Exhibit 10.23

                           MONTEREY BAY BANCORP, INC.

                        FORM OF INDEMNIFICATION AGREEMENT


     This Indemnification  Agreement  ("Agreement") is made as of this _____ day
of  August,  2002,  by and  between  Monterey  Bay  Bancorp,  Inc.,  a  Delaware
corporation (the "Company"), and _______________ ("Indemnitee").

     WHEREAS, the Company and Indemnitee recognize the increasing  difficulty in
obtaining  directors'  and  officers'  liability   insurance,   the  significant
increases  in the  cost of such  insurance  and the  general  reductions  in the
coverage of such insurance;

     WHEREAS,  the Company and  Indemnitee  further  recognize  the  substantial
increase in corporate  litigation in general,  subjecting officers and directors
to expensive  litigation risks at the same time as the availability and coverage
of liability insurance has been severely limited;

     WHEREAS,  Indemnitee  does not regard the current  protection  available as
adequate under the present circumstances,  and Indemnitee and other officers and
directors of the Company may not be willing to continue to serve as officers and
directors without additional protection; and

     WHEREAS,  the Company  desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and directors of
the Company and to indemnify  its  officers and  directors so as to provide them
with the maximum protection permitted by law.

     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

                                        1

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Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued


     1. Indemnification.

          (a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee  is or  was a  party  or is  threatened  to be  made a  party  to any
threatened,  pending,  or completed action,  suit or proceeding,  whether civil,
criminal,  administrative,  or investigative  (other than an action by or in the
right of the  Company),  by  reason  of the  fact  that  Indemnitee  is or was a
director, officer, employee, or agent of the Company, by reason of any action or
inaction on the part of Indemnitee  while an officer or director or by reason of
the fact that  Indemnitee  is or was  serving at the request of the Company as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines, and amounts paid in settlement (if such settlement is
approved in advance by the Company,  which  approval  shall not be  unreasonably
withheld) actually and reasonably incurred by Indemnitee in connection with such
action,  suit, or  proceeding if Indemnitee  acted in good faith and in a manner
Indemnitee  reasonably believed to be in or not opposed to the best interests of
the Company,  and,  with respect to any criminal  action or  proceeding,  had no
reasonable cause to believe Indemnitee's  conduct was unlawful.  The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption  that  Indemnitee  did not act in good  faith and in a manner  which
Indemnitee  reasonably believed to be in or not opposed to the best interests of
the  Company,  and with  respect  to any  criminal  action  or  proceeding,  had
reasonable cause to believe that Indemnitee's conduct was unlawful.

          (b)  Proceedings By or in the Right of the Company.  The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any  threatened,  pending,  or completed  action or suit by or in the
right of the  Company to  procure a judgment  in its favor by reason of the fact
that  Indemnitee  is or was a  director,  officer,  employee,  or  agent  of the
Company,  by reason of any action or inaction on the part of Indemnitee while an
officer,  or director or by reason of the fact that Indemnitee is or was serving
at the  request of the  Company as a director,  officer,  employee,  or agent of
another  corporation,  partnership,  joint venture,  trust, or other enterprise,
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee in  connection  with the defense or settlement of such action or suit
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in or not opposed to the best  interests of the Company and except that no
indemnification  shall be made in respect  of any  claim,  issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company unless and
only to the extent  that the Court of  Chancery  of the State of Delaware or the
court in which such action or suit was brought shall determine upon  application
that, despite the adjudication of liability but in view of all the circumstances
of the case,  Indemnitee is fairly and reasonably entitled to indemnity for such
expenses  which the Court of  Chancery  of the State of  Delaware  or such other
court shall deem proper. Notwithstanding the foregoing, Indemnitee shall have no
right to  indemnification  for expenses and the payment of profits  arising from
the purchase and sale by  Indemnitee of securities in violation of Section 16(b)
of the  Securities  Exchange Act of 1934, as amended,  or any similar  successor
statute.
                                        2

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Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

          (c) Mandatory  Payment of Expenses.  To the extent that Indemnitee has
been  successful  on the merits or otherwise in defense of any action,  suit, or
proceeding  referred  to in  Subsections  (a) and (b) of this  Section  1 or the
defense of any claim, issue, or matter therein,  Indemnitee shall be indemnified
against  expenses  (including  attorneys'  fees)  and any  costs  of  settlement
(including  amounts paid in settlement if such settlement is approved in advance
by the Company,  which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection therewith.

     2. Expenses; Indemnification Procedure.

          (a)  Advancement  of Expenses.  The Company shall advance all expenses
actually  and  reasonably  incurred by the  Indemnitee  in  connection  with the
investigation,  defense,  settlement or appeal of any civil or criminal  action,
suit, or proceeding referenced in Section 1(a) or (b) hereof.  Indemnitee hereby
undertakes  to repay such amounts  advanced  only if, and to the extent that, it
shall  ultimately  be  determined  that the  Indemnitee  is not  entitled  to be
indemnified  by the  Company  as  authorized  hereby.  The  advances  to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20) days
following  delivery  of a written  request  therefor  by the  Indemnitee  to the
Company.

          (b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to his right to be indemnified under this Agreement,  give the Company
notice in writing as soon as  practicable  of any claim made against  Indemnitee
for which  indemnification will or could be sought under this Agreement.  Notice
to the Company  shall be directed to the Secretary of the Company at the address
shown on the  signature  page of this  Agreement  (or such other  address as the
Company  shall  designate  in writing  to  Indemnitee).  Notice  shall be deemed
received five (5) days after the date postmarked,  if sent by domestic certified
or  registered  mail,  properly  addressed;  otherwise  when such  notice  shall
actually be received by the Company. In addition,  Indemnitee shall (i) give the
Company such  information  and  cooperation as it may reasonably  require and as
shall be within  Indemnitee's power and (ii) upon request of the Company testify
at, or be deposed in connection with, any proceeding to adjudicate or consider a
Claim against Indemnitee for which indemnification will or could be sought under
this Agreement.
                                        3

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Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

          (c)  Procedure.  Any  indemnification  and  advances  provided  for in
Section 1 and this  Section 2 shall be made no later than  forty-five  (45) days
after  receipt of the  written  request  of  Indemnitee.  If a claim  under this
Agreement,   under  any  statute,  or  under  any  provision  of  the  Company's
Certificate of Incorporation or By-laws  providing for  indemnification,  is not
paid in full by the Company within  forty-five (45) days after a written request
for payment thereof has first been received by the Company,  Indemnitee may, but
need not, at any time thereafter  bring an action against the Company to recover
the  unpaid  amount  of the  claim  and,  if  successful  in  whole  or in part,
Indemnitee  shall  also be  entitled  to be paid  for  the  expenses  (including
attorneys'  fees) of  bringing  such  action.  It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
connection  with  any  action,  suit  or  proceeding  in  advance  of its  final
disposition)  that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed,  but the burden of proving such defense shall be on the Company,
and  Indemnitee  shall be  entitled  to receive  interim  payments  of  expenses
pursuant  to  Subsection  2(a)  unless  and until  such  defense  may be finally
adjudicated  by court  order or judgment  from which no further  right of appeal
exists. It is the parties' intention that, if the Company contests  Indemnitee's
right to indemnification,  the question of Indemnitee's right to indemnification
shall be for the  court to  decide,  and  neither  the  failure  of the  Company
(including  its  Board  of  Directors,   independent   legal  counsel,   or  its
shareholders) to have made a determination that indemnification of Indemnitee is
proper in the circumstances  because Indemnitee has met the applicable  standard
of conduct  required  by  applicable  law,  nor an actual  determination  by the
Company  (including  its Board of  Directors,  any  committee or subgroup of the
Board  of  Directors,  independent  legal  counsel,  or its  shareholders)  that
Indemnitee  has not met such  applicable  standard  of conduct,  shall  create a
presumption  that  Indemnitee  has or has  not met the  applicable  standard  of
conduct.

          (d) Notice to Insurers.  If, at the time of the receipt of a notice of
a claim pursuant to Subsection 2(b) hereof, the Company has director and officer
liability  insurance  in effect,  the Company  shall give  prompt  notice of the
commencement  of  such  proceeding  to  the  insurers  in  accordance  with  the
procedures set forth in the respective  policies.  The Company shall  thereafter
take all necessary or desirable  action to cause such insurers to pay, on behalf
of the  Indemnitee,  all  amounts  payable  as a result  of such  proceeding  in
accordance with the terms of such policies.

                                        4

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Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

          (e) Selection of Counsel.  In the event the Company shall be obligated
under  Subsection 2(a) hereof to pay the expenses of any proceeding  against the
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding,  with counsel approved by the Indemnitee,  which counsel may
be counsel  for the  Company,  upon the  delivery to the  Indemnitee  of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by the Indemnitee and the retention of such counsel by the Company,  the
Company will not be liable to the  Indemnitee  under this Agreement for any fees
of counsel  subsequently  incurred by the  Indemnitee  with  respect to the same
proceeding,  provided that (i) the Indemnitee shall have the right to employ his
counsel in any such proceeding,  at the Indemnitee's  sole expense;  and (ii) if
(A) the employment of counsel by the Indemnitee has been  previously  authorized
by the Company,  (B) the Indemnitee  shall have reasonably  concluded that there
may be a conflict of interest  between  the  Company and the  Indemnitee  in the
conduct of any such defense or (C) the Company shall not, in fact, have employed
counsel  to assume the  defense of such  proceeding,  the fees and  expenses  of
Indemnitee's counsel shall be at the expense of the Company.

     3. Additional Indemnification Rights; Nonexclusivity.

          (a) Scope.  Notwithstanding any other provision of this Agreement, the
Company  hereby  agrees  to  indemnify  the  Indemnitee  to the  fullest  extent
permitted by law,  notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement,  the Company's Certificate
of  Incorporation,  the  Company's  By-laws or by  statute.  In the event of any
change,  after the date of this Agreement,  in any applicable law,  statute,  or
rule which expands the right of a Delaware  corporation to indemnify a member of
its board of directors or an officer,  such changes shall be, ipso facto, within
the  purview  of  Indemnitee's  rights  and  Company's  obligations,  under this
Agreement.  In the event of any change in any  applicable  law,  statute or rule
which narrows the right of a Delaware  corporation  to indemnify a member of its
board of  directors or an officer,  such  changes,  to the extent not  otherwise
required by such law, statute or rule to be applied to this Agreement shall have
no effect on this Agreement or the parties' rights and obligations hereunder.

          (b)  Nonexclusivity.  The  indemnification  provided by this Agreement
shall not be  deemed  exclusive  of any  rights  to which an  Indemnitee  may be
entitled under the Company's  Certificate  of  Incorporation,  its By-laws,  any
agreement,  any vote of stockholders  or  disinterested  Directors,  the General
Corporation  Law of the State of Delaware,  or  otherwise,  both as to action in
Indemnitee's  official  capacity  and as to action  in  another  capacity  while
holding  such  office  (each an  "Indemnified  Capacity").  The  indemnification
provided  under this  Agreement  shall  continue as to Indemnitee for any action
taken or not taken while serving in an  Indemnified  Capacity even though he may
have ceased to serve in an Indemnified  Capacity at the time of any action, suit
or other covered proceeding.

                                        5

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Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

     4. Partial  Indemnification.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
expenses,  judgments, fines or penalties actually and reasonably incurred by him
in the  investigation,  defense,  appeal or  settlement of any civil or criminal
action, suit or proceeding,  but not, however, for the total amount thereof, the
Company  shall  nevertheless  indemnify  Indemnitee  for  the  portion  of  such
expenses, judgments, fines or penalties to which Indemnitee is entitled.

     5. Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge that
in certain instances, Federal law or public policy may override Delaware law and
prohibit the Company from  indemnifying  its directors  and officers  under this
Agreement or otherwise. For example, the Company and Indemnitee acknowledge that
the  Securities  and Exchange  Commission  ("SEC") has taken the  position  that
indemnification is not permissible for liabilities arising under certain federal
securities  laws,  federal  legislation  prohibits  indemnification  for certain
Employee   Retirement  Income  Security  Act  of  1974,  as  amended  ("ERISA"),
violations,  and the  Company,  as the  holding  Company  for a federal  savings
institution,  is subject to the prohibitions and limitations on  indemnification
set forth in the federal banking laws  including,  without  limitation,  Section
8(k)  and  18(k),  of the  Federal  Deposit  Insurance  Act and the  regulations
promulgated thereunder. Indemnitee understands and acknowledges that the Company
has  undertaken  or may be required in the future to  undertake  with the SEC to
submit the question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify Indemnitee
and agrees that he will be bound by the findings of such court.

     6. Officer and Director Liability  Insurance.  The Company shall, from time
to time, make the good faith determination  whether or not it is practicable for
the  Company  to obtain and  maintain a policy or  policies  of  insurance  with
reputable  insurance  companies  providing  the  officers  and  directors of the
Company with coverage for losses from wrongful  acts, or to ensure the Company's
performance of its indemnification obligations under this Agreement. Among other
considerations,  the Company  will weigh the costs of obtaining  such  insurance
coverage  against the protection  afforded by such coverage.  In all policies of
director and officer  liability  insurance,  the Indemnitee shall be named as an
insured  in such a manner as to  provide  the  Indemnitee  the same  rights  and
benefits  as are  accorded  to  the  most  favorably  insured  of the  Company's
directors, if the Indemnitee is a director; or of the Company's officers, if the
Indemnitee  is not a director of the Company but is an officer.  Notwithstanding
the  foregoing,  the Company shall have no obligation to obtain or maintain such
insurance  if the Company  determines  in good faith that such  insurance is not
reasonably available,  the premium costs for such insurance are disproportionate
to the amount of coverage  provided,  the coverage provided by such insurance is
limited  by  exclusions  so  as to  provide  an  insufficient  benefit,  or  the
Indemnitee  is covered by similar  insurance  maintained  by a subsidiary of the
Company.

                                        6

<PAGE>

Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

     7. Severability.  Nothing in this Agreement is intended to require or shall
be construed  as requiring  the Company to do or fail to do any act in violation
of applicable law. The Company's inability,  pursuant to court order, to perform
its  obligations  under this  Agreement  shall not  constitute  a breach of this
Agreement.  The provisions of this  Agreement  shall be severable as provided in
this Section 7. If this  Agreement or any portion hereof shall be invalidated on
any  ground by any  court of  competent  jurisdiction,  then the  Company  shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated,  and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

     8. Exceptions.  Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims  Initiated by Indemnitee.  To indemnify or advance expenses
to  Indemnitee  with  respect  to  proceedings  or claims  initiated  or brought
voluntarily  by  Indemnitee  and not by way of defense,  except with  respect to
proceedings  brought to  establish or enforce a right to  indemnification  under
this  Agreement  or any other  statute or law or  otherwise  as  required  under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement  of expenses may be provided by the Company in specific cases if the
Board of Directors finds it to be appropriate; or

          (b) Lack of Good  Faith.  To  indemnify  Indemnitee  for any  expenses
incurred  by the  Indemnitee  with  respect  to  any  proceeding  instituted  by
Indemnitee  to enforce or  interpret  this  Agreement,  if a court of  competent
jurisdiction  determines  that  each  of the  material  assertions  made  by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or

          (c) Notwithstanding the foregoing,  the Company shall not be obligated
to indemnify  Indemnitee  for  expenses or  liabilities  of any type  whatsoever
(including,  but not  limited  to,  judgments,  fines,  ERISA  excise  taxes  or
penalties,  and amounts  paid in  settlement)  which have been paid  directly to
Indemnitee by an insurance  carrier  under a policy of officers' and  directors'
liability insurance maintained by the Company.

                                        7

<PAGE>

Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

     9. Construction of Certain Phrases.

          (a) For purposes of this Agreement,  references to the "Company" shall
include, in addition to the resulting corporation,  any constituent  corporation
(including  any  constituent of a constituent)  absorbed in a  consolidation  or
merger which, if its separate existence had continued,  would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
if  Indemnitee  is or  was a  director,  officer,  employee  or  agent  of  such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director,  officer,  employee or agent of another  corporation,
partnership, joint venture, trust or other enterprise, Indemnitee shall stand in
the same position  under the  provisions of this  Agreement  with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

          (b) For purposes of this Agreement,  references to "other enterprises"
shall include  employee  benefit plans;  references to "fines" shall include any
excise taxes  assessed on Indemnitee  with respect to an employee  benefit plan;
and  references  to "serving at the request of the  Company"  shall  include any
service as a director,  officer,  employee or agent of the Company which imposes
duties on, or involves  services by, such director,  officer,  employee or agent
with respect to an employee benefit plan, its  participants,  or  beneficiaries;
and if  Indemnitee  acted in good  faith and in a manner  Indemnitee  reasonably
believed  to be in the  interest of the  participants  and  beneficiaries  of an
employee  benefit plan Indemnitee shall be deemed to have acted in a manner "not
opposed to the best interests of the Company" as referred to in this Agreement.

     10.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts, each of which shall constitute an original.

     11.  Successors  and  Assigns.  This  Agreement  shall be binding  upon the
Company  and its  successors  and  assigns,  and shall  inure to the  benefit of
Indemnitee and Indemnitee's estate, heirs, legal representatives and assigns.

                                        8

<PAGE>

Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

     12.  Attorneys'  Fees.  In the  event  that any  action  is  instituted  by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses,  including
reasonable  attorneys' fees, actually and reasonably incurred by Indemnitee with
respect to such action,  unless as a part of such action, the court of competent
jurisdiction  determines that each of the material assertions made by Indemnitee
as a basis for such action were not made in good faith or were frivolous. In the
event of an  action  instituted  by or in the  name of the  Company  under  this
Agreement  or to  enforce  or  interpret  any of the  terms  of this  Agreement,
Indemnitee shall be entitled to be paid all court costs and expenses,  including
attorneys'  fees,  incurred by Indemnitee  in defense of such action  (including
with  respect  to  Indemnitee's  counterclaims  and  cross-claims  made  in such
action),  unless  as a part of such  action  the court  determines  that each of
Indemnitee's  material  defenses  to such  action were made in bad faith or were
frivolous.

     13. Notice. All notices,  requests,  demands and other communications under
this  Agreement  shall be in  writing  and  shall be  deemed  duly  given (i) if
delivered by hand and receipted for by the party  addressee or (ii) if mailed by
certified or registered  mail with postage  prepaid,  on the third  business day
after the mailing date. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.

     14. Consent to  Jurisdiction.  The Company and the  Indemnitee  each hereby
irrevocably  consent to the  jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action proceeding which arises out of or
relates  to this  Agreement  and agree  that any  action  instituted  under this
Agreement shall be brought only in the state courts of the State of Delaware.

                                        9

<PAGE>

Monterey Bay Bancorp, Inc.
Form Of Indemnification Agreement, Continued

     15. Choice of Law. This  Agreement  shall be governed by and its provisions
construed in  accordance  with the laws of the State of Delaware,  as applied to
contracts between Delaware  residents entered into and to be performed  entirely
within Delaware.


     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date first above written.

                                         MONTEREY BAY BANCORP, INC.
                                         567 Auto Center Drive
                                         Watsonville, California  95076


                                         By:
                                             -----------------------------------
                                             Name:
                                             Title:


AGREED TO AND ACCEPTED:

INDEMNITEE:


----------------------------
Name:

Address:


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