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                                   REGENCY BANCORP

                           INCENTIVE STOCK OPTION AGREEMENT

    Regency Bancorp, a California corporation (the "Company"), has granted to
Steven  F. Hertel  (the "Optionee"), an option (the "Option") to purchase a
total of 30,000 shares of Common Stock, at the price determined as provided
herein, and in all respects subject to the terms, definitions and provisions of
the Regency Bancorp 1990 Stock Option Plan, as amended (the "Plan").  The terms
defined in the Plan shall have the same defined meanings herein.

    1.   NATURE OF THE OPTION.  This Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code.

    2.   EXERCISE PRICE.  The exercise price is $8.94 for each share of Common
Stock, which price is not less than the fair market value per share of the
Common Stock on the date of grant.

    3.   EXERCISE OF OPTION.  This Option shall be exercisable during its term
in accordance with the provisions of Section 6 of the Plan as follows:

         (a)  RIGHT TO EXERCISE.

              (i)  This Option shall vest cumulatively from the date of grant
of the Option, exercisable during a period of 120 months after the date of grant
as follows:  % of the shares subject to the Option shall be vested as folows:
1/3 immediately, 1/3 on 12/16/97, and 1/3 on 12/16/98.

             (ii)  This Option may not be exercised for less than 10 shares nor
for a fraction of a share.

            (iii)  In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 5, 6, 7 and 8 below.

         (b)  METHOD OF EXERCISE.  This Option shall be exercisable by written
notice which shall state the election to exercise the Option and the number of
shares in respect of which the Option is being exercised.  Such written notice
shall be signed by the Optionee and shall be delivered in person or by certified
mail to the Secretary of the Company accompanied by payment of the exercise
price.

    No shares will be issued pursuant to the exercise of an Option unless such
issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange or inter-dealer quotation system upon
which the shares of the Company's Common Stock may then be listed or quoted.
Assuming such compliance, the shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
shares.  An Optionee shall have no rights as a shareholder of the Company with
respect to any shares until the issuance of a stock certificate to the Optionee
for such shares.


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    4.   METHOD OF PAYMENT.  Payment of the exercise price shall be by cash,
certified check, official bank check, or by the delivery of shares of the
Company's Common Stock which (i) have been owned by the Optionee for at least
six (6) months or such other period as the Committee may require; and (ii) have
an aggregate fair market value on the date of surrender equal to the exercise
price.  In addition, an Optionee may also elect to satisfy the exercise price by
requesting that the Company withhold a sufficient number of shares from the
shares otherwise due upon exercise which have an aggregate fair market value on
the date of exercise equal to the exercise price; provided, however, that such
an election is subject to approval or disapproval by the Committee, and if the
Optionee is subject to Section 16 of the Securities Exchange Act of 1934, as
amended, the timing of the election and exercise of the option must satisfy the
requirements of Rule 16b-3.  Moreover, the Optionee may exercise the Option by
delivering to the Company, together with the exercise notice, (i) a copy of
irrevocable written instructions provided by the Optionee to a designated
brokerage firm to effect the immediate sale of the purchased shares and remit to
the Company, out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate exercise price payable for the purchased
shares plus all applicable federal, state and local income and employment taxes
required to be withheld by the Company by reason of such purchase and (ii)
written instructions to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale
transaction.

    5.   TERMINATION OF STATUS AS AN EMPLOYEE FOR ANY REASON OTHER THAN CAUSE.
If Optionee ceases to serve as an employee, he may, but only within three months
after the date he ceases to be an employee of the Company or its affiliates,
exercise this Option to the extent that the Option was vested as of the date of
such termination; provided that in no event is the date of exercise beyond
expiration of the Option.  To the extent that the Option was not vested as of
the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.

    6.   TERMINATION OF STATUS AS AN EMPLOYEE FOR CAUSE.  If Optionee's status
as an employee is terminated for Cause, as provided in Section 6(c) of the Plan,
this Option shall terminate on the thirtieth day after the date of termination
of employment.  "Cause" may consist of an act of embezzlement; fraud;
dishonesty; breach of fiduciary duty to the Company (which for purposes of this
Section 6 includes the Company's affiliates); deliberate disregard of the rules
of the Company which result in loss, damage or injury to the Company; the
unauthorized disclosure of any of the secrets or confidential information of the
Company; the inducement of any client or customer of the Company to break any
contract with the Company or the inducement of any principal for whom the
Company acts as agent to terminate such agency relations; engagement in any
conduct which constitutes unfair competition with the Company; or the removal of
Optionee from any office of the Company by any bank regulatory agency.

    7.   DISABILITY OF OPTIONEE.  Notwithstanding the provisions of Section 5
above, if Optionee is unable to continue his employment with the Company as a
result of his disability (as defined below), he may, within 12 months from the
date of termination of employment, exercise his Option to the extent the Option
was vested as of the date of such termination; provided that in no event is the
date of exercise beyond expiration of the Option; and, provided further, that,
in


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certain situations, an exercise after three months following such termination
may preclude favorable tax treatment normally accorded incentive stock options
(I.E., the Option will be taxed as a non-qualified stock option).  To the extent
that the Option was not vested as of the date of termination, or if Optionee
does not exercise such Option within the time specified herein, the Option shall
terminate.  For purposes of this provision, "disability" shall mean the
inability of Optionee to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment and shall be determined
by the Board of Directors or the Committee on the basis of such medical evidence
as the Board of Directors or Committee deems warranted under the circumstances.

    8.   DEATH OF OPTIONEE.  In the event of the death of Optionee while
Optionee is an employee of the Company or its affiliates, the Option may be
exercised, at any time within 12 months following the date of death, by
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent the Option was vested as of
the date of death; provided that in no event is the date of exercise beyond
expiration of the Option.

    9.   NON-TRANSFERABILITY OF OPTION.  This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by him.  The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

    10.  TERM OF OPTION.  Subject to earlier termination as provided in the
Plan, this Option shall terminate 10 years from the date of grant of this
Option, and may be exercised during such term only in accordance with the Plan
and the terms of this Option.

    11.  EARLY DISPOSITION OF STOCK.  Optionee understands that if he disposes
of any shares received under this Option within two (2) years after the date of
this Agreement or within one (1) year after such shares were transferred to him,
he will be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount generally measured by the
difference between the exercise price and the lower of the fair market value of
the shares at the date of the exercise or the fair market value of the shares at
the date of disposition.  OPTIONEE AGREES TO NOTIFY THE COMPANY IN WRITING
WITHIN 5 DAYS AFTER THE DATE OF ANY SUCH DISPOSITION.  Optionee understands that
if he disposes of such shares at any time after the expiration of such two-year
and one-year holding periods, any gain on such sale will be taxed as long-term
capital gain.

    12.  QUALIFICATION AS AN INCENTIVE STOCK OPTION.  Optionee understands that
the Option is intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Code.  Optionee understands, further, that: (a)
under the Code, if an optionee is unable to continue his or her employment with
the Company as a result of a total and permanent disability (as defined in
Section 22(e)(3) of the Code), and if the other requirements for incentive stock
option treatment contained in Section 422 of the Code are satisfied, Optionee
will be entitled to exercise the Option within 12 months of such termination
without defeating incentive stock option treatment; but (b) if Optionee is
unable to continue his or her employment with the Company as a result of his or
her disability, and such disability is not a total and permanent


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disability (as defined in Section 22(e)(3) of the Code), the Option will not
qualify as an incentive stock option unless it is exercised within three
months of the date of termination (I.E., while the Option may be exercised
for a period of 12 months after such termination, the exercise more than
three months following termination will result in the Option being taxed as a
non-qualified stock option).  Finally, Optionee understands that: (a) an
exercise procedure involving the withholding of shares otherwise due upon
exercise of an Option or an immediate sale of acquired shares in a broker
sale and remittance procedure will be a disqualifying disposition of such
shares, while the exercise method involving the delivery of previously owned
shares will not (provided that if the shares being delivered were acquired
upon the exercise of incentive stock options, they satisfy the holding
periods mentioned above); (b) the exercise price for the shares subject to
this Option has been determined in accordance with the Plan at a price not
less than 100% (or, if Optionee owned at the time of grant more than 10% of
the voting securities of the Company, 110%) of the fair market value of the
shares at the time of grant; (c) the Company believes that the methodology by
which the fair market value was determined at such time represented a good
faith attempt, as defined in the Code and the regulations thereunder, at
reaching an accurate appraisal of the fair market value of the shares; and
(d) the Company shall not be responsible for any additional tax liability
incurred by Optionee in the event that the Internal Revenue Service were to
determine that the Option does not qualify as an incentive stock option, for
any reason, including a determination that the valuation did not represent a
good faith attempt to value the shares.

DATE OF GRANT: DECEMBER 16, 1996

                             Regency Bancorp


                             By:       ROY JURA,
                                -------------------------------
                                  Duly Authorized on Behalf of
                                  Regency Bancorp




      Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board of Directors and the Committee upon
any questions arising under the Plan.

    Dated: DECEMBER 16, 1996



                                  STEVEN F. HERTEL
                                  Optionee




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