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                              AMENDED AND RESTATED
                                SGV BANCORP, INC.
                              EMPLOYMENT AGREEMENT


      This  AGREEMENT  ("Agreement")  is made effective as of June 28, 1995, and
amended and restated as of July 24, 1998, by and between SGV Bancorp,  Inc. (the
"Holding  Company"),  a  corporation  organized  under  the laws of the State of
Delaware, with its principal administrative office at 225 North Barranca Street,
West Covina,  California and Ronald A. Ott (the  "Executive").  Any reference to
"Association"  herein shall mean First Federal  Savings and Loan  Association of
San Gabriel Valley or any successor thereto.

      WHEREAS,  the Holding  Company  wishes to assure itself of the services of
Executive for the period provided in this Agreement; and

      WHEREAS,  the  Executive  is willing to serve in the employ of the Holding
Company on a full-time basis for said period.

      NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.    POSITION AND RESPONSIBILITIES.

      During the period of Executive's employment hereunder, Executive agrees to
serve as Executive Vice President,  Chief Financial Officer and Treasurer of the
Holding  Company.  The  Executive  shall render  administrative  and  management
services to the Holding Company such as are customarily  performed by persons in
a similar  executive  capacity.  During said  period,  Executive  also agrees to
serve,  if elected,  as an officer and director of any subsidiary of the Holding
Company.

2.    TERMS AND DUTIES.

      (a) The period of Executive's  employment  under this  Agreement  shall be
deemed to have  commenced as of the date first above written and shall  continue
for a period of thirty-six  (36) full calendar  months  thereafter (the "initial
term").  Commencing  on the  first  anniversary  date  of  this  Agreement,  and
continuing on each anniversary  date  thereafter,  the board of directors of the
Holding Company  ("Board") may extend the Agreement an additional year such that
the  remaining  term of the  Agreement  shall  be three  (3)  years  unless  the
Executive  elects  not to extend  the term of the  Agreement  by giving  written
notice in accordance with Section 8 of this Agreement. The Board will review the
Agreement  and the  Executive's  performance  at least  annually for purposes of
determining whether to extend the Agreement and the results of such review shall
be included in the minutes of the Board's  meeting.  The Board shall give notice
to the  Executive  as soon as  possible  after  such  review as to  whether  the
Agreement is to be extended.  Notwithstanding  any  provision of the  Agreement,
however,  in the event of a Change in Control as hereinafter  defined in Section
5, the Agreement shall be automatically  renewed,  such that the initial term of
the Agreement shall



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commence  on the date the  Change in Control  occurs and the term of  employment
shall end on the date three (3) years thereafter.

      (b) During  the period of  Executive's  employment  hereunder,  except for
periods of absence  occasioned  by illness,  reasonable  vacation  periods,  and
reasonable  leaves of absence,  Executive  shall  devote  substantially  all his
business time, attention,  skill, and efforts to the faithful performance of his
duties hereunder including  activities and services related to the organization,
operation  and  management of the Holding  Company and its,  direct or indirect,
subsidiaries   ("Subsidiaries")   and   participation  in  community  and  civic
organizations;  provided,  however,  that,  with the  approval of the Board,  as
evidenced by a resolution of such Board, from time to time, Executive may serve,
or continue to serve,  on the boards of directors of, and hold any other offices
or positions in, other  companies,  which,  in such Board's  judgment,  will not
present any conflict of interest with the Holding  Company or its  Subsidiaries,
or materially  affect the  performance  of Executive's  duties  pursuant to this
Agreement.  Executive  may also serve,  or  continue to serve,  on the boards of
directors of, and hold any other  offices or positions  in,  community and civic
organizations,  which, in the Board's judgment, will not present any conflict of
interest with the Holding Company or its Subsidiaries,  or materially affect the
performance of Executive's duties pursuant to this Agreement; provided Executive
notify the Board of such  activity  and the Board does not take Board  action to
object to such activity.

      (c) Notwithstanding anything herein contained to the contrary, Executive's
employment  with the Holding Company may be terminated by the Holding Company or
the  Executive  during  the term of this  Agreement,  subject  to the  terms and
conditions of this Agreement.

3.    COMPENSATION AND REIMBURSEMENT.

      (a) The  Holding  Company  or its  Subsidiaries  shall  pay  Executive  as
compensation a salary of not less than $143,928 per year ("Base  Salary").  Base
Salary  shall also  include any amounts of  compensation  deferred by  Executive
under any tax qualified or unqualified  plan  maintained by the Holding  Company
and its Subsidiaries. Such Base Salary shall be payable semi-monthly. During the
period of this  Agreement,  Executive's  Base Salary  shall be reviewed at least
annually;  the first  such  review  will be made no later than one year from the
date of this  Agreement.  Such review  shall be  conducted  by the Board or by a
Committee of the Board delegated such responsibility by the Board. The Committee
or the Board may increase  Executive's Base Salary.  Any increase in Base Salary
shall become the "Base Salary" for purposes of this  Agreement  from the date of
such increase. In addition to the Base Salary provided in this Section 3(a), the
Holding Company shall also provide  Executive,  at no premium cost to Executive,
with all such other  benefits as are provided  uniformly to permanent  full-time
employees of the Holding Company and its Subsidiaries.

      (b) The Executive shall be entitled to participate in any employee benefit
plans,  arrangements and perquisites  substantially equivalent to those in which
Executive was participating or otherwise deriving benefit from immediately prior
to the beginning of the term of this Agreement,  and the Holding Company and its
Subsidiaries will not, without Executive's prior written consent,


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make  any  changes  in such  plans,  arrangements  or  perquisites  which  would
adversely affect Executive's rights or benefits thereunder, except to the extent
such  changes  are  made  applicable  to all  Holding  Company  and  Association
employees eligible to participate in such plans, arrangements and perquisites on
a  non-discriminatory  basis.  Without  limiting the generality of the foregoing
provisions of this Subsection (b), Executive shall be entitled to participate in
or receive benefits under any employee benefit plans, including, but not limited
to,   retirement   plans,   supplemental   retirement   plans,   pension  plans,
profit-sharing   plans,   stock   option  or   restricted   stock  award  plans,
health-and-accident  plans,  medical coverage or any other employee benefit plan
or arrangement made available by the Holding Company and its Subsidiaries in the
future to its senior executives and key management employees,  subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and  arrangements.  Executive shall be entitled to incentive  compensation
and bonuses as provided in any plan of the Holding Company and its  Subsidiaries
in which  Executive is eligible to  participate.  Nothing paid to the  Executive
under  any  such  plan or  arrangement  will be  deemed  to be in lieu of  other
compensation to which the Executive is entitled under this Agreement.

      (c) In addition to the Base Salary  provided for by paragraph  (a) of this
Section 3 and other  compensation  provided for by paragraph (b) of this Section
3, the Holding  Company  shall pay or  reimburse  Executive  for all  reasonable
travel and other  reasonable  expenses  incurred  by  Executive  performing  his
obligations under this Agreement and may provide such additional compensation in
such form and such amounts as the Board may from time to time determine.

4.    PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

      (a) Upon the  occurrence of an Event of  Termination  (as herein  defined)
during the Executive's term of employment  under this Agreement,  the provisions
of  this  Section  shall  apply.  As  used  in  this  Agreement,  an  "Event  of
Termination"  shall mean and include any one or more of the  following:  (i) the
termination by the Holding Company of Executive's full-time employment hereunder
for any reason  other than  termination  governed  by Section  5(a)  hereof,  or
Termination  for  Cause,  as  defined  in  Section  7 hereof;  (ii)  Executive's
resignation from the Holding Company's employ, upon, any (A) failure to elect or
reelect or to appoint or reappoint Executive as Executive Vice President,  Chief
Financial  Officer and Treasurer,  unless  consented to by the Executive,  (B) a
material change in Executive's  function,  duties, or responsibilities  with the
Holding  Company or its  Subsidiaries,  which  change  would  cause  Executive's
position to become one of lesser responsibility,  importance,  or scope from the
position and attributes thereof described in Section 1, above,  unless consented
to by  the  Executive,  (C) a  relocation  of  Executive's  principal  place  of
employment by more than 30 miles from its location at the effective date of this
Agreement, unless consented to by the Executive, (D) a reduction in the benefits
and  perquisites  to the Executive from those being provided as of the effective
date of this Agreement,  unless consented to by the Executive, (E) a liquidation
or dissolution of the Holding Company or the Association,  or (F) breach of this
Agreement by the Holding Company.  Upon the occurrence of any event described in
clauses (A), (B), (C), (D) (E) or (F), above,  Executive shall have the right to
elect to terminate his employment  under this Agreement by resignation  upon not
less than sixty (60) days prior  written  notice given within six full  calendar
months after the event giving rise to said right to elect.


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      (b)  Upon  the  occurrence  of an  Event  of  Termination,  on the Date of
Termination,  as defined in Section 8, the Holding  Company shall pay Executive,
or, in the event of his subsequent death, his beneficiary or  beneficiaries,  or
his estate,  as the case may be, a sum equal to the payments  due the  Executive
for the remaining term of the agreement,  including Base Salary, bonuses and any
other cash or deferred compensation paid or to be paid to the executive, and the
amount  equal  to  the  annual  contributions  that  would  have  been  made  on
Executive's  behalf to any  employee  benefit  plans of the  Association  or the
Holding   Company  during  the  remaining  term  of  this  Agreement   based  on
contributions  or  payments  made  (on  an  annualized  basis)  at the  Date  of
Termination.  At the  election of the  Executive,  which  election is to be made
prior to an Event of Termination,  such payments shall be made in a lump sum. In
the event that no election is made,  payment to the Executive  will be made on a
monthly basis in approximately  equal installments  during the remaining term of
the  Agreement.  Such  payments  shall not be reduced in the event the Executive
obtains other employment following termination of employment.

      (c) Upon the occurrence of an Event of  Termination,  the Holding  Company
will  cause  to be  continued  for  the  Executive  and his  previously  covered
dependents  life,  medical,  dental and  disability  coverage that the Executive
agrees is  substantially  equivalent  to the coverage  maintained by the Holding
Company  or its  Subsidiaries  for  Executive  and his  dependents  prior to his
termination  at no cost to the  Executive.  Such  coverage  shall cease upon the
expiration of the remaining term of this Agreement.

5.    CHANGE IN CONTROL.

      (a) For purposes of this  Agreement,  a "Change in Control" of the Holding
Company or the  Association  shall mean an event of a nature that;  (i) would be
required to be  reported in response to Item 1(a) of the current  report on Form
8-K,  as in effect on the date  hereof,  pursuant  to Section 13 or 15(d) of the
Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act");  or (ii)
results in a Change in Control of the  Association or the Holding Company within
the  meaning of the Home  Owners'  Loan Act of 1933,  as  amended,  the  Federal
Deposit  Insurance Act, and the Rules and Regulations  promulgated by the Office
of Thrift Supervision  ("OTS") (or its predecessor  agency), as in effect on the
date hereof  (provided,  that in applying the definition of change in control as
set forth under the rules and regulations of the OTS, the Board shall substitute
its judgment for that of the OTS); or (iii) without  limitation such a 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 voting  securities of the Association or the Holding
Company  representing 20% or more of the  Association's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting  securities of the  Association  purchased by the Holding Company and any
voting securities  purchased by any employee benefit plan of the Holding Company
or its  Subsidiaries';  or (B)  individuals who constitute the Board 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
solely


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composed of members who are Incumbent  Board members,  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 or is effectuated in which the Association or Holding
Company  is not the  resulting  entity;  provided,  however,  that such an event
listed above will be deemed to have  occurred or to have been  effectuated  upon
the receipt of all required federal regulatory approvals not including the lapse
of any statutory waiting periods;  or (D) a proxy statement shall be distributed
soliciting  proxies from  stockholders 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  with one or more  corporations as a result of which the outstanding
shares of the class of securities  then subject to such plan or transaction  are
exchanged for or converted into cash or property or securities not issued by the
Association or the Holding Company shall be  distributed;  or (E) a tender offer
is made and accepted for 20% or more of the voting securities of the Association
or Holding Company then outstanding.

      (b) If a Change in Control has  occurred  pursuant to Section  5(a) or the
Board has determined  that a Change in Control has occurred,  Executive shall be
entitled to the benefits  provided in paragraphs (c) and, (d), of this Section 5
upon his  subsequent  termination  of  employment at any time during the term of
this Agreement due to (i) Executive's  dismissal,  or (ii) Executive's voluntary
resignation, unless such termination is because of his death, or Termination for
Cause.

      (c) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the  Holding  Company  shall pay  Executive,  or in the event of his  subsequent
death, his beneficiary or  beneficiaries,  or his estate, as the case may be, as
severance pay or liquidated damages, or both, a sum equal to the greater of: (i)
the  payments due for the  remaining  term of the  Agreement;  or (ii) three (3)
times Executive's  highest annual compensation for the last 5 years. Such annual
compensation shall include Base Salary, commissions,  bonuses,  contributions or
accruals on behalf of Executive  to any pension and profit  sharing  plans,  any
benefits to be paid or received under any  stock-based  benefit plan,  severance
payments,  directors or committee fees and fringe benefits paid or to be paid to
the  Executive  during  such years.  At the  election  of the  executive,  which
election is to be made prior to a Change in Control, such payment shall be made:
(a)  in a  lump  sum,  (b)  on  a  semi-monthly  basis  in  approximately  equal
installments  over a period of thirty-six (36) months  following the Executive's
termination,  or (c) on an annual basis in approximately equal installments over
a period of thirty-six (36) months following the Executive's  termination.  Such
payments shall not be reduced in the event  Executive  obtains other  employment
following termination of employment.

      (d) Upon the Executive's entitlement to benefits pursuant to Section 5(b),
the Company  will cause to be continued  for the  Executive  and his  previously
covered  dependents  life,  medical,  dental and  disability  coverage  that the
Executive agrees is substantially  equivalent to the coverage  maintained by the
Institution for Executive and his dependents prior to his termination at no cost
to the Executive.  Such coverage and payments shall cease upon the expiration of
thirty-six (36) months following the Date of Termination.


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6.    CHANGE OF CONTROL RELATED PROVISIONS.

      In each calendar  year that the Executive is entitled to receive  payments
or  benefits  under the  provisions  of the  Employment  Agreement,  the Holding
Company shall  determine if an excess  parachute  payment (as defined in Section
4999 of the  Internal  Revenue  Code of  1986,  as  amended,  and any  successor
provision thereto,  (the "Code")) exists. Such determination shall be made after
taking any  reductions  permitted  pursuant to Section  280G of the Code and the
regulations thereunder.  Any amount determined to be an excess parachute payment
after taking into account such reductions shall be hereafter  referred to as the
"Initial Excess  Parachute  Payment".  As soon as practicable  after a Change in
Control, the Initial Excess Parachute Payment shall be determined. Upon the Date
of Termination  following a Change in Control, the Holding Company shall pay the
Executive, subject to applicable withholding requirements under applicable state
or federal law, an amount equal to:

      (1) twenty (20) percent of the Initial Excess  Parachute  Payment (or such
other amount equal to the tax imposed under Section 4999 of the Code); and

      (2)  such  additional  amount  (tax  allowance)  as  may be  necessary  to
compensate the Executive for the payment by the Executive of state and local and
federal income and excise taxes on the payment  provided under clause (1) and on
any payments under this Clause (2). In computing such tax allowance, the payment
to be made under  Clause (1) shall be  multiplied  by the "gross up  percentage"
("GUP"). The GUP shall be determined as follows:

                    Tax Rate
            GUP  =  __________

                    1- Tax Rate

            The "Tax Rate" for purposes of computing the GUP shall be the sum of
            the  highest  marginal  federal  and  state  and  local  income  and
            employment-related  tax rates,  including any applicable  excise tax
            rates,  applicable to the Executive in the year in which the payment
            under Clause (1) is made.

      (3) Notwithstanding the foregoing,  if it shall subsequently be determined
in a final judicial determination or a final administrative  settlement to which
the Executive is a party that the excess parachute payment as defined in Section
4999 of the Code,  reduced as described  above,  is more than the Initial Excess
Parachute  Payment (such  different  amount being  hereafter  referred to as the
"Determinative Excess Parachute Payment") then the Holding Company's independent
accountants  shall  determine the amount (the  "Adjustment  Amount") the Holding
Company  must pay to the  Executive  in order to put the  Executive  in the same
position  as the  Executive  would  have been if the  Initial  Excess  Parachute
Payment  had been  equal  to the  Determinative  Excess  Parachute  Payment.  In
determining  the  Adjustment  Amount,  independent  accountants  of the  Holding
Company shall take into account any and all taxes  (including  any penalties and
interest)  paid by or for the  Executive or refunded to the Executive or for the
Executive's benefit. As soon as practicable


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after the Adjustment  Amount has been so determined,  the Holding  Company shall
pay the  Adjustment  Amount to the  Executive.  In no event  however,  shall the
Executive make any payment under this paragraph to the Holding Company.

7.    TERMINATION FOR CAUSE.

      The term  "Termination  for  Cause"  shall  mean  termination  because  of
Executive's  personal  dishonesty,  willful misconduct,  any breach of fiduciary
duty involving  personal profit,  intentional  failure to perform stated duties,
willful violation of any law, rule, regulation (other than traffic violations or
similar  offenses),  final  cease and  desist  order or  material  breach of any
provision of this Agreement  that results in a material loss to the  Association
or the Holding Company.  Notwithstanding  the foregoing,  Executive shall not be
deemed to have been  Terminated for Cause unless and until there shall have been
delivered  to him a  Notice  of  Termination  which  shall  include  a copy of a
resolution duly adopted by the affirmative  vote of not less than  three-fourths
of the  members of the Board at a meeting of the Board  called and held for that
purpose  (after  reasonable  notice to  Executive  and an  opportunity  for him,
together with counsel,  to be heard before the Board),  finding that in the good
faith  opinion  of  the  Board,  Executive  was  guilty  of  conduct  justifying
Termination  for Cause and specifying  the  particulars  thereof in detail.  The
Executive shall not have the right to receive compensation or other benefits for
any period after  Termination  for Cause.  Any stock options and related limited
rights granted to Executive  under any stock option plan, or any unvested awards
granted to Executive  under any stock benefit plan of the Holding Company or its
Subsidiaries,  shall become null and void effective upon Executive's  receipt of
Notice of Termination  for Cause pursuant to Section 8 hereof,  and shall not be
exercisable  by or  delivered  to  Executive  at any  time  subsequent  to  such
Termination for Cause.

8.    NOTICE OF TERMINATION.

      (a) Any purported termination by the Holding Company or by Executive shall
be communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement,  a "Notice of Termination"  shall mean a written notice which
shall indicate the specific termination  provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances  claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

      (b) "Date of  Termination"  shall mean the date specified in the Notice of
Termination  (which,  in the case of a Termination for Cause,  shall not be less
than  thirty  (30) days from the date such  Notice  of  Termination  is  given);
provided,  however,  that if a dispute  regarding  the  Executive's  termination
exists, the "Date of Termination" shall be determined in accordance with Section
8(c) of the Agreement.

      (c) If, within thirty (30) days after any Notice of  Termination is given,
the party  receiving such Notice of Termination  notifies the other party that a
dispute  exists  concerning  the  termination,  except upon the  occurrence of a
Change in Control and voluntary  termination  by the Executive in which case the
Date of  Termination  shall be the date  specified  in the  Notice,  the Date of
Termination


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shall be the date on which the dispute is finally  determined,  either by mutual
written agreement of the parties,  by a binding arbitration award, or by a final
judgment,  order or decree of a court of  competent  jurisdiction  (the time for
appeal  therefrom  having  expired  and no appeal  having  been  perfected)  and
provided  further that the Date of Termination  shall be extended by a notice of
dispute  only if such  notice is given in good faith and the party  giving  such
notice  pursues  the  resolution  of such  dispute  with  reasonable  diligence.
Notwithstanding  the  pendency of any such  dispute,  the Holding  Company  will
continue to pay Executive his full compensation in effect when the notice giving
rise to the dispute was given  (including,  but not limited to, Base Salary) and
continue him as a participant in all  compensation,  benefit and insurance plans
in which he was  participating  when the notice of dispute was given,  until the
dispute is finally  resolved in  accordance  with this  Agreement.  Amounts paid
under this Section are in addition to all other amounts due under this Agreement
and shall not be offset  against  or reduce  any other  amounts  due under  this
Agreement.

9.    POST-TERMINATION OBLIGATIONS.

      All  payments  and benefits to  Executive  under this  Agreement  shall be
subject to Executive's  compliance  with this Section 9 for three (3) full years
after  the  earlier  of the  expiration  of this  Agreement  or  termination  of
Executive's   employment  with  the  Holding  Company.   Executive  shall,  upon
reasonable  notice,  furnish  such  information  and  assistance  to the Holding
Company as may reasonably be required by the Holding  Company in connection with
any litigation in which it or any of its  subsidiaries  or affiliates is, or may
become, a party.

10.   NON-COMPETITION.

      (a) Upon any termination of Executive's  employment  hereunder pursuant to
Section 4 hereof,  Executive  agrees not to compete with the Holding  Company or
its  Subsidiaries for a period of one (1) year following such termination in any
city, town or county in which the Executive's  normal business office is located
and the Holding Company or any of its Subsidiaries has an office or has filed an
application for regulatory approval to establish an office, determined as of the
effective date of such termination, except as agreed to pursuant to a resolution
duly adopted by the Board.  Executive  agrees that during such period and within
said cities, towns and counties, Executive shall not work for or advise, consult
or otherwise  serve with,  directly or  indirectly,  any entity  whose  business
materially competes with the depository, lending or other business activities of
the Holding Company or its  Subsidiaries.  The parties hereto,  recognizing that
irreparable  injury will result to the Holding Company or its Subsidiaries,  its
business  and  property in the event of  Executive's  breach of this  Subsection
10(a)  agree  that in the event of any such  breach by  Executive,  the  Holding
Company or its Subsidiaries, will be entitled, in addition to any other remedies
and damages  available,  to an injunction  to restrain the  violation  hereof by
Executive,  Executive's partners,  agents,  servants,  employees and all persons
acting for or under the direction of Executive.  Executive represents and admits
that in the event of the  termination  of his  employment  pursuant to Section 7
hereof,  Executive's  experience  and  capabilities  are such that Executive can
obtain  employment  in a business  engaged in other lines  and/or of a different
nature than the Holding Company or its Subsidiaries, and that the enforcement of
a remedy  by way of  injunction  will  not  prevent  Executive  from  earning  a
livelihood. Nothing herein will be construed as prohibiting the


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Holding Company or its Subsidiaries  from pursuing any other remedies  available
to the Holding Company or its Subsidiaries for such breach or threatened breach,
including the recovery of damages from Executive.

      (b)  Executive  recognizes  and  acknowledges  that the  knowledge  of the
business activities and plans for business activities of the Holding Company and
its  Subsidiaries as it may exist from time to time, is a valuable,  special and
unique  asset of the  business  of the  Holding  Company  and its  Subsidiaries.
Executive  will not,  during or after the term of his  employment,  disclose any
knowledge of the past, present, planned or considered business activities of the
Holding Company and its Subsidiaries thereof to any person,  firm,  corporation,
or other entity for any reason or purpose whatsoever unless expressly authorized
by the Board of Directors  or required by law.  Notwithstanding  the  foregoing,
Executive  may disclose  any  knowledge of banking,  financial  and/or  economic
principles,  concepts or ideas which are not solely and exclusively derived from
the business  plans and  activities  of the Holding  Company.  In the event of a
breach or threatened  breach by the Executive of the provisions of this Section,
the Holding Company will be entitled to an injunction restraining Executive from
disclosing,  in whole or in part, the knowledge of the past, present, planned or
considered  business  activities of the Holding  Company or its  Subsidiaries or
from rendering any services to any person,  firm,  corporation,  other entity to
whom such knowledge, in whole or in part, has been disclosed or is threatened to
be  disclosed.  Nothing  herein will be  construed  as  prohibiting  the Holding
Company from pursuing any other  remedies  available to the Holding  Company for
such  breach or  threatened  breach,  including  the  recovery  of damages  from
Executive.

11.   SOURCE OF PAYMENTS.

      (a) All payments  provided in this Agreement  shall be timely paid in cash
or check from the general funds of the Holding  Company  subject to this Section
11(b).

      (b)  Notwithstanding  any provision herein to the contrary,  to the extent
that  payments  and  benefits,  as  provided by this  Agreement,  are paid to or
received by Executive  under the Employment  Agreement  dated June 28, 1995, and
amended and restated on July 24, 1998,  between  Executive and the  Association,
such  compensation  payments  and  benefits  paid  by the  Association  will  be
subtracted  from any  amount  due  simultaneously  to  Executive  under  similar
provisions  of this  Agreement.  Payments  pursuant  to this  Agreement  and the
Association  Agreement shall be allocated in proportion to the level of activity
and the time  expended on such  activities by the Executive as determined by the
Holding Company and the Association on a quarterly basis.

12. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

      This  Agreement  contains  the entire  understanding  between  the parties
hereto and supersedes any prior employment agreement between the Holding Company
or any  predecessor  of the  Holding  Company  and  Executive,  except that this
Agreement  shall not affect or operate  to reduce  any  benefit or  compensation
inuring  to  Executive  of a kind  elsewhere  provided.  No  provision  of  this
Agreement


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<PAGE> 10



shall be  interpreted  to mean that  Executive  is  subject to  receiving  fewer
benefits than those available to him without reference to this Agreement.

13.   NO ATTACHMENT.

      (a) Except as  required by law,  no right to receive  payments  under this
Agreement  shall be  subject to  anticipation,  commutation,  alienation,  sale,
assignment,  encumbrance,  charge,  pledge, or  hypothecation,  or to execution,
attachment,  levy, or similar process or assignment by operation of law, and any
attempt,  voluntary  or  involuntary,  to affect any such action  shall be null,
void, and of no effect.

      (b) This  Agreement  shall be binding  upon,  and inure to the benefit of,
Executive and the Holding Company and their respective successors and assigns.

14.   MODIFICATION AND WAIVER.

      (a) This  Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

      (b) No term or  condition of this  Agreement  shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement,  except by written  instrument of the party charged with such
waiver or estoppel.  No such written waiver shall be deemed a continuing  waiver
unless specifically  stated therein,  and each such waiver shall operate only as
to the specific  term or condition  waived and shall not  constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.   SEVERABILITY.

      If, for any reason,  any provision of this  Agreement,  or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this  Agreement or any part of such  provision not held so invalid,  and each
such other  provision and part thereof shall to the full extent  consistent with
law continue in full force and effect.

16.   HEADINGS FOR REFERENCE ONLY.

      The headings of sections  and  paragraphs  herein are included  solely for
convenience of reference and shall not control the meaning or  interpretation of
any of the provisions of this Agreement.


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<PAGE> 11



17.   GOVERNING LAW.

      This  Agreement  shall be  governed  by the laws of the State of  Delaware
without regard to principles of conflict of laws of the State of Delaware.

18.   ARBITRATION.

      Any  dispute  or  controversy  arising  under or in  connection  with this
Agreement shall be settled exclusively by binding arbitration,  conducted before
a panel of three  arbitrators  sitting in a location  selected by the  Executive
within fifty (50) miles from the location of the Association, in accordance with
the rules of the American Arbitration  Association then in effect.  Judgment may
be entered on the arbitrator's award in any court having jurisdiction; provided,
however,  that Executive  shall be entitled to seek specific  performance of his
right to be paid  until  the Date of  Termination  during  the  pendency  of any
dispute or controversy arising under or in connection with this Agreement.

      In the event any dispute or  controversy  arising  under or in  connection
with Executive's  termination is resolved in favor of the Executive,  whether by
judgment, arbitration or settlement,  Executive shall be entitled to the payment
of all  back-pay,  including  salary,  bonuses and any other cash  compensation,
fringe  benefits and any  compensation  and benefits  due  Executive  under this
Agreement.

19.   PAYMENT OF LEGAL FEES.

      All reasonable costs and legal fees paid or incurred by Executive pursuant
to any dispute or question of interpretation relating to this Agreement shall be
paid or  reimbursed  by the Holding  Company,  if Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement.

20.   INDEMNIFICATION.

      The  Holding  Company  shall  provide  Executive   (including  his  heirs,
executors and  administrators)  with coverage  under a standard  directors'  and
officers' liability  insurance policy at its expense, or in lieu thereof,  shall
indemnify Executive (and his heirs, executors and administrators) to the fullest
extent  permitted  under  Delaware  law against  all  expenses  and  liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or  proceeding  in which he may be  involved  by  reason  of his  having  been a
director or officer of the Holding Company  (whether or not he continues to be a
director or officer at the time of incurring such expenses or liabilities), such
expenses and  liabilities to include,  but not be limited to,  judgments,  court
costs and attorneys' fees and the cost of reasonable settlements.


                                      11

<PAGE> 12



21.   SUCCESSOR TO THE HOLDING COMPANY.

      The Holding  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  Association  or the  Holding
Company,  expressly  and  unconditionally  to assume  and agree to  perform  the
Holding Company's  obligations  under this Agreement,  in the same manner and to
the same extent that the Holding Company would be required to perform if no such
succession or assignment had taken place.



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<PAGE> 13


                                   SIGNATURES


      IN WITNESS WHEREOF, SGV Bancorp, Inc. has caused this amended and restated
Agreement  to be  executed  and its  seal to be  affixed  hereunto  by its  duly
authorized officer and its directors,  and Executive has signed this amended and
restated Agreement, on the 24th day of July, 1998.


ATTEST:                                   SGV BANCORP, INC.



/s/ Edie J. Beachboard              By:   /s/ Benjamin S. Wong
--------------------------                --------------------------------------
Secretary                                 For the Entire Board of Directors


            [SEAL]


WITNESS:



/s/ Barrett Andersen                 By:  /s/ Ronald A. Ott
---------------------------               ------------------------------ 
                                              Ronald A. Ott




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