of Employment  or Service  (General).  Unless  otherwise
           -------------------------------------------------
determined by the Committee and except as otherwise  provided in the Plan,  upon
the  termination of a  Participant's  employment or service for any reason other
than  Retirement,  Disability or death,  Change  in Control or  Termination  for
Cause,  the  Participant's  unvested  Stock Awards as of the date of termination
shall be forfeited and any rights the  Participant  had to such  unvested  Stock
Awards shall become null and void.

      (d) Termination of Employment or Service  (Retirement).  Unless  otherwise
          --------------------------------------------------
determined by the Committee,  in the event of a  Participant's  Retirement,  the
Participant's  unvested  Stock  Awards  as of the  date of  Retirement  shall be
forfeited and any rights the Participant had to such unvested Stock Awards shall
become null and void; provided however, that upon the Participant's  Retirement,
the Committee,  in its discretion,  may determine that all unvested Stock Awards
shall continue to vest in accordance with the Award Agreement if the Participant
is immediately engaged by the Holding Company or an Affiliate as a consultant or
advisor or continues to serve the Holding  Company or an Affiliate as a director
or advisory director.

      (e)  Termination of Employment or Service  (Disability  or death).  Unless
           ------------------------------------------------------------
otherwise  determined by the  Committee,  in the event of a  termination  of the
Participant's service due to Disability or death, all unvested Stock Awards held
by such Participant shall immediately vest as of the date of such termination.

      (f) Termination of Employment or Service (Change in Control). In the event
          --------------------------------------------------------
of a Change in Control, all unvested Stock Awards held by such Participant shall
immediately vest as of the date of the Change in Control.

      (g)  Termination  of  Employment  or  Service  (Cause).  Unless  otherwise
           -------------------------------------------------
determined by the Committee,  in the event of the Participant's  Termination for
Cause, all unvested Stock Awards


                                      11

<PAGE> 12



held by such  Participant as of the effective date of such Termination for Cause
shall be forfeited and any rights such  Participant  had to such unvested  Stock
Awards shall become null and void.

      (h)  Issuance  of  Certificates.   Unless  otherwise  held  in  Trust  and
           --------------------------
registered in the name of the Trustee, (i) reasonably promptly after the Date of
Grant with  respect to shares of Common  Stock  pursuant to a Stock  Award,  the
Holding Company shall cause to be issued a stock certificate,  registered in the
name of the  Participant to whom such Stock Award was granted,  evidencing  such
shares;  provided,  that  the  Holding  Company  shall  not  cause  such a stock
certificate  to be issued  unless it has received a stock power duly endorsed in
blank with respect to such shares.  Each such stock  certificate  shall bear the
following legend:

            "The  transferability  of this  certificate  and the shares of stock
            represented  hereby  are  subject  to the  restrictions,  terms  and
            conditions (including forfeiture provisions and restrictions against
            transfer)   contained  in  the  SGV  Bancorp,   Inc.   Amended  1997
            Stock-Based  Incentive  Plan and the Award  Agreement  entered  into
            between the registered owner of such shares and SGV Bancorp, Inc. or
            its Affiliates. A copy of the Plan and Award Agreement is on file in
            the office of the  Corporate  Secretary  of SGV Bancorp,  Inc.,  225
            North Barranca Street, West Covina, California 91791- 1080."

      Such legend  shall not be removed  until such shares vest  pursuant to the
terms of the Plan.

      (ii) Each certificate  issued pursuant to this Section 9(h), in connection
with a Stock  Award,  shall be held by the  Holding  Company  or its  Affiliates
unless the Committee determines otherwise.

      (i)  Non-Transferability.  Except to the extent permitted by the Code, the
           -------------------
rules  promulgated  under  Section  16(b) of the Exchange  Act or any  successor
statutes or rules:

            (i)   The  recipient  of a Stock  Award  shall not  sell,  transfer,
                  assign,  pledge,  or otherwise  encumber shares subject to the
                  Stock  Award until full  vesting of such shares has  occurred.
                  For purposes of this  section,  the  separation  of beneficial
                  ownership  and  legal  title  through  the  use of any  "swap"
                  transaction is deemed to be a prohibited encumbrance.

            (ii)  Unless determined otherwise by the Committee and except in the
                  event of the  Participant's  death or  pursuant  to a domestic
                  relations  order, a Stock Award is not transferable and may be
                  earned in his lifetime only by the  Participant  to whom it is
                  granted.  Upon the death of a  Participant,  a Stock  Award is
                  transferable by will or the laws of descent and  distribution.
                  The  designation  of a  beneficiary  shall  not  constitute  a
                  transfer.


                                      12

<PAGE> 13



            (iii) If a recipient  of a Stock Award is subject to the  provisions
                  of  Section 16 of the  Exchange  Act,  shares of Common  Stock
                  subject  to such  Stock  Award may not,  without  the  written
                  consent of the  Committee  (which  consent may be given in the
                  Award Agreement),  be sold or otherwise disposed of within six
                  (6) months following the date of grant of the Stock Award.

      (j) Accrual of  Dividends.  Whenever  shares of Common Stock  underlying a
          ---------------------
Stock Award are  distributed to a Participant  or beneficiary  thereof under the
Plan, such  Participant or beneficiary  shall also be entitled to receive,  with
respect to each such share  distributed,  a payment equal to any cash  dividends
and the number of shares of Common Stock equal to any stock dividends,  declared
and paid with  respect  to a share of the Common  Stock if the  record  date for
determining  shareholders  entitled to receive such dividends  falls between the
date the relevant  Stock Award was granted and the date the relevant Stock Award
or installment thereof is issued. There shall also be distributed an appropriate
amount of net earnings,  if any, of the Trust with respect to any dividends paid
out on the shares related to the Stock Award.

      (k) Voting of Stock  Awards.  After a Stock Award has been granted but for
          -----------------------
which the shares  covered by such Stock Award have not yet been  vested,  earned
and distributed to the Participant  pursuant to the Plan, the Participant  shall
be entitled  to vote or to direct the Trustee to vote,  as the case may be, such
shares of Common  Stock  which the Stock Award  covers  subject to the rules and
procedures  adopted by the Committee for this purpose and in a manner consistent
with the Trust agreement.

      (l) Payment.  Payment due to a Participant  upon the redemption of a Stock
          -------
Award shall be made in the form of shares of Common Stock.

10.   PERFORMANCE AWARDS
      ------------------

      (a) The  Committee  may  determine  to  make  any  Award  under  the  Plan
contingent upon the achievement of any conditions  related to the performance of
the Holding Company or its Affiliates. Each Performance Award shall be evidenced
in the Award  Agreement,  which  shall set forth the  applicable  conditions  of
performance  applicable to the Award, the maximum amounts payable and such other
terms  and  conditions  as are  applicable  to  the  Performance  Award.  Unless
otherwise  determined by the Committee,  each Performance Award shall be granted
and  administered to comply with the requirements of Section 162(m) of the Code,
and shall be subject to the conditions set forth below in paragraphs (b) through
(f).

      (b) Any  Performance  Award shall be made not later than 90 days after the
start of the period for which the  Performance  Award  relates and shall be made
prior to the completion of 25% of such period. All determinations  regarding the
achievement  of any  Performance  criteria  will be made by the  Committee.  The
Committee may not increase during a year the amount of a Performance  Award that
would otherwise be payable upon achievement of the Performance  criteria but may
reduce or eliminate the payments as provided for in the Award Agreement.


                                      13

<PAGE> 14



      (c)  Nothing  contained  in the Plan will be deemed in any way to limit or
restrict the Committee  from making any Award or payment to any person under any
other plan,  arrangement or understanding,  whether now existing or hereafter in
effect.

      (d) A Participant who receives a Performance Award payable in Common Stock
shall have no rights as a shareholder  until the Common Stock is issued pursuant
to the terms of the Award Agreement. The Common Stock may be issued without cash
consideration.

      (e) A  Participant's  interest  in a  Performance  Award  may not be sold,
assigned, transferred, pledged, hypothecated, or otherwise encumbered.

      (f) No Award or  portion  thereof  that is subject  to the  attainment  or
satisfaction  of a condition or  Performance  criteria  shall be  distributed or
considered to be earned or vested until the Committee  certifies in writing that
the conditions or  Performance  criteria to which the  distribution,  earning or
vesting of such Award is subject has been achieved.

11.   DEFERRED PAYMENTS
      -----------------

      The  Committee,  in its  discretion,  may permit a Participant to elect to
defer receipt of all or any part of any cash or stock payment under the Plan, or
the Committee may determine to defer receipt by some or all Participants, of all
or part of any such  payment.  The  Committee  shall  determine  the  terms  and
conditions of any such deferral, including the period of deferral, the manner of
deferral,  and the method for measuring  appreciation on deferred  amounts until
their payout.

12.    METHOD OF EXERCISE OF OPTIONS
       -----------------------------

      Subject to any applicable Award Agreement,  any Option may be exercised by
the  Participant in whole or in part at such time or times,  and the Participant
may make payment of the Exercise Price in such form or forms, including, without
limitation,  payment by delivery of cash,  Common  Stock or other  consideration
(including,  where  permitted by law and the  Committee,  Awards)  having a Fair
Market Value on the exercise date equal to the total Exercise  Price,  or by any
combination of cash, shares of Common Stock and other  consideration,  including
exercise  by  means  of  a  cashless  exercise  arrangement  with  a  qualifying
broker-dealer, as the Committee may specify in the applicable Award Agreement.

13.   RIGHTS OF PARTICIPANTS
      ----------------------

      No Participant  shall have any rights as a shareholder with respect to any
shares of Common  Stock  covered by an Option  until the date of  issuance  of a
stock  certificate  for such Common Stock.  Nothing  contained  herein or in any
Award  Agreement  confers on any person any right to  continue  in the employ or
service of the Holding Company or an Affiliate or interferes in any way with the
right of the  Holding  Company or an  Affiliate  to  terminate  a  Participant's
services.


                                      14

<PAGE> 15



14.   DESIGNATION OF BENEFICIARY.
      --------------------------

      A Participant  may, with the consent of the Committee,  designate a person
or persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Holding Company and may be revoked in writing. If a Participant
fails effectively to designate a beneficiary, then the Participant's estate will
be deemed to be the beneficiary.

15.   DILUTION AND OTHER ADJUSTMENTS.
      ------------------------------

      In the event of any change in the  outstanding  shares of Common  Stock by
reason of any stock dividend or split, recapitalization,  merger, consolidation,
spin-off,  reorganization,  combination or exchange of shares,  or other similar
corporate  change,  or other increase or decrease in such shares without receipt
or  payment  of  consideration  by  the  Holding  Company,  or in the  event  an
extraordinary  capital  distribution  is  made,  the  Committee  may  make  such
adjustments to previously  granted Awards, to prevent dilution,  diminution,  or
enlargement  of the  rights  of  the  Participant,  including  any or all of the
following:

      (a)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other  securities that may underlie future Awards under the
            Plan;

      (b)   adjustments  in the  aggregate  number  or kind of  shares of Common
            Stock or other securities  underlying  Awards already made under the
            Plan;

      (c)   adjustments in the Exercise Price of  outstanding  Incentive  and/or
            Non-statutory  Stock Options, or any Limited Rights attached to such
            Options.

      No such adjustments may, however,  materially change the value of benefits
available to a Participant  under a previously  granted Award.  All Awards under
this Plan  shall be  binding  upon any  successors  or  assigns  of the  Holding
Company.

16.   TAX WITHHOLDING.
      ---------------

      (a)  Whenever  under this Plan,  cash or shares of Common  Stock are to be
delivered  upon  exercise or payment of an Award or any other event with respect
to rights and benefits hereunder,  the Committee shall be entitled to require as
a condition of delivery (i) that the Participant  remit an amount  sufficient to
satisfy all federal,  state,  and local  withholding  tax  requirements  related
thereto, (ii) that the withholding of such sums come from compensation otherwise
due to the Participant or from any shares of Common Stock due to the Participant
under this Plan or (iii) any  combination  of the foregoing  provided,  however,
that no amount shall be withheld from any cash payment or shares of Common Stock
relating to an Award which was transferred by the Participant in accordance with
this Plan.



                                      15

<PAGE> 16



      (b) If any  disqualifying  disposition  described  in Section 7(k) is made
with respect to shares of Common Stock acquired under an Incentive  Stock Option
granted  pursuant to this Plan,  or any  transfer  described  in Section 6(c) is
made,  or any election  described in Section 17 is made,  then the person making
such disqualifying disposition, transfer, or election shall remit to the Holding
Company or its  Affiliates an amount  sufficient to satisfy all federal,  state,
and local withholding  taxes thereby  incurred;  provided that, in lieu of or in
addition to the foregoing,  the Holding Company or its Affiliates shall have the
right to withhold such sums from compensation  otherwise due to the Participant,
or, except in the case of any transfer pursuant to Section 6(c), from any shares
of Common Stock due to the Participant under this Plan.

17.   NOTIFICATION UNDER SECTION 83(b)
      --------------------------------

      The  Committee  may,  on the Date of Grant or any later  date,  prohibit a
Participant  from making the election  described below. If the Committee has not
prohibited  such  Participant  from making such  election,  and the  Participant
shall, in connection with the exercise of any Option,  or the grant of any Stock
Award,  make the election  permitted  under Section 83(b) of the Code (i.e.,  an
election to include in such  Participant's  gross income in the year of transfer
the amounts  specified in Section  83(b) of the Code),  such  Participant  shall
notify the  Committee of such  election  within 10 days of filing  notice of the
election  with the  Internal  Revenue  Service,  in  addition  to any filing and
notification  required  pursuant to  regulations  issued under the  authority of
Section 83(b) of the Code.

18.   AMENDMENT OF THE PLAN AND AWARDS.
      --------------------------------

      (a) Except as provided in  paragraph  (c) of this Section 18, the Board of
Directors  may at any time,  and from time to time,  modify or amend the Plan in
any respect,  prospectively or retroactively;  provided however, that provisions
governing  grants of Incentive  Stock Options shall be submitted for shareholder
approval to the extent required by such law, regulation or interpretation.
 Failure to ratify or approve  amendments or modifications by shareholders shall
be effective only as to the specific  amendment or  modification  requiring such
ratification.  Other  provisions  of this  Plan will  remain  in full  force and
effect. No such termination,  modification or amendment may adversely affect the
rights  of  a  Participant  under  an  outstanding  Award  without  the  written
permission of such Participant.

      (b) Except as provided in paragraph  (c) of this Section 18, the Committee
may  amend  any  Award  Agreement,  prospectively  or  retroactively;  provided,
however,  that no such  amendment  shall  adversely  affect  the  rights  of any
Participant  under an  outstanding  Award  without the  written  consent of such
Participant.

      (c) In no event shall the Board of  Directors  amend the Plan or shall the
Committee amend an Award Agreement in any manner that has the effect of:


                                      16

<PAGE> 17



            (i)   Allowing any Option to be granted with an exercise price below
                  the  Fair  Market  Value  of the  Common  Stock on the Date of
                  Grant.

            (ii)  Except as  required  under  Section  15 hereof,  allowing  the
                  exercise price of any Option previously granted under the Plan
                  to be reduced  subsequent to the Date of Award without receipt
                  of stockholder approval.

19.   EFFECTIVE DATE OF PLAN.
      ----------------------

      The Plan  originally  became  effective on July 21, 1997; the Amended 1997
Stock-Based  Incentive  Plan  became  effective  upon  approval  by the Board of
Directors of SGV Bancorp, Inc. on July 24, 1998.

20.   TERMINATION OF THE PLAN.
      -----------------------

      The right to grant Awards under the Plan will  terminate  upon the earlier
of: (i) ten (10) years after the Effective  Date;  (ii) the issuance of a number
of  shares  of  Common  Stock  pursuant  to  the  exercise  of  Options  or  the
distribution  of Stock Awards which together with the exercise of Limited Rights
is equivalent  to the maximum  number of shares  reserved  under the Plan as set
forth in Section 4 hereof.  The Board of  Directors  has the right to suspend or
terminate the Plan at any time,  provided that no such action will,  without the
consent of a Participant, adversely affect a Participant's vested rights under a
previously granted Award.

21.   APPLICABLE LAW.
      --------------

      The Plan will be  administered in accordance with the laws of the state of
California and applicable federal law.




                                       17

<PAGE> 18


            IN WITNESS  WHEREOF,  the Holding Company has established this Plan,
as adopted by the Board of  Directors of SGV  Bancorp,  Inc. on  ______________,
1998.


ADOPTED BY                          SGV BANCORP, INC.
 THE BOARD OF DIRECTORS:


____________________________        By:   ____________________________________
Date                                      For the Entire Board of Directors



                                       18