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                              AMENDED AND RESTATED
        FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF SAN GABRIEL VALLEY
                              EMPLOYMENT AGREEMENT


      This AGREEMENT ("Agreement") is made effective as of June 28, 1995, and is
amended and restated as of July 24, 1998, by and among First Federal Savings and
Loan  Association  of  San  Gabriel  Valley  (the  "Association"),  a  federally
chartered savings institution,  with its principal  administrative office at 225
North Barranca Street, West Covina, California, SGV Bancorp, Inc., a corporation
organized  under the laws of the State of Delaware,  the holding company for the
Association (the "Holding Company"), and Ronald A. Ott ("Executive").

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

      WHEREAS, Executive is willing to serve in the employ of the Association 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 his employment  hereunder,  Executive agrees to serve
as  Executive  Vice  President,  Chief  Financial  Officer and  Treasurer of the
Holding Company.  Executive shall render  administrative and management services
to the  Association  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 the Holding Company or any subsidiary of
the Association.

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 disinterested members of the
board of  directors of the  Association  ("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 Executive's  performance  annually for purposes of
determining  whether to extend  the  Agreement  and the  rationale  and  results
thereof 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 other  provisions of this
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


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employment  shall 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 Association 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 Association,  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  to  the  contrary,   Executive's
employment  with the  Association  may be terminated by the  Association  or the
Executive during the term of this Agreement, subject to the terms and conditions
of this Agreement.

3.    COMPENSATION AND REIMBURSEMENT.

      (a) The  Association  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  Association.  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  Association  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 Association.

      (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  Association  will not,
without  Executive's  prior  written  consent,  make any  changes in such plans,
arrangements or perquisites which would materially  adversely affect Executive's
rights or  benefits  thereunder;  except to the  extent  such  changes  are made
applicable to all Association


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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  Association 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  Association  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 Association  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 Association or the Holding  Company of Executive's  full-time
employment hereunder for any reason other than a termination governed by Section
5(a) hereof,  or  Termination  for Cause,  as defined in Section 7 hereof;  (ii)
Executive's  resignation from the  Association'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  Association,  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 Executive,  (C) a relocation of Executive's  principal place of employment
by more than 30 driving  miles from its location at the  effective  date of this
Agreement, unless consented to by the Executive, (D) a material 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 Association or Holding Company,  or (F) breach
of this Agreement by the Association. 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 Association 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 to the Executive for
the remaining term of the  Agreement,  including but not limited to Base Salary,
bonuses  and any other cash  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;  provided,  however,  that any payments pursuant to this subsection
              --------   -------
shall not, in the  aggregate,  exceed  three times  Executive's  average  annual
compensation  for the five most recent  taxable  years that  Executive  has been
employed by the  Association  or such  lesser  number of years in the event that
Executive  shall have been employed by the Association for less than five years.
In the event the  Association  is not in  compliance  with its  minimum  capital
requirements or if such payments pursuant to this subsection (b) would cause the
Association's  capital  to be  reduced  below  its  minimum  regulatory  capital
requirements, such payments shall be deferred until such time as the Association
or successor thereto is in capital compliance. 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 as of the Executive's  Date of  Termination.  In the
event that no election is made,  payment to 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 Association  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  Association or the
Holding Company for Executive and his dependents  prior to his termination at no
cost to the Executive,  except to the extent such coverage may be changed in its
application to all Association or Holding Company employees. 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
Association  or Holding  Company 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


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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 Association or
the Holding  Company,  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  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, (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: (1) Executive's  dismissal or (2)  Executive's  voluntary
resignation  unless such  termination is because of his death or Termination for
Cause.

      (c) Upon Executive's entitlement to benefits pursuant to Section 5(b), the
Association  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:  (1) the
payments due for the  remaining  term of the  Agreement;  or (2) three (3) times
Executive's  highest  annual  compensation  for the last  five (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;
provided however, that


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any  payment  under  this  provision  shall  not  exceed  three  (3)  times  the
Executive's average annual compensation.  In the event the Association is not in
compliance with its minimum capital requirements or if such payments would cause
the  Association's  capital to be reduced below its minimum  regulatory  capital
requirements, such payments shall be deferred until such time as the Association
or successor thereto is in capital compliance. At the election of the Executive,
which election is to be made prior to a Change in Control, such payment shall be
made in a lump sum as of the Executive's Date of Termination.  In the event that
no  election is made,  payment to the  Executive  will be made in  approximately
equal  installments  on a monthly basis 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 Association  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
Association 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.

6.    CHANGE OF CONTROL RELATED PROVISIONS

      Notwithstanding  the  provisions  of  Section  5, in no  event  shall  the
aggregate  payments or benefits to be made or afforded to  Executive  under said
paragraphs (the "Termination Benefits") constitute an "excess parachute payment"
under Section 280G of the Code or any successor  thereto,  and in order to avoid
such a result,  Termination Benefits will be reduced, if necessary, to an amount
(the  "Non-Triggering  Amount"),  the value of which is one dollar  ($1.00) less
than an amount equal to three (3) times Executive's "base amount", as determined
in accordance  with said Section 280G. The allocation of the reduction  required
hereby among the Termination  Benefits provided by Section 5 shall be determined
by Executive.

7.    TERMINATION FOR CAUSE.

      The term  "Termination  for  Cause"  shall  mean  termination  because  of
Executive's personal dishonesty, incompetence, willful misconduct, any breach of
fiduciary duty involving personal profit,  intentional failure to perform stated
duties,  willful  violation of any law, rule or  regulation  (other than traffic
violations  or similar  offenses)  or final  cease-and-desist  order or material
breach of any provision of this Agreement. In determining incompetence, the acts
or omissions  shall be measured  against the generally  prevailing  standards of
professional  competence for executive  officers having comparable  positions in
the savings  institutions  industry.  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 a
majority 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


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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  Association,  the Holding  Company or any  subsidiary  or affiliate
thereof, 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 Association 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 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. 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 Association . Executive shall,  upon reasonable
notice,  furnish such  information  and  assistance  to the  Association  as may
reasonably be required by the  Association in connection  with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.



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10. NON-COMPETITION.

      (a) Upon any termination of Executive's  employment  hereunder pursuant to
Section 4 hereof,  Executive  agrees not to compete with the  Association  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 Association 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  Association.  The parties  hereto,
recognizing that irreparable injury will result to the Association, 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  Association,  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.  Nothing herein will be construed as prohibiting the Association from
pursuing  any other  remedies  available to the  Association  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  Association  and
affiliates  thereof,  as it may exist from time to time, is a valuable,  special
and unique asset of the business of the Association.  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  Association  or
affiliates  thereof to any person,  firm,  corporation,  or other entity for any
reason or purpose  whatsoever.  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  Association.  Further,  Executive  may  disclose
information  regarding the business activities of the Association to the OTS and
the  Federal  Deposit  Insurance  Corporation  ("FDIC")  pursuant  to  a  formal
regulatory  request.  In the event of a breach or threatened breach by Executive
of the  provisions  of this  Section,  the  Association  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
Association or affiliates thereof, 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  Association  from  pursuing  any other  remedies
available to the Association 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  Association.  The  Holding  Company,
however,  unconditionally  guarantees  payment and  provision of all amounts and
benefits due  hereunder to Executive  and, if such amounts and benefits due from
the Association are not timely paid or provided by the Association, such amounts
and benefits shall be paid or provided by the Holding Company.


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      (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 as of July 24,  1998,  between  Executive  and the Holding
Company,  such  compensation  payments and benefits paid by the Holding  Company
will be  subtracted  from any  amounts due  simultaneously  to  Executive  under
similar  provisions of this Agreement.  Payments  pursuant to this Agreement and
the Holding  Company  Agreement shall be allocated in proportion to the level of
activity and time expended on such  activities by 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 Association or
any  predecessor of the  Association  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 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 Association 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.


                                      9

<PAGE> 10



15.   REQUIRED PROVISIONS.

      (a) The Association may terminate Executive's  employment at any time, but
any termination by the Association,  other than Termination for Cause, shall not
prejudice  Executive's  right to  compensation  or  other  benefits  under  this
Agreement.  Executive shall not have the right to receive  compensation or other
benefits  for any  period  after  Termination  for Cause as defined in Section 7
hereinabove.

      (b) If Executive is suspended  from office and/or  temporarily  prohibited
from  participating  in the  conduct  of the  Association's  affairs by a notice
served under Section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C.  ss.1818(e)(3)  or (g)(1);  the  Association  's  obligations  under this
contract  shall  be  suspended  as of the  date of  service,  unless  stayed  by
appropriate  proceedings.  If the  charges  in the  notice  are  dismissed,  the
Association  may in  its  discretion  (i)  pay  Executive  all  or  part  of the
compensation  withheld while their contract  obligations were suspended and (ii)
reinstate (in whole or in part) any of the obligations which were suspended.

      (c)  If  Executive  is  removed   and/or   permanently   prohibited   from
participating  in the conduct of the  Association's  affairs by an order  issued
under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act, 12 U.S.C.
ss.1818(e)(4) or (g)(1),  all obligations of the Association under this contract
shall terminate as of the effective date of the order,  but vested rights of the
contracting parties shall not be affected.

      (d) If the  Association is in default as defined in Section 3(x)(1) of the
Federal Deposit  Insurance Act, 12 U.S.C.  ss.1813(x)(1)  all obligations of the
Association  under this contract shall terminate as of the date of default,  but
this paragraph shall not affect any vested rights of the contracting parties.

      (e) All  obligations  of the  Association  under  this  contract  shall be
terminated, except to the extent determined that continuation of the contract is
necessary for the continued operation of the institution, (i) by the Director of
the OTS (or his designee), the FDIC or the Resolution Trust Corporation,  at the
time the FDIC enters into an agreement to provide  assistance to or on behalf of
the  Association  under the authority  contained in Section 13(c) of the Federal
Deposit Insurance Act, 12 U.S.C. ss.1823(c);  or (ii) by the Director of the OTS
(or his  designee)  at the  time  the  Director  (or his  designee)  approves  a
supervisory  merger  to  resolve  problems  related  to  the  operations  of the
Association  or when the  Association  is determined by the Director to be in an
unsafe or unsound condition. Any rights of the parties that have already vested,
however, shall not be affected by such action.

      (f) Any  payments  made  to  Executive  pursuant  to  this  Agreement,  or
otherwise,  are  subject  to and  conditioned  upon  compliance  with 12  U.S.C.
ss.1828(k) and 12 C.F.R.  ss.545.121 and any rules and  regulations  promulgated
thereunder.


                                      10

<PAGE> 11



16.   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.

17.   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.

18.   GOVERNING LAW.

      The  validity,   interpretation,   performance  and  enforcement  of  this
Agreement shall be governed by the laws of the State of California,  but only to
the extent not superseded by federal law.

19.   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 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  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.

20.   PAYMENT OF COSTS AND 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  Association  if Executive is successful on the merits
pursuant to a legal judgment, arbitration or settlement.



                                      11

<PAGE> 12



21.   INDEMNIFICATION.

      (a)  The  Association  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  federal  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  Association  (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.

      (b) Any payments made to Executive pursuant to this Section are subject to
and  conditioned  upon  compliance  with 12  C.F.R.ss.  545.121 and any rules or
regulations promulgated thereunder.

22.   SUCCESSOR TO THE ASSOCIATION.

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



                                      12

<PAGE> 13


                                   SIGNATURES


      IN WITNESS  WHEREOF,  First Federal  Savings and Loan  Association  of San
Gabriel  Valley and SGV  Bancorp,  Inc.  have caused this  amended and  restated
Agreement  to be executed  and their seals to be affixed  hereunto by their duly
authorized  officers and  directors,  and  Executive has signed this amended and
restated Agreement, on the 24th day of July, 1998.


ATTEST:                             FIRST FEDERAL SAVINGS AND LOAN
                                    ASSOCIATION OF SAN GABRIEL VALLEY



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


      [SEAL]


ATTEST:                             SGV BANCORP, INC.

                                             (Guarantor)


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



      [SEAL]


WITNESS:



/s/ Betty Ehlenburg                      /s/ Ronald A. Ott
---------------------------              ---------------------------------
                                             Ronald A. Ott



                                      13