<PAGE>

                                     EXHIBIT 10.2

                                    MID-STATE BANK
                              DEFERRED COMPENSATION PLAN
                          AMENDED AND RESTATED JULY 1, 1996



     WHEREAS, MID-STATE BANK (the "Bank"), by resolution of the Board of
Directors, has previously adopted this Deferred Compensation Plan (the "Plan")
for the purpose of providing performance-oriented deferred compensation for
personnel of the Bank; and

     WHEREAS, it is believed that the continuation of this Plan providing for
deferred compensation will be in the best interests of the Bank; and

     WHEREAS, it is believed that by providing more distribution options the
Bank would enhance the Plan, and consequently the performance of participating
executives.

     NOW, THEREFORE, it is hereby declared as follows:


                                     ARTICLE 1
                                    DEFINITIONS
                                          
     1.1  TITLE.  This Plan shall be known as the Mid-State Bank Deferred
Compensation Plan.

     1.2  DEFINITIONS.

          (a)  "Account" shall mean the account maintained by the Committee
for each Participant under this Plan for each Plan Year.

          (b)  "Affiliate" shall mean:

               (1)  any corporation while it is a member of the same controlled
group of corporations (within the meaning of Code Section 414(b)) as the Bank;

               (2)  any organization while it is under "common control" with the
Bank (within the meaning of Code Section 414(c));

               (3)  any organization while it is an "affiliated service group"
together with the Bank (within the meaning of Code Section 414(m)); or

                                    
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               (4)  any other entity while it is required to be aggregated with
the Bank under Code Section 414(o);

provided, however, that the phrase "more than 50 percent" shall be substituted
for the phrase "at least 80 percent" each place the latter appears in Code
Section 1563 and in the regulations under Code Section 414(c).

          (c)  "Bank" shall mean Mid-State Bank, a California banking
corporation, and any successor thereto.

          (d)  "Beneficiary" shall mean the person last designated in writing by
the Participant to the Committee as the Participant's beneficiary under this
Plan, or, if there is no designated beneficiary or the designated beneficiary
does not survive the Participant, the Participant's estate.

          (e)  "Board of Directors" shall mean the Board of Directors of
the Bank.

          (f)  "Break in Service" shall mean any Plan Year during which a
Participant completes less than 1,000 hours of employment with the Bank and the
Affiliates.

          (g)  "Committee" shall mean the committee appointed by the Board of 
Directors pursuant to the provisions of this Plan.

          (h)  "Code" shall mean the Internal Revenue Code of 1986, as 
amended from time to time, all successor laws thereto, and any regulations or 
guidance promulgated thereunder.  Where the Plan refers to a particular 
section of the Code, the reference shall also apply to any successor to that 
section.

          (i)  "Deferral Election" shall mean an election made under Section 
7.1 or 7.2.

          (j)  "Disability" shall mean any mental or physical condition,
illness, or injury which renders a Participant unable to perform his or her
employment duties in a normal and regular manner, and which is expected to
result in death or has lasted or is expected to last for a continuous period of
not less than six (6) months.  Disability shall be determined by a physician
acceptable to both the Committee and the Participant.
     
          (k)  "Employer" shall mean the Bank and any Affiliates authorized
by the Board of Directors to adopt this Plan, and which, by direction of the
Affiliate's board of directors, or appropriate executive authority if a
partnership or proprietorship, adopts this Plan.

                                    2
<PAGE>

          (l)  "ERISA" shall mean the Employee Retirement Income Security Act 
of 1974, as amended from time to time, all successor laws thereto, and any 
regulations or guidance promulgated thereunder.  Where the Plan refers to a 
particular section of ERISA, the reference shall also apply to any successor 
to that section.

          (m)  "Full Year of Service" shall mean any calendar year in which 
an individual completes at least 1,000 hours of employment with the Bank or 
the Affiliates.

          (n)  "Net Profits" shall mean net income (during the Plan Year for 
which an allocation is made) on the Bank's audited financial statements net 
of all expenses including reserves for loan losses, provision for income 
taxes, and extraordinary items, all as determined according to generally 
accepted accounting principles.

          (o)  "Participant" shall mean each employee of the Bank or any 
other Employer who is designated by the Committee as eligible to participate 
hereunder.

          (p)  "Plan" shall mean this Deferred Compensation Plan, as set 
forth herein.

          (q)  "Plan Year" shall mean any calendar year during which the Plan 
is in effect beginning January 1, 1983.

          (r)  "Return on Equity" shall mean, for purposes of Section 4.1, 
the return on stockholder's equity, as determined according to generally 
accepted accounting principles, during the Plan Year for which an allocation 
is made.

                                     ARTICLE 2
                                   PARTICIPATION

     2.1  ELIGIBILITY.  Carrol Pruett, Raymond Jones, Daryl Flood, James G. 
Stathos, Thomas E. Reese, John Fowler, and such other persons constituting 
senior management of the Bank, its successors, or Affiliates as the Committee 
may from time to time designate, shall be eligible to participate in the Plan.

     2.2  GENERAL RESTRICTION.  Notwithstanding Section 2.1, participation 
shall be limited to a "select group of management or highly compensated 
employees" within the meaning of ERISA Section 201(2).

     2.3  CONTINUANCE AS PARTICIPANT.  Every person who becomes a Participant 
shall continue to be a Participant until the date he or she:

                                    3
<PAGE>

          (a)  Resigns or is dismissed as an employee of the Bank or its
Affiliates;

          (b)  Retires on or after attaining his or her normal retirement
date (as set forth in the Bank's Policy Manual); or

          (c)  Dies or suffers a Disability.

     2.4  BREAK IN SERVICE.  Any person who after becoming a Participant has a
Break in Service shall cease to be a Participant in this Plan until, after
returning to work, he or she has completed one thousand (1,000) hours in the
employment of the Bank or the Affiliates.


                                     ARTICLE 3
                               ADMINISTRATION OF PLAN

     3.1  MEMBERS.  The Committee hereunder shall consist of five (5) members
appointed by the Board of Directors.  Notwithstanding anything to the contrary
set forth herein, no Participant under the Plan shall be eligible to serve as a
member of the Committee.

     3.2  COMMITTEE ACTION.  The Committee shall, for the purpose of 
administering the Plan, choose a secretary and an assistant secretary (either 
of whom is hereafter referred to as "Secretary") who shall keep minutes of 
the Committee's proceedings and all records and documents pertaining to the 
Committee's administration of the Plan.  The Secretary may execute any 
certificates or other written direction on behalf of the Committee.  Three 
(3) members of the Committee shall constitute a quorum.

     3.3  RIGHTS AND DUTIES.  The Committee, on behalf of the Participants, 
shall be charged with the general administration of the Plan and shall have 
all powers necessary to accomplish those purposes, including, but not by way 
of limitation, the following:

          (a)  To construe, interpret, and administer the Plan;

          (b)  To make allocation and determinations required by the Plan;

          (c)  To compute and certify the amount and kind of benefits payable 
to Participants;

          (d)  To authorize all disbursements by the Bank or the Affiliates
pursuant to the Plan;

                                    4
<PAGE>

          (e)  To maintain all the necessary records for the administration 
of the Plan; and

          (f)  To make and publish such rules for the regulation of the Plan 
as are not inconsistent with the terms hereof.

Decisions and determinations by the Committee shall be final and binding upon
all parties and shall be given the maximum deference allowed by law.

     3.4  INFORMATION.  To enable the Committee to perform its functions,
the Bank and the Affiliates shall supply full and timely information to the
Committee on all matters relating to the compensation of the Participants, their
employment, their death or Disability, and any other pertinent facts as the
Committee may require.

     3.5  COMPENSATION, INDEMNITY, AND LIABILITY.  The members of the 
Committee shall serve without bond and without compensation for their 
services hereunder.  All expenses of the Committee shall be paid by the Bank 
and the other Employers.  The Bank and the other Employers shall furnish the 
Committee with such clerical and other assistance as is necessary in the 
performance of its duties.  No member of the Committee shall be liable for 
the act or omission of any other member of the Committee nor for any act or 
omission on his or her own part, excepting only his or her own willful 
misconduct or gross negligence. The Bank shall indemnify and hold harmless 
each member of the Committee against any and all expenses and liabilities 
arising out of his or her membership on the Committee, excepting only 
expenses and liabilities arising out of his or her own willful misconduct or 
gross negligence.

     3.6  TAXES.  If the whole or any part of a Participant's Accounts shall 
become liable for the payment of any estate, inheritance, income, or other 
tax which an Employer shall be required to pay, the Employer shall have the 
power and authority to pay such tax and reduce the book account of the person 
whose interests hereunder are so liable.  Prior to making any payment, the 
Employer may require such releases or other documents from any lawful taxing 
authority as it shall deem necessary.

     3.7  EMPLOYMENT OF COUNSEL.  The Committee may consult with legal 
counsel (who may be counsel for the Bank) and shall be fully protected with 
respect to any action taken or permitted by good faith pursuant to the advice 
of such counsel.

                                     ARTICLE 4
                             DEFERRED COMPENSATION POOL


                                    5
<PAGE>

     4.1  DEFERRED COMPENSATION POOL.  The Board of Directors shall, within
sixty (60) days following the end of each Plan Year, cause the Bank (and, to the
extent applicable, any other Employer) to determine an amount as follows:

                                    6
<PAGE>
<TABLE>
<CAPTION>
          RETURN ON EQUITY                   AMOUNT OF "ALLOCATION"
          ----------------                   ----------------------
<S>                                    <C>
          Less than 10%                               -0-
          10% but less than 15%                2% of Net Profits
          15% but less than 20%                3% of Net Profits
          20% or more                          4% of Net Profits
</TABLE>

     4.2  FORFEITURE; REDUCTION OF ALLOCATIONS.  Any "forfeitures," as that
term is defined in Section 5.3, occurring in a Plan Year shall be credited as
part of and used to reduce the amount of allocation under this Plan from the
Bank or any other Employer for that Plan Year.


                                     ARTICLE 5
                                    ALLOCATIONS

     5.1  SEPARATE ACCOUNTS.   The Committee shall establish and maintain on 
all books and accounts of the Plan, by Plan Year, a separate Account for each 
Participant.

     5.2  ALLOCATIONS.  Within sixty (60) days after the close of the Plan 
Year, the Committee shall allocate the amount allocable under this Plan for 
such Plan Year by the Bank or any other Employer pursuant to Section 4.1 
among the Accounts of those persons who were Participants on the last day of 
the Plan Year.  This amount shall be allocated among such Accounts in such 
proportions as the Committee shall determine from time to time. 

     5.3  ALLOCATION OF FORFEITURES.  The term "forfeitures" as used in this 
Plan means the unvested portion of an Account established pursuant to Section 
5.1 for a person whose status as a Participant has been terminated. 
Notwithstanding the foregoing, in the case of an individual whose status as a 
Participant is terminated as a result of the termination of his or her 
employment with the Bank or the Affiliates for cause, the term "forfeitures" 
means the vested and unvested portion of an Account established pursuant to 
Section 5.1.  Whether a Participant's termination of employment is "for 
cause" shall be determined by the Committee in its sole and absolute 
discretion.  All forfeitures occurring in a Plan Year shall be used to reduce 
the amount that must be allocated for such Plan Year by the Bank or any other 
Employer pursuant to Section 4.1 and shall be allocated accordingly.

     5.4  RATE OF RETURN.  The full amount of the funds credited to the 
Accounts of each Participant shall accrue an annual rate of return equal to 
ninety percent (90%) of the Bank's prime rate (as that rate may be determined 
from time to time by the Board of Directors).  Funds remaining in the 
Accounts, after any installment payment described in Article 7 hereof, shall 
continue to accrue a rate of return as set forth in this Section 5.4. This 
return shall be adjusted and credited to each Account quarterly.

                                    7
<PAGE>

                                     ARTICLE 6
                                      VESTING

     6.1  FULLY VESTED INTEREST.  Subject to Section 5.3, the full amount
credited to the Accounts established for each Participant pursuant to Section
5.1, including any interest credited thereto, shall be fully vested in the
Participant for whom the Accounts are established after such Participant has
completed ten (10) Full Years of Service.  For purposes of this Plan, the
Accounts of Messrs. Pruett, Jones, Flood, and Reese shall be considered fully
vested.

     6.2  PARTIAL VESTING.  Subject to Sections 5.3 and 6.1, the amount
credited to the Accounts established for a Participant pursuant to Section 5.1,
including any interest credited thereto, shall become vested in the Participant
for whom the Accounts were established in accordance with the following
schedule:

<TABLE>
<CAPTION>
             FULL YEARS            PERCENTAGE OF 
             OF SERVICE            ACCOUNT VESTED
             ----------            --------------
<S>                         <C>
                  1                     10%
                  2                     20%
                  3                     30%
                  4                     40%
                  5                     50%
                  6                     60%
                  7                     70%
                  8                     80%
                  9                     90%
                 10                    100%
</TABLE>

     6.3  BREAKS IN SERVICE.  Should a Participant have a Break in Service, 
the Full Years of Service rendered by the Participant after the Break in 
Service shall be taken into account for purposes of determining the 
percentage, if any, of the amount in his or her Accounts derived from 
allocations made before the Break in Service that is vested in the 
Participant.

     6.4  FORFEITURE OF UNVESTED AMOUNT.  Except as provided in Section 5.3, 
on termination of a Participant's status as a Participant, that portion of 
the amount in the Account established for the Participant pursuant to Section 
5.1 that is not vested as provided in this Article shall be forfeited by the 
Participant.  This amount shall be credited, in the manner prescribed by 
Articles 4 and 5, to reduce the amount allocable under this Plan from the 
Employer for the then current Plan Year.  Notwithstanding the foregoing, 
where a Participant's employment with the Bank or the Affiliates is 
terminated for cause, all funds in the Account established for the 
Participant pursuant to Section 5.1, whether vested or not vested, shall be 
immediately forfeited by the 

                                    8
<PAGE>

Participant and credited, in the manner prescribed by Articles 4 and 5, to 
reduce the allocable amount under this Plan by the Employer for the then 
current Plan Year.

                                     ARTICLE 7
                          PAYMENT OF DEFERRED COMPENSATION

     7.1  ANNUAL ELECTION.  On or before the December 31 preceding a Plan
Year, a Participant may elect in writing to receive the vested portion which may
be credited to his or her Account for said Plan Year, either:

          (a)  Upon retirement, either:

               (1)  In a single amount not later than sixty (60) days after the
close of the Plan Year in which his or her retirement occurred; or

               (2)  In equal monthly, quarterly, or annual installments over 
a specified number of years, which shall be not more than ten (10) years, 
commencing not later than sixty (60) days after the close of the Plan Year in 
which his or her retirement occurred.

          (b)  In the fifth Plan Year after the Plan Year for which the 
Deferral Election was made, either:

               (1)  In a single amount not later than sixty (60) days after
the close of the fifth Plan Year after the Plan Year for which such Deferral
Election was made; or

               (2)  In equal monthly, quarterly, or annual installments over 
a specified number of years, which shall be not more than ten (10) years, 
commencing not later than sixty (60) days after the close of the fifth Plan 
Year after the Plan Year for which such Deferral Election was made.

"Retirement" shall mean early, normal, or deferred retirement as set forth in
the Bank's Policy Manual.

Notwithstanding the foregoing, in no event shall benefit payments commence later
than the year following the year in which the Participant terminates employment
with the Bank or the Affiliates.

     7.2  RULES REGARDING DELAY OF PAYMENTS.  A Participant may elect to 
delay the time at which the Account balance is to be paid under Section 7.1(b),
or subsequently under this Section 7.2, until: 

                                    10
<PAGE>

          (a)  As soon as possible after January 1 of the fourth Plan year
following the year the election to delay payment is made; or

          (b)  Termination of employment, if earlier.

Such election to delay payments must be received by the Board before the January
1 of the year preceding the date the amounts would otherwise first become
payable under Section 7.1(b) or this Section 7.2.  The election to delay
payments shall also specify the form of payment, whether in one lump sum in cash
or in installments over a period not exceeding ten (10) years.  

Any change in the elected time or form of payment shall not be valid unless the
Participant shall have remained employed with the Bank or the Affiliates for a
period of at least one year after the date on which such election is made.

Notwithstanding the foregoing, in no event shall benefit payments commence later
than the year following the year in which the participant terminates employment
with the Bank or the Affiliates.

     7.3  DEATH OR DISABILITY.  Notwithstanding anything to the contrary 
herein, should a Participant die or suffer a Disability prior to termination 
of employment with the Bank or the Affiliates, the full value of his or her 
vested interest (as of the date of death or Disability) in the Accounts 
established for him or her under Section 5.1 shall be paid to the 
Participant's Beneficiary or to the Participant, as the case may be, in equal 
monthly installments over a ten (10) year period commencing not later than 
sixty (60) days after the close of the Plan Year in which the death or 
Disability occurred.

On the death of a Participant following retirement, payments shall be made to
the Participant's Beneficiary or estate in the manner prescribed by Section 7.1
or 7.4, as appropriate.

     7.4  RETIREMENT.  Upon the retirement of a Participant, the full value 
of his or her vested interest (as of the date of retirement) in the Accounts 
established for him or her under Section 5.1 shall be paid in the form 
elected under Section 7.1 or 7.2.

     7.5  HARDSHIP.  A Participant may at any time apply to the Board of 
Directors in writing for the withdrawal of all or part of such Participant's 
Accounts for a financial emergency.  The Board of Directors shall approve 
such withdrawal only for an unanticipated emergency that is caused by an 
event beyond the control of the Participant and that would result in severe 
financial hardship if early withdrawal were not permitted.  If the Board of 
Directors approves such a withdrawal, such amount shall be deducted from such 
Participant's Accounts and paid to such Participant in cash.  No payment 
shall be made under this Section if the Committee determines that such 

                                    10
<PAGE>

payment would lead any other amounts deferred hereunder to be deemed 
constructively received under the Code.

     7.6  TERMINATION.  Notwithstanding any provision to the contrary herein, 
upon a Participant's termination of employment with the Bank or the 
Affiliates, other than by reason of retirement (as defined in Section 5.1), 
death, Disability, or termination of employment for cause, the full value of 
his or her vested interest in the Participant's Accounts shall be paid in a 
lump sum payment within sixty (60) days following the date of termination.

     7.7  COMMITTEE DISCRETION.  Notwithstanding the foregoing, the Committee 
may, in its sole and absolute discretion, change the form and the timing of 
payments under the Plan.

     7.8  TAX WITHHOLDING.  The Bank may withhold from any payment made under 
this Plan (and transmit to the proper taxing authority) such amounts as it 
may be required to withhold under any Federal, state, or other law.

                                     ARTICLE 8
                             AMENDMENT AND TERMINATION

     8.1  AMENDMENTS.  The Bank shall have the right to amend the Plan in
whole or in part from time to time by resolutions of the Board of Directors, and
to amend or cancel any amendments; provided, however, that no action under this
Section shall cancel or affect in any way amounts previously credited to any
Participant's Account.  Such amendments shall be stated in an instrument in
writing, executed by the Bank in the same manner as the Plan, and the Plan shall
be amended in the manner and at the time therein set forth, and all Participants
shall be bound thereby.

     8.2  DISCONTINUANCE OF PLAN.  It is the expectation of the Bank that
the Plan will be continued indefinitely, but continuance of the Plan is not
assumed as a contractual obligation of the Bank or any Employer, and the right
is reserved at any time to discontinue and to terminate the Plan.  If the Bank
decides to discontinue and to terminate the Plan, it shall notify the Committee
of its action in an instrument in writing, executed by the Bank in the same
manner as the Plan, and the Plan shall be terminated at the time therein set
forth, and all Participants shall be bound thereby; provided, however, that no
action under this Section shall cancel or affect in any way amounts previously
credited to any Participant's Accounts.

     8.3  MERGER.  In the event of a dissolution or a liquidation of the Bank 
or a reorganization, merger, or consolidation of the Bank with one or more 
corporations as a result of which the Bank will not be the surviving 
corporation, or a sale of substantially all of the assets and property of the 
Bank to another person, or in the event of any other 

                                    11
<PAGE>

single transaction involving the Bank where there is a change in ownership of 
at least twenty-five percent (25%), except as may result from a transfer of 
shares of another corporation in exchange for at least eighty percent (80%) 
control of that corporation, notwithstanding any provision of this Plan to 
the contrary, the full value of each Participant's vested interest in his or 
her Accounts shall be paid in a single amount not later than sixty (60) days 
following receipt of notice of such intended dissolution, liquidation, 
merger, reorganization, or consolidation.

                                     ARTICLE 9
                                   MISCELLANEOUS

     9.1  LIMITATION ON PARTICIPANT'S RIGHTS.  Participation in the Plan
shall not give any Participant the right to be retained in the employ of the
Bank or any Affiliate or any right or interest in the Plan other than as herein
provided.  The Bank and the Affiliates reserve the right to dismiss any
Participant without any liability for any claim against them, except to the
extent provided herein.  The Plan shall create only a contractual obligation on
the part of the Bank and shall not be construed as creating a trust.  The
payments to a Participant or his or her designated Beneficiary or other
beneficiary hereunder shall be made from assets which shall continue, for all
purposes, to be a part of the general assets of the Bank or the Affiliates, and
no person, other than the Bank or the Affiliates, shall have, by virtue of the
provisions of the Plan, any interest in such assets.  To the extent that any
person acquires a right to receive payments from the Bank or any other Employer
under the provisions hereof, such right shall be no greater than the right of
any unsecured general creditor of the Bank or the relevant Employer.

     9.2  OTHER PLANS.  The Plan shall not affect the right of any employee
or Participant to participate in and to receive benefits under and in accordance
with the provisions of any other Bank or Affiliate plans which are now or
hereafter in existence.

     9.3  RECEIPT OF RELEASE.  Any payment to any Participant in accordance
with the provisions of the Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Committee, the Bank, and any other
Employer; the Committee may require such Participant, as a condition precedent
to such payment, to execute a receipt and release to such effect.

     9.4  CALIFORNIA LAW.  To the extent not preempted by Federal Law, the
Plan shall be construed, administered, and governed in all respects under and by
laws of the State of California, without regard to any conflict of laws
provisions.  If any provisions of this instrument shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.

                                    12
<PAGE>

     9.5  HEADINGS.  Headings and subheadings in this Plan are inserted for
convenience or reference only and are not to be considered in the construction
of the provisions hereof.  

     9.6  SUCCESSORS AND ASSIGNS.  The Plan shall inure to the benefit of,
and be binding upon, the parties hereto and their successors and assigns;
provided, however, that the amounts credited to the Accounts of a Participant
shall not be assignable or transferable, and any purported transfer, assignment,
encumbrance, or attachment shall be void.

     9.7  INTENT.  The Plan is to be construed as a plan maintained to 
provide deferred compensation to a "select group of management or highly 
compensated employees" within the meaning of Section 201(2) of ERISA.  The 
Plan is intended to be exempt from the participation, vesting, funding, and 
fiduciary requirements of Title I of ERISA, to the fullest extent permitted 
under the law. The Plan shall at all times be "unfunded" within the meaning 
of ERISA and the Code.

     9.8  GENDER AND NUMBER.  Where the context permits, words in any
gender shall include any other gender, words in the singular shall include the
plural, and the plural shall include the singular.

     IN WITNESS WHEREOF, the Bank has caused these presents to be executed by
its duly authorized officers this 10th day of July, 1996.


                             MID-STATE BANK


                             By /s/ Carrol R. Pruett        
                                ---------------------------------
                                    Carrol R. Pruett, President



                             By /s/ James G. Stathos        
                                ---------------------------------
                                    James G. Stathos
                                    Executive Vice President



                                    13